text:
    In the Matter of the Application of James H. Foley to compel the Delivery of the Books, etc., by Isaac Leroy.

      (Supreme Court, Albany Special Term,

      Filed May 1, 1894.)

    1. Town officers—Oath of office—Filing.
    An attempt by a town clerk to file his constitutional oath of office within eight days after it is taken, is a sufficient compliance with the statute.
    3. Office—Books and papers.
    When a person produces, a certificate from the proper election officers, of his election to an office, and gives the necessary undertaking where one is required by law, he is entitled to the delivery of the books and papers pertaining to such office.
    3. Same—Quo warranto.
    A person claiming title to an elective office in opposition to a certificate of election, has not ordinarily the right to an opportunity to establish his title in proceedings of this character, but is compelled to resort to quo warranto.

   Herrick, J.

This is an application pursuant to chapter 179 of the Laws of 1893, to compel the delivery of books, papers, etc., appertaining to a public office.

The claimant James H. Foley, claims to have been elected town ■clerk of the town of Watervliet, at the election held April 9th, 1894, and produces upon this application his own affidavit, and that of a member of the town board of canvassers of said town .showing that Foley was a candidate for town clerk and that he received a majority of the votes cast at such election, and that the board of town canvassers, canvassed said votes, and duly declared James H. Foley elected town clerk of the town of Watervliet.

That the election was held on the 9th day of April, and that such canvass and declaration of the result was made by the town canvassers on the 10th day of April, 1894.

The claimant further shows that he took the constitutional oath of office on the 16th day of April, 1894, and that on the same day he made a demand on the defendant LeRoy, for the delivery to him of the books and papers of the office, and that LeRoy refused to deliver the same to him; the facts thus far stated are undisputed.

There is a controversy between the parties as to the filing of the ■oath of office, the claimant asserting that he entered the office of clerk, who was then engaged in writing, and laid his constitutional oath of office, together with his verified statement of the expenses of his election, upon the table, at the time of and just prior to his presenting to him a written demand for the delivery of the books and. papers; that subsequently and while in possession of said office, he ascertained that LeRoy had not marked said oath as being filed, as town clerk.

The defendant, LeRoy denies this statement of Foley that he deposited such paper on the table in said office, while he, LeRoy, was engaged in writing the truth of the facts appears to be this, from all the affidavits and statements before me, that the claimant Foley, went to the office or place that was used as the town clerk’s office, and then occupied by LeRoy, and demanded possession, which LeRoy refused to give. Foley remained in the office and thereafter while LeRoy was absent from said office, the claimant Foley had a new lock placed upon the door, and has remained in possession thereof, and of many of the books and papers of the office, to the exclusion of LeRoy. That LeRoy claiming to be still town clerk, and with some of the books and documents of the office, has established what he claims to be the town clerk’s office at his own house. And that Foley as town clerk has endorsed his constitutional oath of office, and filed it in the town -clerk’s office now occupied by him,

Whether it was filed in the precise manner that Foley says, is of little consequence, the purpose of it being to indicate his acceptance of the office, and that being manifested by his filing or attempting to file it within eight days after it was taken, seems to me a sufficient compliance with the statute.

This is not a proceeding to try title to office, but a summary proceeding to authorize the delivery of books and papers to the person who upon uncontested facts appears entitled to hold the office in question; and where it appears that a person claiming an elective office, has received the majority of the votes cast at the election at which such _ office was to be filled, and has received a certificate of such election, and has taken the oath of office required by law, such facts are sufficient to entitle him to the necessary books and papers pertaining to such office, and for the granting of an order under the statute referred to. Matter of Bradley, 141 N. Y. 527; 57 St. Rep. 816.

A person claiming title to an elective office in opposition to a certificate of election, is not ordinarily entitled to try to establish such title to office, notwithstanding such certificate of election, in proceedings of this character, but is compelled to resort to his remedy by quo warranto.

But the defendant in these proceedings asserts that his title to office relates back of the election of 1894, and the certificate of the claimant of the result of such election, to the election of 189S, and that as a matter of law, there was no election to be held for the office of town clerk for the town of Watervliet at the election of 1894, and that the ballots cast for such office and the canvass of the same, and declaration of the result, and the certificate of election issued thereupon, were all nugatory, void, and of no effect, and he claims that upon the undisputed facts in the case, his title to such office, and not that of the claimant is clear.

It appears from the papers before me in a prior proceeding, which by the consent of all the parties have been read as part of the papers in the proceeding now pending, that the defendant LeEoy was elected town clerk of the town of Watervliet at the town election held in the spring of 1893, and he claims that by virtue of the statutes then in force he was elected to the office for the term of two years.

He asserts that he was elected on the 11th day of April, 1893, , and that chapter 344 of the Laws of 1892, having become a law ' on the same day, that it made the term for which he was elected two years.

The election was held under the provisions of chapter 22 of the laws of 1858; that act provides for the division of the town of Watervliet into election districts, and provides for holding the town elections by election districts, and further provides that after the canvass of the votes in each election district, that the statement of the result made by them shall be certified to the annual town meeting to be held on the succeeding day, and that the-board of town officers at such annual town meeting shall complete-the canvass by adding all the statements of the several districts-together, and declare the result the same day as though such votes had been polled at such annual town meeting.

The ballots were cast on the 10th day of April, and the statements of the results of the several election districts were made on that day, they were added together at th^ annual town meeting held on the 11th day of April, the following day, and for that, reason the defendant’s contention is, that he was in fact elected upon the 11th day of April, instead of on the 10th ; what is designated as the annual town meeting in the statute having been held on the 11th day of April.

Thé general town law providing that town clerks shall be-elected at the annual town meetings, the defendant’s claim is that, that was the time when he was elected, and the only time the-town clerk can be elected.

That is doubtless true, if the election in question had taken place under the general law in relation to town meetings, and the election of town officers, but as before stated the election in question was held under a special law, and § 20 provides as follows : “Hothing in this act shall be construed so as to alter the time or place of holding the annual town meetings, or doing any business usually done at the annual town meeting with the exception of. the election of town officers as herein provided.”

Thus expressly recognizing and providing that the election of town officers shall be held at a different time from the annual town meeting.

I have already briefly discussed the legal questions here involved, In the Matter of the Application of James H. Foley, 58 St. Rep. 823, to which reference is hereby made, and see no reason to change my views thereon, as then expressed, and it seems to me, that upon the undisposed facts in the case, that the defendant has no-right or title to the. office in question ; nothing exists in this case to cause a departure from what I understand to be the correct rule in these proceedings, that where a person produces a certificate of election, from the proper election officers, of his election to-such office, with proof that he has taken the constitutional oath of office, and filed the same, and given the necessary understanding, where one is required bv law, he is entitled to the delivery to him of the books and papers pertaining to such office. Matter of Bradley, 141 N. Y. 527; 57 St. Rep. 816.

An order will be granted to the claimant as prayed for in his petition.


source: Caselaw Access Project

author: Newburger, J.

license: Public Domain

text:
    Samuel McMillan, App’lt, v. Simon Stern, Resp’t.

      (New York City Court, General Term,

      Tiled April 23, 1894.)

    "Witness—Section 829 op O^de.
    In an action on a note by the indorsee against the maker, conversations between the defendant and the deceased payee are inadmissible on the defendant’s behalf, under § 829 of the Code.

      William G. Me Crea, for app’lt; Guggenhezmer & Uniermyer, for resp’t.
   Newburger, J.

This is an appeal from a judgment in favor •of defendant. This action was on a promissory note made by the defendant to the order of one Stevenson and endorsed to the plaintiff for value before maturity. The answer admits the execution of the note, but denies that the plaintiff was the bona fide holder for value without notice of the defendant’s equities. The answer further alleges by way of set off, that prior to the making of the note, he had entered into a contract of employment with Stevenson, the payee .mentioned therein according to the terms of which Stevenson who was a brewer covenanted to employ the defendant as salesman and collector in his brewery, the terms of which contract the said Stevenson violated by discharging him, and by reason of which breach, the said Stevenson was indebted unto the defendant in an amount greater than the amount of the note. On the trial, defendant was called on his own behalf and was asked as to conversations between himself and Stevenson then deceased, in reference to the note, which was objected to by plaintiff as being contrary to the provisons of § 829 of the Code, and to which exception was duly taken. This evidence was incompetent, and the admission of it by the trial justice was error as the testimony was inadmissible under § 829 of the Code. The respondent claims however that the error was cured when the plaintiff took the stand himself in rebuttal, and testified to the same transactions. A careful examination of the printed case fails to disclose any such testimony. While it is true that the plaintiff did testify in rebuttal, he positively states that he was not , present at the interview referred to by the defendant, and therefore could not testify as to this transaction. (See folios 70-71.) It is claimed by the learned counsel for the respondent that whatever error was committed was cured by the testimony of the plaintiff, and cites the case of Trow v. Shannon, 8 Daly, 239. In that case, the deposition of the decedent, taken during her lifetime was read in evidence, and the court properly held that this cured the defect But in the case at bar, the testimony of the defendant as to conversations with the deceased assignor, stands alone and uhcontradicted, and no stronger argument need be advanced as to the error of the trial justice in its admission than to quote from the brief of the respondent’s counsel, the following quotation from Card v. Card, 39 N. Y. 317. “The intention is that the surviving party to the transaction in issue shall not have the unfair advantage of giving his version of the matter when the other and adverse party to the transaction is prevented by death to contradict or explain it. The judgment appealed from must therefore be reversed and a new trial ordered, with costs to the appellant to abide the event.

All concur. ,.


author: ETewburger, J.

text:
    Edmund L. Mooney et al., Resp’ts, v. John Robinson, App’lt.

      (New York City Court, General Term,

      Filed April 23, 1894.)

    Appeal—Verdict.
    Where the trial judge has properly submitted the only question in dispute to the jury, the verdict will not be disturbed.

      J. Warren Lawton, for app’lt; Mooney & Shipman, forresp’ts.
   ETewburger, J.

This is an action by the plaintiffs for sional services. The answer of the defendant was a general denial. On the trial of the action, the only question raised was. that of employment. The plaintiffs claimed employment by an agent of the defendant and a subsequent ratification by the defendant The trial justice properly submitted the question of retainer to the jury, and they having found for the plaintiff, the judgment must be affirmed with costs. All concur.


author: McCarthy, J.

text:
    Callman Rouse, Resp’t, v. Aaron Goodman, App’lt.

      (New York City Court, General Term,

      Filed April 23, 1894.)

    Supplementary proceedings—Referee.
    A motion to remove a referee in supplementary proceedings on the ground that he occupies same office with plaintiff's attorney is properly denied in the sound discretion of the court, where such fact is disputed, and the judgment debtor appeared at the examination and waived such objection.

      Abraham Levy, for app’lt; William A. Cans, for resp’t.
   McCarthy, J.

This is an appeal by the defendant judgment debtor from an order denying a motion to remove a referee in supplementary proceedings on the ground that that referee has his office in-the same office with the plaintiff’s attorney. On the hearing of the motion this was disputed and it was also asserted and sworn to, that the judgment debtor appeared at the examination and waived this objection. This is also certified to, by the referee. On these facts the justice at special term in the exercise of his sound discretion denied the motion to remove. The .facts are sufficient to justify, this determination and there being no abuse of discretion order must be affirmed with costs. All concur.


author: Conlan, J.

text:
    Henry Schwabeland et at., Resp’ts, v. Herman Buchler et al., App’lts.

      (New York City Court, General Term,

      Filed April 23, 1894.)

    1. Contract—Rescission.
    Where the vendee, as an inducement to a sale, represents to the vendor’s clerk that he owes no one except the vendor and another party, the act of confessing judgments for other indebtedness then existing furnishes an available reason for rescission and an immediate right of action.
    2. Replevin—Levy.
    Where, in an action of replevin by the vendor, it appears that the sheriff is in possession of the property before rescission of sale, he must, in order to justify, show that he acquired the right to possession by either attachment or execution.
    Appeal from judgment entered on verdict for plaintiff and from an order denying new trial.

      Herman M Both, for app’lts; Foster, Hotaling & Klenke, for resp’ts.
   Conlan, J.

This is an action of replevin originally brought against John J. Gorman, as sheriff of the city and county of New York, and the present defendants were afterwards substituted, they being indemnitors. The plaintiff seeks to recover for forty-six tubs of butter, one hundred and seventy-five cases of eggs and four boxes of cigars alleged to have been fraudulently obtained by one Krieger from them in the month of April, 1892, while the goods in question were in possession of Krieger they were taken by the sheriff as alleged in the answer on execution against Krieger. The goods were demanded of the sheriff and refused, and this action followed April 22, 1892. It appears from the evidence that in January, 1892, Krieger represented to the plaintiffs that he was a person of means and had property which he described to the plaintiffs’ credit clerk, Henry Schlebohm, with whom he had the conversation that he was perfectly reliable and that all the parties he owned anything to,were the plaintiffs and the Glimm Brothers; that he had money in the State Bank and $2,000 in the savings bank which he was thinking of investing in real estate. The witness says, the first representations were made about the 10th or 15th of January and the last about March 26, 1892, and relying on these representations he gave instructions to the salesman to sell to Krieger, and he afterwards obtained goods from the plaintiffs to the amount of $1,212.60 in April on a credit of ten days. Krieger, in January, 1892 owed the plaintiffs $700, and in March, $285, of which $200 was paid by check in the latter month, leaving a balance of $85 due plaintiffs at the time the credit of $1,212.60 was obtained. It appears further that Krieger confessed judgment on the 22d of April, 1892, in favor of Buchler, one of the defendants, for the sum of $905, and on the same day lie also confessed judgment in favor of one Schneifer for the sum of $760 within three days after he had obtained a considerable amount of goods from the plaintiffs, upon the representations that he had made to their credit clerk. It is admitted at folios 59 and 60 that the only question involved is one of fraud and false-representations. Upon the trial the defendants decided not to put in any evidence and asked to go before the jury on the question of fraud, which request was granted. We are unable to find any reason in the rulings of the trial judge which would call for a reversal of the judgment. The plaintiffs appear to us to have made -out their case by clear proof of fraudulent representations on the part of Krieger, whereby they were induced to part with their property in April, 1892, and the defendants offer no evidence in explanation of the conduct of Krieger in making the representations and obtaining this credit. Krieger was not called as a witness nor his absence in any way accounted for, and the introduction in evidence of the two judgments against Krieger, confessed April 22, 1892, is a sufficient refutation of the truth of his statements to the plaintiffs’ credit clerk and upon which the plaintiffs relied in parting with their property. The act' of confession was to the plaintiffs an available reason for rescission of the contract of sale and an immediate right of action; as the consideration for the judgments appear to have been an indebtedness other than to the plaintiffs or Grlimm existing at the time of the representations by Krieger to the plaintiffs’ credit clerk and not disclosed but continued and very materially added to, down to and during the time of the purchases made by Krieger of the plaintiffs in April, 1892. This case is distinguished from that of Wise v. Grant et al., 140 N. Y. 593; 56 St. Rep. 496. In that case it was alleged and proven that the sheriff levied upon the goods under an attachment against the fraudulent vendee before the sale was rescinded, and there was notice before rescission. And the court held that replevin would not lie because the fraudulent vendee had a leviable interest which had been attached before rescission. But there was no proof whatever by the defendants as to how the sheriff had acquired possession of the property from Krieger, and it was not proven that he acquired the right to possession by either attachment or execution; one of which conditions must necessarily appear—for all that appears in the case he might have been a naked trespasser acting without the warrant of any legal authority. The allegation in the answer that he took the property by virtue of certain executions proves nothing. The sheriff was in possession without notice to the plaintiffs as to how he became so, and the demand upon him was sufficient for the purposes of replevin. The motion for nonsuit was properly denied.

Ko errors were committed on the trial, and the judgment should be affirmed, with costs

All concur.


text:
    Skinner Engine Company, Resp’t, v. Old Staten Island Dyeing Establishment, App’lt.

      (New York City Court, General Term,

      Filed April 23, 1894.)

    Bills and notes—Equities between obiginal pasties.
    The acceptance of a note in full and complete discharge of an antecedent debt, before maturity and without notice, cuts off all defenses and claims in favor of the maker against the payee.

      Burrill, ZabriskÁe & Burrill, for app’lt; Ewing, Whiihman & Ewing, for resp’t.
   McCarthy, J.

We have examined very carefully the authorities cited by the appellants and think that many of the distinctions drawn, are too fine and not borne out by the evidence in this case. The evidence is clear, and snfficient that the plaintiff accepted this note in suit in full and complete discharge of the antecedent debt and thus became a bona fide holder for value before maturity. This being so, cuts off any defenses or claims which the defendant might have against Bamhurst unless evidence of knowledge or notice thereof to plaintiff is shown. This has not been done and where the evidence is unimpeached and not contradicted, it is the duty of the trial justice to direct a verdict for the plaintiff. These facts in our opinion appear in this case and, finding no error in the rulings, judgment must be affirmed with costs.

All concur.


author: Eewburger, J.

text:
    Rosalie Wasserberg, Resp’t, v. The Cunard Steamship Company, Limited, Appl’t.

      (New York City Court, General Term,

      Filed April 23, 1894.)

    Carrier—Exemption.
    Where, under a provision in a ticket limiting the recovery for loss of baggage to a specified sum unless the additional value was declared, the passenger pays, on demand of the company’s agent, extra freight therefor, such provision will not limit the recovery.

      Owen, Gray & Sturges, for app’lt; Max Altmayer, for resp't.
   Eewburger, J.

This action was brought to recover the value of certain baggage delivered to defendant at Liverpool for transportation to Mew York, and claimed to have been lost. The answer of the defendant alleges that its liability, if any, for the loss of baggage is limited to five pounds sterling by reason that any value in excess of that sum was not declared. From a judgment entered upon the verdict of a jury therein, and from an order denying a motion for a new trial, this appeal is taken. The plaintiff’s testimony is that the defendant’s agent demanded from the plaintiff $5.00 for extra freight for the package, the contents of which had been disclosed to the agent, and that she paid the same and therefore the plaintiff is not limited in her recovery by the provisions in the ticket. Glovinsky v. Cunard Steamship Co., 56 St. Rep. 407 ; 26 N. Y. Supp. 751. The judgment must therefore be affirmed with costs.

All concur.


text:
    Robert Williamson, Resp’t, v. Gustav T. Lawrence et al., App’lts.

      (New York City Court, General Term,

      Filed April 23, 1894.)

      1. Replevin—When maintainable.
    In order to maintain an action of replevin against a sheriff for seizing property by virtue of a bill of sale, the true owner must be in actual or constructive possession, or have the right to reduce it to his immediate possession.
    3. Same—Mortgage sale.

      A. person to whom property is struck down on a chattel mortgage sale, has, upon making an accepted deposit, sufficient possession for this, purpose.
    3. Same—Sheriff's power under bill of sale.
    In such case, the power of the sheriff, in acting under bill of sale, is dependent solely upon the right of the vendee, named therein.
    4. Contract—Intoxication.
    An instrument, procured by fraud, trick or artifice," or executed by a party while in such a state of intoxication as to be incapable of consenting or contracting, is invalid.
    Appeal from judgment entered an verdict for plaintiff and from order denying new trial.

      IT. T. Tompkins, for app’lts; Charles Sleekier, for resp’t.
   Conlan, J.

This action was brought originally against the sheriff of the city and county of New York to recover the possession of two horses, claimed to have been purchased at a sale under foreclosure of a chattel mortgage executed by one Frederickson to one Schumacher to secure the payment of seven hundred and fifty dollars which was in settlement of a co-partnership between the mortgagor and the mortgagee. The horses were purchased by plaintiff on January 20th, 1893, at public auction for $158.00, and the plaintiff paid a deposit of $25, to !the auctioneer who received the same; this was just ten o’clock in the morning, the plaintiff went away, as he says, for the balance of the purchase money, returning about 10.30 with the money, but was unable to get possession of the horses, because as he learned they were in the possession of the sheriff. The sale to th'e plaintiff is also" testified to by the auctioneer Schwab who put the horses in the stable, awaiting plaintiff’s return with the balance of the purchase money, but while he was gone, they were seized by the sheriff. The sale was advertised for half past nine and appears to have been honestly and fairly conducted. The evidence discloses a gross fraud and imposition practiced upon Schumacher, 'the mortgagee, whereby he was rendered, as he says unconscious, and while in that condition, he was made to sign certain papers,, one purporting to sell the horses in question and other property of the value of $750, to the defendant Lawrence for $350, the consideration being represented by a check for that amount made by a third party named Wells and which check Schumacher found in his pocket the next morning, but says he does not know how the same came into his possession. Another to release Frederickson from all indebtedness to him growing out of the partnership referred to, and a third. authorizing said Wells to settle all fees and expenses incident to the sale, conditioned that Schumacher return him the amount as paid before 9.30 A. M. of January 11th, 1893, otherwise to be deducted from the amount of the check. These three papers all bear date January 10th, 1893. Schumacher testifies that he has no recollection of signing these papers; that they were obtained from him in the early part of January at a saloon on the corner of Watts and Greenwich streets in this city. That he went to the saloon in company with four men, two of whom were Lawrence and Wells, the others he did not know ; that he drank three glasses of beer, leaving a fourth untouched, while he went to a closet; that he had his senses about him and knew what he was doing; when he returned to the party he drank the fourth glass of beer, when as he says at fol. 56 “ I was gone, I became stupefied as though I was drunk; I became drowsy and sleepy.” Other witnesses testified to his condition when he entered the saloon, and when he was taken to his home after the transaction had been completed. Mr. Schnepel, the saloon-keeper, is not able to fix the date, but says Schumacher was sober when he came to the place, that the parties Schumacher, Lawrence and Wells went into "a small private i office and that Schumacher, remained after the others went out and when he saw Schumacher about fifteen minutes afterward, he acted strange, as though something was the matter with him, something wrong, stupid. Conrad Tulken, another witness for the plaintiff testifies that when he saw Schumacher at the saloon between five and seven o’clock in the evening of the occasion, Schumacher was sitting on top of a chair and having his head over a little table in the office; that his head was lying on the table, that he took him home; that he had to assist him; that he was blabbing, but could not understand what he said ; that he carried him upstairs, removed his shoes and left him with his wife. It is needless to say that the defendants’ evidence differs from that detailed above, but comment upon this evidence seems to be unnecessary. The jury considered it and their verdict was warranted from the evidence and fully sustains the plaintiff’s theory. What follows is but the attempt to carry into effect the bill of sale and release thus obtained. The sheriff took possession of the property in question on January 20th after the purchase by the plaintiff at the auction sale. The right to maintain this action by the plaintiff against the sheriff is given by § 1690 of the Code of Civil Procedure and as construed in Wise et al. v. Grant, 140 N. Y. 593; 56 St. Rep. 496, requires only that the true owner shall be in actual or constructive possession or have the right to reduce it to his immediate possession. The plaintiff became the owner of the horses when they were struck down to him and his deposit of $25 accepted by the seller; he then had the right to the possession of the property; that he did not take possession for reasons of convenience of his own cannot avail the defendants here, so long as his right to the immediate possession remained. Lawrence the defendant acquired no title from Schumacher by re'ason of the pretended bill of sale of January 10th, 1893, for it is plainly evident that Schumacher was not in a condition of mind or understanding to have entered into any such negotiations or to have effected any such transfer. The bill of sale thus obtained had no binding effect on him and conveyed no title to Lawrence for it was the outcome of an imposition practiced upon Schumacher at a time when he was without understanding. In Page v. Krekey, 137 N. Y. 307; 50 St. Rep. 650, the court says, “ It has been uniformly held that an instrument procured by fraud, trick or artifice, or executed by a party in such a state of intoxication, as to be incapable of consenting or contracting, is invalid as between the parties to the transaction." The sheriff’s right to possession depended solely upon Lawrence’s right to the property and to its possession and he could not take what Lawrence could not claim, and it follows, as a matter of course that the property was properly taken from the sheriff and the verdict that they were the property of the plaintiff was properly rendered. JSTo errors were committed on the trial, and the charge was eminently fair to all parties. For the reasons above stated, we are of the opinion that the judgment should be affirmed with costs. All concur.


author: Per Curiam.

text:
    Lewis Kemmelhor, Resp’t, v. Isaac Cohen, App’lt.

      (New York Common Pleas, General Term,

      Filed April 26, 1894.)

      Appeal—Finding.

    Where the evidence is sufficient to warrant the justice in his finding, the judgment will he affirmed on appeal.
    Appeal from judgment of the fourth judicial district of New York.

      Otto Irving Wise, for app’lt; Douglass & M., for resp’t.
   Per Curiam.

The burden of showing error is on the appellant. It does not appear that the motion to amend the complaint was granted, or that the judgment was not rendered on the original cause of action. There was evidence sufficient to warrant the justice in finding as he did in that cause of action. The judgment should therefore be affirmed with costs.


author: Pryor, J. Bischoff, J.

text:
    Robert G. Irving, Resp’t, v. Joseph A. Britton, App’lt.

      (New York Common Pleas, General Term,

      Filed May, 1894.)

    1. Wagers—Lottery—Pool-selling.
    Chap. 479 of 1887, so far as it purports to authorize pool-selling at a horse race, is void for repugnancy to § 10, art. 1 of state Constitution.
    3. Same.
    A pool on a horse race is a lottery within the constitutional prohibition.
    3. Same—Bookmaking.
    Bookmaking on a horse race is still illegal, under the provisions of the Revised Statutes against betting and gaming.
    Appeal from judgment of general term, city court, affirming judgment on trial by the court. Action on a note given for an interest in a pool and for a bet with a bookmaker at a horse race. The opinion states the case.

      Howe & Hummel, for app’lt; Leroy B. Orane and JEchoard V. B. Kissam, for resp’t.
   Pryor, J.

The cause of action admitted by stipulation of the parties is a transaction in pool selling and bookmaking on a horse race; and if such pool selling and bookmaking be illegal, the plaintiff is barred of recovery by the immemorial and salutary maxim i that ex turpi causa non oritur actio. Gray v. Hook, 4 N. Y. 449, 455; Hull v. Ruggles, 56 N. Y. 424. By §§ 351 and 352 of the Penal Code, pool selling and bookmaking on a horse race are denounced as crimes, and punished by fine and imprisonment. But plaintiff contends that the pool selling and bookmaking exhibited in the case are authorized by the act of 1887, commonly called the Ives Pool Bill; and if so, then, beyond question, the action is well brought. That the effect of the Ives bill, if a valid enactment, is to legalize such pool selling is inevitable upon the provisions of the statute and is settled by authoritative adjudication. Brennan v. Brighton Beach Racing Ass’n, 56 Hun, 188; 30 St. Rep. 406; Bishop on Written Laws, § 104a. Conceding so much, the defendant answers that the Ives Bill is a nullity because repugnant to section 10, article I of the Constitution, which says: “ Nor shall any lottery hereafter be authorized or any sale of lottery tickets allowed within this state.” Whether within the meaning of this prohibition, pool selling and bookmaking on horse races be lotteries, is the precise point for adjudication.

By incorporating the interdict of lotteries in the constitution and associating it with the fundamental guarantees of life, liberty and property, the people of New York signalize, by the most emphatic manifestation, their sense of the enormity of the evil they seek to suppress. That evil consists in the temptation and facilities afforded by the lottery for the indulgence of the passion of gambl- ■ ing—an indulgence, by all experience, as inimical to the well being . of the state as of the individual. Gambling is the mischief against which the prohibition of the Constitution is levelled; and it is “ the office of the judge to malee such construction as will suppress the mischief and advance the remedy, and to suppress all evasions for the continuance of the mischief.” Magdalen College Case, 6 Coke, 125-134; Wilkinson v. Gill, 74 N. Y. 63, 67. The language of the Constitution is generic, not specific; not one species of lottery, but all lotteries are proscribed. What, then, in the sense of this provision of the fundamental law, is a lottery?

In the jurisprudence of New York, at least, the import of the term is not open to doubt or dispute, for its definition is established as well by legislation as by the adjudication of the courts. “A lottery is a scheme for the distribution of property by chance among persons who have paid or agreed to pay a valuable consideration for the chance, whether called a lottery, raffle or gift enterprise, or by some other name.” Penal Code, § 323 ; People v. Noelke, 94 N. Y. 137. “ Where a pecuniary consideration is paid, and it is to be determined by lot or chance, according to the scheme held out to the public, wliat and how much he who pays the money is to receive for it—that is a lottery.” Hull v. Ruggles, 56 N. Y. 424; Kohn v. Koehler, 96 N. Y. 367. Accordingly, in Governors, etc., v. The Amer. Art Union, 7 N. Y. 228, it was adjudged that “ an annual distribution by lot among the members of an art union of works of art purchased by their subscriptions is a lottery within the meaning of the Constitution.” In Hull v. Ruggles, supra, it was so held of a scheme of selling packages of candy, in some of which were tickets entitling to a prize and in others not. So in Negley v. Devlin, 12 Abb. N. S. 210, of a ticket entitling to admission to a concert, “ and to whatever gift might be awarded to its number.” So, in Wilkinson v. Gill, 74 N. Y. 63, of “ any game or device of chance in the nature of a lottery,” the chief judge saying that “ the courts have uniformly looked beyond the mere form of the transaction and sought out and suppressed the substance itself.” Equally illustrative of the principle of a lottery are the cases wherein the transaction was adjudged not to be a lottery. Thus, in People v. Gillson, 109 N. Y. 389, 402 ; 16 St. Rep. 185, the scheme was held to be no lottery because not involving “ the slightest element of chance.” Similarly, in Kohn v. Koehler, 96 N. Y. 362, 368, the scheme was declared not a lottery, because the property “ was not raffled for or distributed 'by lot or chance. From all the cases these are collected as the constitutent elements of a lottery; namely, first, an expedient held out to the public: which, secondly, for a pecuniary consideration, offers the possibility and promise of a gain, not the product of the outlay, but contingent merely upon a designated chance event. As the name imports , the lot or chance is the essential property of the unlawful enterprise, and the allurements to the public the incident that aggravates its mischievous quality. Being a species of gambling, so extensive in its influence and so fatal in its effect, the people by provision in the organic law of the government, forbid its presence or operation within the limits of the state.

The method of pool selling, found by the trial court, is as follows:

“ A list of horses, as competitors in each of the said races, was placed on an indicator in open view, and to each horse was attached a number, a clear space being reserved for the name of each horse with a separate dial attached, which showed the number of times the horse had been chosen; and the defendant, for the purpose of investing money on certain horses in said races, purchased a card or receipt, commonly called a ticket, stating at the time the horse upon which he purchased the card or ticket, which ticket had on its face a number which corresponded to the number attached to the name of the horse on the indicator, the number being used merely to facilitate business and having no other significance. When the purchase had been made, the pool indicated the whole number of cards, receipts or tickets sold or taken, shown upon an indicator placed in the open view, and which was done from time to time as each card, receipt or ticket was purchased or taken. When the pool was closed, the total amount invested on the different horses, or the amount of the different cards or tickets purchased or taken on the different horses, was added together and shown on a different dial, in the open view, called the total, and the total constituted the pool. The total, less the commission of the person conducting the pool, was divided in equal sums and paid to the persons having selected cards, tickets or receipts on the winning horse, upon presentation of their cards, tickets or receipts. Any number of persons acting separately, could choose any horse in the race, and the number of cards, tickets or receipts sold or taken on each horse was unlimited. Any person could buy or take as many cards, receipts or tickets on each horse or as many horses in the race as he chose.”

Tested by either criterion, whether by the definition of tne courts or of the statute, the process set forth is in every essential a lottery. By it, “ for a pecuniary consideration, is determined by lot or chance, according to a scheme held out to the public, what and how much he who pays the money is to have for it.” Hull v. Ruggles, 56 N. Y 427. And it is “ a scheme for the distribution •of property by chance among persons who have paid or agreed to pay a valuable consideration for the chance.” Penal Code § 323. That the event of a race is contingently dependent upon chance is a self evident proposition. 1 Edmonds Stats, at Large, 614, § 8. Indeed were the result susceptible of infallible anticipation, betting on a horse race would be as senseless and futile as upon the rising of the sun or the successions of the seasons. It is the element of chance and the uncertainty of the event alone that stimulate and support the wagers of the competing bettors. True, fraud may make the result a foregone conclusion ; but, then, fraud is a circumstance in the calculation of chances by those not in the swindle, and fraud of itself would expose the transaction, though legal, to the condemnation of the law.

The decision of the learned trial judge upon the legality of pool selling appears to have been affected by the impression that the Ives Bill determines it to be “ in the line of public welfare.” And yet that very act denounces pool selling, at any other place or time than on a race course and race day, as a felony, and punishes it by confinement in the state prison. How the same thing can be a legal and laudable pastime at Sheepshead on a race day' and still be an infamous offense at all other times and at all other places we own our inability to understand. The legislature may be criticised for inconsistency, but is not amenable to the malediction imprecated upon “them that call evil good.”

Not by principle only, but by authority as well we are sustained in the conclusion that pool selling is a lottery. In State v. Lovell, 10 Vroom, 458, the point was expressly adjudicated by a tribunal eminent for learning and ability; and at a special term of our own supreme court the same result was reached by Mr. Justice McLennan, in an argument of convincing cogency. Reilly v. Gray, nnreported; see McLanahan v. Mott, 73 Hun, 131; 56 St. Rep., 85; Horner v. United States, 147 U. S. 449 ; United States v. Zeigler, 30 Fed. Rep. 499 ; Stale v. Clark, 33 N.Y. 329; Tollet v. Thomas, L. R., 6 Q. B. 514; United States v. Wallis, 58 Fed. Rep. 942. In Brennan v. Brighton Beach Ass'n, supra, the constitutionality of the Ives Bill was not suggested for discussion or decision; and hence, the case is not to be accepted as implying a recognition of the validity of the statute. The conclusion is that the statute, chapter 479, Laws of 1887, in so far as it purports to authorize pool selling, is repugnant to the prohibition of lotteries in section 10, article I of the Constitution, and is void and of no effect

Whether the act be equally inoperative to legalize bookmaking is a question presented and argued by counsel, but which requires no decision ; since, in any event the judgment must be reversed. The consideration for the note in suit was partly an interest in the pool and partly a bet with the bookmaker, but how much of either is not apparent. The case, then, is of a contract avoided by partial illegality in an entire and indivisible consideration. The Saratoga County Nat. Bk., etc. v. King, 44 N. Y. 87. We should not forbear to remark, however that as the act of 1887 does not purport to validate bookmaking, but only exempts it from the operation of §§ 351-352 of the Penal Code, the illegality of it is obvious and inevitable from the provisions of the Revised Statutes against betting and gaming. 1 Edmonds Stats, at Large, 614, § 8. The specific criminality of the transaction may be effaced, but it remains unlawful; and-all contracts implicated with it are void by the express terms of the statute.

Judgment reversed, and judgment directed for the defendant, dismissing the complaint upon the merits, with the costs of this appeal and of the court below.

Daly, C. J., concurs.

Bischoff, J.

(concurring in result) Were I agreed with my brethren that the so called Ives Pool Law,” eh. 479, L. 1887, purports to legalize pool selling, I should unhesitatingly concur that the act contravenes the constitutional interdiction of the authorization of lotteries by the legislature of this state. Const. 1821, art VII, § 11; Const. 1846, art. I, § 10. That a pool upon the result of a horse race is a lottery is apparent from the fact that it is but one of many devices for the venturing or hazarding of a smaller sum for the chance of obtaining a greater ; and that such a pool is a lottery was judicially determined in State v. Lovell, 39 N. J. L., 458. (See, also, as to what constitutes a lottery, note in 16 Am. St. R., 42, containing an elaborate review of adjudged cases.) I am, however, of the opinion that an intention to legalize pool selling is not the inevitable effect of the apt in question, nevertheless, I concur that the judgment appealed from must be reversed because the act provides no justification therefor. The facts in this case are all admitted, and it is with the conclusions of law that we are concerned. These facts are substantially that the consideration for the note in suit rested upon the result of gaming transactions, pools formed as a method for betting upon the results of horse races; that the races Were held under the auspices of a duly incorporated association for improving the breed of' horses, and were run upon days legalized for such purposes by the act alluded to ; that these pools were formed at such times and at the places where the races took place; in fact, that the transactions in question came within the provisions of the act in its essential particulars. The sole question presented is whether, in view of these facts, payment of the note in suit may or may not be enforced in law.

The “ Ives Pool Law ” (ch. 479, L. 1887, § 4) provides that races may be conducted upon any race track of an incorporated association for not more than thirty days in each year; that §§ 351 and 352 of the Penal Code shall not apply to such tracks during the number of days during which races are permitted; that racing and pool selling shall be confined to the tracks where the races take place, and the days of such races. The effect, however, of these provisions is merely to remove the penal inhibition against the public placing and recording of bets, as contained in §§ 351 and 352 of the Penal Code, under certain conditions and restrictions. The act in effect declares that the sections of the Penal Code shall not be operative where compliance with the precribed conditions shall exist, and the regulation as to the lime and place for the selling of pools is obviously but one of the restrictions in contemplation of which the operation of the penal laws is suspended. The result is precisely the same as if the sections of the Penal Code referred to had originally exempted Eool selling at the times and places mentioned in the “ Ives Pool aw ” from their operation. So far only do the provisions of the “ Ives Pool Law ’’extend, and in no way do they affect the civil aspect of the gaming contract thus entered into. By the organic law, as well as by the statutory enactment, the contract is civilly void and unenforceable. Revised Statutes, vol. Ill, p. 1962, § 8,, Article Third, Title VIII, Chapter XX, Banks Bros,’ 7th ed. The facts that provision for the infliction of punishment or the making of the contract is omitted, or that by force of some special statute the contract may be made with penal impunity, do not alter the rule. Gibbons v. Gouverneur, 1 Denio, 170 ; Buchman v. Pitcher, 1 N. Y. 392. That a common law or statutory right or offense, when subsequently made the subject of penal enforcement or restraint, is not effected by the punitory enactment in the absence of a clear intent, is a well settled proposition. Renwick v. Morris, 3 Hill, 621; Tremain v. Richardson, 68 N. Y. 617 ; Candee v. Haywood, 37 N. Y. 653; Colden v. Eldred, 15 Johns. 220; Platt v. Sherry, 7 Wend. 238 ; Seidmore v. Smith, 13 Johns. 322. In such a case the subsequent regulation is cumulative upon priorremedy, and the repeal or suspension of the cumulative provision is of no more effect than was its enactment.

Familiar analogies to the principle governing this case are too numerous to call for mention. The “debt of honor” of popular acceptance does not derive its quality from a criminal inception of the obligation, but from the civil impossibility of its enforcement. The card player may not infringe a penal law in his successful prosecution of a fair game, but with his recovery of the stakes the courts will not be concerned. To hold that the “ Ives Pool Law,” by the force of its provisions regulating the time and place for the selling of pools on horse races, purported to legalize contract obligations arising from, the sales would entail an unauthorized application of the rules governing statutory construction. This would intend, so far, a repeal by implication of the provisions of the Revised Statutes relating to gaming contracts, and such implication must, therefore, be unavoidable, in order that it may obtain. Hawkins v. Mayor, 64 N. Y. 188 ; Mark et al. v. State, 97 N. Y. 578; People v. Palmer, 52 N Y. 83; People v. Mallory, 2 Sup. Ct. T. & C., 76. An implied repeal only then results when the necessary operation of the latter enactment cannot be harmonized with the terms and effect of an earlier act and extends only to the repugnance. Sutherland on Stat. Constr., § 138.

The “ Iv'es Pool Law ” relates, as above shown, to the penal aspect of the acts in question, and the repeal of the statute which takes av^ay the civil remedies for the enforcement of a gaining debt would be an unauthorized rather than a necessary result in solving its meaning. Matter of Curser, 89 N. Y. 401. Upon a reasonable construction, therefore, both these statutes may be given their proper effect, and in harmony in no way results. People v. Palmer, supra; People ex rel. Woods v. Crissey, 91 N. Y. 616. The case of Brennan v. Brighton Beach Ass'n, 56 Hun, 188; 30 St. Rep. 406, has not been overlooked, but I am unable to follow the ruling there made after ''careful consideration such as the high character of the court announcing the decision calls for.

With reference to any contention that the “Ives Pool Law ” is in contravention of the constitutional interdiction of the authorization, by the legislature, of lotteries or the sale of lottery tickets, it is to be observed that every presumption is in favor of the constitutionality of legislative enactments, and every act of the legislature is to be sustained rather than defeated, unless the language employed plainly precludes every reasonable construction other than that it was intended by the act to infract the organic law. People v. Briggs, 50 N. Y. 553. It is not the province of the courts to nullify the legislative will only because a particular law may be of vicious tendencies, while every constitutional provision remains inviolate. Whether a particular provision is wise or unwise it is the particular province of the legislature to decide. If, therefore, the constitutionality of any act is to be successfully challenged, not only must the provisions of the act be in apparent conflict with some constitutional provision which restricts or prohibits the exercise of legislative- authority in the particular case, People ex rel. Hatfield v. Comstock, 78 N. Y. 356, but every reasonable construction also, of which the language is susceptible, must lead to the same end. Sutherland on Stat. Constr., § 331; Sweet v. Cily of Syracuse, 129 N. Y. 316 ; 38 St. Rep. 933. Hence, if the languages is susceptible of two constructions, alike reasonable, though conflicting, that construction is to be preferred which will give effect to the act though the other may at first view appear to be a more natura,! interpretation of the language. Sutherland on Stat. Constp, § 332. Applying these canons of construction to the “Ives Pool Law;,” I am of- the opinion that it was the intention of the legislature to vpth draw -existing penal provisions so far as they might apply to pool selling at the times and places specified in the act, and not to legalize such sales. The act, in my opinion, tolerated, but did not authorize, pool selling. The constitutional interdiction against lotteries and the sale of lottery tickets does not require the legislature to prescribe punitory redress for the conduct of lotteries or sale of lottery tickets. The matter therefore rested in legislative discretion. The suspension or repeal, or partial repeal, therefore, of existing penal provisions did not contravene any provision of the Constitution, while the suspension, or repeal, and the remaining penal provisions were generally applicable to every part of the state.

My conclusion is that, upon the admitted facts, the recovery below was unauthorized, and that the judgments of the general and trial terms of the court below should be reversed and judgment directed for the defendant for dismissal of the complaint upon the merits, with the costs of this appeal and of the court below.


author: O'Brien, J. Van Brunt, P. J.

text:
    The People, Pl’ff, v. St. Nicholas Bank of New York et al., Def’ts. Hugh J. Grant. Temporary Receiver, App’lt.

      (Supreme Court, General Term, First Department,

      Filed March 16, 1894.)

      1. Receiver—Temporary—Instructions prom court.
    Where a depositor in an insolvent hank is indebted to the hank on a note secured by collaterals, a temporary receiver cannot allow the deposit as a set oil against the note without the authorization of the court.
    3. Same.
    He is entitled to instructions from the court, on the application of the depositor for the surrender of the collaterals upon payment of the balance due on the note after deducting the amount of the deposits.
    Appeal from an order denying the application of the temporary receiver for instructions.

      John M. Boioers, for app’lt; Theodore JS. Hancock, Atty. Gen., for the People.
   O'Brien, J.

On the 26th of December, 1893, the applicant was appointed temporary receiver of the St. Nicholas Bank, in an action brought upon the relation of the attorney general, pursuant to §§ 1785 and 1786 of the Code of Civil Procedure, to dissolve the corporation because of its insolvency. At this date one Charles Kurzman had to his credit in the bank §1,145.14, and he was indebted to it upon three demand loans amounting to §3,000, which were secured by a pledge of collaterals. Kurzman notified the receiver that he was prepared to pay off the demand loans, upon the receiver applying such balance as an off-set. Thereupon, the receiver, being in doubt as to the propriety of granting such request, applied to this court for instructions as to whether he should make such application, and surrender the securities.

The court, while stating that a depositor who was indebted to the bank had a right to have the amount of his deposit offset against his debt, denied the application of the receiver, and refused to instruct him in the premises, for the reason, as stated in the opinion, that “ there is no necessity for the receiver to make a special application to the court, in such cases.” In this we think the learned judge overlooked the express provisions of the Code. As some question has arisen, and the practice has not been definitely announced, we think it proper to refer at length to the sections of the Code which we regard as controlling. Preliminary thereto, it is to be remembered that the distinction between temporary and permanent receivers is a very old one, and the reason for it becomes apparent, when we consider the duties which each has to perform, and the powers essential and necessarily given to-each to enable him to perform such duties. We do not deem it-necessary to examine at length the powers and duties of a temporary and permanent receiver, respectively, prior to the Code, for the reason that the subject is fully discussed in the case of Herring v. N. Y. L. E. & W. Railroad Co., 105 N. Y. 340; 7 St. Rep. 547, and because the Code itself is explicit as to what are the duties and powers of such officers. Thus, by § 1788, it is provided that, in the action brought by the attorney general, the court—as was done in this case—may appoint a receiver, who, by the express language of the section—

“ Is a temporary receiver until final judgment is entered. A temporary receiver has power to collect and receive the debts, demands and other property of the corporation, to preserve the property and the proceeds of the debts and demands collected, to sell or otherwise dispose of the property, as directed by the court. * * * Unless additional powers are specially conferred upon him, as prescribed in the next section, a temporary receiver has only the powers specified in this section and those which are incidental to the exercise thereof.”

§ 1789 provides as follows:

“ A temporary receiver * * * is in all respects subject to-the control of the court. In addition to the powers conferred upon him (as temporary receiver), the court may, by the order or interlocutory judgment appointing him, or by an order subsequently made in the action, or by the final judgment, confer upon him the powers and authority and subject him to the duties and liabilities of a permanent receiver, or so much thereof as it thinks-proper, except that he shall not make any distribution among the creditors or stockholders before final judgment, unless he is specially directed so to do by the court.”

From a reading of these sections, we think it clear that the receiver, without the instructions and order of the court, would have no power to surrender the collaterals which were pledged as security for the loan, and permit the offset of the amount on deposit. Hence, the necessity, in a proper case, of applying to the court. As correctly argued by counsel for the receiver, the latter is an officer and representative of the court. He is at all times entitled to, and must receive, the advice and protection of the court. The provisions of the Code referred to, moreover, limit his powers, and expressly confer upon the court the duty of enlarging them from time to time as the exigencies of the situation may require. As said, therefore, by Danforth, J., People v. Security Life Ins. and Annuity Co., 79 N. Y. 270:

“ Since the receiver is an officer, or, as he is commonly called, the ‘ hand,’ of the court, it would be singular if he could not at any time go to it with his complaint, or for instructions, in regard to matters touching the fund placed in his custody.”

It will be seen, moreover, that it was the view of the lawmakers that the assets of the corporation could be more wisely administered by not conferring general powers upon a temporary receiver, but by practically placing the corporation. in the hands of the court, and conferring upon the court the right to enlarge the powers of, or give additional authority to, the temporary receiver, when, in a given case, it was shown to be necessary for the wise •and proper administration of the affairs of such insolvent corporation. The theory of the law providing for a temporary receiver is that until the final judgment is entered in the action, declaring the corporation to be insolvent,and that its affairs are to be wound up, and its assets distributed, the temporary receiver may have to be discharged, and that he should only interfere with the assets, pending the litigation, just so far as is necessary to preserve them, and that he should not be allowed to sell or dispose of them, except from necessity, and then upon application to the court. With respect to the present application, the law was correctly laid down by the court, because the right of set off exists between the bank and its depositor upon cross demands, where both are due. Here, no demand having been made by the depositor, his claim was not due, unless such demand is excused by the insolvency of the bank. Now, it is not admitted or proved, in the case at bar, that the St. Nicholas Bank is or was insolvent. It has yet to be determined, and the temporary receiver lias nothing to say on that subject, nor ought he be called upon to admit or deny that allegation. Yet it is only in the case of proved or admitted insolvency that the person liable on the call loan can set off his deposit, where he had not demanded payment thereof. The denial of the motion of the receiver upon the ground that there was no necessity for any instructions was, in effect, a denial of his right, in a proper case, to allow a set off. Even though we assume that there was no doubt as to the right, upon the facts stated, of the depositor to the set off, the temporary receiver, being without power, could not allow it without the authorization of the court Hence, the necessity of the application, leaving it for the court to determine, upon the facts presented, whether it should grant or refuse it. But the refusal to either grant or deny the application of the receiver upon the ground that there was no necessity for it seems to us to have been error. The order appealed from should therefore be reversed, and the receiver is instructed to apply the balance due to Charles Kurzman, and, upon receiving the difference, surrender the securities.

Follett, J., concurs.

Van Brunt, P. J.

(dissenting). The petitioner herein was appointed'in December, 1893, temporary receiver of the St. Nicholas Bank, and he thereupon duly qualified, and entered upon his duties. On the - day of January, 1894, said receiver presented his petition to this court, alleging that one CharlesKurzman was indebted to the bank upon certain demand loans-aggregating $3,000, for the payment of which he had deposited certain collateral securities. He also alleges, inferentially, that said Kurzman was a depositor in said bank, and that at the time said bank ceased to do business there was standing to his credit, as such depositor, the sum of $1,145.14. The petition further-shows that on the 28th of December, 1893, he was notified by said depositor that he was prepared to pay off said loans, applying his balance with said bank as an offset against said loans. - The petitioner further alleges that, being in doubt as to the propriety of granting the request of said Kurzman to pay off said loans, and allow the offset of the balance of his deposit as against ^the amount due and owing by him to said bank on account of said loan, and to return said collaterals, he prays the instructions of' the court in the premises, and with said petition submitted an order which he desired, directing him to make such offset, and to surrender said securities, upon payment of the balance remaining due upon said demand loans. The court below refused to.make the direction, holding that, if the boobs of the bank showed the facts above set forth, the receiver would be protected, in the absence of any suggestion of fraud, and therefore it could see no reason for granting the order applied for in this case; and an order was thereupon entered, denying said application, and from such order this appeal is taken.

It is admitted by the appellant that, if the petitioner was a permanent receiver, there would be no necessity for the application to the court; but it is claimed that what the receiver desired to-do in reference to the receipt of this loan he was not permitted to do, under his appointment as temporary receiver, because he had no right to assume to dispose of the property of which he was the temporary receiver. I am unable to see that, by the procedure which was desired by the temporary receiver, there is any dispositionunade of any property of the corporation. On the contrary, he is simply collecting debts due to the corporation, which he is in duty bound to do, whether he is temporary or permanent receiver. By the provisions of the ‘ Code,'§ 1788, under which temporary receivers are appointed, a temporary receiver has power to collect and receive the debts, demands, and other property of the corporation; to preserve the property and the proceeds of the debts and demands collected ; to sell or otherwise dispose of the propérty as directed by the court; to collect, receive, and preserve the proceeds thereof (namely, of such sales); and ‘to maintain any action or special proceeding for any of those purposes (namely, for the collection, receipt, etc., of the debts, demands, and other property of the corporation, or for the collection,' receipt, and preservation of the proceeds of any sales of property of the corporation made by direction of the court). Now,'the temporary receiver having the right to, maintain an action to recover a debt due the corporation, what would be the judgment which the temporary receiver could procure, in case he brough suit to recover the loan in question? Clearly, for the balance which would be due to the bank after of-setting the amount of the depositor’s balance, upon payment of which the receiver would be required to give up the securities pledged as collateral. Now, he having the power to collect and the power to sue, it is difficult to see why he has not power to receive payment upon the some terms which he could get by suit. If a receiver’ has no power, independently of special directions of the court in each particular case, to surrender the collaterals pledged for a loan with the bank of which he has been appointed temporary receiver, many of the securities of the corporation would be placed in great jeopardy. If a receiver holds notes indorsed, for the payment of which negotiable collaterals have been pledged, in order to charge the indorser the receiver must not only present the notes, but have the collaterals in readiness to be surrendered in case the maker pays the notes and unless these conditions are complied with the indorser is discharged. Ocean Nat. Bank v. Fant, 50 N. Y. 474. If, upon payment of loans due to the bank, the collaterals held as security for these loans cannot be surrendered by the temporary receiver, how many indorsers may be discharged ? This illustration simply shows that a temporary receiver has ample authority to receive payment of loans, and surrender collaterals held as security, and he needs no direction from the court to perform these duties.

The idea, in obtaining an order of the court, undoubtedly, is to protect the receiver under all circumstances. But it is only where there are doubtful questions that the receiver is entitled to come to the court for instructions. Where, upon a given state of facts, his duty is plain, there is no more reason for a receiver coming to the court for instructions than there is for any other trustee, and gross abuses have grown up because of the facility with which the courts have granted these orders in particular cases. If a receiver is entitled to any instructions, they should be in the nature-of a rule of action, and not a direction to do a particular thing in a particular case. The court is supposed to know what it is doing when it lays down a rule of action, but it by no means follows when it directs a particular thing to be done in a particular case. It is undoubtedly true that a temporary receiver is a mere custodian, standing in the place of the court, and is not in any way a trustee for the creditors of the corporation. But he is supposed to be an intelligent custodian, able to manage the ordinary affairs of collecting and preserving the assets of a corporation without specific directions from the court, in individual instances, as to what should bé done. Great stress is laid upon the remarks of Judge Danforth in the case of People v. Security Life Ins. & Annuity Co., 79 N. Y. 267. At page 270 he says:

“ Since the receiver is an officer sometimes called the 1 hand of the court,’ it would be singular if he should not at any time go to it with his complaint, or for instructions in regard' to any matter touching the fund placed in«his custody; and more especially when, as in the case before us, it is in danger, through his own error, of being unfairly distributed.”

This language is to be construed, having in view the facts of the case. In that case, because of the faulty advise given by the receiver, certain creditors were in danger of losing their claims; and the rec’eiver applied to the court to know what should be done, and the court pointed out the way in which the rights of these creditors might be secured. It was this question which was being discussed, and in such a case the court held that the receiver was justified in coming to the court for instructions,—a case very different from those which continually arise in the ordinary administration of the affairs of a corporation in the process of liquidation. That this is the policy of the law is strikingly evidenced by the provisions of § 1789 of the Code, which provides that, in addition to the powers conferred upon him by the provisions of the last section, the court may, by the order or interlocutory judgment appointing him, or by an order subsequently made in the action, or by the final judgment, confer upon him the powers and authority, and subject him to the duties and liabilities, of a permanent receiver, or so much thereof as it thinks proper. This language clearly shows that if the necessity exists that the temporary receiver should have the powers of a permanent receiver, in addition to that which he enjoys as a temporary receiver, the proper course is for the court to give him such powers, and not to direct him to do a particular thing which he would be able to do if he were a permanent receiver. A temporary receiver is no more under the control of the court, and is no more an officer or hand of the court, than a permanent receiver. And it being conceded that, if the petitioner were a permanent receiver, he would have the authority to do that which he, by his petition in this proceedings, asks the court to direct him to do, it .seems evident that, if any order were necessary (which it seems to me clear it was not), the proper course would have been to confer upon him the powers of a permanent receiver in respect to the subject involved. As already suggested, this is the clear intention of § 1789. It says that, in addition to the powers conferred upon him by the last section (referring to the section which treated of the powers of a temporary receiver), the court may confer upon him the powers and authority of a permanent receiver, or so much thereof as it thinks proper, except that he shall not make any distribution among the creditors and stockholders before final judgment unless specially directed so to do by the court. And this is the only case in which special directions are contemplated to a temporary receiver in respect to subjects over which a permanent receiver would have authority by virtue of his appointment. I repeat that it seems to me clear that it was the intention, in the framing of this section, to prevent applications in special cases by a temporary receiver, and to provide, where necessary, that his powers should be enlarged by conferring upon him the powers of, a permanent receiver.

In the case at bar, it being conceded that a permanent receiver would have had the right to do that which the petitioner asks to be directed to do, the manifest course to pursue would have been, in any event, to do nothing more than confer upon the temporary receiver the powers of a permanent receiver in respect to tiro subject involved. And the court was entirely right in refusing to grant the order asked for, directing the receiver to do a specific think in a specific case. But, as already stated, it seems to me to be apparent that the temporary receiver had just as full authority to act as any permanent receiver could have had. The view that it was the intention of the Code that, in case additional authority was to be conferred upon the temporary receiver, it was by giving him the power of a permanent receiver, and that, for the purposes of the collection of the debts due to the corporation, the temporary receiver had the right to do everything that a permanent receiver could do, is further evidenced by the provisions of § 1788. It is there provided that unless additional powers are specially conferred upon him, as prescribed in the next section (the next section prescribing how additional power is to be conferred upon the temporary receiver, viz. by giving him the powers of a permanent receiver), a temporary reciever has only the powers specified in this section, and those which are incidental to the exercise thereof. What does this last clause mean? Evidently, that the temporary receiver has the right to do everything which is ordinarily necessary to be done in order to collect the debts of the corporation of which he is the receiver. And one of the necessary powers, in order to collect such debts, is to be at liberty to surrender the collaterals pledged for the debts; and another is to allow the credits and offsets to which the debtor is by law entitled. I think, therefore, that the order appealed from should be affirmed.


author: McAdam, J.

text:
    Theodore B. Foulke, Resp’t, v. Eugene Thalmessinger App’lt.

      (New York Superior Court, General Term,

      Filed April, 1894.)

    1. Hew trial—Effect of denial.
    The denial by the trial judge of an application for a new trial is, in effect, a determination by him that the verdict is satisfactorily sustained by the evidence.

      2. Same—Preponderance of evidence.
    The term, “preponderance of evidence,” generally signifies that which satisfies the conscience and carries conviction to an intelligent mind.
    8. Same—Humber of witnesses.
    The fact that the witnesses for one side out-number those on the other, will not necessarily create such a fair preponderance as is necessary to require a verdict to be set aside as against its weight.
    Appeal by defendant from judgment entered on verdict of jury in favor of plaintiff, and from order denying motion for new trial.

      I. M. Dittenhoefer, for app’lt; 0. A. Decker, for resp’t.
   McAdam, J.

The plaintiff sued to recover $583.33 as-a balance due on a contract of employment comméncing June 16th, 1890, and continuing until January 1st, 1891, at the agreed compensation of $2,000 per year. The plaintiff testified to the contract as stated and to the performance of the required services under it. 'The defendant, on the other hand, denied the making of the alleged contract, and insisted that the arrangement made with the plaintiff was of a temporary character looking forward to the formation of a safe deposit company, in which he expected to obtain permanent employment for the plaintiff at $2,000 per year; that, the plaintiff would have to take the chances of success in the matter; that in the meantime, while his services continued, he would pay him out of bis own pocket at the rate of $1,000 per annum; and that he paid the plaintiff under this arrangement all moneys to which he became entitled.

The father of the defendant corroborated this theory of the defense, while the plaintiff denied that any such understanding as. that insisted upon by the defendant was ever made. In short, there was a direct conflict in the evidence as to the facts. These-were submitted to the jury who found in favor of the plaintiff for the amount claimed.

Ro motion to dismiss was made at any stage of the case, nor was any request made to direct a verdict in favor of either side.

The defendant now insists that the verdict is against evidence and relies upon Meddaugh v. Bigelow, 67 Barb., 106, in which it was-held, that “If the plaintiff’s case is not free from doubt on his own testimony, and he fails for want of preponderance of proof when considered in connection with the evidence of two witnesses on the part of the defendant, who were conversant with all the facts and whose testimony in denial was clear and exact, the verdict in favor of plaintiff is clearly against conscience and the court is justified in setting it aside and ordering a new trial.” In that case the verdict had been set aside by the trial judge, and the appeal considered was from his order.

Judge Miller, concurring in the above, said: “Independent of any other view of the question, I think the judge who tried the cause, and heard the witnesses testify, was better qualified to determine whether the jury were misled, than any other tribunal; and as he exercised his discretion judiciously and properly, this court ought not to interfere.”

Where a motion for a new trial made on the minutes of the trial judge is entertained and granted by him, his discretion, if not abused, is for the reason stated by Judge Miller entitled to great weight and generally sustained. Langlois v. Hayward, 36 St. Rep. 59 ; Campanello v. N. Y. C. & H. R. R. R. Co., 39 St. Rep. 445 ; 15 N. Y. Supp., 670; Barrett v. Third Ave. R. R. Co., 45 N. Y. 628.

But in this case the trial judge denied the application for a new trial, which was in effect a determination by him.that the verdict-was satisfactorily sustained by the evidence, for which reason Meddaugh v. Bigelow, supra, is inapplicable and a different rule applies. The question of credibility of the witnesses is always for the jury. In determining the value and credibility of evidence, witnesses are to be weighed, not numbered, and the term preponderance of evidence generally signifies that,which satisfies the conscience and carries conviction to an intelligent mind.

In Freund v. Paten, 10 Daly, at p. 383, the court said, “If there are fewer doubts in the minds of the jury upon that side of the case than upon the other, then such party is entitled to a verdict because a preponderance of evidence exists.”

In Styler v. L. I. R. R. Co., 75 Hun, 547; 58 St. Rep. 727, the jury found for the plaintiff on conflicting evidence, and the court held: “We must assume, therefore, that the testimony on the part of the plaintiff commanded the belief of the jury, and in that view the verdict cannot be disturbed.”

A party having the burden of proof generally maintains the issue, if the proof be such that its strength and value of character convinces a court or jury of his right to recover.

While the term “ preponderance ” literally means to outweigh, yet one witness whose testimony carries conviction outweighs for judicial purposes a dozen who tell a story which is incredible.

In Becker v. Koch, 104 N. Y. at p. 404; 5 St. Rep. 688, the court said: “ It is a good general rule that the credibility of a witness is matter for the jury, and the fewer technical obstructions there are to the practical operation of that rule the better.”

In Haskins v. Haskins, 9 Gray, 890, the court held: “ The J weight’ or 1 preponderance of proof,’ is a phrase constantly used, the meaning of which is well understood and easily defined. It indicates clearly to the jury, that the party having the burden of proof will be entitled to their verdict, if, on weighing the evidence in their minds, they shall find that greater amount of credible evidence sustains the issue which is to be established before them.”

In criminal cases the evidence must produce a moral certainty of guilt and exclude every other hypothesis, hence the prisoner is entitled to the benefit of any reasonable doubt, but in civil actions it is sufficient where there is a preponderance of evidence in favor of the party supporting the issue, Freund v. Paten, 10 Daly, 379; N. Y. Guaranty Co. v. Gleason, 78 N. Y. at p. 513, and the rule as to reasonable doubt has no application thereto. N. Y. & B. Ferry Co. v. Moore, 102 N. Y. 667; 1 St. Rep. 374; S. C., 18 Abb. N. C. 106; People v. Briggs, 114 N. Y. at p. 65 ; 22 St. Rep. 317.

In civil cases a jury cannot be required to discard testimony which produces a rational belief, because it does not conclusively establish the fact to be proved. Watkins v. Wallace, 19 Mich. 57 ; 14 Eng. R. 378. The courts are not authorized to set aside a verdict simply because if they had been on the jury they would have found a different one, and it is not enough that the verdict may possibly be wrong, • but the court should be satisfied that after giving proper weight to all the evidence it cannot be right Sweeny v. The Mayor, 43 St. Rep. 642; 17 N. Y. Supp. 797. The mere fact that the witnesses for one side outnumber those on the other will not necessarily create a fair preponderance such as is necessary to require a verdict to be set aside as against its weight. A fair preponderance of evidence in this connection means evidence of such a character and weight as will carry conviction to the minds of the jurors of the existence of the facts sought to be proven. Schick v. Brooklyn City R. R. Co., 32 St. Rep. 245; 10 N. Y. Supp. 528; Fitton v. Brooklyn City R. R. Co., 25 St. Rep. 948; 5 N. Y. Supp. 641; Hickenbottom v. Delaware, etc., R. R. Co., 15 St. Rep. 11.

Tested by these rules, the verdict was not against the weight or preponderance of evidence. It is sufficiently sustained by satisfactory proofs and the judgment and order appealed from must be affirmed with costs.

Sedgwick, C. J., and Freedman, J., concur.