author: Van Brunt, P. J. Barrett, J. Patterson, J.

text:
    The Brush Electric Illuminating Company, App’lt, v. The Consolidated Telegraph & Electrical Subway Company, Resp’t.

      (Supreme Court, General Term, First Department,

      Filed June 26, 1891.)

    Injunction—What bights eneobced—Rent oe electbical subway.
    The plaintiff, an electric illuminating company, entered into a contract ith defendant, an electrical subway company, by which the former was. to use the latter’s subways, and to pay therefor a certain rent. Plaintiff used the subway several years without, paying any rent, the subway company made a demand for the same, and threatened to cut out and remove the plaintiffs’ cables if not paid. Plaintiffs brought an'action to restrain such proceedings. EeId, that waiving the question whether the court had, or had not, jurisdiction, under special laws relating to the subject-matter of the controversy, to grant an injunction, plaintiff could not ask a court of equity to intervene until it had paid the rent due before the commencement of the proceedings.
    Appeal from order of special term denying motion to continue injunction pendente lite.

      Esek Cowen, W. P. Putney, B. F. Einstein and Paul D. Cravath, for app’lt; J. C. Carter, F. R. Coudert, Edward Lauterbach, M. Egleston and W. N. Cohen, for resp’t.
   Van Brunt, P. J.

—The plaintiff in this action, together with the plaintiffs in the other actions argued herewith, were duly incorporated for the purpose of the manufacture, use and transmission of electricity for the production of heat, light and power in the city of New York, and for a long period of time maintained poles and wires and other conductors in the streets of the city by which their currents were transmitted and distributed. Prior to-the year 1887 overhead wires were exclusively used by these corporations.

In 1884 the legislature passed an act which provided that all telegraphic, telephonic and electric light wires and cables used in any incorporated city of this state having a population of 500,000’ or over, should thereafter be placed under the surface of the streets, lanes and avenues of the city.

In 1885 an act was passed by which in cities having a population exceeding a million, the mayor, comptroller and commissioner of public works of such city were authorized and directed to appoint three disinterested persons who were to be a board of commissioners of electrical subways, which board was charged with the responsibility of enforcing the provisions of the act of 1884 hereinbefore mentioned, and of causing to be removed from-the surface and to be maintained and operated under ground wherever practicable all' electric wires and cables used or to be used in the business in any such city. Under this act it was contemplated that the electric light companies should build the subways according to plans to be submitted to the said board of commissioners; and in case of the failure of said companies to-propose or put in use a suitable plan the commissioners were directed, to devise and make a general plan such as would meet the requirements of the acts of the legislature. In 1886 the act in question was amended in some immaterial particulars. In the said year the board of commissioners of subways which had been duly appointed pursuant to the act of 1885 for the purpose of carrying into effect the duties imposed upon them by that act entered into a contract with the Consolidated Telegraph & Electric Subway Co. (the respondent) for the construction of the subways into which the overhead electric wires were to be put. In April, 1887, the said commissioners entered into another contract with said respondent whereby they agreed to provide, build, equip, maintain and operate subways according to plans and specifications furnished therefor by the commissioners of subways or their successors.

The fifth paragraph of said contract reads as follows: “ The party of the second part (the respondent) may fix a fair scale of rent to be charged according to the kind of conductors and the amount of space required therefor, which shall be at the same rate to all companies making a like use of said subways; but the scale of rentals or any charge fixed or made by the party of the second part (the respondent) shall at all times be subject to the control, modification and revision of the parties of the first part (the commissioners of subways) or their successors, and no contract shall be made between the party of the second part and any company or corporation on any terms which shall not require the payment by such other company or corporation of rents at the ' rate so fixed.”

The tenth paragraph of said contract reads as follows: “In case any dispute shall .arise between the party of the second part (the respondent) and any company occupying or desiring to occupy said subways, the same shall be referred to the party of the first part, or their successors, for settlement, whose decision shall be final.”

In June, 1887, the legislature passed an act by which the agreement made between the commissioners of subways for the city of -New York and the Consolidated Telegraph & Electric Subway Company under date of July 26, 1886, as amended and modified by second and further contract or agreement between said parties dated the 7th of April, 1887, was ratified and confirmed; subject, however, to the provisions of that act.

Section 7 of the act reads as follows:

“ § 7. In case, and whenever it shall be made to appear to the satisfaction of any of the justices of the supreme court, or any judge of the court of common pleas in and for the city and county of Hew York, or any judge of the superior court of the city of Hew York, or to the satisfaction of either of said courts, that the said board constituted by this act, or its successors, or any officer or agent of ■ said board or its successors, or the said The Consolidated Telegraph & Electric Subway Company or any corporation or persons claiming under the said board or its successors, or under the said company, shall have violated or shall have failed to observe and fully perform or to carry into full effect all or any of the provisions of this act or of either of the acts hereinbefore mentioned, or of the said agreement, .or shall have failed to furnish just and equal facilities under this act or the said agreement to any and all corporations lawfully competent to manufacture, use or supply electricity, or to operate electrical conductors in any street, avenue or highway in the city of New York, applying for such facilities upon terms that to the court shall appear just and reasonable, then and in every such case said judge or justice or court may, by proper proceedings in the nature of a writ of mandamus or by mandamus, enforce the provisions of this act or of the acts before mentioned, or óf the said agreements or of any agreements made under the said acts, or compel the granting of such facilities, or may grant such relief as may be proper in the premises. And the said board or its successors, or the mayor, aldermen and commonalty of the city of New York, or any person, company or corporation aggrieved by any such violation or failure as aforesaid, shall be entitled to institute and maintain such proceedings as are by this section authorized.”

The defendant having completed a large number of miles of subways in 1888, announced a tariff which would be charged the electric light companies for the use of the subways, and in 1889 applications were made by various of the electric light companies for space in the subways for the period of one year, some of which applications contained the rental inserted therein, and in others the rental was left blank; but all the electric light companies making this application knew the scale of rent which the defendant had adopted for the use of the subways constructed by them. These applications having been granted by the defendant, and space assigned in the subways to these various electric light companies, they proceeded to put their wires therein and use the same for the purposes of their business. It further appears that these companies protested against the rates which were charged by the defendant for the use of its subways upon the ground that they were unjust, unreasonable and not fair; and negotiations were had between the defendant and some of these electric light companies for a reduction of these rentals, such negotiations, however, being predicated upon an occupation of the subways by the electric companies for a series of years. Some slight portion of the rental thus claimed by the defendant has been paid, but for a long period of time prior to the commencement of these actions there had been a refusal upon the part of the electric light companies to pay any rent to the defendant upon ■ the ground that the rent demanded was unfair. In October, 1890, the defendant notified the electric light companies that they were required to pay the rentals due, or else to take out and remove their cables and electrical conductors from the subways; and in case of failure to Comply with the requirements of the notice upon a certain date, measures would be taken by the defendant for the removal or cutting out of both the cables and conductors belonging to the electric light companies from the subways owned by the defendant Thereupon these actions were commenced and injunctions were obtained to restrain action upon the part of the defendant. Upon the hearing of the motion to make the injunction permanent during the pendency of the action the motion was denied, and from such denial this appeal is taken.

The plaintiffs, claiming that the rental charged by the defendant is unjust and unreasonable, have brought this action to have a fair scale of rentals determined by the court, all action upon the part of the defendant towards the collection of any rent whatever to be enjoined pending the investigation of this question.

The plaintiffs invoke the jurisdiction of the court upon the ground that the contracts hereinbefore mentioned provide that the defendant may fix a fair scale of rents; and upon the claim that § 7 of the act of 1887, above cited, provides that the electric light companies may occupy ducts in these subways upon terms that to the court may appear just and reasonable.

It seems to be clear under the elementary principles which determine whether contractual relations have been entered into between parties that the application of these electric light companies for space in the subways, with knowledge of the rental which was claimed to be charged, the granting of these applications and the occupation of the subways constituted a contract between the companies and the defendant to pay such rentals, unless there is something which is peculiar in the situation of the parties which takes their action out of the ordinary rules governing the conduct of parties to contracts. It is not necessary to cite authorities for the proposition that if A. desires B. to let him the use of anything which belongs to B. and he knows B.’s price for such occupation, and his application being granted he enters into such occupation, it makes a contract to pay the price.

But it is said that the electric light companies, the plaintiffs in these actions, are not governed by this rule, because they were compelled to get out of the streets and go into the subways. This is undoubtedly true. This court knows from the previous struggles of these electric light companies which have come before it to keep out of the subways and to conduct their business (notwithstanding that it had become a public nuisance) by the use of overhead wires, that it was not until they were threatened with the destruction of their business if they continued to maintain a. nuisance in the streets that they consented to occupy any portion of the subways which have been prepared for them. And it is also true that a very large part of that reluctance arose from the fact that it would necessarily be more expensive to use an artificial envelope for their conductors than to allow them to be surrounded by the open air. Having resisted the law to the very last moment, it may be that they were compelled to enter these subways rather precipitously. But for this the defendant was not responsible, and if any harsh or unfair contract was insisted upon, under the circumstances, by the defendant, the plaintiffs had their appeal, because the scale of rents or any charge fixed or made by the defendant was at all times subject to the control, modification and revision of the board of electrical control, or their successors, and if the terms of the contract which had been entered into between the defendant and the electric light companies were of such a character as required modification an appeal was given to the board of electrical control, and with but one exception, as far as we can see from the papers, no such rights were ever exercised.

But these parties without paying, or offering to pay, any rental whatever have come into a court of equity to have this rental fixed, upon the ground that it is unreasonable, without any resort whatever t"o the tribunal which had the power to modify the terms of the contract entered into between them and the defendant.

It is a familiar principle that at least until all measures which the law gives to a party have been exhausted to restrain a wrong, equity cannot be called upon to interfere. And it may well be doubted in a case of this description where the provisions of the law (because these contracts have become law by being adopted and approved by the legislature) state that the decision of the board shall be final, whether equity can interfere unless upon proof of fraud upon the part of the board.

But it is urged that under § 7 of the act of 1887, to which reference has already been had, notwithstanding this provision of the contract, jurisdiction has been conferred upon the courts to determine and fix what is a fair and reasonable rental or to grant such relief as may be proper in case such .jurisdiction is invoked.

An examination of the section, however, will show that the court as a court of equity has no jurisdiction conferred upon it. The whole jurisdiction conferred by that section is conferred upon a justice of the supreme court or a judge of the court of common pleas or superior court or upon either of those courts to enforce in a particular way the provisions of the various acts and the various agreements under said acts and to compel the granting of such facilities, and the granting of such relief as might be proper in the premises; and this way pointed out is by proper proceedings in the nature of a writ of mandamus or by mandamus; and no other jurisdiction whatever is conferred.

It is apparent that no general equity jurisdiction was intended to be conferred, because the jurisdiction conferred by this act may be exercised by a justice or a judge and need not be by the court at all. It is true that the court may act; but the court has no power to do anything more than a judge would have the right to -•do out of court under the provisions of this act And that this is the true interpretation placed upon this act is apparent from the last clause thereof, .which is as follows: “And the said board or its successors, or the mayor, aldermen and commonalty of the city of New York, or any person, company or corporation aggrieved by any such violation or failure as aforesaid, shall be entitled to institute and maintain such proceedings as are hy this section authorized.” As has been before seen, the only proceedings authorized by this section are proceedings in the nature of a writ of mandamus. Even though, therefore, a judge or a court might, where proceedings in the nature of a mandamus had been instituted, grant such relief as the' circumstances required, the very wording of the section excludes all other jurisdiction upon the part of a court or judge.

Again, even if a court of equity had jurisdiction, yet it could not intervene in an action of this character because of the position of the plaintiffs. They allege that the rental is unfair, but they have entered into a contract to pay this rental, and it is clear that no matter what the jurisdiction of the court may be as to rentals, accruing subsequent to the filing of a bill, they would have no power to relieve the companies from a debt which they have incurred prior to the initiation of these proceedings. They were bound to pay what was due before they could come into a court of equity and ask to be relieved from subsequent payment, even if the court had jurisdiction to entertain such an application, which we do not think it has. But in the case at bar they offer to pay nothing, they bring no money into court, and are seeking to be relieved from a debt which they owe to these defendants, by the intervention of this court upon the theory that they made a contract which it was improvident for them to make ; and that being compelled by the force of circumstances and the fear that their business might be destroyed, to make this contract, they ought not to be held to it.

We know of no rule of equity jurisprudence which justifies a court in intervening under such circumstances.

But it is claimed that even if there had been a valid agreement upon the part of the plaintiffs to pay rentals at the rate charged, their failure to pay would not justify the defendant in its threatened conduct.

It is conceded that the letting of these subways is not leasing an interest in real estate, and therefore under no circumstances could a possessory action to recover possession of the space occupied by these electric light companies as real estate be maintained. And it is clear that a possessory action for the recovery of personal property will not lie, as replevin could not be had to recover a hole in the ground.

The nature of the rights conferred upon these plaintiffs by the contract which they entered into with the defendant is peculiar because of the situation of the parties and the thing leased and the purpose for which it is rented. The fact however that the thing rented can neither be considered real estate nor personal estate cannot deprive the defendant of the protection of the law in the use of its property as against one who has entered upon its enjoyment under a contract which he has wilfully violated.

As has already been stated, under these circumstances equity will not intervene because the proposed action of the defendants would at most be a trespass, the damages for which might be easily ascertained. As far as the interruption of the business of the plaintiffs is concerned, that could not be considered, because they have no right in equity to continue their business at the expense of the defendants.

The position taken by the counsel for the appellants upon the argument of this appeal was that the only remedy of the defendants was to sue for the amount of these rents; and in case the occupants of the subways failed and the amount could not be collected upon execution, in the case of a corporation, to have the corporation dissolved, and to have a receiver occupy the subways during the pendency of the dissolution proceedings, with the right of the purchaser from the receiver to continue the occupation, and so on ad infinitum. Such a result never could receive the sanction of law, and unless the court is pointed to some plain, well established principle which necessarily brings about such a result, it would hesitate before it interfered under such circumstances.

It might well be claimed that the rights of these defendants in reference to the occupation of their subways by the plaintiffs is similar to the right of a passenger to occupy a place in the train of a common carrier. It is well established both at common law and by statute that a common carrier has the right to eject a passenger who refuses to pay his fare. And for the same reason it would seem that when the plaintiffs refuse to pay the compensation which they agreed to pay for the occupation of these subways, the defendants would have a right to eject them from the vehicles in which they had been allowed to place their wires for the purpose of the conduct of their business. The position of the plaintiffs in the conduct of their business by means of these subways, by and with the consent of the defendant, seems to be like that of a licensee. They are permitted to conduct their business through this space over which the defendant -has control upon a promise to pay a certain remuneration. Failing to comply with their contract upon which the permit depended, the right to continue to conduct their business by means of these subways necessarily ended, and the defendants had a right to prevent its continuance.

We are of opinion, therefore, that a court of equity could not intervene certainly until these plaintiffs had paid what was due before the commencement of these proceedings, and that probably the sole jurisdiction of the court is controlled by § 7 of the act of 1887 and can be invoked only in the form of the proceedings therein prescribed in a proper case.

The order should be affirmed, with costs.

Barrett, J.

—While unreservedly concurring in the result arrived at by the presiding justice in this case, and in the other cases presented at the same time, I prefer to state briefly the conclusions at which I have arrived. These actions proceed upon the theory that the plaintiffs obtained access to certain allotted ducts in the defendant’s subway without having made any valid or binding contract as to rent, and they ask the court to determine what would be a just and reasonable rent. In the meantime they ask us to enjoin the defendant from disturbing them, and in the end to enjoin the defendant from collecting any greater sum as rental than the sum finally adjudged in these actions to be just and reasonable. Thus, without alleging what would be a just and reasonable rent, without furnishing a particle of proof upon that head, without giving any reason for the absence of either such allegation or proof, and without tendering or even offering to bring into court any given sum deemed by them to be just and reasonable, the plaintiffs ask us to grant an injunction which will permit their continued occupancy of the allotted ducts, without one penny of immediate compensation to the defendant. What, in fact, do they offer pending this litigation? Nothing whatever but a phrase They say in their complaints that they “ have always been ready and willing to pay to the defendant a fair and just and reasonable rental for these ducts.” In plain terms, therefore, the plaintiffs in the name of equity invoke a positive abuse of judicial power. Having secured possession of the ducts without any contract as to rent, they boldly ask us to keep them there pendente lite in the full and complete enjoyment of all the rights and privileges of tenancy, freed from any of its corresponding duties or obligations.

Upon the plaintiff’s own complaint, therefore, there was not a particle of equity in the application which was denied. If there was no contract, the plaintiffs were in possession as bare licensees, and upon their refusal after due- notice to remove, they became trespassers. This view of the true relation of the parties is not affected in the least by the fact that, under the legislation confirming the contract between the commissioners of electrical subways and the defendant, the plaintiffs had an undoubted right to the due allotment of necessary space in the subways. But the further claim made by the plaintiffs that such right was absolute and could not be preliminarily conditioned upon reasonable terms and regulations, is, in my judgment, preposterous. The time to ■settle the question of rent and all other terms was when the plaintiffs applied for space. The defendant had a perfect right, and indeed it was its duty, to refuse to permit any company to occupy the' subways until the contract therefor was complete. The law is sufficiently explicit in this regard. The defendant could fix what it deemed a fair scale of rentals, and if the companies agreed to that scale, well and good. That settled the question. If, however, the companies deemed such scale to be unfair or unreasonable, an arbiter between them and the defendant was provided, namely, the board of electrical control. That board had full revisory power with regard to such rentals, and in the absence of fraud or bad faith its decision was final and binding upon both parties. It is entirely clear that the plaintiffs were bound in the first instance to appeal to this board in case(the rates fixed by the defendant were deemed unreasonable. It is equally clear that the court could not revise or reverse the honest judgment of that board, and that the.companies could not appeal to the court, even after an unsuccessful appeal to the board, without averring fraud or bad faith. In case, however, the board should refuse or neglect to act promptly upon the companies’ appeal, a summary remedy was provided by § 7 of the act of 1887.

The object of the provisions of this latter section was to secure the granting of just and equal facilities, upon fair and reasonable terms, to all applicants alike. The plaintiffs, however, neither appealed to the board to revise the rentals fixed by the defendant, nor to the court to proceed by mandamus under this § 7. They simply took possession of the alloted space under written applications, some of which specified the rentals and others did not. In the latter instances it is however, conceded that the companies-were aware of the rates of rentals which the defendant had fixed. I agree with the presiding justice that the facts are sufficient to establish a contract relation between the companies, and the defendant as to these rentals. . The plaintiffs, however, were not-even then without redress. They could still appeal to the board of electrical control, which was authorized at all times to control,, modify and revise either the scale of rentals of any fixed charges. While such appeal is afforded to them, they cannot, I repeat, appeal to the courts. Certainly not, as already pointed out, without showing fraud or bad faith on the part of the board. If, therefore, the plaintiffs are in possession without a contract, the defendant has a perfect right to treat them as licensees and to remit them to their original position as outside applicants in quest of possession.. If, however, they are in possession under a contract, they must abide by its terms or seek its modification in the only manner authorized by law. They cannot come into court and ask to be upheld in their naked possession until at some future time and by means of an investigation utterly unknown to any court, whether of law or equity, “ the fair thing,” so to speak, between the parties has been arrived at.

With regard to the question as to whether the defendant can under any circumstances resort to the remedy of eviction, I think the plaintiffs must be held to the position assumed in their complaints. They do not admit the tenantcy under a completed lease, but. simply claim that they are in possession under an implied agreement to give them a lease upon fair and reasonable terms to be judicially ascertained. Thus their attitude in the interim, as we have already seen, is necessarily that of licensees.. They are in possession, they say, without a contract, under the right, however, which the law gives them and the duty which the law imposes upon them, to place their conductors in the subway. Still, they are there as mere licensees until a contract such as the law authorizes and even compels the defendant to impose is entered into. Upon the case made by the plaintiffs, therefore, there can be no doubt of the defendant’s right to remove an apparatus wbibh simply trespasses upon the subways. But I agree with the presiding justice, that even upon the defendant’s case of a completed contract, the-right exists to remove the plaintiff’s apparatus for non-payment of the agreed rentals. When the nature and object of the subways are considered, it becomes apparent that the ordinary rules which govern as between landlord and tenant can have no application. The-subway is a great public work authorized for a specific purpose and constructed with a view to a special service. It stands to reason-that, when the conditions upon which the service is granted have been broken, such service may be discontinued and the facilities afforded by the structure withdrawn. To limit the defendant to the ordinary action to recover money, would be subversive of the-entire svstem thus inaugurated. Supposed .analogies with regard to possessory actions are misleading. For the defendant, though a private corporation, has here public duties to perform, duties which "require that it should grant or withhold the service under reasonable rules and regulations; never of course, arbitrarily. It is, for instance, bound to supply the city of New York and each of its several departments, free of charge, with all the space necessary for their electrical conductors. It is also bound to economize the space in the subway, so that no one company shall occupy more than it actually needs to the exclusion or detriment of any other company. It is further bound to charge the same rates to all occupants making a like use of the subways. Again, when its net annual profits exceed ten per cent, upon the actual cash capital invested by it in constructing and equipping the subways, the excess is required to be paid into the treasury of the city of New York. Then, too, the management and control of the spaces occupied by any company is subject to the rights of all other occupants, and expressly to such reasonable rules and regulations as the defendant may make. Other provisions might be adverted to, but I have specified enough to show the quasi public character of the duties.imposed upon the defendant, and the necessity, if it is to perform its functions successfully, pf regulating the space under its control, in such a manner that no one non-paying company shall have the right of permanent occupancy and continuous service to the detriment not only of the city and the defendant, but of others who are willing to pay, and who may thus be crowded out by a non-paying occupant.

I think, therefore, that payment of the agreed or fixed rentals is an essential and reasonable condition to the use of the allotted space, and that the defendant should not be interfered with in resuming possession of such space and again offering it for electrical purposes except in a case of real oppression and injustice. No such case has here been made out. On the. contrary, an injunction under the circumstances disclosed would plainly be both unjust and oppressive.

I concur, therefore, for these reasons, in the affirmance of the orders appealed from.

Patterson, J.

—I have out little to add to the opinion of the presiding justice which covers the material points discussed on the argument of this appeal. The several plaintiffs entered into the occupation of space in the conduits of the defendant under an absolute obligation to pay for their use. That they were compelled to do so by law cannot affect that obligation, for such compulsion resulted from a necessity connected with the public safety; their business as theretofore conducted being dangerous to the community. At the time they entered into the occupation of the space referred to, they knew not only they were required to pay, but also the rates established. Under such circumstances an implied contract arose to pay that rent unless a different one were fixed by the tribunal created by the law to regulate rentals, which, as I read the statute and the contracts, is in the first instance the board of electrical control. Even assuming that this court or a justice thez-eof or the judges of the court of common pleas or of the superior court have under the seventh section of the act of 1887 a right to fix rents under any circumstances. I do not think that provision can be construed as being retro-active or as relating to anything more than the fixing of rents after the jurisdiction has been invoked; for it is not to be assumed that the court can control or administer this property of the defendants or interfere with past, relations between it and the plaintiffs as to an adjustment of rents any more than it could between private parties who had entered, into contract relations from which an implication of law would arise as to an amount of rent to be paid for the use or occupation of property; and it is entirely immaterial how this subway may be catalogued as property, or whether the relation of landlord and tenant exists or the defendant is to be regarded as a carrier furnishing facilities for transportation, or whether it is to receive rent eo nomine (which the statute distinctly provides for) or as compensation. Whatever it may be called,' the defendant is entitled to its recompense, and that is for services rendered and. facilities afforded, and it is simply impossible that construction can be given to these acts which would enable the plaintiffs to goon from year to year using the subway in their business with dilatory proceedings in courts by appeals from adjudications fixing rates; and then if they are dissatisfied, abandoning the use and leaving the defendant to nothing but mere common law actions.

I agree with the presiding justice that whatever power the court may have over the subject is limited by the statute, but if general equity rules are applicable, the plaintiffs must put themselves in a position to show they are entitled to the consideration of a court of equity. That can be done only by securing to the defendant,, either by a deposit of money or by a sufficient bond, the amount, of rent which they knew was charged at the time they entered into occupation, which was neither $1,000 a mile as fixed by the-defendant or $900 a mile, which seems to have been considered by the board of electrical control a proper sum. Nothing whatever has been done by either of the plaintiffs in that direction,, and the court will not now make any order concerning it, for the case must be determined on the facts as they are presented in the record, and were submitted to the judge in the court below.

We are not called upon to interfere with the action of the defendant, nor to point out to either party what is the remedy for the non-payment of this rent. It is sufficient that no case has been made for the interference of the court by injunction, and if the defendant transcends its legal right in preventing the use of the subways by the plaintiffs, the latter have their adequate remedy at law.

Order affirmed, with costs.


source: Caselaw Access Project

author: Barrett, J.

license: Public Domain

text:
    Peter Santoz Suarez, Resp’t, v. The Manhattan Railway Company et al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed June 26, 1891.)

    1. Injunction—Elevated railroad—Eights of abutters—What PROPER TO INCLUDE.
    In an action for damages caused by the construction of defendants’ elevated railroad in the street on which plaintiff’s property abuts, without compensation for the easements of light, air and access, and for an injunction restraining the maintenance of the road, Held, that it was proper to enjoin the running of trains on defendants’ road, as it is one of the incidents to the maintenance of the road.
    2. Damages to abutting property.
    In such case a finding that the value of the plaintiff’s interest in the premises was lessened by the taking of the easements in the sum of $12,000, was not a commutation of future trespasses, but simply a finding as to the present value of the easements, upon payment of which defendants might relieve themselves from the operation of the injunction.
    3. Damages—Acts subsequent to commencement of action.
    In such case defendants requested a finding of the damages suffered down to the time of the trial, which damages were found and allowed. Held, that defendants could not afterwards object that damages were allowed for acts committed after the action was brought.
    Appeal from a judgment of the special term granting the plaintiff an injunction nisi and an award for past damages.

      Julien T. Davies and Samuel Blythe Rogers, for app’lts; Henry A. Foster and John A. Weeks, Jr., for resp’t.
   Barrett, J.

—There is but little in this case which has not already been passed upon in numerous decisions of the court of appeals and of this court.

Upon the merits we think the money awards made at the special term were moderate, and we find no errors in the admission or rejection of evidence. Novelty is claimed for the point that it was error to grant an injunction against the running of trains, but judgments in this form have been repeatedly granted and sustained. The operation of the road has been invariably treated as ■ an incident to the maintenance and use of the structure. In the Lahr Case, 104 N. Y., 268; 4 N. Y. State Rep., 340, it was expressly held that the defendant was liable for the operation of its trains and the consequences flowing therefrom as incidents to the permanent structure which necessarily increase and aggravate the plaintiff’s injury.

“The structure here and its intended use,” said Ruger, Ch. J., “ cannot be separated and dissected, and it must be regarded in its entirety in considering the effect which it produces upon the property of the abutter.” The learned counsel for the defendants have submitted an elaborate brief in which they seek to distinguish this case from the Lahr case, but we think unsuccessfully. They concede that as to past trespasses the law holds the defendants liable for all the incidents of such trespasses; but they insist that in estimating the fee value such incidents should be disregarded. What the court at special term did was to ascertain the value of the plaintiff’s easements at the time of the trial These were the easements of light, air and access, and such were the easements “taken" by the defendants. It was found that the value of the plaintiff’s interest in the premises was lessened by that “taking in the sum of $12,000. This was not, as the defendants contend, a commutation of future trespasses, nor was it an indirect way of requiring the defendants “ to pay for the incidental results of future imaginary trespasses.” It was simply a finding as to 'the present value of the easements, upon payment of which the defendants might relieve themselves from the operation of the injunction.

The Lahr case, although an action at law, affords a complete justification for the finding. The plaintiff there was permitted to recover all the damages occasioned to his property by the taking of the easements. That case was taken out of the operation of the Uline case, 101 N. Y., 98, by the consent of the parties, and the rule with regard to the abutter’s entire damage was laid down with distinctness. That rule, even within the limitations suggested by Earl and Finch, JJ., covered the damages sustained by abutting owners by reason of the construction and operation of the railway so far as such damages resulted from the taking or destruction of their street easements of light, air and access. The defendants' argument on this head is refined and subtle, but its fallacy lies mainly in the postulate that the court has required the defendants, as the sole condition upon which they may legalize their structure, to pay also for the right to run trains. The court has done nothing of the kind. It has given the defendants an opportunity even at this late day to pay for the easements taken, and the price of those easements is their lessened value to-day resulting from the unlawful maintenance of the structure and operation of the road thereon.

We do not think any of the other points deserving of special consideration except the complaint that the court below awarded damages for acts of the defendants subsequently to the commencement of the action. There might be some difficulty with regard to this finding in view of the decision of this court in Cornell v. Manhattan Railway Company, decided March 13, 1891, 37 N. Y. State Rep., 624. But we think the defendants cannot avail themselves of the objection, because of their own request to the learned judge to find the damages down to the time of the trial. Their fifth conclusion of law specifically embraces this very proposition, and although it is preceded by a statement that they do not consent to the finding, it is evident that thereby they simply intend to guard against any possibility of assent to the amount to be specified by the learned judge in the finding. We need not, therefore, consider the main question, nor the subsidiary one, as to whether the findings would justify a modification of the judgment by the deduction of what might otherwise be deemed in excess of what is authorized.

Upon the whole, and without adverting to several^ other points taken by the appellants, which we deem unsubstantial, we think the judgments should be affirmed, with costs.


author: Van Brunt, P. J.

text:
    Frederick P. Olcott et al., App’lts, v. Deborah Powers et al., Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed June 26, 1891.)

    Mortgage—Railroad—Powers of bondholders' committee.
    A judgment creditor of a railroad company began a suit to marshal the assets of the company, determine the liens upon it, and procure a sale of the property to satisfy his claim. Pending the suit, the holders of mortgage bonds of the company entered into an agreement by which they authorized a committee of the bondholders “ to take such proceedings, give such directions, execute such papers and do such acts, under the said mortgage or deed of trust, or otherwise, as they may consider judicious, in order to bring about an enforcement of the said security, and the payment of the principal and interest of the said bonds held by us, respectively, or so much thereof as may be collectible.” Under this agreement the bonds were deposited with a trust company, subject to the disposal of the committee, and certificates issued reciting the agreement, and providing that by receiving the same, the holders assented thereto. In the agreement the object of the deposit was stated to be, “ in order that the said bonds and coupons may be used by said committee for the purpose of bringing about a sale, foreclosure or reorganization of the road, or for the purpose of realizing, in our behalf, our proportions of the proceeds of any sale to which we may be entitled.” The agreement authorized the committee, if an opportunity should arise, to make an arrangement or settlement without resorting to foreclosure proceedings, subject to confirmation by two-thirds in amount of the subscribers thereto, their representatives or assigns. The agreement further provided that, if during its continuance, any event not therein provided for should arise, or it should become necessary to amend the agreement, a meeting of the bondholders shall be called by the committee, and the question determined by a majority vote of all present, or represented by proxy, and s jail be binding upon the committee and all subscribers to the agreement, their representatives or assigns. Reid, that a contract to sell the bonds to a third party, made by the committee, pursuant to a resolution adopted by a majority of the bondholders at a meeting called by the committee for that purpose, and assented to by two-thirds, was valid as against the non-assenting minority, and it was not necessary at the meeting called by the committee to amend the agreement.
    Appeal from judgment entered upon report of referee.

      A. H. Joline, for app’lts; G. F. Canfield, for resp’ts.
   Van Brunt, P. J.

—There was substantially no dispute of fact upon the trial before the referee, and the question involved depends upon the construction of the agreement hereinafter mentioned.

The controversy relates to the ownership of five consolidated mortgage bonds of the Scioto Valley Railway Company, with the coupons appertaining thereto, of the value of $7,039.50.

The Scioto Valley Railway Company, an Ohio corporation, became involved in difficulties in the year 1885. It had issued several series of bonds, secured by mortgages upon its property, and among others, it had made its “ consolidated mortgage ■' to the Central Trust Company of Hew York, as trustee, to secure an issue of consolidated mortgage bonds.

• It made default in payment of interest on these bonds on July 1, 1885.

In 1885 Collis P. Huntington, a judgment creditor of the railway company, began a suit in the court of common pleas for , Scioto county, Ohio, to marshal the assets of the company, ascertain and determine the amount of the liens upon it, and procure a sale of the property to satisfy his claim.

On February 15, 1886, an agreement was made by the holders of consolidated bonds looking to united action on their part.

This agreement, so far as necessary to be recited for the purpose of considering the questions raised upon this appeal, is as follows:

“ Whereas,, on the 7th day of September, 1880, the Scioto Valley Eailway Company executed a mortgage or deed of trust, whereby it conveyed all its railroad, property and franchise to the Central Trust Company of New York, as trustee, to secure the payment of the principal and'interest of certain bonds of the said, rail way company, commonly known as the consolidated mortgage bonds, which mortgage is by its terms a first and only mortgage lien on about thirty miles of said railway, and also a third lien on the remaining 100 miles, more or less, thereof;
“ And, whereas, the interest upon the said consolidated mortgage bonds was made payable on the 1st day of January and the 1st day of J uly in each and every year until their maturity on the 1st day of July, 1910;
“And, whereas, the said mortgage provides that whenever any interest upon the said bonds shall remain due and unpaid for the space of six months after demand, the trustee, at the request of one-third in amount of the said bondholders, may enter and foreclose ;
“And, whereas, default was made in the payment of the interest upon the said bonds which became due on the 1st day of July, 1885, which default still continues;
“And, whereas, a receiver have been put in possession of the said railway, and proceedings have been begun by the holders of the so-called first mortgage bonds to foreclose their mortgage:
“Now, therefore, we, the undersigned, who are respectively holders of the said consolidated mortgage bonds to the amounts set opposite our names, respectively, as hereunto subscribed, in consideration of the advantages which shall result to us, respectively, from a concert of action in enforcing our legal and equitable rights as secured to by the said mortgage, and for other good considerations, do hereby, each for himself and not the one for the other or either of the others, agree each with the others and each with the committee hereinafter mentioned as follows, that is to say:
First. That we will act together in all matters touching the enforcement of our rights in the premises, and especially of the payment by the said railway company of the principal and interest of our said bonds, it being especially understood and agreed that whatever may be done under this agreement shall be subject to the stipulations herein contained, for our respective benefit, according to tne amount of the said bonds held by us respectively; and that to facilitate and accomplish this end, we hereby ratify and confirm the action of the meeting of bondholders held in the city of New York on the 5th of November, 1885, appointing the following gentlemen a committee on our behalf, namely, Messrs. John W. Ellis, I. El Archer, E. T. Colburn, Evans E. Dick and Hugh L. Cole.
“And said committee are hereby authorized and empowered as our attorneys, and in our names, to take such proceedings, give such directions, execute such papers, and do such acts, under the said mortgage or deed of trust or otherwise, as they may consider judicious in order to bring about an enforcement of the said security and the payment of the principal and interest of the said bonds held by us respectively, or so much thereof as may be collectible.
That, in case a vacancy should at any time occur in the said committee by death, resignation, or otherwise, such vacancy may' be filled by a majority vote of the surviving members of said committee, subject to the confirmation of a majority in interest of the subscribers hereto, their legal representatives or assigns; and that such substitute shall have and exercise all the powers and authority under this agreement, previously possessed by the person in whose stead he shall have been selected and appointed, and to the same extent and effect as if he were named one of the said committee herein. That no member of the committee shall be individually pecuniarily liable, nor liable for the acts of the others nor for anything but his own wilful misconduct.
Second. That in order that the said bonds held by us respectively, and the coupons belonging thereto, may be used by the said committee for the 'purpose of bringing about a sale, foreclosure or reorganization of the road, or for the purpose of realizing in our behalf respectively our respective proportions of the proceeds of any sale to which, as holders of the said bonds, we may be entitled, we do hereby agree, at the time of the signing of this agreement by us, to deposit with the Central Trust Company of Hew York our bonds, to be held by it until the time of such sale, foreclosure, or reorganization, and then to be delivered upon request to the said committee, if they should require the same for any of the aforesaid purposes, provided that at the time of such deposit transferable certificates for such bonds and coupons, showing our right and title thereto, and that they are deposited under and subject to this agreement, shall be delivered to us respectively; and we do further agree that for the purpose of meeting the expenses of the said committee in carrying into effect the provisions of this agreement, that each of the subscribers hereto shall pay into the hands of the said Central Trust Company, for the use of our said committee, the sum of five dollars upon each of the said bonds held by him, upon depositing the same under this agreement, and that the aggregate amount of such contributions shall constitute a fund for the payment of such expenses, and that no expenses beyond the amount of said fund shall be incurred by the said committee, unless they shall be authorized to do so by a vote of a majority in interest present at a general meeting under this agreement,, to be called as provided in § 5th, in which case such further expenses may be incurred to the extent that shall be thus authorized, and each of the parties hereto shall contribute his pro rata proportion of the same.
Third. If, during the continuance of this agreement, an opportunity shall arise for making an arrangement or settlement of our respective claims upon said bonds without resorting to foreclosure proceedings, and upon terms which the said committee shall consider advisable, they are hereby authorized to make such arrangement or settlement accordingly, subject to confirmation by two-thirds in amount of the subscribers hereto, their representatives or assigns.
Fourth. That our committee is especially empowered to cause an appearance to be entered for us in any suits affecting our in-' terests which have already been, or which may hereafter be, instituted in any state or federal court, and to take steps to protect our interests therein.
Fifth. If, during the continuance of this agreement, any event not herein provided for should arise in relation to any matter growing out of the duties hereby devolvipg upon the said committee, or if it may become necessary to, in an3r manner, alter, amend or reconsider this agreement, or to levy any additional assessment on the subscribers hereto beyond the amounts herein-before provided for, a meeting for the purpose shall be called by the committee, and shall be determined by a vote of the majority in interest present or represented by proxy, and such determination shall be binding as well upon the said committee as upon all the subscribers hereto, their representatives or assigns.”

Under this agreement, up to and including April 2, 1889, consolidated mortgage bonds to the amount of $413,000, with unpaid coupons attached, were deposited with the Central Trust Co. and certificates issued therefor, such certificates providing that by receiving the same the holders assented to the agreement.

Among the consolidated bonds so deposited were five, numbered respectively 53, 54, 147, 148 and 135, and having thereunto annexed coupons maturing on and after July 1, 1885.^ The negotiable certificates representing these five bonds were in the name of Pomroy Brothers, and in due course were assigned and transferred to the respondents Deborah Powers and Son.

On April 2, 1889, the “ Cole Committee ” made an agreement with the firm of I. B. Hew combe & Co., and the Central Trust Company with reference to the consolidated bonds which had been deposited with the last mentioned company under the agreement of February 15, 1886.

This agreement was the result of a meeting of holders of con-sol certificates, called and held in Hew York April 2, 1889, in the manner prescribed by the agreement of February 15, 1886. At that meeting holders of certificates representing $261,000 out of $413,000 deposited consols were present I. B. Hewcombe & Go. made a proposition to acquire the deposited bonds. A discussion took place, and the proposition in an amended form was approved by a unanimous vote. The committee was directed to accept the proposition subject to confirmation by two-thirds in amount of the certificate holders.

The committee then met and a memorandum agreement was made and approved, and signed by Mr. Dick, for the committee, and by the representative of I. B. Hewcombe & Co.

The formal written agreement was thereafter drawn up, and was subscribed by the parties. It was dated April 2, 1889; acknowledged May 10, 1889, and signed by Mr. Evans K Dick, as chairman of the Consolidated Mortgage Bondholders’ Committee.

Mr. Dick signed it by “ the direction of the bondholders, in meeting convened, as to substance, and by the direction of the said committee as to substance and form.” Prior to May 10, 1889, the Cole committee issued a circular to the holders of said certificates informing them that said committee had been instructed in writing by the holders of certificates, representing 421 out of a total of 473 consolidated bonds deposited with the trust company to make the agreement.

The agreement recited among other things, that L B. Hewcombe & Co. had undertaken a reorganization of the Scioto Valley Bailway, involving an issue of $4,000,000 new four per cent, first mortgage or consolidated mortgage bonds, and desired to acquire title to the bonds deposited under the Cole agreement; and provided for the delivery of new bonds for certificates representing old bonds, bond for bond. It further provided that I. B. Hewcombe & Co., should buy back the new bonds or buy the old certficates on or before October 1, 1889, at 80, with interest from April 1, 1889, at 5 per cent.

It was provided in the fifth article of the agreement that “ in case the said I. B. Hewcombe & Co. elect to pay for the certificates in money, without the exchange of bonds having been made, the said committee will, upon the deposit of the necessary sums in the Central Trust Companj'-, notify its certificate holders to deliver their certificates to the Central Trust Company for the account of I. B. Hewcombe & Co. and receive payment for the same; when all such new bonds or sums of money shall have been so deposited, title to all the old consolidated bonds deposited under the agreement of July 15, 1886, shall vest in I. B. Hewcombe & Co.”

The date “ July 15 ” is no doubt a clerical error, as the bondholders’ agreement is referred to in the preamble of the Hewcombe agreement as “ dated February 15, 1886.”

It was further provided by article fourth that the agreement should become binding as soon as certificates representing two-thirds in amount of the deposited consols should have been stamped as assenting thereto.

In all there were $475,000 consols deposited under the Cole agreement, $413,000 of which were deposited before the meeting of April 2, 1889. More than two-thirds in amount of the certificates assented to the Hew combe agreement.

On May 13, 1889, an “agreement of purchase and reorganization of the Scioto Valley Bailway Company ” was made between a large number of holders of Scioto Valley securities, and the plaintiffs, Olcott, Fry and Hollins, were made a committee thereunder (Schedule A) annexed to complaint.

By instrument dated September 26, 1889, I. B. ISTeweombe & Co. transferred to the purchasing committee, the plaintiffs in this action, all the said consolidated bonds on deposit with the Central Trust Company in consideration of the furnishing by the committee and the payment to the Central Trust Company of the cash required to pay for the certificates in money. The sum of money required for this purpose was $259,875, being 82£ per cent on £315,000 of certificates outstanding.

Three hundred and fifteen thousand dollars, par value, was the entire amount of outstanding certificates, representing deposited .consols, on October 1, 1889. The remaining certificates were all turned over to the committee by I. B. ISTeweombe & Co., and, therefore, no cash was required to meet them.

Among the $315,000 of bonds for which there were certificates outstanding, and for which cash was paid into the trust company on October 1st, were the five bonds in question in this action.

Of. the $315,000 bonds, $310,000 drew their cash, leaving in ■ the Central Trust Company, still applicable to the payment of the five outstanding certificates, the sum of $4,125, which is $825 for each certificate.

The plaintiffs, as the assignees of I. B. ISTeweombe & Co., fully performed the provisions of the agreement of April 2, 1889, on their part.

About two months after the agreement was made, and on June 13, 1889, Mr. George F. Canfield, in reply to a circular issued by the “ Cole committee,” notified Mr. Dick, the chairman of that committee, that he was the holder of certificates representing the five disputed bonds, and that he was opposed to the sale of the certificates on the terms stated in the circular, and that he forbade any action looking to the sale of such certificates at any less price than par and accrued interest.

On June 20, 1889, Mr. Canfield sent a notice to the Central Trust Company denying the power of the committee to sell his bonds, and demanding delivery of them, and tendering his certificates.

On September 19, 1889, Mr. A. B. Powers, one of the defendants, demanded of the Central Trust Company the delivery of the five bonds, and tendered, the certificates.

The reorganization proceeded thereafter in regular course. In the suit of Huntington against The Scioto Yalley Eailway Company and others, which was not a foreclosure action, but one brought by a judgment creditor under the provisions of the Ohio law to procure a sale of the debtor’s property to pay the judgment, the Central Trust Company had answered, and on December 10, 1889, a decree was entered adjudicating the rights of the various parties and the priorities of the respective liens, and directing a sale of the property to satisfy the amount due upon said liens.

On January 22, 1889, a sale under the decree was made by Joseph Eobinson, special master, and at such sale there was realized a sum sufficient to pay the full amount of principal and interest of all the consolidated bonds, namely, $1,407.90 per bond, which amount the court ordered the special master to distribute to the holders of consolidated bonds, and said sum was, on February 10, 1890, after the commencement of this action, distributed by the master.

After the commencement of this action, which was begun on February 4, 1890, the five bonds in question were, through an oversight, delivered to the special master, together with all the other consolidated bonds in possession of the trust company, and upon this being discovered the master paid into the trust company $7,039.50, being the dividend amount applicable to the five bonds, and took a receipt therefor, stating that the bonds were in litigation between the purchasing committee and D. Powers & Sons, and the Central Trust Company agreed to hold the amount pending the litigation, and to pay it to the parties whom the courts should finally determine to be the owners of the bonds.

In view of the claim by D. Powers & Sons, the Central Trust Company refused to deliver the bonds to the purchasing committee, and thereupon this action was brought to determine the ownership of the securities.

The Central Trust Company answered, submitting its' rights and duties to the decision of the court.

The defense and claim set up by the respondents, Deborah Powers k Sons, was to the effect that the consolidated bondholders’ agreement did not confer upon the committee power to sell the bonds to third parties, but simply to collect the money due upon the bonds, and that power to collect does not include power to sell. The learned referee coincided in this view and gave judgment for said defendants, D. Powers & Sons, and from such judgment this appeal is taken.

There is no question but that, taking into consideration the recitals of the bondholders’ agreement it was in contemplation at the time that that agreement was signed that the rights of the holders of these bonds were to be enforced against the railway -company by means of the bonds and mortgage, and that it was deemed for the advantage of all in the enforcement of their rights under the bond and mortgage that united action should be had. It was' for this purpose that the combination was formed. This view is re-enforced by the provisions of the second paragraph of the agreement, which provided that “ in order that the said bonds held by us respectively, and the coupons belonging thereto, may be used by said committee for the purpose of bringing about a sale, foreclosure or reorganization of the road, or for the purpose of realizing in our behalf, respectively, our respective proportions of the proceeds of any sale to which, as holders of said bonds, we may be entitled.”

This language clearly contemplated that the committee were to represent the holders of the bonds in the distribution of any proceeds which might arise from the enforcement of' the claims of the bondholders of the mortgage, or otherwise. And we think that under the third clause of the agreement, where it speaks of the arrangement or settlement of their respective claims without resorting to foreclosure proceedings, it was contemplated that such' settlement should be made with the debtor and, perhaps, by agreement with the holders of other securities, and in no manner contemplated or conferred any power upon the members of the committee to make apy sale or disposition of the bonds, but only to collect and compromise the debt.

The fifth clause of the agreement, however, is of an entirely different character. And as in our judgment the decision of this case depends upon this clause of the agreement, it may not be improper to repeat its language again in this connection.

If, during the continuance of this agreement, any event not herein provided for should arise in relation to any matter growing out of the duties hereby devolving upon the said committee, or if it may become necessary to in any manner alter, amend or reconsider this agreement, or to levy any additional assessment on the subscribers hereto beyond the amounts hereinbefore provided for, a meeting for the purpose shall be called by the committee and shall be determined by a vote of the majority in interest present or represented by proxy, and such determination shall be binding as well upon the said committee as upon all the subscribers hereto, their representatives or assigns.”

It seems to us that by means of this provision in the agreement, the unexpected was to be provided for; that it was considered safe that the decision of the majority in respect to the best means of realizing'upon these bonds should control; and that if the scheme as contained in the agreement was found ineffectual and it became apparent that it was necessary to adopt a different method in order to realize upon these bonds, the committee should have the power so to do, provided their action was ratified by a majority of those present at a meeting called in the manner provided for by the agreement.

It was in pursuance of this provision ■ of the agreement, apparently, that the Cole committee called a meeting of the certificate holders and submitted to them the proposition of Newcombe & Co., in reference to their bonds.

The proposition was discussed at this meeting and after amendment was approved by unanimous vote, and the committee were directed to accept the proposition subject to confirmation by two-thirds of the certificate holders, thus protecting as far as possible, the interests of said holders.

Pursuant to the power conferred upon the Cole committee, the agreement with Newcombe & Co. was signed and confirmed by 421 out of a total of 473 of the consolidated bonds.

It is true that the original reorganization agreement was not formally altered or' amended; but it certainly was reconsidered, and a new basis of realization upon these bonds were presented, and not only adopted by a majority of the certificate holders, but by over two-thirds thereof.

There is no provision in the bondholders’ agreement requiring its reconsideration to be reduced to writing; nor is the form provided for except that it shall not be done unless at a meeting called for the purpose and a vote of a majority of those present or represented by proxy shall be cast in favor of the proposed reconsideration or alteration.

The fifth clause evidently was intended to meet unforeseen contingencies, and to bind the minority of these bondholders who had signed this bondholders’ agreement to the action of the majority in case it became necessary in the opinion of the majority and of the committee to adopt some other scheme, and that a factious minority should not be able to prevent the carrying out of a scheme which to the committee and to the majority of the bondholders might seem for the advantage of all concerned.

The language is: “if during the continuance of this agreement, any event not herein provided for should arise.” The event did arise when bTewcombe & Co. made their proposition. The committee called a meeting of the certificate holders, submitted the proposition, as made, to them, and as amended it was overwhelmingly adopted.

The learned referee, in his opinion in noticing this article of the •agreement, bases his opinion upon the fact that no proposition to alter the agreement was submitted at the meeting of the certificate holders, and that what was submitted to the meeting, as he claims, appears to have been simply a proposition of bTewcombe & Co. to purchase the bonds, which was assumed to have been in the power of the majority to accept and make binding on all parties to the agreement. If that was so, Powers & Co., are bound; otherwise not.

The very submission of the proposition to the meeting of the bondholders and its adoption was a reconsideration of the agreement which that meeting was authorized by the provisions of the fifth article to do.- It was submitting a different proposition looking to the result of collection through a means which had not been contemplated by the original agreement, and this was an event not provided for in the agreement which arose. The committee had an opportunity to realize upon these bonds. They did not know what would be the result in case they awaited the ending of the foreclosure proceedings and the sale of the road. They deemed it for the advantage of these certificate holders to make a certainty of what was then an uncertainty.

But it is said that the bTewcom.be contract is not and does not purport to be a contract for the sale of the bonds. It is simply a contract for the sale of assenting certificates and the bonds of such certificate holders as expressly assented to these terms.

It seems to us that this is a very strained construction of the agreement. It was necessary that there should be some record kept of those who assented to this agreement, in order that it might ascertain when two-thirds of the certificate holders had assented ; and as the agreement could not become operative until such two-thirds had assented, it was a matter of some importance, and it was for that reason that the certificate holders were invited to present their certificates to the Central Trust Co. to have them stamped “ Assent to the agreement, etc.”

It is also true that throughout this agreement the certificates are the indicia of property which is spoken of, and not the bonds. But it is perfectly clear that as the bonds followed the certificates and as holders of the certificates under the terms of the agreement would be entitled to the bonds, it is immaterial whether they spoke of bonds-or certificates, and the agreement expressly provides that when Newcombe & Co. comply with their part of the agreement the title to all the old consolidated bonds deposited under the agreement should vest in Newcombe & Co. If it was not intended to bind the. signers of the original reorganization agreement to this new arrangement, and only to bind those who assented to this new arrangement, what would have been the necessity of calling the meeting under the fifth clause of the reorganization agreement That shows clearly the intention with which this new agreement was entered into; and it was impossible for them to successfully carry out the negotiations if there should be outstanding bonds which were not bound thereby.

By the terms of the fifth clause, already adverted to,'the adoption by this meeting of the negotiation with Newcombe & Co. bound all the subscribers to the agreement, their representatives or assigns. It, therefore, does not seem possible to substantiate the claim that only the assenting certificate holders were bound by this arrangement

It is further claimed that the Newcomb contract was at most an executory contract to sell, and the title would not pass until the money was paid and that long prior to that the powers of the Cole committee were revoked. Undoubtedly an attempt to revoke was made, but where parties enter into an agreement with each other containing mutual covenants where it is apparent upon the face of the agreement that the Signing by one is the inducement for another to sign, and that the agreement is entered into in order that all shall share alike in the result, and where it is apparent that it was the intention of the signers of this agreement that the will of the majority should control, it is difficult to see where the power of revocation comes in. In addition to that, upon the faith of this very agreement moneys were subscribed for the phrpose of carrying -it into effect.

If there was to be a power of withdrawal what was the sense in providing that the determination of the meeting of certificate' holders should be binding upon all the subscribers to the agreement, if each one of them had a right to withdraw when he pleased.

It is somewhat difficult to see how he could be bound, if he need not remain a subscriber. It is clear that it was the intention of these parties that the subscribers to the agreement should be bound by its terms and conditions, that there should be no power of revocation, and that the majority should control, in reference to the methods of realizing upon their bonds in case the scheme contemplated in the agreement should be found inoperative. The whole basis of the agreement would necessarily fall if there was a power of revocation. Therefore, the holders of the bonds, now represented by Powers & Son, having become parties to this agreement, Powers & Co. could not withdraw the securities from the pledge under which they had been placed.

Upon the whole case, therefore, we are of opinion that the learned referee erred in holding that under the circumstances the committee had no power to make a sale of the bonds to Rewcombe & Co., and that the judgment should be reversed, the order of reference vacated, and a new trial ordered with costs to appellant to abide event

Barrett and Patterson, JJ., concur;


author: Bartlett, J. Barrett, J. (dissenting).

text:
    Arthur J. Connelly, Resp’t, v. The Manhattan Railway Company, App’lt

      (Supreme Court, General Term, First Department,

      Filed June 26, 1891.)

    Evidence—Expert—Form oe question.
    In an action for damages for personal injuries, a physician testified that he first saw the plaintiff about a fortnight after the accident, and found him then suffering from meningitis. The witness stated that he had heard the portion of the plaintiff’s testimony which gave an account of the accident. He was then asked, “ Were those injuries, received in the way which he has stated, sufficient to produce the results and conditions you discovered on your examination ? ” Held, that such question was improper, as it permitted the witness to answer for himself, irom the testimony of the plaintiff, the facts upon which he based his opinion, without informing the jury what he supposed or believed such facts to be,
    Appeal from judgment in favor of plaintiff, entered upon a verdict at circuit, and also from an order denying the defendant’s motion for a new trial.

      Julien T. Davies, Alexander S. Lyman and Brainard Tolles, for app’lt; Jacob Fromme and Chauncey Shaffer, for resp’t.
   Bartlett, J.

—There is evidence enough in this case to sustain the judgment, and I should be in favor of affirmance were it not for an error which it seems to me was committed by the learned trial judge in the admission of testimony. Dr. Adolph H. Lesser was examined as a witness to prove the extent and nature of the injuries sustained by the plaintiff. He testified that he first saw the plaintiff about a fortnight after the accident, and found him then suffering from meningitis. The witness was then asked by Mr. Shaffer, who represented the plaintiff upon the trial, to what he attributed this meningitis. This question was objected to by the defendant’s counsel on the ground that it allowed the witness to accept or reject such facts as he saw fit, and because the form of the question was improper, and the opinion of the witness should be asked on facts stated; it being admitted that the witness had no knowledge of the plaintiff until after the accident. The objection was overruled, and the defendant’s counsel excepted, and the witness answered: “ 1 have heard a portion of the plaintiff’s testimony.” What next followed is shown by this extract, from the appeal book:

“Question by the court: The plaintiff in this case claims to have been thrown down in a car of the elevated railroad, on his back. Did you hear his statement of the manner in which he was thrown down? A. Yes, sir, I heard that.”

Thereupon the court put the following question:

“In answer to court: Q. Were those injuries, received in the way in which he has stated, sufficient to produce the results and conditions you discovered on your examination ? ”

Counsel for defendant objected to the question on the ground stated to the question put by Mr. Shaffer to the witness. The court overruled the objection and counsel for defendant duly excepted.

“A. It was quite sufficient to produce that injury; to produce meningitis; it was quite sufficient to produce Mr. Connelly’s difficulty.’’

The witness then went on to say that meningitis was a progressive disease, and there can be little doubt that his testimony on this subject'tended to augment the damages awarded to the plaintiff.

I do not see how the evidence thus admitted can be distinguished from that which led to the reversal of the judgment in Page v. Mayor, 32 N. Y. State Rep., 563, and The People v. McElvaine, 121 N. Y., 250; 30 N. Y. State Rep., 977. The objection to the question allowed to be answered was that it permitted the witness to assume for himself from the testimony of the plaintiff the facts upon which he based his opinion, without informing the jury what he supposed or believed such facts to be. No doubt it is not an uncommon practice, in examining medical witnesses, to ask them whether they have heard the testimony of the person who deposed to the circumstances under which injuries were received, and if he answers in the affirmative, to inquire as to his opinion upon the testimony so given. This practice, however, which is usually resorted to for the purpose of facilitating the progress of the trial can only be justified where no objection is made. The party against whom the evidence is offered is entitled, if he so desires, to have an explicit statement made to or by the expert witness of the precise state of facts upon which his opinion is based; and it seems to me clear that this rule was disregarded in the admission of the evidence to which reference has been made on the trial of the case at bar.

For these reasons, I think we ought to reverse the judgment and order a new trial.

Yan Brunt, P. J., concurs.

Barrett, J. (dissenting).

-This case toox a somewhat unusual “turn at the trial. It is an action for damages for a personal injury to the plaintiff, while a passenger on one of the defendants’ cars. The injury resulted from a collision of two trains upon the defendants’ elevated railroad at Seventy-sixth street and Third avenue in this city, on the 12th of March, 1888, the day of the “ Great Blizzard.’’ The defendants, in their answer, denied the fact of the collision and all charges of negligence. Upon the ■opening of the trial, however, they asked leave to amend their answer, so far as to admit the collision. They also admitted that the fact of such collision, of itself, entitled the plaintiff to recover damages, and they asked leave to further amend their answer by setting up “ the affirmative defense that the accident happened, notwithstanding the exercise of the highest degree of care on the part of the defendants; that it was an unavoidable accident within the meaning of the law, and was attributable to what is known in the law as an act of God, and could not be prevented by the exercise of that degree of care which the law required of the defendants, under the circumstances existing at the time the accident happened.’’ This motion was granted, and the court allowed the answer to be amended accordingly. The case was then tried upon the theory that the affirmative was upon the defendants, except as to the amount of damages. Accordingly the plaintiff contented himself with proving the fact of the injury, and the damages resulting therefrom. Thereupon the defendants took up the burden which they had thus imposed upon themselves, and gave testimony tending to support the affirmative allegation which we have quoted. When they rested, the plaintiff gave some testimony tending to contradict or explain the defendants’ evidence, and thereupon the whole case was submitted to the jury, who found for the plaintiff with $10,000 damages.

The defendants’ first point is, that they established the fact that the accident was unavoidable, and could not have been prevented by the exercise of that degree of care which the law required of them under the existing circumstances, and that, therefore, they were entitled to the direction of a verdict in their favor. We have read all the evidence with great care, and we do not think that this contention is well founded.

There was, in our judgment, enough to go to the jury upon these questions. The appellants have presented an able and exhaustive argument in support of this contention, but we think it was competent for the jury upon the whole case to say that the self-imposed burden had not been fully met It was indeed a fearful day, and the defendants were entitled to and doubtless received the full benefit of this consideration. The storm, however, did not absolve the defendants from their duty to exercise that degree of care which the circumstances called for. It rather demanded more than ordinary vigilance and vigor. We think it was proper for the jury to consider several circumstances tending to show a want of proper care. The car in which the plaintiff was standing at the time of the collision was blocked at the Seventy-sixth street station. It had been standing there for twenty minutes. One of the defendants’ rules is that “ when trains are blocked, agents will immediately notify the entire line, display the card ‘ line blocked,’ and sell no tickets unless passengers insist on purchasing.” Was this notice given? If not, why not? And if given, why was a train permitted to proceed from the Eighty-fourth street station in the direction of this “block?” Why, at least, were the engineers of that train not notified of the “ block ” and ordered to proceed from Eighty-fourth street slowly and with care, instead of being directed to skip the Seventy-sixth street station? These are questions which naturally and properly suggest themselves. But they are entirely unanswered by any testimony offered by the defendants. The jury had a right to consider the absence of such testimony when they were asked to believe that the defendants had done everything in their power to' prevent the collision. The defendants seemed to think that their responsibility rested upon the manner in which the colliding solely train was run. But they were also called upon to exercise due care (regard being had, of course, for the exceptional circumstances with which they were dealing), in the dispatch and movement of their trains. Then, as to the running of the colliding train, we think it was for the jury to say whether the engineers- did their full duty in the premises. Upon the testimony of these men, the claim is made that every possible agency was brought to bear to prevent the accident, and that the train failed to respond to the brakes and the sand solely because of the down grade and the •extraordinary condition of the tracks.

It appeared, however, that the down grade- stopped between Seventy-ninth and Seventy-eighth streets, and that from a point about twenty-five feet north of Seventy-eighth street down to the Seventy-sixth street station, and somewhat beyond, it was entirely level. Considering this fact, and also the great force, with which the colliding train was driven into the standing car, the jury were justified in doubting the entire accuracy of the testimony given by these engineers, and in attributing the collision to the rate of speed at which the train was run, to the neglect of the engineers to observe the train standing in front of them sooner than they did, and to their failure to apply the brakes in due season. The great momentum attending the collision, and the fact that the engineers had been ordered to pass the Seventy-sixth street station without stopping, certainly give color to these considerations. When, in addition, we find that the engineers are not quite in harmony as to the rate of speed, and are contradicted by one of the plaintiff’s witnessess (Jacobs), who says that, notwithstanding the blinding and unparalleled storm, the train did not go slow, but “ at the same rate it always goes, the same as they go down every grade,” it is impossible to say that there was absolutely no question for the jury. The schedule time was twelve miles an hour, which is probably what Mr. Jacobs meant by “ the same rate it always goes.” One of the engineers (Ehein) says they passed down the grade at not more than six miles an hour, and that notwithstanding every effort, and the use of every possible .appliance, they were still going at the rate of four miles an hour when they struck the standing train.

This, too, although a considerable part of the space traversed was upon a level. The other engineer (Eyan) says, on his direct examination, that at the crest of the hill at Eighty-third street the train was going at between “four and six miles an hour; ” yet, on cross-examination, he testified that “ as near as he could judge, the rate of speed while he was ctiming down from Eighty-fourth street to Seventy-sixth street was between about six and •eight miles an hour.”

There were still other circumstances which might properly be •considered by the jury. We need not go over them all. Suffice it to say that upon the whole we think the learned judge was right in denying the motion for a direction and in submitting the ease to the jury. It was'so • submitted in a careful charge, the exceptions to which are not pressed further than by a general protest against the theory that the admission and amendment made at the opening of the trial shifted the burden of proof. But there can be no doubt that the defendants did assume this burden, and that the charge was entirely correct in the view taken of this admission and amendment The statement in the charge that the burden was on the defendants to show “ that the collision could not have been avoided,” should be read in connection with what precedes and what follows. It is apparent that the learned judge conveyed no such idea to the jury as that the defendants were liable as insurers. He qualified the expression above quoted by the reference to “ human care, skill and foresight,” which follows it. What preceded accentuates his meaning and renders it quite clear that the jury could not have misunderstood what he sought to convey. At one time he speaks as follows:

‘•You, therefore, see that the burden of proof has been shifted, and is now upon the defendant, the railroad company, to satisfy you by a fair preponderance of evidence that the contention that they make that this was not due to any act or neglect or omission or failure to perform the legal duty imposed upon them, that it was from no fault on their part or their servants that this injury resulted.”

This is again emphasized by the observation :

“I do not mean that you are to determine that question as to whether it could not be possible upon some view to have prevented the injury, but the test is whether the defendant company used all the skill and care and foresight that human beings are ordinarily endowed with and are called upon to exercise. If they have done that, they have performed their duty.”

It is plain that the jury could not have been misled by the expression objected to.

The remaining question relates to the admission of evidence. The defendants contend that it was error to permit the physicians who examined and treated the plaintiff to state the symptoms of which he complained when they were examining him with a view to diagnosis and treatment. It has always been the rule to admit testimony of this character. Greenlf. on Ev., § 102; Phil. on Ev. (5th Am. ed.), vol. 1, 147-150; Matteson v. R. R. Co., 35 N. Y., 491, 492.

The patient’s “ complaints and representations of pain and suffering,” as was said in the case last cited, “together with his appearance and conduct, necessarily formed the basis” of the physician’s judgment.

The rule to which the appellants refer, and which we think they misapply, -relates to similar statements, not in their nature mere exclamations of pain, made to non-professional witnesses. Such declarations have been finally excluded in this state. Roche v. Brooklyn City & Newtown R. R. Co., 105 N. Y., 295; 7 N. Y. State Rep., 361. In the latter case, however, a reservation is distinctly suggested with regard to statements made to a physician for the purpose of professional attendance.

The only serious question as to the admission of evidence is whether the physicians should have been permitted, without a hypothetical question, to state that the injuries received by the plaintiff were sufficient to produce the conditions which they discovered. The accident occurred, as we have seen, on the 12th of March. Prior to that time the plaintiff was a strong and healthy man. After the accident he suffered more or less for a week or two, when he went to his family physician, who, after an examination, decided that a specialist was required. Thereupon he consulted Dr. Lesser. This was in the early part of April. Dr. Lesser testified that he found the plaintiff suffering from spinal cerebral meningitis with continuation of changes along the spinal marrow or spinal cord. He was then asked to state the cause of such meningitis. This was objected to on the ground that the question “allowed the witness to accept or reject such facts as he saw fit, that the form of the question was improper, and that hi¡§ opinion should be asked on the facts stated, and also that the question was indefinite and uncertain.” Although this objection was overruled, the question was not answered, the witness simply saying, “I have heard a portion of the plaintiff’s testimony.” We quote what followed, from the case.

“ Question by the court: Q The plaintiff in this case claims to have been thrown down in a car of the elevated railroad on his back. Did you hear this statement on the manner in which he was thrown down? A Yes, sir; I heard that.

“ Thereupon the court put the following question:

“In answer to the court: Q. Were those injuries, received in
the way in which he has stated, sufficient to produce the results and conditions you discovered on your examination ?
“ Counsel for defendant objected to the question on the ground stated to the question put by Mr. Shaffer to the witness. The court overruled the objection and counsel for the defendant duly excepted.
“A. It was quite sufficient to produce that injury, to produce meningitis. It was quite sufficient to produce Mr. Connelly’s difficulty.”

The question put by Mr. Shaffer to the witness was that which we have above mentioned as to the cause of the meningitis.

While it would undoubtedly have been better to frame a hypothetical question, we think it was not error, under the peculiar facts of this case, to permit the question as formulated by the learned judge. The witness, it is true, stated that he had heard a portion of the testimony; but that portion, as appeared from the subsequent answer, covered all that the plaintiff had testified to as to the manner in which he was thrown down. Now, there really was nothing more in the plaintiff’s testimony on that head than the bare statement that owing to the shock of the collision he was thrown down upon his back. He remembered, and all he did remember was, that he bad an umbrella in his hand when he fell, that that umbrella was found under his back after the fall and was then broken in the center ; and that when he fell he struck something, but could not tell what This was the entire story of the fall. It was neither disputed nor modified. Ho different version of the affair was given by any one. In itself it admitted of no possible misapprehension or varying hypothesis. It afforded no opportunity for accepting part of the testimony and rejecting such of it as the witness might deem unreliable. If a hypothetical question had been framed, it would have amounted to nothing more than asking the witness to assume that, owing to the shock of the collision, a man fell on his back in a car with his umbrella under him and struck “ something.” Indeed the reference in the question to his testimony was almost superfluous, in view of the prefatory statement as to the plaintiff’s claims. It was equivalent to asking him, “Did you hear the plaintiff’s statement that he was thrown down in a car on the elevated railroad, on his back ?” That was the substance of it, with the single addition of his having struck “ something.” It would be sacrificing substance to form to hold that such a question, under such circumstances, permitted the witness to usurp the functions of the jury or to give conclusions based upon his own view of the facts. The simplicity of the single fact testified to by the plaintiff, and the impossibility of viewing such fact in any but one way, save the question from the condemnation of such cases as Page v. The Mayor, 32 N. Y. State Rep., 563, and warrant us in sustaining the judgment, the case being otherwise free from error. The question put to one of the physicians: “In your opinion is the disease from which the plaintiff is suffering likely to be temporary or permanent ?” was clearly objectionable, and the ruling favorable to the question erroneous. The error, however, was not prejudicial, as the answer excluded any doubt, uncertainty or mere likelihood. The physician declared that the disease was a permanent and progressive one and inevitably fatal; that he based his opinion on a large experience in the same kind of cases, and from the fact that when the spinal cord is once diseased it can never recover itself.

The questions put to the non-professional witnesses were unobjectionable. They only called for the plaintiff’s appearance, movements, manner of walking, etc. This has always been allowed. The questions put to these witnesses being proper, the plaintiff is not responsible for an inadmissible remark made by one of them, such as that “he looks to me like a physical wreck.” That was not called for by the question and was improperly volunteered.

The damages were not in our judgment excessive. The plaintiff was severely and permanently injured. He was put to great expense, and his earnings have been diminished.

Upon the whole, we see no reason for disturbing the verdict, and the judgment and order appealed from should, therefore, be affirmed, with costs.

Judgment reversed and a new trial ordered.