author: Brady, J.:

text:
    ALEXANDER H. COULTER, Appellant, v. THE BOARD OF EDUCATION FOR THE CITY AND COUNTY OF NEW YORK, Respondent.

      Contract—receipt in full—Liability of master to servant for negligence of a co-senamt.

    The plaintiff entered into a contract with the school officers of the Eighth ward of the city of New York to do all the carpenter work necessary in erecting a school-house. In consequence of the laches of the contractor for the mason work, the plaintiff was delayed in fulfilling his contract, and brought this action to recover the damages sustained thereby.
    In compliance with one of the requirements of the contract, the plaintiff, at the time of receiving the final payment, filed a certificate stating “that all claims and demands for extra work or otherwise, under or in connection with the contract * * * have "been presented to the said school officers, and the amount to be paid therefor agreed upon by and -between them or a majority of them and the undersigned, to wit, the sum of $483.82 ; and I further certify that the last payment under said contract * * * will be in full of every claim or demand, except the amount so agreed upon for extra work.” Held, that the certificate operated as an extinguishment of any claim the plaintiff might have.
    Whether, if this were not so, the plaintiff and the mason being fellow-servants, he would not be precluded from recovering, under the rule" that one servant cannot maintain an action against the common employer on account of injuries sustained by the negligence of a co-servant, gumre.

    Appeal from a judgment in favor of the defendant, entered on the report of a referee.

      E. Ellery Anderson, for the appellant.
    The effect of the words contained in the certificate cannot be greater than a release of a particular demand, followed by a general release of all claims and demands, which has always been held to discharge the particular matter mentioned only. (McIntyre v. Williamson, 1 Edw. Ch., 54; Jackson v. Stackhouse, 1 Cowen, 122; Chitty on Contracts, 90, 858.) The certificate refers to claims under and in connection with the contract. It is submitted that this only embraces amounts which the plaintiff could sue for under the contract, and has no reference to a claim for damages against the defendants by reason of the negligence of their agent, the mason. (Allamon v. The Mayor, 43 Barb., 33; Dubois v. Delaware and Hudson Canal Co., 4 Wend., 285.) The rule, that when an injury is inflicted by one employe on another employe, both being under the same employer, and engaged in a common business or enterprise, the employer does not guarantee to each employe the competency of the other employes, only applies to cases where the superior or employer has not, himself, by failure of duty, or by omission or neglect on his part, produced or contributed to the injury complained of. (Flike v. Boston and A. R. R. Co., 53 N. Y., 549; Laning v. N. Y. C. R. R. Co., 49 id., 521; Brinkner v. Same, id., 672; Warner v. Erie Railway Co., 49 Barb., 558, reversed in 39 N. Y., 468; Keegan v. Western R. R. Co., 8 id., 175.)

      E. Delafield Smith, for the respondent.
    If the work on the part of the mason was unreasonably delayed, it was the duty of the school officers, and not of the defendants, to see that he complied with the terms of his contract. The case, then, amounts to this, that the school officers, by neglecting to enforce the provisions in Armstrong’s contract against delay, caused injuries and damage to the plaintiff. This, conceding all the plaintiff claims'to be true, was misfeasance on the part of the school officers, who were independent officers, and for such misfeasance, or for malfeasance of such officers, the defendants cannot be held liable. (Martin v. Mayor of Brooklyn, 1 Hill, 545 ; Lorrilard v. Town of Monroe, 1 Kern., 392; Russell v. The Mayor of New York, 2 Denio, 461; Hefford v. City of Bedford, 16 Gray, 297.) The plaintiff is estopped by the certificate of May 10, 1864, from asserting any claim on the defendants for the alleged grievances stated in the complaint. (Devlin v. Mayor, 4 Duer, 337.) If the injuries of which the plaintiff complains arose from the negligence or delay of the contractor for the mason work, Armstrong, it is clear that the defendants cannot be held liable therefor. Armstrong was an independent contractor with the school officers of the Eighth ward, and for his carelessness, negligence, or unskillfulness in the execution of his work, neither the defendants nor the school officers are liable. (Kelly v. The Mayor, 1 Kern., 432; Blake v. Ferris, 1 Seld., 48; Pack v. The Mayor, 4 id., 222; Treadwell v. The Mayor, 1 Daly, 123.) Even admitting that the school officers of the Eighth ward can be regarded as the agents of the defendants, then the plaintiff and Armstrong were two servants or employes in the employ of one principal, and in the same general business, and for any damages sustained by the plaintiff, by reason of the negligence, carelessness or unskillfulness of Armstrong, the defendants are not liable. (Coon v. The S. and U. R. R. Co., 5 N. Y., 492.)
   Brady, J.:

The plaintiff made a contract with the school officers of the Eighth ward of this city, to do the carpenter work necessary toward the erection of a school-house in that ward. The mason work was to be done by Mr. Lanty Armstrong, with whom the officers made a contract for that purpose, and about the same time the agreement was made with the plaintiff. The mason failed to perform with sufficient expedition to allow the plaintiff to proceed with his work, as he was ready and able to, and in consequence thereof he was subjected to loss by a rise in the cost of labor and in the price of the materials to be employed. The work of the plaintiff was to be done under the direction and supervision of the superintendent of school buildings, and the materials were also to be furnished under his supervision. The plaintiff complained of the delay of the mason, and duly notified the superintendent of it, but no action ivas taken, it would seem, to compel the mason to proceed, or to abandon his contract. The necessary facts to establish the claim, assuming it to be one which could be enforced, were sufficiently proved. The averments in the complaint to that end were established. The complaint was, nevertheless, on the motion of the defendant’s counsel, dismissed. The question presented is, whether that disposition of the case was proper.

There are several reasons why the plaintiff cannot maintain this action, some of which will be considered.

First. It appeared by the contract that the last payment was not to be made until a certificate of the superintendent of school buildings, that the payment was due, had been filed in the office of the clerk of the board of education, and, in addition thereto, that there had also been filed in that office a certificate that all claims and demands for extra work or otherwise, under or in connection with the contract, had been presented to the parties of the first part, and the amount to be paid therefor agreed upon by and between them, or a majority of them, and the plaintiff, and that such payment was in full of every claim or demand whatever, in the premises, except the amount so agreed upon for extra work. It also appeared that a certificate had been given and filed in accordance with these provisions, and that the plaintiff had also signed a certificate contemplated by them. The certificate of the officers concludes as follows: “We do further certify that the sum of §433.92 has been agreed upon and allowed by us in full of all claims and demands for extra work or otherwise, under or in connection with the said contract.” The plaintiff’s certificate is as follows:

“ I do hereby certify that all claims and demands for extra work or otherwise, under or in connection with the contract of Alex. H. Coulter, made with the school officers of the Eighth ward, for the carpenter work on the new school building of ward school No. 8, situate on Grand, near Laurens street, in said ward, dated the 4th day of February, 1863, have been presented to the said school officers, and the amount to be paid therefor agreed upon by and between them, or a majority of them, and the undersigned, to wit, the sum of $433.92. I further certify that the last payment under said contract, to wit, the sum of'$1,767, will be in full of every claim or demand whatever in the premises, except the amount so agreed upon for extra work.

“Dated New York, May 10, 1864.

“ALEX. H. COULTER.”

The provisions of the contract relative to the certificate to be given for the last payment are clear. They contemplate a final adjustment of all matters between the contracting parties, in any way connected with or growing out of the contract. This is not only indicated by the language employed, but by the further agreement contained in the eleventh paragraph of the contract, which is as follows:

Eleventh. “ Should any dispute arise concerning the true construction of the plans or drawings and specifications hereinbefore mentioned, or any part of either, the same shall be decided by the said superintendent of school buildings, and his decision shall he final; but should any other difference arise between the parties of the first and second parts, the same may be submitted to the arbitration of two competent and disinterested persons, one to be named by the parties of the first part, or a majority of them, and the other by the party of the second part, which two, in case they cannot agree, may choose an umpire; and the decision of the arbitrators, or of the umpire, shall be binding and conclusive on all the parties hereto.”

The defendants are not the contracting parties, although the product of the agreement inures to their benefit. They are the paymasters, and are to be governed in their payments by the action of officers over whom they have by law no control, except so far as the right to approve of the contract made confers it. They rely upon the acts of these officers when a contract is made in reference to the completion of the work in accordance with the obligations assumed, and have the right to believe that the duties imposed have been properly discharged. When the certificate for which the contract calls is presented, it is their right therefore to assume that it has been given at the proper time and in the proper manner; that is, after an arrangement or adjustment of all matters of difference, if any have existed, and more particularly when the contractor himself, by his own deliberate act, has so declared. The certificates of the school officers and the plaintiff contain precisely this: The officers certify that a further sum beyond the last payment has been agreed upon and allowed by them in full of all claims and demands for extra work or otherwise, under or in connection with the said contract. The plaintiff certifies that the last payment under the contract would be in full of every claim or demand whatever in the premises, except the amount agreed upon for extra work; and further, that all claims and demands for extra work or otherwise, under or in connection with the contract, had been presented to the school officers, and that the amount to be paid therefor was the sum of $433.92. There is no evidence that the present claim was not made and passed upon. There is no evidence that prior to the payments made to the plaintiff, the present claim was presented to the defendants, or that they had notice of it; and they parted from a fund which they might have, held as an indemnity against a litigation which might have followed a refusal of the school officers to give the certificates, which must have been withheld unless the damages claimed by the plaintiff had been allowed. It is no answer to this, that Mr. Davenport, the finance clerk, told the plaintiff when he signed the receipt, that the certificate only related to the extra work. He had no authority to represent or to bind the defendants in any way, and what he said cannot effect their rights. The plaintiff had signed the certificate which contained the important elements for the defendants, and there is no pretense that any undue advantage was practiced or attempted in reference to it. The certificate and receipt operated as an extinguishment of his claim. (Devlin v. The Mayor, 4 Duer, 337.) He obtained his money, giving that paper, and must take the consequences.

Secondly. The plaintiff and the mason were employed by the same principal in a common enterprise, and no action can be sustained by either against the employer on account of injuries sustained by the negligence of the other. (Coon v. The S. and U. R. R. Co., 5 N. Y., 492; Warner v. Erie R. Co., 39 id., 468; Brickner v. N. Y. C. R. R. Co., 49 id., 672; Laning v. Same, id., 521; Flike v. Boston and A. R. R. Co., 53 id., 549 ; Wright v. N. Y. C. R. R. Co., 25 id., 562) This question, having been argued elaborately on both sides, is discussed, but in great doubt whether the doctrine invoked by the defendants can be called into requisition ; whether, in other "words, the mason, being a separate contractor, may be regarded as a servant within the principle. The plaintiff’s counsel sought to avoid the application of this rule of law, upon the theory that the act which occasioned the plaintiff’s damages was that of the principal — the employer —but the fact is otherwise. The delay was caused by the mason, he and the plaintiff working together in the construction of the school-house. The theory suggested rests, it would seem, on the proposition that the defendants could, by the exercise of their rights under the contract, require the mason to proceed more rapidly; but this must be assumed to be so, and without having all the facts and circumstances before us. This cannot be done by the appellate court, and could not be done by the tribunal before which the cause was tried. Neither there nor here, can any speculation be entertained, as to the result of a controversy which might have taken place between the defendants and one not a party to the record. If it were so, however, the cause would be too remote to warrant the imposition of damages. If there be any merit in the distinction sought to be enforced, it can only be where the employer is directly chargeable by his own act with causing the injury, and not, as in this case, where the attempt is made to reach him because he omitted, when he might have done so, to prevent another from doing it. The cases, supra, do not in any respect conflict with this conclusion. The rule which absolves the employer from responsibility for damages caused by the negligence of a fellow laborer or employe, is not free from exceptions; but they arise only when the employer has failed to select competent and skillful workmen, or materials fit for the emergency which calls for their use. The history of the doctrine itself, is given by Chief Justice Church in Flike v. Boston and Albany R. R. Co. (supra). The rule of exception is stated in that case as follows: The master is liable if his own negligence or want of care produces the injury, and this may be manifested by employing unfit servants or agents, or furnishing-improper or unsafe machinery, implements, facilities or materials for the use of the servant.” There is in this ease no evidence of the in competency of the mason employed — a fact which, on these authorities, it is the duty of the claimant to show, if he seeks redress from the employer for the act of the fellow-servant. (25 N. Y., supra.) The gravamen of the plaintiff’s case here is delay. The ability of the mason to accomplish his task, we do not understand to be questioned. His negligence, or rather his omission to do his work with sufficient dispatch to shield the plaintiff, is the foundation of the'demand asserted. The claim of the plaintiff is one that could not well be foreseen. It was the sudden increase of wages and materials, events which are not always foreshadowed, and against which human foresight cannot always guard. The flexibility of the common law cannot mould itself so as to create a special rule for each particular case, without becoming an unsettled, fluctuating and unsteady science. There must be, and indeed there is, a general rule to meet the varied vicissitudes of life, in business and otherwise, marked however by exceptions which are the necessary results of peculiar facts and circumstances developed and requiring the qualification made. When these elements are established, there are few occasions when they are not found broad enough to embrace almost every form of redress allied to the subject to which they relate. Such is the case here. The negligence complained of is not that of the defendants, assuming the superintendent of school buildings to be the defendants’ agent. It was not his duty to perform the -mason work. He had no authority to hurry its performance. It may be assumed that he was to supervise it; but that was only to see that the mason performed his contract properly, and thus to protect the defendants from unjust dealings. Whether he or the defendants could expedite .it by compulsory process, does not appear, as already suggested. There may have existed many and good reasons against the accomplishment of such a result. It is clear, however, that this is not a case within the exceptions to the rule stated, if the rule as suggested apply; and unless a new one is to be announced for this case, the defendants are not liable. There are other questions which might be discussed here, but they are not necessary for the disposition of this appeal, and are not therefore considered.

The judgment should be affirmed, with costs.

Davis, P. J., concurred; Daniels, J., concurred in the result.

Judgment affirmed.


source: Caselaw Access Project

license: Public Domain

text:
    WILLIAM H. PLACE, Respondent, v. CHARLES A. CHESEBROUGH, Appellant.

      Reference — inability of party to pay referee's fees not valid objection to — when ordered —power of court to order.

    It is no objection to an order referring an action, that the plaintiff is insolvent and -will be unable to pay the referee’s fees, and that the action is brought in bad faith.
    A reference may be ordered although one of the several issues in the case may not require the examination of a long account.
    The power of the court to refer common-law actions involving the examination of a long account, existed at the time of the adoption of the Constitutions of 1777 and 1833.
    Appeal from an order directing a reference in an action on contract.

      Frank E. Blackwell, for the appellant.

      E. Schenck, for the respondent.
   Brady, J.:

The bills of particulars to the proof of which the plaintiff’s evidence must be directed, consist-of about sixty items, and it abundantly appears, therefore, that the trial of two of the issues of fact, at least, in this controversy, will require the examination of a long account. Indeed, this necessity is not questioned by the appellant. His objections to the reference, indicated by the affidavit read in opposition to the motion therefor, are, that the plaintiff is insolvent and cannot pay the referee’s fees, and that the action is brought in bad faith. Neither of these objections can be entertained. .The insolvency of a plaintiff does not avoid, the necessity of applying to his case the usual rules of law. Whether it would subject him to the obligation of filing security of any kind, is an entirely different question. The good faith of an action is not the subject of investigation on a motion of the kind made heréin, and the result of which we are called upon to review! That element goes to the merits. When it appears that the trial of an issue of fact will require the examination of a long account on either side, it may be referred. (Code, § 271, sub. 1.) The practice of referring such cases has long- prevailed (Marter v. Hotchkiss, 1 Keyes, 585), and is entirely consistent with administration of justice; indeed, indispensable to it, in many litigations which have been presented to the courts for settlement. (See Whitaker v. Desfosse, 7 Bosw., 678 ; Goodyear v. Brooks, 2 Abb. Pr. [N. S.], 296; Batchelor v. The Albany City Ins. Co., 6 id., 240.)

The proposition, that when there is one of several issues in an action on contract, which does not require the examination of a long account, a reference cannot be ordered, is erroneous and at variance with the established practice of the court. It is not supported by the cases of Evans v. Kalbfleisch (16 Abb. [N. S.], 13) or Townsend v. Hendricks (40 How., 143).

In the latter case the action was in tort, and the results declared were, that in such an action a compulsory order of reference could not be made; that section 271 of the Code,.must be read in connection with section 2 of article 1 of the Constitution, and was limited- to actions on contract; and that where the action from its nature was not referable, the answer could not make it so.

In the former case the court held that there was but one cause of action alleged in the complaint which arose' upon a special contract, and that the action would not require the .examination of a long account. It is quite evident that these cases do not sustain the rule stated, and equally clear that they are not applicable to this case. The power- of the court to refer common-law actions on contract, involving the examination of a long account, existed at the time of the adoption of the Constitutions of 1777 and 1822, and it has been settled by repeated decisions of the courts of this State, that, under statutes relating to the subject, passed prior and subsequent to the Constitution of 1777, compulsory references could be ordered in actions on contracts. (Townsend v. Hendricks, supra.)

The order made at Special Term should for these reasons be affirmed, with ten dollars costs and disbursements.

Davis, P. J., and Daniels, J., concurred.

Ordered accordingly.


text:
    ELIZABETH WALKER and others, Executors, etc., Appellants, v. CHARLES B. SHOEMAKER, Respondent.

      Action for rent—when counter-claim may he interposed.

    In an action brought to recover rent, a mere trespass, or a tort of any character not amounting to eviction in whole or in part, cannot be set up as a defense.
    Where a landlord, being desirous of repairing the roof of his building, agreed with the tenant that if he would allow him to enter upon the premises and repair the same, he would do the work with diligence, care and caution, which he failed to do, whereby the tenant was injured: held, that the tenant might set up the damages sustained thereby as a counter-claim in an action brought by the landlord to recover rent.

      Cram v. Dresser (2 Sandf., 120) distinguished.
    Appeal from an order made at the Special Term, overruling a demurrer to the counter-claim set up in the defendant’s answer.

      Emile Beneville, for the appellants.
    The cause of action set forth in the counter-claim, does not grow out of any contract; and, although pleaded in form ex contractu, is a pure tort, and cannot be counter-claimed in an action for rent. The defendant’s remedy is an action for damages resulting from the plaintiffs’ negligent and abusive use of the license granted them. (Cushing v. Adams, 18 Pick., 110-114; Drake v. Cockroft, 4 E. D. Smith, 34; Mayor, etc., v. Parker Vein S. S. Co., 21 How., 289; Wendell v. Johnson, 8 N. H., 220; Reynolds v. Clark, 1 Str., 624; Cram v. Dresser, 2 Sandf., 120.) Nor can the defendant, by changing the form of his action, change the nature of the plaintiffs’ liability, and convert that into a contract, which the law deems a tort. (Walter v. Bennett, 16 N. Y., 252; Mayor, etc., v. Parker Vein S. S. Co.,
      21 How., 289.) And in no case is the tenant’s claim for damages resulting from the landlord’s negligence or trespass, and not amounting to an eviction, an answer to an action for rent. (Dyett v. Pendleton, 8 Cow., 729; Edgerton v. Page, 20 N. Y., 281.) The injuries, in the case at bar, are alleged to be inflicted on the defendant’s personal property, and are not to the possession or quiet enjoyment of the demised premises. (Drake v. Cockroft, 4 E. D. Smith, 34.) The matter pleaded in defendant’s counterclaim is hot a contract, since it lacks one of the principal elements of a contract, viz., consideration. (1 Pothier on Oblig., 123 ;1 Parsons on Cont., 427; Blackstone Com., bk. II, p. 444.) The permission to enter the demised premises was a mere technical license, and an abuse of it would give the tenant a right of action for damages. (3 Kent’s Com., 452; Wolf v. Frost, 4 Sandf. Ch., 73; Cook v. Stearns, 11 Mass., 533.)

      Jos. K. Murray, for the respondent.
   Brady, J.:

The action is to recover rent. The defense is a counter-claim. The facts constituting it are as follows: After the defendant had taken possession, plaintiffs obtained the right, by agreement with him, to put a new roof on the house demised, which was not needed to prevent waste or injury — a privilege not reserved by the agreement of rental. In consideration of this right, thus granted, the plaintiffs promised to do the work with diligence, care and caution, which they failed to.do, and by winch failure the defendant was injured. The court at Special Term held that these elements presented a good defense by way of counter-claim, and overruled the. plaintiffs’ demurrer, by which the converse of the proposition was sought to be maintained. The defense by way of counter-claim, in actions of this kind, has been limited by the cases, and ,the rule declared is, that a mere trespass, and indeed a tort of any character, not amounting to eviction in whole or in part, cannot be set up as a defense. (Cushing v. Adams, 18 Pick., 110, 114; Drake v. Cockroft, 4 E. D. Smith, 34; Mayor, etc., v. Parker Vein S. S. Co., 21 How., 289 ; Cram v. Dresser, 2 Sandf., 120; Edgerton v. Page, 20 N. Y., 281.)

It must appear, to create such a defense, that the acts of the landlord amount to a breach of the contract of letting; otherwise they are not connected with the subject of the action. (Edgerton v. Page, supra.) Hone of these adjudications, however, discuss the effect of the provisions of the Code in relation to counterclaims, to which particular reference will be made hereafter, and none of them bear any analogy to this case, except Cram v. Dresser (supra). In that case the landlord entered to make repairs under a right thereto reserved in the lease, and the defendant, feeling aggrieved by the manner in which the right was exercised, claimed damages in diminution of the rent, but the claim was' rejected. The decision was made, however, before the provisions of the Code in reference to counter-claims were enacted, and rested upon the doctrine of recoupment of damages established by the case of Reab v. McAlister (8 Wend., 109); a doctrine conceded to be more limited than the statutory counter-claim under which the defendant here seeks to be allowed his damages. Under the provisions of the Code (§§ 149, 150), there are two classes of counterclaims, indicated by the first and second subdivisions of section 150. The second subdivision", prescribing the second class of counterclaims allowed to be set up, so far as it relates to the subject-matter in hand, is as follows: “ In an action arising on contract, any other cause of action arising also on contract, and existing at the commencement of the action.” The cause of action which the defendant sets up as a counter-claim is one arising on contract. It is not a trespass or a tort, but solely a claim for the violation of an express contract. The plaintiffs, to put on the new roof, entered under the contract and as matter of right, having promised to do what they were granted the privilege of doing, in a careful workmanlike manner, and diligently, so that the beneficial enjoyment of the premises would not be prevented or unnecessarily interfered with. They failed to do this, and the defendant’s claim for such failure necessarily arises out of contract, and is one relating to the subject-matter of the action, namely, the use of the premises demised; though perhaps not connected with the subject of the action, namely, the payment of the rent as declared by the cases, supra. The Code thus providing that when, as in this case, the action arises on contract, “ any other cause of action arising on contract ” may be set up as a counter-claim, the defense interposed herein, arising, as it does, on contract, is a valid defense and cannot be rejected. The design of the statute is to avoid circuity of action, allowing parties to settle their differences by the examination of mutual demands, and arraying them each against the other. This object seems to be very clearly expressed by the language employed: “ Any other cause of action arising also on contractand by-the further provision: The defendant may set forth by answer as many defenses and counter-claims as he may have, whether they be such as have been heretofore denominated legal or equitable, or both;” thus establishing a consolidation of causes of action through the medium of an answer, and giving the parties an opportunity, in one litigation, of disposing of various claims, if they really exist, or are asserted to have some foundation in fact. For these reasons it is thought that the defense was proper, and the decision of the court at Special Term correct. The suggestion that the agreement is without consideration, is not, under the circumstances of this case, entitled to serious examination. The plaintiffs have enjoyed the advantages of the contract. It is executed, and they must accept the burdens it imposed, whatever they may be. The proposition that the agreement was a naked or conditional license, and revokable at pleasure, is not available to the plaintiffs as a release from any obligation incurred by its use. The defendant could not have withdrawn it, as suggested by the learned presiding justice in deciding the demurrer, after the plaintiff had partially completed the roof. This seems to be demonstrated by the eases which he cites: Mumford v. Whitney (15 Wend., 380); Pierrepont v. Barnard (2 Seld., 279); see, also, Miller v. The Auburn and Syracuse R. R. Co. (6 Hill, 61). But being executed and unrevoked, it is clear on the authorities, that even if the agreement were a mere license and without consideration, it would be a justification of the act of entering upon the premises to erect the roof, and therefore binding. The consideration of the agreement here was the benefit derived from the completion of the new roof, while the premises were occupied by a tenant paying rent. The order made at Special Term should be affirmed, with costs.

Daniels, J., concurred.

Order affirmed.


author: Davis, P. J.:

text:
    DANIEL FALLON, Plaintiff, v. THE MAYOR, ALDERMEN, Etc., OF THE CITY OF NEW YORK, Defendant.

      Chap. 758, Lems of 1873—effect of, on leases of m'mories inNew York—Jfi’aud— when can he shown.

    The only effect of section 2 of chapter 758, Laws of 1873, was to remove the prohibition against paying the arrears of rent upon leases of armories in the city of Mew York, created by section 2 of chapter 9, Laws of 1872, in the cases specified in the said section.
    Such section did not take away legal defenses that existed by reason of the invalidity of such leases because made in violation of law, nor did it deprive the city or county of the right to allege fraud and collusion between the lessor and the public officials as a defense to actions upon such leases.
    The board of supervisors had no authority to make leases for armories and charge the county with the obligations thereby created, until all the requirements of the act of 1870 (chap. 80), had been complied with.
    Motion for new trial on exceptions ordered to be heard in the first instance at General Term.

      Fred. Smyth, for the plaintiff.

      J. C. Carter, for the defendant.
   Davis, P. J.:

The court below directed a verdict for the plaintiff, and ordered the exceptions on the part of the defendants to be heard in this court in the first instance, suspending judgment in the mean time. The principal exceptions arise upon the request to submit to the jury the question whether the lease on which the action was brought, was procured by fraudulent collusion between members of the board of supervisors and the plaintiff, and upon the several requests to charge on propositions of law. It is obvious that the learned judge by whom the Circuit was held, took this course for the purpose of procuring as speedily as practicable the opinion of the appellate courts upon the legal propositions involved, and especially upon the effect of section 2, of chapter 758, of the Laws of 1873 (Sess. Laws of 1873, p. 1127), upon the rights and obligations of the respective parties to such leases. That section is in these words : “ Nothing contained in any act heretofore passed shall prevent the payment of arrears of rent for armories and drill rooms, in cases in which the board of supervisors, since the first day of January, 1872, shall have authorized the leases of such armories and drill rooms- to be canceled and the public use thereof to cease, on condition of the payment' of such arrears of rent, or in cases in which the premises shall have been continuously occupied as armories or drill rooms until the present time, or until the expiration of the terms for which the same were leased.” It is obvious that the lease on which the plaintiff sues, is within the scope of this provision, because the premises had been continuously occupied to the then present time. The object of this statute is very plain. It is to remove.the supposed preventive effect of some previous act or acts of the legislature; and its end is fully accomplished when that removal- is produced. By a provision contained in section 2 of chapter 9 of the Laws of 1872, the' payment of arrears of rent on all leases and armories, was excluded from the general provisions of the chapter, and in substance prohibited. The second section of chapter 758 of the Laws of 1873, was intended to and does remove this prohibition upon the payment of arrears of rent,” in the cases specified in the section, to wit, where the leases had been canceled by authority of the board of supervisors, and the public use of the demised premises had ceased on condition of payment of such arrears; and in cases in which the premises had been continuously used up to the time of the passage of the law; and in eases where the term of the lease had already expired, and such use had been continued up to the expiration of the terfn. It took away an obstacle which prevented' the payment of such arrears; and it applies only to arrears upon leases which had terminated by agreement or by lapse of time, and to arrears upon continuing leases when occupation and use had gone on up to the passage of the act. The language used is not apt to take away legal defenses that existed by reason of the invalidity of leases because made in violation of law; nor to deprive the city or county of the right to allege fraud and collusion between the lessor and the public officials, as a defense to actions upon such leases. If the intent had been to give validity to all outstanding leases of armories and drill rooms, and take away all defenses thereto, whether of want of authority or fraud, language would have been chosen which would have plainly expressed that intent, as might well have been done in fewer words than those of the section under consideration; but pains were taken, by the use of words of well known significancy, to limit the effect of the section to “ arrears of rent,” and to the removal of an obstacle specially interposed by previous act of the legislature, which prevented payment of arrears, in the specified cases. As the rent sued for in this action has all accrued subsequently to the passage of the act of 1873, it is not “ arrears of rent” within the descriptive words of that act, and the case stands unaffected by the act. The defendants are sued for an alleged liability of the county of New York, and if an action will lie for such liability, it must be held that the defendants may set up and assert any defense which infected the contract, or affected the right to recover thereon. We think the case should have been sent to the jury upon the question of fraud. In considering this question, it is hardly necessary to say, that, inasmuch as the jury would have had the right to give full faith and credit to all the evidence and testimony on the part of defendants, tending to show fraud, and to have drawn every legitimate inference therefrom leading their minds in that direction, and to have discarded altogether the. evidence in denial or explanation of the alleged fraud, we are, since the question has been withheld from the jury, to look at the case as though it stood, so far as this question of fact is concerned, upon the defendant’s evidence only. That evidence tended to show that portion of a committee of the board of supervisors, charged with the duty of finding suitable premises for a drill room or armory, were informed that the premises described in this lease were in the hands of a party ready to lease them to the county for at most $10,000 per annum. That one member of the committee had a brother-in-law, the plaintiff, who was employed in the office of the mayor as server of corporation notices. That soon after information was given two members of the committee that the premises could be had for $10,000, this brother-in-law of one of those to whom such information had been given, took a lease to himself of the premises for ten years, at an annual rent of $9,500, from January 1, 1873. That two days afterward the committee reported in favor of renting the same premises from the brother-in-law of one of the committee, for the same term of ten years, at an annual rent of $14,000 and all taxes; and a resolution was passed on the same day to rent on those terms; and on the same day the lease was executed between the plaintiff, who was and is the brother-in-law of one of the committee, and the board of supervisors. A jury would certainly have been justified in scanning this transaction with a jealous eye," and perhaps in concluding that it was a snug and shrewd little job to secure to the plaintiff a comfortable income of $4,500 per annum for ten years, at the expense of the tax-payers of the city; and it is quite possible they might have believed and found that it was brought about by collusion between the plaintiff and some of the officials connected with the affair, and so have stamped the transaction as a fraudulent one. The collusion of the plaintiff with any one or more of such officials would have been a fraud upon the county, and the fact that such collusion and the circumstances attending the procuring of the lease were unknown to the board of supervisors as a board, would not diminish the fraud on plaintiff’s part, but would rather intensify it by necessarily involving the concealment of the collusive action of a part of the committee with himself. We think the motion for a new trial should be granted on this point.

The powers of the board of supervisors to make leases of this kind, and charge the county with the obligations thereby created, were specifically defined by acts of the legislature. They could only act "in that regard in the execution of a duty which the statute imposed, and that duty could arise or exist only on it appearing that the preliminary requirements of the act of 1870 had been complied with. (Laws of 1870, chap. 80, vol. 1, pp. 217-248.)

The lease was made in 1872, for a term to commence on the 1st of January, 1873. It was an original lease, and not the renewal of one made under previous laws, and the resolution of the 19th of December, 1872, passed three days' after the making of the lease, and before the commencement of the term, transferring the sixth regiment of the New York State national guard to the leased premises, furnished a strong presumption that the lease was made for the use of that regiment. The effort to uphold the authority upon papers prepared on the application of the ninety-sixth regiment in 1864, was not satisfactory. That regiment never occupied the premises, nor was it connected with them otherwise than by an application on the 16th of December, 1872, by the commanding officer of that regiment, which the subsequent action of the board shows, was not acceded to. Enough, we think, was not shown by the plaintiff, to authorize the action of the board in making the lease ; but as there must be a new trial on the question of fraud, it is not so material to analyze and examine this question at length, as upon the new trial it may be presented upon other and different evidence. The occupation of the premises by the sixth regiment, as shown, was not such a ratification of the lease as makes it obligatory on the county or city. There would be no protection for the corporation of Hew York, if the. doctrine of ratification which is applied to private persons and corporations, was held to be applicable. We have often held to the contrary, and cannot therefore give validity to a lease void for want of authority to make it, or for fraud in making it, because of the occupancy and use of the premises by some regiment assigned to them. It is another question whether any, and what liability can grow out of such occupancy.

The motion for a new trial should be granted, with costs to abide the event.

Daniels, J., concurred.

Motion granted, costs to abide event.


author: Davis, P. J.: Brady, J.:

text:
    ROBERT T. FORD, Plaintiff, v. THE MAYOR, Etc., OF THE CITY OF NEW YORK, Defendant.

      Chap. 80, Laws of 1870—power of supervisors to lease armories—ratification of lease.

    The hoard of supervisors cannot lease buildings for armories simply because, in their opinion, they will sooner or later be needed for the use of some one or more of the regiments of the county. Ho power to make such leases exists, except upon compliance with all the requirements of section 120 of the military code.
    Occupancy of premises so leased, by one of the regiments of the national guard, and payment of rent from time to time by the officers of the city, cannot be treated as a ratification of a lease made without authority.

      Motion for judgment on a verdict ordered by the court, subject to the opinion of the court at General Term.

      W. H. Townley, for the plaintiff.

      James C. Carter, for the defendant.
   Davis, P. J.:

In. the case of Fallon against these defendants (argued at the present term), we have considered the effect of section 2 of chapter 758 of the Laws of 1873, and have come to the conclusion that nothing contained in that section prevents the defendants from contesting the validity of a lease in an action brought for rent accruing subsequently to the passage of that act. No question of fraud is made in this case. It stands upon undisputed facts, and the only question it presents, is, whether the board of supervisors had power to make leases of buildings for armories and drill rooms, generally, and in anticipation of the wants of the regiments or military companies of the óounty, and without regard to the requirements of section 120 of the military code. (Laws of 1870, chap. 80, vol. 1, pp. 217, 248.) The lease on which this action is brought, was made on or about the 19th day of September, 1872, for the term of ten years and seven months from the 1st day of October, 1872, at an annual rent of $24,000.

Its only basis, as a professed compliance with the requirement of the act under which the authority to make such leases is derived, is to be found in a resolution passed by the board of supervisors on the 19th day of September, 1872. That resolution is an instruction to the clerk of the board to execute a lease of the premises “ to be for the purpose of armories and drill rooms; ” and it is based upon the report of a committee, that the building is suitable for the purposes, and can be leased, if obtained immediately, on very advantageous terms to the county.

The report states, also, that the sixth regiment must have an armory forthwith, as the lease of the building known as Tammany • Hall has been canceled, and the said regiment will be compelled to vacate. Other portions of the militia have pressing needs of new or additional accommodation.”

The lease was not, however, made for the sixth regiment, nor for any regiment in particular, but upon the opinion of the committee and the board that it would be wanted for some regiment. It was attempted to uphold the lease, by showing that the twelfth regiment had, in October, 1862, made application by the captains of its respective companies, in compliance with the statute then existing, for an armory and drill room, and that that regiment subsequently occupied a portion of the premises.

It appeared, however, that at the time of making the lease, in September, 1872, the twelfth regiment was in occupancy of other premises, leased by the county for its use for a term of five years from the 1st day of May, 1870, and that on the 19th day of December, 1872, a resolution was adopted by the board of supervisors, accepting a proposition of the lessor of those premises to cancel the lease on payment of rent up to May, 1873 ; and thereupon the lease was soon after canceled, and the said twelfth regiment was transferred to the premises leased of plaintiff.

There seems to be nothing in these facts to support the power to make the lease in question, unless it be found in the fact that some months after this lease was executed, it became-convenient to put it into the occupancy of the twelfth regiment, which, having lost its former armory by a cancellation of the lease, was entitled to have another armory provided by the county. The creation of that exigency by the cancellation of an existing lease, did not, by retroactive sanction, give validity to the lease made some two months before. The case upon this point comes right down to the naked question : Had the supervisors power to lease the premises of plaintiff without any compliance with the requirements of section 120 of the military code, because the board was of opinion that they would sooner or later be needed for the use of some one or more of the regiments of the county ? In our opinion, this question must be answered in the' negative. Occupancy by the twelfth regiment, and payment of rent from time to time by the officers of the city, cannot be treated as a ratification of a lease made without authority. To apply that rule to such case is to strip the defendants of all ability to defend themselves against acts of public officers in excess of lawful authority. We are of opinion that the defendants are entitled to judgment.

Daniels, J., concurred.

Brady, J.:

The twelfth regiment applied for an armory, in compliance with the law thereunto relating at the time of the application, and one was provided. They were subsequently transferred to the armory occupied by them referred to in the complaint herein, and to recover the rent of which this action was brought. It is not pretended that any application was made under the provisions of the act of 1870, but the plaintiff relies upon the original application and its continuing force, as an authority to transfer them to any armory provided by the board of supervisors. It has, he claims, in other words, a retrospective effect, and so long as they present the necessary constituents of a regiment, the use of an' armory by them must be regarded as an occupancy under and by virtue of the application duly and legally made, and therefore a legal and binding one upon the city. I think this question is evolved from the facts and circumstances of this case, and is to be met. IJpon the view taken by my brethren, however, assuming it to present the controlling question involved on this appeal, I concur with them.

Judgment ordered for defendant on the verdict.

        Vide opinion in Fallon v. The Mayor, ante, p. 583.


text:
    JAMES REID and another, Respondents, v. MICHAEL MARTIN, Appellant.

      Goods sold on credit—if sode is induced by fra/ud, action may be brought at once — in such case the fraud is a niaterial issue— Order of arrest.

    When goods are sold on credit, if the sale be induced by fraudulent misrepresentations, suit for the value may be commenced before the termination of the period of credit. In such action the question of fraud is material to the issue, and the judgment recovered therein will not be deemed to have been recovered in an action on contract.

      Appeal from an order made by honorable Justice Donohue, November 27, 1874, denying a motion for the discharge of the defendant from imprisonment on execution, and for a perpetual stay.
    The action was brought to recover the value of certain liquors sold to the defendant, and, on the 19th day of February, 1870, by virtue of an order of arrest therein, defendant was arrested by the sheriff of Dutchess county. That order was obtained on the ground, among others, that the defendant had been guilty of a fraud in contracting the debt. Copies of the affidavits used to procure the arrest were served upon the defendant. On May 27, 1872, defendant filed a petition in bankruptcy.
    On the 11th day of June, 1872, judgment was entered herein against the defendant, and, execution thereon against his property having been returned unsatisfied, execution was issued against the person of defendant, which was returned “ not found.”
    On February 6, 1873, defendant was discharged in bankruptcy, and the debt in question is claimed to have been covered by such discharge.
    Defendant gave bail on his arrest, and, after the return of the latter execution, an action was commenced against the bail, who were finally permitted to surrender the defendant to the sheriff in their exoneration.

      W. S. Palmer, for the appellant.
    If the proceedings in bankruptcy operated to discharge this debt, the motion is a proper one. The discharge being obtained after judgment, it was too late to plead. (Monroe v. Upton, 50 N. Y., 593.) This debt is discharged unless it was fraudulently contracted. (Bankrupt Act, §§ 33., 34.) All the allegations of the complaint, charging fraud, are wholly irrelevant and immaterial; the complaint is essentially one for goods sold and delivered, without a single characteristic of a complaint for fraudulently obtaining goods. This position is sustained by a uniform current of authorities. (Roth v. Palmer, 27 Barb., 652; Kayser v. Sichel, 34 id., 84; Wright v. Campbell, 21 How., 9; Weigand v. Sichel, 33 id., 174; Williams v. Tilt, 36 N. Y., 319, 323.) The rule is unqualified, that the only matters established by the judgment are those which the plaintiff must have proved to make out his case. (Edward v. Gardner, 45 N. Y., 349 ; Wood v. Henry, 40 id., 124; Church of Redeemer v. Crawford, 14 Abb. [N. S.], 200.) If a body execution would lie, it is because the judgment established a fraud — if not, because the judgment established no such thing. If there was any tort they have waived it. Having made their election they are bound by it. (Lane v. Beam,, 19 Barb., 51.) There have been no laches. (Monroe v. Upton, 50 N. Y., 593.)

      Wm. P. S. Melvin, for the respondents.
    The action is founded in fraud, from which the bankrupt’s discharge will not release him. (In re Kimball, 1 Nat. Bankr. Reg., 193; In re Louis Glazer, id., 336 ; In re Whithouse, 4 id., 15.) And the honorable justice, before whom the motion was heard, from the decision in which this appeal is taken, says: “ By the express terms of the bankrupt act, no debt contracted by fraud shall be discharged by the act. The act does not put the denial on the shape in which the debt is ; it puts it on the ground of the character of its contraction.” (In re Paterson, 1 Nat. Bankr. Reg., 307; In re Robinson, 2 Nat. Bankr. Reg., 341; Dresser v. Brooks, 3 Barb., 429; Clark v. Rowling, 3 N. Y., 216 ; Monroe v. Upton, 50 id., 593.) If the court can gather from the complaint and affidavits on arrest a state of facts which disclose a fraud in the creation of the debt, that is sufficient. (In re Kimball, 1 Nat. Bankr. Reg., 193; Stewart v. Emerson, 8 id.; In re Simpson, 2 id., 18.)
   Davis, P. J.:

The motion was denied by the court below solely on the ground that the debt for which the judgment was recovered, was not discharged by the decree in bankruptcy, because it was contracted by fraud. Section 33 of the act of congress, known as the bankruptcy act, declares that no debt created by the fraud * * * of the bankrupt * * * shall be discharged under this act, but the debt- may be proved, and the dividend thereon shall be a payment on account of said debt.” _

The federal courts sitting in bankruptcy, have given this section a construction consistent with the manifest intention of congress. Whenever the debt,” says Blatchford, J. (In re Paterson, 1 Nat. Bankr. Reg., 307), “ no matter whether it be in the shape of a judgment or in any other form, was created by fraud and had its root and origin in fraud, then it is not to be discharged.” We are to look, therefore, on such motions as this, to the origin of the indebtedness, and if, in so doing, we clearly see that the debt was created in fraud, we must hold the discharge to be inoperative to extinguish it, and that the creditor is entitled to all the remedies given him by the laws of the State in which his action may be prosecuted, or his judgment recovered.

In this case it is insisted that fraud is not the subject-matter of the action, and that therefore all the allegations of the complaint, tending to show fraud in the creation of the debt, are immaterial, and that no issue could have been taken upon them, and therefore the judgment cannot be held to have determined anything in respect of them. It is true the complaint in this action is upon contract for the purchase-price of goods sold and delivered ; but that fact is by no means conclusive upon the question whether or not the debt was created by fraud. It is well settled, that where goods are sold upon credit, if it appear, before the term of credit has expired, that the sale and credit have been procured by the fraud of the purchaser, the seller is not bound to wait for the expiration of the credit, but may instantly sue upon an implied promise to pay forthwith the value of the goods, and recover upon proof of the fraudulent acts or representations. The fraud is, in such case, necessarily involved in the issue as part of the evidence necessary to establish the right of recovery. Under the former system it would not be set forth in the pleadings, which would usually and might always have been simply the common counts in indebitatus assum/psit. • Under the present system, the assertion of such allegations in the complaint, if unnecessary, would not be prejudicial to the defendant, and after issue of fact joined as in this case, would be obnoxious to no objection on the part of the defendant. In this case the plaintiffs sue for the whole purchase-price of the goods sold, and they show on the face of their complaint that the sale was made upon credit, payable by installments, varying from thirty days to four and one-half months from the date of the sale. The full term of credit had not expired when they brought their suit for the whole amount, and hence, as one ground entitling them to an immediate recovery, they allege that they were induced to make the sale by certain false and fraudulent representations made by defendant, on the faith of which they relied. After issue joined, and judgment rendered upon such pleadings, it will hardly do to hold that the record shows that the recovery was upon a simple contract for a debt not created by fraud. But it appears by the papers that an order of arrest was made by one of the justices of this court, upon affidavits showing the case to be one within section 179 of the .Code of Procedure. The affidavits upon which" this order was founded, are brought before us without objection by the respondent, and it is fair to presume that they were also before the special term. The defendant was arrested on the order and gave bail, as is stated in his own affidavit. The affidavits abundantly show that the debt was created by fraud. There is no merger of the fraud in the judgment, so that the plaintiffs are precluded from establishing that fact. Their right to imprison the debtor may depend upon their ability to show an order of arrest, founded upon affidavits sufficient to give jurisdiction to make the order; and whenever a discharge after arrest is sought for, upon any ground which involves the power to enforce the judgment by that remedy, we think it competent to meet the effort by showing not only the primary order, but that the debt which has ripened into judgment, was created by fraud.

We are of opinion that it does appear that the debt in this case was one that is not discharged by the decree in bankruptcy and the bankrupt’s discharge granted thereon. The order should be affirmed, with "ten dollars costs, besides disbursements.

Brady and Daniels, JJ., concurred.

Ordered accordingly.


text:
    THE PEOPLE ex rel. AMOS H. TROWBRIDGE, Administrator, and ELIZABETH HARDEN, Administratrix, etc., v. THE COMMISSIONERS OF TAXES AND ASSESSMENTS OF THE CITY AND COUNTY OF NEW YORK.

      Taxation—Sluwes of stock in foreign corporations—owners of, not personally subject to taxation thereon—Bonds—how taxed,.

    Residents of this State, owning shares of stock in a corporation created under and by the laws of this State, or of any foreign State, are not subject to be personally assessed and taxed thereon under the laws of this State.
    Bonds, being evidence of a fixed indebtedness, are taxable at their actual value.
    Certiorari to review the proceedings of the commissioners of taxes, in assessing the relators, as administrator and administratrix of George Harden, deceased.

      John E. Burrill, for the relator.
    Under our statutes the assessment is made upon the property of the corporation and not upon • the stockholder. (Utica Co. v. Supervisors, 1 Barb. Ch., 432; 1 R. S. [4th ed.], [marg. pag.] 388, §§ 1, 3; id., 714, §§ 1, 3; id. [marg. pag.], 415, §§ 6, 7, 10; id., 752, 753, §§ 6, 7, 10; People v. Utica Co., 15 Johns., 382; Indiana v. Woram, 6 Hill, 33; Mohawk Co. v. Clute, 4 Paige, 384, 385; Oswego Co. v. Dolloway, 21 N. Y., 449.) Under the statutes of this State relating to taxation, the personal property of a resident actually situated in another State, is not to be included in the assessment here. (People v. Commissioners of Taxes, 23 N. Y., 224; People v. Gardner, 51 Barb., 352; Pacific Mail Co. v. Assessors, 47 How. Pr., 164.) . Foreign corporations are inhabitants of the States by whose laws they are created, have no power of migration, and can exist only in the State of their origin. (Merrick v. Van Santvoord, 34 N. Y., 218, 219; Stevens v. Phœnix Co., 41 id., 152-154; Ohio and Miss. Co. v. Wheeler, 1 Black [U. S.], 286; Green v. Van Buskirk, 7 Wall., 150.) Where a corporation is exempted by statute from taxation, the shareholders cannot be taxed on their stock. (State v. Brannin, 3 Zab., 484; Tax Cases, 12 Gill & J., 117; Bank of Cape Fear v. Edwards, 5 Ired., 516; Johnson v. Commonwealth, 7 Dana, 338.) The Revised Statutes provide that the shareholder shall not be taxed in respect to his shares in any corporation whose capital stock is taxed. (1 R. S. [4th ed.), 388; Water Power Co. v. Boston, 9 Metc., 199 ; Gardiner Cotton Co. v. Gardiner, 5 Greenl., 133; Salem Iron Factory v. Danvers, 10 Mass., 514; Smith v. Burley, 9 N. H., 423; Gordon v. Mayor of Baltimore, 5 Gill, 231; Tax Cases, 12 Gill & J., 117.)

      William Barnes, for the respondent.
   Davis, P. J.:

This case is brought to a hearing upon the return of the respondents, and the facts therein stated are to be taken as true. (People ex rel. Westbrook v. Ogdensburgh, 48 N. Y., 390.) The return states that the relators, as administrator, etc., of the estate of George Harden, deceased, were assessed by the deputy tax commissioner in the sum of $1,000,000 for personal property, and the same was entered in the annual record of assessed valuation of real and personal estate. That afterward, and in due time, the relators, claiming to be aggrieved by the assessment, made application to have the same-corrected, and thereupon made the statement annexed to the return, marked Schedule A,” which, so far as the items of property are concerned, is as follows:

Nominal value.

7.000 shares Mariposa preferred. Ho value.

3,843 shares Chicago, R. I. and Pac............... $376>614 00

3.000 shares Quicksilver preferred..........'..____ 84>000 00

500 shares Mil. and St. Paul preferred..........

do. do.................... 27 >500 00

340 shares St. Louis, A., and Terre Haute......1 15 > 540 00

200 shares Wilkesbarre Coal Co................ • 4>000 00

9.000 shares Mariposa certificates. Ho value or sales.

19,000 Horth Carolina bonds. Ho value or sales.

535 shares Mil: and St. Paul common........... 18 >725 00

Cash, Jan. 1,1874, deposited in JJ. S. Trust Co..... 148 > 000' 00

Total nominal value.........................$669 >379 00

Claims as stated............................ 115 >000 00

$554,379 00

The relators also set forth in the schedule, that the stocks and securities above mentioned are the stocks of incorporated companies, and that, as relators believed, such companies are taxed and do pay a tax on their capital stock, and that there are claims and demands made against the estate, the extent of which are undetermined ; that they already amount to the sum of $115,000, and may exceed the amount of money belonging to the estate.

The schedule was duly verified, and the relators claimed that the assessment should be corrected by wholly vacating the same. The respondents thereupon reduced the assessment from $1,000,000 to $500,000, which latter amount they determined to be the sum at which the relators, in their administrative capacity, were taxable for the year 1874. They ascertained and fixed that sum, by taking the sum given in schedule A, as the total nominal value of the personal property belonging to said estate, to wit, $669,379; and deducting therefrom the ascertained claims against the estate, as set forth in schedule A, at $115,000, and the further sum of $54,379, to cover the amount of any unascertained claims.

We are of opinion that in determining the assessment in this case, the respondents proceeded upon erroneous principles. It was conceded by the respondents, on the argument, that the stocks, stated in the schedule as “ 3,000 shares Quicksilver preferred, nominal value $84,000,” are stocks in The Quicksilver Mining Corporation, created by and under the laws of this State, and having its principal place of business in the city of New York. The certiorari states that it was organized for the purpose of operating mines in the State of California, and that its property is in .that State. Conceding this to be true, it is nevertheless a New York corporation, and taxable upon its capital stock, under the laws of this State, as provided by section 3 of chapter 456 of the Laws of 1857. (Oswego County v. Dolloway, 21 N. Y., 459 ; People ex rel. Pacific Mail Co. v. Commissioners of Taxes, 8 S. C. [1 Hun], 143; affirmed by Court of Appeals.) The shares of stock held by the relators in that corporation, were not taxable to them. (N. Y. Stat. at Large, vol. 1, 360, 361.) We are of opinion, also, that the commissioners erred in including in their assessment the stocks of corporations created by and under the laws of other States.

Such corporations are taxable, and we must. presume, in the absence of proof, that taxes in their respective home States, are duly assessed and collected upon their capital stock or property. The stocks in such corporations, held by individuals here, are simple representatives of capital or property employed in business in_ other States, the title of which is vested in, and controlled by, the artificial person created by and residing in such States. They represent an interest which is or may become a membership in the corporation, and evidence of a right to participate in divided profit, and in the ultimate dividend of surplus, after the payment of all debts and obligations of the corporation. The stock certificates are not themselves the property, but are evidences of - the rights just mentioned, to be possessed, enjoyed and enforced, under and in conformity with the laws of the State which created the body corporate. The property of the corporation, whether real or personal, in which these certificates of legal or equitable rights are outstanding, is not “ within this State,” which, by the general statute, is the test of taxability; but if any portion of it were, that fact would not affect the question now before us, for then, under our statutes, it would be taxable here, because of its situs, to its possessor or owner, but not to the mere holders of stock in the corporation. We think the case is fairly within the principle of The People ex rel. Hoyt v. The Commissioners of Taxes (23 N. Y., 224), and The People v. Gardner (51 Barb., 352). The commissioners should therefore have excluded the stocks of foreign corporations, by which we mean the corporations created by the laws of other States.

The commissioners should not have deducted the sum of $54,379 to cover unascertained claims. There was no evidence of any such indebtedness, and it was only stated as a mere conjecture, that such claims might be presented.

The commissioners will also be at liberty to inquire into the value of EArth. Carolina bonds, which, being evidence of a fixed indebtedness, are taxable at their actual value.

The proceedings must be reversed, and the assessment remitted to the commissioners, with instructions to reassess the relators according to the suggestions herein expressed.

Brady and Daniels, JJ., concurred.

Ordered accordingly.


text:
    In the Matter of THE KINGSBRIDGE ROAD.

      Appeal—from order of confirmation in street opening proceedings — when may he taken to General Term—Notice of—upon whom served, — chap.- 565 of 1865 — chap. 86 of 1813 — chap. 270 of 1854
    An appeal may be taken to tbe General Term of the Supreme Court, from an order confirming the report of commissioners in proceedings had relative to the opening of streets in the city of Mew York, under chapter 565 of the Laws of 1865, which adopts the provisions of chapter 86 of the Laws of 1813.
    Whether the provisions of tbe act of 1813, that the report of the commissioners, when confirmed, should be final and conclusive, considered under the circumstance that such order of confirmation was then made by a court consisting of three judges, would prevent an appeal to the General Term from an order which may now be made by a single judge, quaere.

    Chapter 270 of the Laws of 1854, authorizes an appeal to the General Term in such cases; but no appeal lies from the decision of the General Term to the Court of Appeals.
    In such proceedings the municipal corporation which seeks to acquire the title in ivmtMm to lands for a public highway, and to make assessments upon parties benefited, etc., is, in a legal sense, the adverse party in respect to all persons affected by the proceedings, and the several persons whose property is taken or assessed, are not, in a legal sense, “ adverse parties ” to each other, and service of a notice of appeal on the clerk of the court and the corporation counsel in such cases is sufficient.
    Motion to dismiss the appeal of James Lynch from the order of the Special Term, confirming the report of commissioners of estimate and assessment, made in an application of the department of public parks, for and in behalf of the mayor, aldermen, and commonalty of the city of Hew York, relative to the opening of Kings-bridge road northwardly from the southerly line of One Hundred and Fiftyrfifth street to the Harlem river, as laid out by the commissioners of the Central park of the city of New York.

      Granville P. Hawes, Geo. H. Adams, James C. Carter, Gratz Nathan, Kitchell & Jelliffe, and others, for the motion.

      James A. Deering and A. H. Purdy, opposed.
   Davis, P. J.:

This motion is made upon two grounds: First, that the order is not appealable; second, that notice of appeal has not been given to all the parties interested in the confirmation of the report. The notice of appeal was served upon the clerk of the court, and upon the corporation counsel, by whom, as representing the mayor, aldermen, etc., and the commissioners of the Central park, the proceedings to acquire the lands and open the street are conducted, and the motion of confirmation was made. In our opinion this service was regular and sufficient.

The municipal corporation which is seeking by proceedings under the law, to acquire title in invitum to lands for a public highway, and to make assessments upon parties benefited, and compensation to parties injured, is, in a legal sense, the adverse party in respect of all persons affected by the proceedings ; and the several persons whose property is taken or assessed are not, in a legal sense, “ adverse parties ” to each other. They have a common adversary in a controversy in, which they may have divers interests, which may, in some eases, be hostile to each other in practical effects and results, yet they have no adjudications as between themselves for or against each other, and so far as they are severally interested in maintaining the adjudication which the city has obtained against them all, the corporation must be regarded as their representative in a contest between it and the persons who deem themselves prejudiced by such adjudication.

The first point is one of graver importance. The proceedings in this case were taken under the provisions of chapter 565 of the laws of 1865. (Sess. Laws of 1865, 1136.) That act adopts and applies, so far as they are not inconsistent with its own provisions, the several acts and the proceedings thereunder, relating to the opening of streets, roads and public squares, then in force in the city of New York. All parties on this motion have acted upon the assumption that the provision of the act of 1813,' declaring the effect of the order of confirmation, is in full force in this case. Section 178 of the act of 1813, provides that the commissioners of estimate and assessment shall make a report of their proceedings “ to the Supreme Court of Judicature,” and that “such report,' when confirmed by the said court, shall be final and conclusive, as well upon the said mayor, aldermen and commonalty of the city of New York, as upon the owners, lessees, persons and parties interested in, and entitled to the lands, tenements, hereditaments and premises mentioned in the said report, and upon all other persons whomsoever.”

It is upon the effect of this provision, considered of course in the light of subsequent legislation and existing circumstances, that the question whether an appeal from the order of confirmation made by the Special Term, can be taken to the General Term of the Supreme Court. The power to make such final and conclusive order of confirmation, was conferred by the act of 1813, upon the Supreme Court of Judicature. That court then consisted of a single body, composed of three judges, who then held a single term, comprising within itself all the powers, so far as they then existed, which are now distributed amongst the several branches and terms of the same court. It was at that term (which, for the sake of distinction, we may now call a General Term), to which the power to make the final and conclusive order was given.

There is no doubt from the language used by the act, that the intention was to preclude an appeal from such an order of confirmation from the Supreme Court to the then appellate tribunal; and there seems just as little, that the intention was to give the characteristic of finality and conclusiveness to the order by a term of the Supreme Court having as well the original as the ultimate authority of that court.

If the powers of the Supreme Court had been subdivided as now, it may well be questioned whether the order of a single judge sitting at Special Term and disposing of interests and rights so vast and complicated as those involved in some of this class of cases, would have been made final and conclusive upon all parties and persons. But the changes in the courts were not anticipated, and language was used, therefore, which then fitted the orders of a General Term only, but which is now to be fitted to the orders of a Special Term held by a single judge. But this fact is not so much an argument against the application of the language of the act of 1813 to the orders of Special Terms, as in favor of such construction of subsequent legislation touching appeals from orders as shall embrace those made in this class of cases. If the Special Term of the Supreme Court were an inferior tribunal, language as emphatic as that contained in the statute of 1813 would not deprive a party of the fight of review. (Matter of Canal and Walker Streets, 12 N. Y., 406; 2 Keble, 43; 2 Burr., 1040; Lawton v. Commissioners, 2 Caines, 179, 181.)

In the Supreme Court the right of review, being a fundamental one, is always deemed to exist, unless the intent to destroy it is expressed with irresistible clearness.” (Per Hill, arguendo, in Matter of Canal Street, 12 N. Y., 408; citing 2 Cranch, 390, Marshall, C. J.; Lawton v. Commissioners, 2 Caines, 179; Rex v. Commissioners, 2 Keble, 43; Rex v. Morely, 2 Burr., 1040, 1042; 3 Hill, 562, Cowen, J.; Starr v. Trustees, 6 Wend., 564.) When the changes in the organization of the Supreme Court became such that a Special Term could entertain motions for confirmation under the act of 1813, it would necessarily have followed that, had not the Special Term been, so far as its powers extended, a branch of the Supreme Court itself, clothed with co-ordinate authority, the principle of law above referred to would have kept alive the powers of review in the General Term, notwithstanding the act of 1813 declares the order when made to be final and' conclusive.

But the conferring on the Special Term of power to make the order, under the act of 1813, undoubtedly gave to the order of that court the effect declared by the act. Hence, to enable it to be reviewed, required legislation which should, fro tcmto, operate to modify the effect of the order. The act of 1854 seems to us to have been enacted expressly to accomplish such a purpose — that is, to subject orders of the Special Terms tó review in this and other classes of cases which might not be embraced in the more general provisions of the Code.

The first section of the act of 1854 provides that “ an appeal may be taken to the General Term of the Supreme Court, or the Superior Court, or Court of Common Pleas of the City of New York, from any judgment, order or final determination made at a Special Terra of either of said courts, in any special proceedings therein.” (Session Laws 1854, chap. 270, p. 592.)

There seems to us no propriety in frittering away the force of this statute by a judicial incorporation of exceptions which the legislature did not see fit to make.

The statute was obviously made for the express purpose of permitting. a review of orders in all special proceedings, when made in the Special Term, and there seems to be greater reason for applying it to the case of orders which could only have been made by a General Term, when language in respect of them was used hy the legislature which made them not appealable from the latter court. It is to be observed that the act of 1854 gives no appeal except to the General Term, and the right of review terminates under it, in this kind of cases, precisely where the order which was to be final and conclusive was, by the act of 1813, to be made. _ So that, under the act of 1813, the order of the Sv/preme Gowrt is still final and conclusive, precisely as originally contemplated.

But we think the question of the application of the act of 1854 to such cases ought to be regarded as authoritatively settled. In The Matter of Canal and Walker Streets (above cited), the order of confirmation was made at a Special Term in December, 1853; an appeal was taken, and, in September, 1854, the General Term affirmed the order. From the latter order an appeal was taken to the Court of 'Appeals, and a motion was made in the last named court to dismiss that appeal.

The act of 1854 was passed, April 15, 1854, pending the appeal in the Supreme Court, from the Special Term order of December, 1853. The act contains this provision : “ And all appeals heretofore had or taken, and undetermined in special proceedings, shall be as valid and effectual as though had or taken under the provisions of this act.” These facts and dates show, almost to a moral certainty, that the act of 1854 was passed expressly to meet and make valid the appeal then pending in the Canal street case, which was one of great importance.

The motion to dismiss came on speedily in the Court of Appeals, and that court, as stated in the head note of Mr. Kernan, held that, “by virtue of chapter 270 of the Laws of 1854, an appeal lies to the Supreme Court at General Term, from an order made by the same court at Special Term, confirming the report of the commissioners.” Gardiner, C. J., in delivering the opinion of the court, held that the act of 1854 gave an appeal to the General Term of the Supreme Court, and that, independently of that statute, the General Term acquired no jurisdiction of the proceedings.” (12 N. Y., 409.) He exploded the idea that in exercising the powers conferred by the statute of 1813, the court acted as “ a subordinate tribunal of special and limited jurisdiction, to be exercised by those who were, ex officio, judges' of that court,” and held that the order of the Special Term was cm order of the Supreme Court, to which the act of 1854 had application; and he further held, in substance, that to the order of the General Term, in such case, the language of the statute of 1813, declaring it “final and conclusive,” still applied, so that no appeal would lie therefrom to the Court of Appeals, inasmuch as the act of 1854 gave an appeal only to the General Term of the Supreme Court. This contemporaneous construction of the act of 1854, ought, as it seems to us/ to have been regarded as settling the right of appeal in this class of cases, but it seems to have been held otherwise by the General Term of the first district In re Bowery (12 How., 97), in which case the appeal was dismissed, and in The matter of Sixty-fifth Street (23 How., 256), the same view seems to have been expressed.

But in the last case in this court (Matter of Riverside Park, 61 Barb., 40), the question underwent careful review, with all the for-, mer rulings in consideration, and this court held that such an order of confirmation was appealable under the act of 1854. This last decision, we think, gives its legitimate effect to the statute of 1854. It is attacked by counsel because some of the authorities cited are not precisely analogous in principle or in facts. It is enough, however, to say that it has the cases of The matter of Canal and Walker Streets (ubi supra), and King v. The Mayor (36 N. Y., 190), to uphold it, and no authority in the Court of Appeals has been cited which conflicts with it. The case of King v. The Mayor is directly in point. In that case the report of the commissioners was confirmed at Special Term; an appeal from the order to the General Term was dismissed, and a writ of error was brought to the Court of Appeals from the order of dismissal. The opinion of the court, pronounced by Davies, C. J., in which all the judges concurred, says: “ We have no doubt that the order made in this matter was appealable to the General Term of the Supreme Court, and that the order or judgment which the statute declares to be final and conclusive, is that which the Supreme Court fimally makes in the matter. Such has been the uniform practice in matters of this kind. * * * It was the duty of the General Term, therefore, to have heard the appeal, a/nd not to heme dismissed it. If that order had been brought to this court by appeal, we should have reversed it on this ground alone, upon the authority of the cases of The People v. New York Central Railroad Company (29 N. Y., 418), and Bank of Geneva v. Reynolds (33 id., 160), and other cases in which the rule there laid down has been followed.”

Thus it will be seen that the court not only distinctly held that the order was appealable, but that an order of the General Term dismissing the appeal on the ground of supposed want of power to entertain it, would have been reversed on the ground of error in such dismissal, if the correct practice of an appeal from the order had been pursued; but as a writ of error was not an appropriate remedy, that process was dismissed.

The views expressed by the learned chief justice have additional force, from the fact that he had himself filled the office of corporation counsel, and had had opportunity to become familiar with the practice in such cases. It is urged that these cases are shaken by subsequent decisions of the Court of Appeals, and The Mayor, etc., v. Erben (38 N. Y., 305), and The Matter of the Commissioners of Central Park (50 id, 493), are cited as sustaining that view.

There are several reasons why The Mayor v. Erben is not an authority to that effect: First. No such question was involved in the case, it being an action to recover on overpayment on an award of damages, in which the conclusiveness of the report as confirmed only arose collaterally, and no question whether the appeal could have been taken was in any wise involved. Second. The opinion of Hunt, C. J., published in 38 New York (page 305), was the dissenting opinion, and not that of the court; and the decision of the court was directly contrary to the views of Judge Hunt, and the publication of the opinion as that of the court was a blunder of the reporter. [This correction is made by a foot note in the last edition of the volume, at page 311.] And lastly, the remark of Hunt, C. J., was obviously a hasty one, having in view nothing further than the right to look behind an order of confirmation, in such a case as that under his consideration.

The Matter of the Commissioners of Central Park (50 N. Y., 493), involved nothing but the question whether the Code (as amended), gave an appeal to the Court of Appeals, from an order of the General Term confirming the report of commissioners. From the case, as reported, it would seem that the motion for confirmation was made in the first instance at General Term, as doubtless it may be, unless directed by the court, by some general or special rule, to be heard at Special Term; and the court held that the general provisions of the Code relating to appeals to the Court of Appeals, did not authorize an appeal from an order made under section 178, chapter 86 of the Laws of 1813, and thereby declared to be final and conclusive. As the statute of 1854 had no application whatever to the Court of Appeals, it was neither considered nor cited, nor in any wise referred to by counsel, nor by the court; but the cases above cited (12 N. Y., 406 and 36 id., 182), are cited approvingly, and no suggestion is made that the ruling in those cases, that an appeal would lie from the Special to the General Term of the Supreme Court, is open to animadversion. The case can only be said to hold that the questions embraced in the report of the commissioners, should he finally and conclusively determined by the Supreme Court, without further appeal or right of review or ulterior litigation, and hence cannot in any form be brought into the court of last resort.”

The motion to dismiss the appeal should be denied with ten dollars costs, besides disbursements.”

Brady and Daniels, JJ., concurred.

Motion denied, with ten dollars costs, besides disbursements.