author: Andrews, Ch. J.

text:
    In the Matter of the Petition of the Argus Co., William R. Cassidy et al., Resp’ts, v. James H. Manning et al., App’lts.

      (Court of Appeals,

      Filed June 27, 1893.)

    1. Corporations—Petition for relief against illegal acts by directors—Parties.
    In a proceeding brought by two individuals claiming to be directors of the Argus Company, to establish their election as directors of said corporation, and to set aside the pretended election of the appellants, the latter claimed that the ‘ ‘Argus Company ” was joined as one of the petitioners, without authority. Held, that it could not affect their right to have their petition heard that another party was joined as petitioner without, authority.

      2. Motions and orders—Order to show cause—Jurisdiction.
    The jurisdiction of a judge out of court to make an order to show causéis not restricted to cases where the matter to be heard may be heard out. of court.
    3. Same—Rule 38.
    Rule 88 does not undertake to exclude a judge at special term, engaged. at the time in holding a circuit, from entertaining a motion noticed for such term, if, in his judgment, the circumstances and the rights and interests involved render it proper that he should do so.
    4. Corporations—Directors—Election.
    The receipt of illegal votes in favor of a candidate who also has received, a majority of the legal votes, does not defeat his election. It is the rule of corporate elections in stock corporations that the majority of legal votes determine the election.
    5. Same.
    On the 12th of April 1893, a stockholders’ meeting of the Argus Company was legally called, at which petitioners, two of the directors, were present, and they caused notice of the stockholders’ meeting for the election of directors to be duly published. Said meeting was legally organized. Of the 500 shares of the stock, petitioners’ directors received 300 votes, and appellant’s directors about 200 each. During the progress of the meeting first organized, a second meeting was organized in the same room, at which votes were received for appellant’s directors, the largest vote being for James H. Manning, who received 200 in all. The 300 shares-voted upon in favor of petitioners’ directors included 100 shares one Speer purchased from the owner, Mrs. W., by one of the petitioners as agent of said Speer, and voted on by a proxy of Speer’s. Mrs. W. had inherited her stock from her father who had, in 1878, made an agreement with the other owners of the stock that neither of the parties would sell, assign or dispose of any of the stock then held or afterwards acquired, without first offering an opportunity to the other parties to purchase, the agreement further providing that it should terminate when either party should have disposed of his or her shares, and binding the heirs, executors, administrators, devisees and legatees of the parties. Held, that the right of Speer to vote upon the stock purchased of Mrs. W. could not be affected by the existence of an unenforced equity growing opt of the violation of the agreement of 1873, although Speer had notice of the agreement when he purchased.
    6. Same.
    In 1881, and prior to the purchase of the stock by Speer, Mrs. Cassidy gave thirty shares of the stock to her son, and the transfer was entered on the stock book of the Argus Company at her request, although she retained the original certificate. In 1888 she gave all of her shares to her sons, eighty shares to one and forty to another, which were transferred to them on the books, and new certificates issued. Held,, that the agreement of 1873 was thereby terminated, and all parties released from its obligation.
    *7. Same—Entry of transfer on stock book.
    On the 29th of March, 1893, the day following Speer’s purchase of the-stock of Mrs. W., he presented the transfer to Manning, the president of the Argus Company, and requested that he enter it on the transfer book, and issue a new certificate, to be used at the approaching election April 12th. Manning the next day refused to comply, and on March 31 left the state, taking with him the key to his private drawer containing the stock book. That afternoon the two other directors met and issued a notice for a directors’ meeting to be held that evening, of which a written notice was left at Manning’s residence, with his servant, who said he had left the city. At the evening meeting the two directors, being unable to find the old stock book, by resolution adopted a new stock and minute book, and issued the stock to Speer. Held, that if for any reason the existing transfer book is not available for use by the directors of a corporation for the making of transfers of stock, the adoption of a new stock book is incident to the original power vested in the directors, and that this was an exigency which justified the adoption of a new stock book.
    8. Same—Notice of meeting.
    A general notice of a meeting of directors is all that is requisite to a valid meeting of directors for the determination of matters pertaining to the ordinary business affairs of a corporation, and the adoption of a new stock book is not an extraordinary emergency requiring it to be mentioned in the notice of a meeting.'
    9. Same—Injunction—Violation of.
    On April 1, 1893, an injunction was issued enjoining Speer and others, from using the stock book adopted by the two directors at the election of April 12th. The book, although lying upon the table at said election, was not referred to or used. Held, that as the new stock book of the company had been legally adopted, and the inspectors had been enjoined from using it, the qualification in § 20 of the Corporation Law of 1892 applied, and the inspectors were placed in the same position as if the Stock book could not be found, and had no right to use a former stock book in determining the challenges.
    Appeal from order of the supreme court, general term, third department, affirming order of special term adjudging that respondents were duly elected directors- of the Argus Co.

      E. Countryman and E. J. Meegan, for app’lts; Matthew Hale, Wm. N. Cohen, R. A. Parmenter and George L. Stedman, for resp’ts.
   Andrews, Ch. J.

By the order of Judge Parker, made at the Ulster circuit and special term on the 28th day of April, 1893, it was adjudged that William H. Johnson, William E. Cassidy and "William McM. Speer, were duly elected directors of the Argus ■Company at the meeting of stockholders held on the 14th day of April, 1893, and that James H. Manning, Frederick C. Manning and John A. Delehanty, who claimed to have been elected directors at said meeting, were not so elected, and they were enjoined from acting as directors, and required to deliver to the persons so. .adjudged to have beefi elected the property of the Argus Company and control of its affairs, and to refrain from any interference therewith. The general term, for the purpose of facilitating the final disposition of the controversy, promptly affirmed the -order of the special term, and this appeal was taken from the order of affirmance. The matter has been fully argued in this court, .and it remains to state the conclusions reached upon the questions presented. The proceeding which resulted in the order of the -.special term was instituted under § 27 of the General Corporation Law of 1892. That section, which is in substance a re-enactment •of a provision in the Eevised Statutes, 1 Eev. St., 603, § 5, makes it the duty of the supreme court, upon the application of “ any person or corporation ” aggrieved by, or complaining of any corporate election or any proceeding, act or matter touching the same, upon notice to the adverse party or to those to be affected thereby, “ forthwith and in a summary way ” to have the affidavits, proofs and allegations of the parties, or otherwise inquire into the matters or causes of complaint and to establish the election or ■order a new election, or make such order and give such relief as right and justice may require.-

Before considering the merits of the controversy there are -certain preliminary questions raised respecting the procedure which should be determined. The proceeding was commenced by verified petition addressed to the supreme court, purporting to have been made in behalf of the Argus Company and by William H. Johnson and William E. Cassidy, individually, •setting forth alleged facts relating to the election of April 12, 1893, resulting as was claimed in the election of William II. Johnson, William E. Cassidy and William McM. Speer as directors of the Argus Company. The petition averred that James H. Manning, Frederick C. Manning and John A. Delehanty claimed and pretended to have been elected directors at ■such meeting, and had taken possession of the property of the Argus Company, and excluded the rightful directors from the possession and control of its affairs. It concluded by a demand for relief establishing the election of Johnson, Cassidy and Speer .as directors, and vacating and setting aside the pretended election of James H. Manning, Frederick C. Manning and John A. Delehanty. Upon this petition, a justice of the supreme court in the third district, on the 2d day of April, 1893, made an order at -chambers requiring the contesting directors to show cause at a special term to be held at the court house at Kingston, on the loth day of April, 1893, why the prayer of the petition should not be granted.

Several objections to this order are made : (1) It is insisted that the Argus Company was joined as one of the petitioners without .authority. It is a sufficient answer to this objection that § 27 of the General Corporation Law authorizes the proceedings under that section to be taken upon the application of “ any person or corporation ” aggrieved. William U. Johnson and William E. Cassidy, two of the petitioners, were stockholders in the Argus Company, and joined in the petition, and there can be no question of their right to make the application. It cannot affect their right to have their petition heard, that another party was joined as petitioner without authority. (2) It is insisted that the matter being one which under § 27 is to be heard and decided by a judge in court, an order to show cause could only be granted by a court, and could not be granted by a judge out of court. An order to show cause is a means of shortening the usual time of notice of a motion prescribed by the general rules of practice. Section 780 of the Code declares that a notice of eight days shall be given of a motion or other proceeding in an action before a court or judge, where notice is necessary and where special provision is not otherwise made by law, “unless the court or a judge thereof, or a county judge,” upon an affidavit showing grounds therefor, makes an order to show cause, and in the order directs that notice of less than eight days may be given. The jurisdiction of a judge out of court to make such an order is not restrained in terms to cases where .the matter to be heard may be heard out of court, and we perceive no reason in policy or in the language of the statute for annexing such a limitation of his powers. It is obvious that the existence of a power in a judge out of court to make an order shortening the usual notice to be given of a proceeding in court may jaromote the administration of justice and prevent unnecessary and injurious delay. The facts stated in the verification were sufficient to justify the granting of the order, and the discretion of the judge is not reviewable here. (3) It is insisted that conceding the power of a judge out of court to grant an order to show cause returnable at special term, nevertheless this power is subject to a restriction imposed by rule 38 of the general rules of practice of the supreme court, which provides, subject to certain exceptions not here material, as follows: “Rule 38. Contested motions shall not be

noticed or brought to a hearing at any special term held at the same time and place with a circuit.” The order to show cause in this case was returnable at a special term which was then being held in the county of Ulster in connection with a circuit and a court of oyer and terminer duly appointed for that county. On Saturday, the 15th day of April, 1893, the day on which the order was returnable, the judge holding the circuit and special term, on the petition being presented, overruled the now and on the and upon affidavits in support and in opposition thereto, appointed a referee to take testimony, and adjourned the further hearing until Saturday, the 24th day of April, on which day the' matter was heard on the petition, affidavits and proofs taken before the referee, and the court subsequently, on the 28th day of April, decided the case and made the order now in question.

We think the order cannot be assailed for want of power of the court to entertain jurisdiction of the proceeding under rule 38. There is much force in the suggestion that a proceeding instituted under § 27 of the General Corporation Law is not a contested motion ” within the meaning of the rule.

Rule 38 may well be construed as referring alone to those incidental applications ordinarily denominated motions, which are made during the progress of an action or special proceeding after its commencement, and not as embracing an application which is the foundation of a statutory remedy.

But aside from this consideration, there is, we think, another answer to the objection made. Rule 38 must be interpreted in view of the reason upon which it rests. The object of the rule was to prevent interference with the ordinary work of a circuit or court of oyer and terminer, by the interjection of motion business bearing no relation to cases on the calendar, and also to prevent the inconvenience to counsel of being compelled to attend a special term held in connection with a circuit upon motions in outside cases where the hearing might be delayed by the regular calendar business. Rule 38 is a rule primarily regulating the conduct of attorneys. The attorneys give notice of motions and bring them on for hearing, and rule 38 prescribes a rule of conduct for their guidance. The rule does not undertake to exclude a judge at special term, engaged at the same time in holding a circuit, from entertaining a motion noticed for such term, if, in his judgment, the circumstances and the rights and interests involved render it proper that he should do so. He may refuse to hear a contested motion at such a term upon the ground that it was irregularly noticed, but if he chooses to exercise the undoubted jurisdiction of a judge holding a special term, whether separately or in connection with a court, to dispose of any non-enumerated business appertaining to that branch of the court, and the parties are before him, the rule constitutes no limitation upon his power. Any other construction of the rule might result in serious inconvenience. It often happens that the rights of parties require a prompt determination of a question brought up by motion, and if there was an inflexible rule that the party must await the convening of a term appointed exclusively for special term business to bring- ■ it on, and that a judge holding a circuit and special term together could under no circumstances hear it at such term, it would be in many cases an obstruction to the administration of justice. The 27th section of the General Corporation Law, under which the"proceeding was taken, requires the court “ forthwith and in a summary way ” to, hear and dispose of the application. The election of directors of the Argus Company was for the term of a year only, and it is manifest that any considerable delay in determining the contest would contravene the purpose of the statute and continue a state of uncertainty which might be detrimental to the interests of the corporation. We think the special term properly entertained the application, and even if any doubt existed as to «the construction of rule 38, we should be disinclined to review a question of practice in the supreme court which was determined in the first instance by the judge who granted the order to show cause, and afterwards by the judge who made the order under review, and where the general term has affirmed the order.

The disposition of the preliminary objections brings us to a consideration of the merits of the controversy.

The sole question is, which of the contesting claimants are the lawful directors of the Argus Company. It is conceded by both parties that the stockholders’ meeting held on the 12th day of April, 1893, was legally called. It was called pursuant to a resolution passed at a meeting of the directors of 1892, at which two only of the directors were present, viz., James H. Manning and William H. Johnson. They caused notice of the stockholders’ meeting for the election of directors to be duly published on the 27th of March, 1893, the day on which the resolution was passed. It is also conceded by both parties that at the stockholders’ meeting three directors for the ensuing year were legally chosen. It is not claimed that the purpose of the meeting failed, or that no directors were legally elected at the meeting. -The title of the rival claimants is based upon the proceedings of that meeting, each party claiming that its candidates received a majority of the legal votes cast upon that occasion. There is no question of the failure of the meeting to elect directors, or of the holding over of the directors elected in 1892. The sole point in controversy is, which of the two contesting sets of claimants received a majority of the legal votes.

The stockholders’ meeting was organized in the first instance by the appointment of William E. Cassidy as chairman, and the appointment of three inspectors of election. We do not understand it to be claimed that the meeting was not legally organized, although its action is criticised. The meeting proceeded to the election of directors. The stock of the Argus Company consisted of 500 shares. The whole number were voted upon at this meeting. If all ' the persons who voted were entitled to vote upon the shares voted by them respectively, then all the stockholders of. the Argus Company participated in this election. The vote, when canvassed, showed the following result: William H. Johnson and William E Cassidyeach received 310 votes, and William McM. Speer 300 votes r, and James H. Manning received 200 votes, and Frederick G. Manning and John A. Delehanty each received 190 votes. In other words, the Johnson directors (so called) each received at least 300 votes, and the Manning directors (so called) 190 to 200' votes each. It is obvious that if the votes cast for the Johnson directors were legal votes, or if any of them were illegal, nevertheless it appears that the legal votes cast for them exceeded 200, the highest number cast for any one of the Manning directors, the Johnson directors were elected. The receipt of illegal votes in favor of a candidate who also has received a majority of the legal votes does not defeat his election. It is the rule of corporate elections in stock corporations that the majority of legal votes determine the election. The owners of the majority of the shares have the right to designate the directors to whom the management of the corporation shall be committed. The stockholders are the beneficial owners of the corporate property. The majority may act unwisely. But they may change the management for any reason, provided only they act within the limitations of the charter. The question now presented is purely legal, and the mass of evidence in the record, bearing upon the motive of the one party or the other, is wholly irrelevant to the case in its legal aspects.

During the progress of the meeting of the stockholders first organized, a second meeting was organized in the same room, at which votes were received for directors, the largest vote being for James H. Manning, who received 200 in all. It is unnecessary further to refer to the proceedings at this second meeting, for the reason that we find no ground for questioning the regularity of the meeting first organized, and it is properly admitted by the learned counsel for the appellants that the questions upon which he relies are raised by his objections to the proceedings of that meeting after its organization. The 300 shares voted upon in favor of the Johnson directors included 100 shares known as the Worthington stock, which, on the 28th day of March, 1893, was sold by Lily S. Worthington, the then owner, to William McM. Speer, for the sum of $40,000, paid to her on that day. In making this purchase William E. Cassidy acted as the agent of Speer, hut his agency was not disclosed to Mrs. Worthington at the time." On receiving the purchase money Mrs. Worthington signed the printed transfer on. the back of her certificate for the 100 shares and delivered the certificate to Cassidy, who filled in the blank left for the name of the transferee with the name of Speer, the real purchaser, and on the same day, March 28, delivered the certificate and transfer to him. This 100 shares of stock was voted upon by a proxy of Speer in his name at the' stockholders’ meeting April 12, 1893. The vote was challenged and the right to receive this vote, which was cast for the Johnson directors, constitutes one of the principal contentions in this case. Besides this 100 shares of the Worthington stock voted upon, there was also included in the 300 votes given for the Johnson directors, 150 votes on the Cassidy stock (so called). This vote was likewise challenged, and is claimed to have been illegally received. The Cassidy stock consisted of 150 shares, which stood on the books of the Argus Company on the 27th day of March, 1893, when the notice of the stockholders’ meeting was given, in the names of the following persons : Lucie E. Cassidy, 30 shares; William E. Cassidy, 80 shares; John P. Cassidy, 40 shares; 110 shares of this stock was voted on in the name of William E. Cassidy, and 40 shares in the name of John P. Cassidy. The objections to the legality of the vote by Speer on the Worthington stock, and to the vote on the Cassidy stock, are substantially as follows:

(1) That the Worthington stock was transferred in violation of an agreement binding on Mrs. Worthington; (2) That it had not been transferred to Speer on the books of the company; (3) That the Cassidy stock had been sold to Speer, and that the vote thereon in the name of William R or John P. Cassidy was illegal and void; ( 4) That there was no valid authorization from John P. Cassidy to vote upon his stock: (5) That the proceedings at the election were in violation of an injunction granted by Judge Edwards. These objections will be considered in the order stated.

(1) The agreement which it is claimed was violated by Mrs. Worthington was made in 1873, between Daniel Manning, Lucie R. Cassidy and J. Wesley Smith, then the owners of a large majority of the stock of the Argus Company. It is undated, and was drawn by Daniel Manning, who presented it to Mrs. Cassidy for her signature directly after the death of her husband, from whom her interest in the company was derived. The agreement is in substance that neither of the parties will sell, assign or dispose of any of the stock then held or which should be subsequently acquired by him or her in the Argus Company, without having first offered and given to the other parties to the agreement an opportunity to purchase the shares at a fair marketable price,” and in case of the inability of the parties to agree upon a price, it provided that it should be fixed by arbitration. The agreement further provided that “ whenever either party shall have disposed of his or her shares at that time owned by him or her, this agreement is to terminate,” and the concluding clause declared that the agreement “ is to be of force and binding upon and to the heirs, executors, administrators, devisees and legatees of the parties hereto.” The 100 shares held by Mrs. Worthington prior to the sale to Speer on the 28th day of March, 1893, came to her from her father, J. Wesley Smith, one of the parties to the agreement, on his death in 1886, and in 1887 were transferred to her on the books of the Argus Company and a new certificate issued in her name. Assuming that the agreement of 1873 was binding upon Mrs. Worthington-, as heir, next of kin, or as legatee of her father, and that her sale of the stock to Speer was in violation of the agreement, this fact is immaterial in this controversy unless she was by force of the agreement disabled from transferring the stock, or unless Speer, who had notice of the agreement when he purchased, acquired no title as against the Manning interest and could assert no rights founded upon such purchase as a stockholder in the Argus Company. This contention cannot be sustained in either aspect. Mrs. Worthington was the legal owner of the shares. The right of disposition of property is an incident to ownership. The transfer to Speer vested in him the legal title to the shares, although they were not transferred on the books of the company. The recital in the certificate that the stock was “ transferable only on the books of said company by her or her attorneys on the surrender of the certificate ” regulated the relation between the holder of the certificate and the corporation, but did not operate to prevent the vesting of the legal title to the shares in Speer upon the transfer and assignment by Mrs. Worthington. Leitch v. Wells, 48 N.Y., 586; Chemical Bank v. Colwell, 132 id., 250; 43 St. Rep., 876. The qualified non-alienability of the stock sought to be imposed upon it by the agreement of 1873 rested in contract only, and in no respect disabled Mrs. Worthington from vesting the legal title by transfer in another, whether with or without the consent of the other parties to the agreement, or whether or not it was made in disregard of its provisions. The agreement was in its character executory, and fdr its violation the other parties could resort to such remedy as the law affords upon the breach of a contract by either party, which in ordinary cases is an action for damages. It is urged that in this case, considering the nature and object of the agreement of 1873, the remedy by an action for damages would be inadequate, and that the court may in such case specifically enforce its observance and interfere to prevent either party from violating it, and that a purchaser with notice is subject to the same equity.

The jurisdiction of a court of equity to enforce specific performance of a contract relating to personal property, though rarely exerted, cannot be denied, and may be exercised “ where compensation in damages would not furnish a complete and satisfactory remedy.” Johnson v. .Brooks, 93 N. Y., 337. But the granting of this relief rests in the sound discretion of the court and cannot be demanded as a right. Speer having acquired the legal title to the stock by transfer from Mrs. Worthington, it is not perceived how a court of equity could give any relief unless by compelling him to transfer the stock to the other parties entitled to the benefit of the agreement, upon being reimbursed the sum expended in its purchase.. But it is a decisive answer to the objection now being considered that, assuming upon the facts presented the court could, upon the application of the other parties to the agreement or their representatives, enforce specific performance or compel Speer to transfer the stock to the holders of the Manning interest, no such equity has been enforced. The fact that Speer may have held the stock subject to the enforcement of the equitable remedy in no way interferes with his legal title, nor did it preclude the corporation from treating him as a stockholder or from according to him all the rights of a stockholder, so long as the company was not prevented from so doing by the judgment or process of the court. The corporation was not a party to the agreement of 1873. The agreement is between individual stockholders only. They may not elect to seek a remedy in equity. The court upon application might refuse in its discretion to grant equitable relief. The record shows that transfers of stock have been made from time to time by parties to the agreement, without any reference to its provisions; that the agreement remained in the possession of Daniel Manning from the time of its execution until his death, and that its existence was not known to his sons until about two years "prior to the commencement of this proceeding, and that Mrs. Cassidy had but a faint recollection of its execution. The claim is made by the petitioners that the agreement had been disregarded and practically abandoned by the parties to it. We refer to these claims made by the petitioners to. show the variety of considerations which might be presented to a court of equity to influence its action in granting or withholding'the remedy of specific performance. But it is sufficient to say that the right of Speer to vote upon the stock purchased of Mrs. Worthington cannot be affected by the existence of an unenforced equity growing out of the violation by Mrs. Worthington of the agreement of 1873, although Speer had notice of the agreement when he purchased. The Argus Company might legally recognize him as owner of the stock and cause it to be transferred to him on the books of the company, and his vote could not be legally excluded because of the"existence of the agreement.

"The objection to Speer’s right to vote on the Worthington stock has so far been considered on the assumption that the agreement of 1873 was in force at the time of his purchase.

But another conclusive answer to the defense based on the agreement, is that the agreement had been terminated pursuant to a provision in the agreement itself prior to the purchase of the Worthington stock by Speer. The event provided for in the clause in the agreement “ that whenever either party shall have disposed of his or her shares at that time owned or held by him or her, this agreement is to terminate,” had happened by the transfer by Mrs. Cassidy, one of the parties- to the agreement, of all her shares in the Argus Company, with the consent or acquiescence of the other parties thereto, or their representatives, on or before March 27,1888, and the agreement was thereby terminated and all parties released from its obligation. When the agreement was made, Mrs. Cassidy was the owner of 150 shares of the stock, 30 of which were represented by a separate certificate issued in her name. In 1881 she gave these thirty shares to her son, William R Cassidy. Mrs. Cassidy indorsed on the certificate a transfer of the shares to her son, William, and at her request, as the evidence tends to show, an entry was made on the stock book of the Argus Company referring to these shares as follows: “Transferred to William R. Cassidy, March 29, 1881,” and from that date the dividends were paid to the son. The original certificate issued to Mrs. Cassidy was retained by her and the stock has never been formally transferred to William R. Cassidy on the books of the Argus Company. There were associations connected with the origin of Mrs. Cassidy’s title to the 30 shares, and the issuing of the certificates, by reason of which she desired to retain the scrip in her possession, but the evidence that she intended to part with the ownership of the shares and vest the beneficial title In her son is full and complete, and the circumstances relied upon to show the contrary are not sufficient to overcome the clear and positive evidence of Mrs. Cassidy and her son, the written assignment, the entry in the books of the company and the subsequent recognition by the company of the son as the owner of the shares.

In March, 1888, Mrs. Cassidy gave her remaining 120 shares-to her two sons, William E. Cassidy and John P. Cassidy, 80 shares to William E., and 40 si i ares to John P. The shares were-transferred to the sons on the books of the company in the same-year, and new certificates issued in their names. As the result, of these several transactions Mrs. Cassidy in March, 1888, had disposed of all her shares in the Argus Company, and by the terms of the agreement of 1873 the agreement was thereby terminated. It is undoubtedly true that the clause providing that a disposition by either of the parties to the agreement of all the shares held by him or her should terminate the agreement means a disposition pursuant to its provisions. It was not intended to provide that a party transferring his shares in violation of the agreement should thereby be released from its obligations. But a transfer made-with the consent of the other parties, express or implied, would give effect to the condition. In 1881, when the 30 shares were transferred by Mrs. Cassidy, Daniel Manning and J. Wesley Smith, the other parties to the agreement were directors in the company, and must be assumed to have known and consented to the entry in the stock book, and the transfers of .1888 were made on the books of the company, of which all the persons interested are presumed to have had notice. The shares transferred by Mrs. Cassidy to her sons were upon the transfer, liberated from the operation of the agreement. The sons did not take in the capacity of “ heirs, executors, administrators, devisees or legatees,” and the transfers having been made with the implied consent of the other parties to the agreement, the shares in their hands were not bound by its restrictions. There was no reservation in the agreement of a right in the parties thereto by a transaction inter vivos to transfer the stock to the members of their respective families. The consent of the other parties to the transfer by Mrs. Cassidy of the stock to her sons may have been influenced by the fact of this relationship, but the consent having been given when all her shares had been transferred, the event occurred which terminated the agreement. Upon both of the grounds stated we are-of the opinion that the agreement cannot be interposed to deprive Speer of the character of a stockholder, as transferee of the Worthington stock.

(2) The objection that the Worthington stock had not been transferred to Speer on the books of the company, and that for this reason lie was not entitled to vote thereon, assumes that the-stock book of the Argus Company used up to and prior to March 31, 1893. was the legal stock book of the company. In that book Mrs. Worthington appeared to be the owner of the 100 shares-which on the 28th of March, 1893, she sold to Speer, and no transfer thereof to Speer appears thereon. But at a directors’ meeting held on the 31st of March, 1893, a new stock book was. adopted, and this action was ratified at another directors’ meeting-held on April 1st. The appellants assail the validity of this-transaction on the ground that the meetings of March 31st and April 1st were not legally called, and that the action taken was; void. It appears that Speer on the 29th day of March, 1893, the-day following his purchase of the Worthington stock, presented to Mr. Manning, the president of the Argus Company, the certificate issued to Mrs. Worthington, with her transfer indorsed, and requested that the stock should be transferred to him on the-books, and a new certificate issued-in his name, and he referred to ' the approaching election to be held on the 12th of April as the reason for requesting the transfer. The president of the company requested a postponement of the matter till the following day (March 30th), and at an interview with Speer on that day refused to permit the transfer, assigning as a reason for the refusal the-agreement of 1873. Early in the morning of March 31st, Mr. Manning left Albany for Washington. The stock book of the company was in a private drawer used by Mr. Manning in a safe of the Argus Company, which drawer was locked, and of which Mr. Manning took with him the key. On the afternoon of the 31st of March, William R. Cassidy and William H. Johnson, two of the three directors of the company, met and issued a notice for a directors’ meeting to be held the same evening, and the notice was served on Mr. Manning by leaving the same at his residence with a servant girl, who informed the person serving the notice-that Mr. Manning had left the city, this being the first intimation or knowledge that his co-directors had of the fact. The meeting-was held pursuant to the call, Cassidy and Johnson being present. At this meeting the directors were requested to cause a transfer to be made to Speer of the Worthington stock on the books of the company. Being unable to find the old stock book, the directora, by resolution, adopted a new stock and minute book, and proceeded to enter the names of the several stockholders of the company, with the number of shares held by them respectively, in the new stock book, and among others they entered the name-of Speer as the holder of 100 shares, and issued a certificate which was delivered to him on the next day on surrender of the certificate formerly issued to Mrs. Worthington.

We do not understand that the power of the board of directors,, at a meeting lawfully convened, to adopt a new stock book, is denied. It is clear that such a contention, if made, could not be-sustained. The adoption of a stock book in the first instance pertains to the duties of the directors of a - stock corporation, and if for any reason the existing transfer book is not available for use-by the directors for the making of transfers of stock, the adoption of a new stock book is incident to the original power vested in the directors. The denial of this power might result in depriving the real owner of stock of his right to participate in corporate elections. - Section 29 of the Stock Corporation Law of 1892 provides that no transfer of stock shall be valid for any purpose except to-render the transferee liable for debts, until it has been entered in the stock book, and by §20 of the General Corporation Law the stock book is made the evidence of the right of a person challenged to vote at a stockholders’ meeting, and by the same section it is declared that no person shall vote at such meeting upon any stock which has not been owned by him at least ten days next preceding. There was an exigency which justified the adoption of a new stock book in this case. The old stock book was not accessible to the directors present at the meetings. The election was to take place on the 12th of April. Mr. Manning did not return to Albany until the evening of Sunday, April 2, leaving less than nine business days intervening between that date and the day appointed for the election. It is the duty of the directors of a stodk corporation to provide a transfer book to enable stockholders to exercise the rights given them by law. But it is claimed that the action of the directors in adopting a new stock book was invalid for the reason that the notices of the meetings of March 31 and April 1 did not specify the purpose for which they were called. This objection assumes that there is a general principle in the law of corporations which requires the object of a directors’ meeting to be specified in the notice in order to validate corporate action. There is no statutory regulation, nor did the by-laws of the Argus Company make any provision on the subject. We do not find that any such general rule has been established by the decisions, and it is believed that such a rule would be contrary to the general practice and understanding. When a meeting of directors is notified without specification of the particular, purpose, it would naturally be understood that it was called to consider any matters pertaining to the conduct of the affairs of the corporation which might come before it. The statute regulates with great particularity how meetings of stockholders shall be called and conducted for the determination of important questions affecting the interests of the corporation, such as the mortgaging of the corporate property, the increase of stock, the incurring of liability by the guarantee of the bonds of other corporations. We need not determine whether a meeting of directors called to take action upon an extraordinary emergency involving the exercise of unusual power might require a departure from the ordinary rule. It is sufficient to say that the adoption of a new stock book was not an occasion of this character, and that a general notice is all- that is required to a valid meeting of directors for the determination of matters pertaining to the ordinary business affairs of the corporation. The objection now made might be disposed of upon a narrower ground, viz., that no notice, however specific, could under the circumstances have reached Mr. Manning.

(3.) The objection that the Cassidy stock had been sold to Speer and, therefore, could not be legally voted upon by Cassidy, proceeds upon a mistaken assumption of fact. The transaction relating to the sale of the Cassidy stock to Speer is shown by writings. From them it appears that the contract was executory and that the payment by the vendee was conditional upon the transfer of the stock to Speer upon the books of the company, and this condition had neither been performed nor waived on the 12th day of April. The title at that time remained in the Cassidys, and being stockholders of record as to all except the thirty shares which still stood in the name of Mrs. Cassidy, the 120 shares could be properly voted upon by William R. and John P. Cassidy

(4.) The forty shares standing in the name of John P. Cassidy -were voted upon by Mr. Cohen under a proxy executed to him by "William R. Cassidy, as attorney for John P. Cassidy. It is ■claimed that the power of attorney held by William R. Cassidy from his brother did not authorize him to vote on the stock in the name of John P., and that the authorization to Cohen was, therefore, not within his authority. The judge at special term adopted this view, but as the result would not be changed by rejecting the vote on the forty shares, it is unnecessary to re-examine the question.

(5.) The claim that the stock standing on the new stock book in the name of Speer, and of the Cassidys, was voted in violation of the injunction issued by Judge Edwards, rests on the following facts:

On the evening of April 1, 1898, an injunction was issued by Judge Edwards in a suit commenced by James H. Manning and Frederick C. Manning, enjoining the defendants, Lucie R. Cassidy, William R. Cassidy, Ledyard Cogswell and William McM. Speer, from voting either in person or by proxy on any shares of the ■stock of the Argus Company which have not been owned by them or either of them for at least 10 days next preceding the 12th day of April, 1893,” and restraining the inspectors appointed at the meeting of March 31, 1893, who were made defendants in the action, or their substitutes, from receiving any votes on said shares.” The injunction contained a further provision restraining the defendants or any of them from using at any such meeting or at said election (the election of April 12) any book or paper purporting to contain the record of membership of the Argus Company, or any alleged stock or scrip book prepared in pursuance of any alleged resolutions adopted at said illegal meetings held on the 31st of March, 1893, and the said 1st day April, 1893, by said defendants, William R. Cassidy and William H. Johnson, until the hearing and determination of a motion to be made,” etc. The injunction order was served on the inspectors appointed at a meeting- of March 31st, and the other defendants, on the morning of April 12, before the election took place. Upon the organization of the meeting new inspectors were chosen and the election proceeded. Cohen as proxy for John P. Cassidy, William R. Cassidy and Speer offered to vote •on their shares and the vote was received and counted.

The first part of the injunction order was not violated, for the reason that the stock of Speer, William R. Cassidy and John P. Cassidy had been owned by them and was registered in their names more than 10 days prior to the election. By the •second clause the defendants were restrained from using the ■stock hook adopted at the meetings of March 31st and April 1st. It was proved without contradiction that that book, although lying upon the table, was not referred to or used at the meeting. The votes were challenged, and the 20th section of the General Corporation Law provides that “ if the right to vote at any such meeting shall be challenged, the inspectoi-s of election, or other persons presiding thereat, shall require such books (in-eluding the stock book), if they can be had, to be produced as-evidence of the right of the persons challenged to vote at such meeting, and all persons who maj' appear from such book to be members of the corporation may vote at such meeting in person or by proxy.” The injunction neither enjoined the holding of the election, nor did it authorize or require the use of the old stock book. The new stock book having, as we hold, been legally adopted as the stock book of the company, and the inspectors-having been enjoined-from using it, the qualification in § 20 applied. The inspectors were to use the books of the company in determining the validity of the challenges, “ if they can be bad,’” and having been enjoined from using the, new stock book, they were placed in the same position as if they could not be found,, and they had no right to use a former stock book in determining the challenges. We think there was no violation of the injunction, and it is unnecessary to determine how such a violation, if it existed, would have affected the controversy.

Striking out the forty votes cast in the name of John P. Cassidy, and the thirty votes upon the shares which stood in the-name of Mrs. Cassidy, there remains 280 to 240 votes cast for the-new directors, while the minority vote ranged from 190 to 210-votes.

There were some objections to the reception and rejection of evidence on the hearing before the referee. They in the main were connected with an effort on the part of the counsel for the appellants to trace the identity of the persons who advanced the money to Speer for the purchase of the Worthington and Cassidy stock. The strict rules which govern the reception of evidence-in civil actions are not applicable to a proceeding of this character, and we are of the opinion that no essential right of the appellants was prejudiced by the rulings made.

Upon the whole matter we are of opinion that no substantial error has been pointed out, and that, therefore, the order of the general term should be affirmed.

All concur.


source: Caselaw Access Project

author: Haight, J.

license: Public Domain

text:
    The Atlas Furniture Co., Resp’t, v. George P. Freeman et al., App’lts.

      (Supreme Court, General Term, Fifth Department,

      Filed June 23, 1893.)

    Attachment—Affidavit—Fraudulent intent to assign or dispose of-property.
    An affidavit for an attachment stated that on February 10th, for the purpose of obtaining an extension of credit, defendants represented that they were perfectly solvent and had just 1 alien an inventory showing that they had been making money; that on March 9th they wrote that they had finished the inventory and found they had met with great losses; that they were insolvent and were about to make a proposition of compromise: that when questioned in relation to their former statement it was stated that they had not then finished the inventory and did not know how they-stood, and further stated that if plaintiff undertook to collect its claim by suit it would get substantially nothing as tliev would make an assignment preferring the claim of their landlord. Held, that these facts did not establish a fraudulent intent to assign, dispose of or secrete their property, and was insufficient to warrant añ attachment on that- ground.

      Appeal from ail order of the Erie special term, denying defendants’ motion to vacate an attachment.

      Norris Morey, for app’lts; A. C. Wade, for resp’t.
   Haight, J.

The affidavit upon which the warrant was issued shows that the plaintiff was located in Jamestown, N. Y., and the defendants in the city of FTew York; that the defendants were indebted to the plaintiff in the sum of $1,715; that upon the 10th day of February a payment was made thereon reducing the same to the sum of $1,433.29; that for that sum notes of the defendants were accepted and an extension of time given for the payment thereof upon the representation, as stated in the affidavit, that the defendants were perfectly solvent and able to pay their debts; that they had taken an inventory which showed that their business had been profitable and that they had been making money, and that if they could secure the further time in which to pay their indebtedness it would be a great accommodation to them.

Thereafter, and on the 9th day of March, 1893, the defendants wrote the plaintiff as follows: u On completing our inventory we find that we have lost a considerable sum of monev during the past year, due, in a great measure, to the enormous expense of the building which we have been occupying; that the rent provided for in the lease of this building amounted to $5,400 a year, and the lease has four years to run from the first of May. With this lease on our hands we should be immediately compelled to suspend and to turn our property over to an assignee for division among our creditors. We have, however, after considerable difficulty, convinced the landlord of the premises that it is for his best interest to cancel this lease, and to terminate it on the first of May next. But our losses have been so great that even this relief will not place us in a position to meet our obligations in full. Our Mr. Freeman has started west on the 7th inst., to confer with our largest creditors. We hope, within a few days, to submit to you and the rest of our creditors a proposition of compromise which will be acceptable to you. In the meantime rest assured that our only desire will be to protect the interests of all our creditors, and that no one will be permitted to gain an advantage over another.”

Upon the receipt of this letter the secretary of the plaintiff visited Flew York, and on the 15th day of March called upon the defendants, and saw the defendant Cheseb'ro, and was informed by him that the defendant Freeman had gone west; that they had been losing money for quite a long time; that they had their inventory completed, and that they could not pay to exceed forty cents on the dollar on their indebtedness; that Freeman was out trying to get a compromise with their creditors, and on being asked by the secretary of the plaintiff why they had informed him on the 10th of February that their inventory was completed, and that they were doing a prosperous business, he replied that they did not then have it completed, and that they did not then know just how their matters did stand.., The defendant Chesebro further stated. “ that if the plaintiff undertook to collect its claim. by suit, it would get substantially nothing on it, for if the plaintiff commenced suit the defendants would make an assignment preferring their landlord, and the plaintiff would get nothing.” He also stated “that his partner, Freeman, when he left home, had left with him, said defendant Chesebro, a power of attorney, authorizing him to make such a general assignment in behalf of the firm at any time if he, Freeman, should telegraph him to do so.” He further stated in substance “that the plaintiff had better keep still and do nothing, as it would'get nothing if it attempted to enforce the collection of its claim,”

The warrant of attachment was issued upon the ground that the defendants were about 'to assign, dispose of or secrete their property with the intent to defraud their creditors.

Does the matter stated in the affidavit show such intent? We-think not. It may perhaps be sufficient to create a suspicion than, such disposition of their property was intended, but a warrant of attachment will not issue upon a mere suspicion. The intent to-do the wrongful act must appear from the facts disclosed by the affidavit. Thompson v. Dater, 57 Hun, 316; 32 St. Rep., 361.

On the 10th of February the defendants falsely stated that they were solvent, making money and were able to pay their debts if' time was given. Upon this statement they obtained from the plaintiff an extension of credit. One month thereafter they wrote-the plaintiff announcing their insolvency and their inability to pay their debts in full. When questioned in reference to their statement of February 10th, the defendant Chesebro stated that they had not at that time completed their inventory and did not then know how their matters stood. The defendants, in making the-representations upon which an extension of time was procured, may have been dishonest and they majr not. Possibly they at-that time supposed themselves solvent and able to pay. But, whether the representations were made innocently or dishonestly is unimportant, for in either case they do not establish a fraudulent intent to assign, dispose of or secrete their property. Johnson v. Buckel, 65 Hun, 601; 48 St. Rep., 924; Kibbe v. Herman, 51 Hun, 438; 21 St. Rep., 235; Fleitmann v. Sickle, 13 id., 399.

The further facts disclosed by the affidavit are in substance that if the plaintiff undertook to collect its claim by suit that it would get substantially nothing, for the defendants would make an assignment preferring the claim of their landlord. This they had the right to do, and the doing of that which is lawful is not fraudulent. Farwell v. Furniss, 67 How. Pr., 188; Hallenbeck v. Coenen, 34 St. Rep., 689; Stamp v. Herpich, 8 id., 446; Exans v. Warner, 21 Hun, 574.

But it is claimed that the false representations made by the defendants in order to procure an extension of time within which to pay the plaintiff’s claim characterize the threats subsequently made that they would make an assignment and indicated a fraudulent intent Such representations were made in the case of Stamp v. Herpich, supra. But, notwithstanding, it was-held that the threat to make an assignment with preference to-others was not fraudulent under the law.

Again, it is claimed that under the statute as it now stands a preference cannot be made of all of the assignor’s property. Very true, claims cannot be preferred to a greater extent than one-third of the assigned assets after paying the expenses of the assignment and the wages and salaries due employes. But the statute limiting the amount to be paid on preferences is addressed to the assignee and prevents him from paying more than that portion of the assets upon the preferred claims. And it is not apparent how this provision changes the effect of the threat that was made to make an assignment.

The case of Anthony v. Stype, 19 Hun, 265, is distinguishable. In that case the affidavits upon which the warrant was issued showed that he kept his store open, continued to dispose of his goods and to appropriate the proceeds thereof to other purposes than to the payment of his debts, refusing to pay anything either in goods or money to his creditors.

The order should be reversed, with ten dollars costs and disbursements, and the motion to vacate the attachment granted.

Lewis and Bradley, JJ., concur.


author: Dwight, P. J.

text:
    Samuel K. Nester, App’lt, v. Thomas G. Craig, Impl’d, Resp’t.

      (Supreme Court, General Term, Fifth Department,

      Filed June 23, 1893.)

    1. Principal and agent—Authority on agent to contract.
    Defendants, a Detroit firm,wrote and telegraphed to a factor in this state authorizing a sale of 16,000 bushels of barley at $1.50 net at that place. Said factor made a contract with plaintiff for the sale thereof at 80 cents a bushel delivered here at the rate of 2,000 bushels a week, to be paid for as each shipment arrived. The prices named in defendants’ letter and telegram were for 100 pounds ; while those"in the contract were for a bushel of 48 pounds. Held, that the contract as made was not within the authority of the agent, as the terms differed and extra responsibility was placed upon defendants.
    2. Same.
    The factor was a special agent for this transaction, and plaintiff was put upon inquiry as to the extent of his authority and dealt with him at the risk of his authority being exceeded.
    Appeal by the plaintiff from a judgment dismissing his complaint, entered on the direction of a non suit at the Ontario Circuit, and from an order denying his motion for a new trial on the minutes.

      D. B. Backenstose, for app’it; W. S. Hubbell, for resp’t.
   Dwight, P. J.

The action was for damages by the failure of the defendants to perform an executory contract- for the sale to the plaintiff of a large quantity of barley. The plaintiff was a malster at Geneva, Hew York, and the defendants composed the firm of Gillett & Hall, grain dealers at Detroit, Michigan. The contract of sale was made by one I. Blumenthal, a barley broker, assuming to act as agent for the defendants. His authority was derived solely from the following letter and telegram:

“Gillett & Hall, Grain Commission Merchants.
“Detroit, Sept 27 th, 1890.
Mr. I Blumenthal, Rochester, N. Y.
“ Dear Sir.—We expressed to you two samples and you can sell on sample A 6,000 bus. at $1.55 net here; B 10,000 bus. at $1.56 net here. The weight of the barley is 46-|- lbs., but as we let them go through the cleaner in elevator before loading the weight will come to 47 and over.
“Yours, etc.,
“ Gillett & Hall, D.”
“By Western Union Telegraph Co.
“Detroit, Mich., Oct. 21,1890. “ToI. Blumenthal, Com. Agt., Geneva, N. Y.
Will allow you to sell the two lots one fifty net, if not better, although the state is well cleaned out of barley and prices will shortly go much higher.
“ Gillett & Hall.”

The contract entered into by Blumenthal with the plaintiff was as follows:

“ Geneva, 10, 6, 1890.
“ Sold to S. K. Nester, Geneva, N. Y., 6,000 bushels sample A and 10,000 bushels of sample B Michigan state barley as per samples furnished me by Gillett & Hall, of Detroit, at the price of 80 cts. a bushel delivered track Phelps, N. Y., at the rate of 2,000 bushels a week, commencing Oct 20, (or faster if so ordered) till sale is filled, as stated in Mr. Dieterlie’s letter of September 27th. Barley to come recleaned and uniform. Payment to be made by New York exchange as soon as each shipment arrives.
“I. Blumenthal.
“ I accept above sale to me.
“S. K Nester.”

It was conceded that the prices named in the letter and telegram were for 100 pounds of barley ; while that named in the contract was for a bushel of forty-eight pounds. “ Mr. Dieterlie’s letter of September 27,” mentioned in the contract, was the letter of the defendants by “D.,” which is quoted above as defining the authority of the agent Blumenthal.

It seems very clear that the contract upon which the action is brought was not within the authority conferred upon the agent who assumed to make it. The authority was to sell for cash, on immediate delivery, at Detroit, at $1.50 per 100 pounds. The contract was for delivery at Phelps, N. Y., at intervals of a week ■during a period of more than two months, at eighty cents a bushel, payable in instalments after each delivery. These terms differ widely. Possibly the eighty cents per bushel might cover freight, insurance, storage, elevator charges, etc., in addition to the $1.50 per 100 pounds net, which the defendants were to receive, though even that is not demonstrated by the evidence ; but there are other substantial respects in which the terms of the authority, and of the contract differ. By the contract the -defendants were charged with the responsibility of carrying this large amount of grain for an average period of-five weeks, while they waited for their money and bore the risk of loss and damage by tire, or other causes, except so far as they might provide for their own indemnity by insurance. They must provide nearly $1,000 for freight charges and bear whatever risks of transportation are not covered by the liability of the common carrier.

Altogether it is difficult to see how the agent, who held only the authority conferred by the communications of the defendants of September 27 and October 4, could have assumed to make the contract with the plaintiff of October 6.

The plaintiff must be presumed to have known the extent and limitations of the agent’s authority, because the letter of September 27, which controlled that authority, is specifically referred to in the contract itself; but even if such were not the case, he is chargeable with such knowledge and limited by the terms of the authority actually possessed by the agent. He was a special agent, specially authorized for this transaction, and the plaintiff was put upon inquiry as to the extent of his authority, and dealt w-ith the agent at his risk of that authority being exceeded. Walsh v. Hartford Ins. Co., 73 N. Y., 10; Edwards v. Dooley, 120 id., 540-541; 31 St. Rep., 710 ; Michael v. Eley, 61 Hun, 180 ; 40 St. Rep., 597

There was no essential fact in dispute in this case. The question whether the contract was within the authority to make it was a question of law. We think it was correctly disposed of by the direction of a non-suit, and the judgment entered thereon must be affirmed.

Judgment and order appealed from affirmed.

Lewis, Macohber and Haight, JJ., concur.


text:
    John W. Banker, Resp’t, v. William N. Knibloe, App’lt.

      (Supreme Court, General Term, Fifth Department,

      Filed June 23, 1893.)

    Trial—Direction of verdict by request—New trial.
    Both parties asked for a direction of verdict, which the court directed in favor of defendant, but subsequently ordered a new trial on the ground that there was a question of fact which should have been submitted to tbs jury. Held, error;_ that by the course pursued both parties waived the right to go to the jury on any question, and no error was committed in withholding any particular question from the jury.
    Appeal by the defendant from an order of special term, entered in Livingston county, granting the plaintiff’s motion for a new trial on the minutes after a verdict for the defendant, by the direction of the court, at the Livingston circuit.

      L. O. Reed, for app’lt; D. W. Daggett, for resp’t.
   Dwight, P. J.

At the close of the evidence both parties asked for the direction of a verdict by the court, and neither party asked to go to the jury upon any question in the case. The court thereupon directed a verdict for the defendant, but stayed the entry of judgment and gave time to the plaintiff to move for a new trial. The motion was afterwards heard at a special term held by the same judge, and the order for a new trial was granted solely upon, the ground, as appears from the opinion of the judge, that there was a question of fact in the case which should have been submitted to the jury.

The situation is peculiar. By the course taken by the parties on the trial, both of them waived the right to go to the jury upon any question in the case, and submitted all questions of fact as-well as of law to the decision of the court. Bank of Attica v. Pottier & Stymus Mfg. Co., 17 St. Rep., 327, 332; Dillon v. Cock-croft, 90 N. Y. 649; Provost v. McEncroe, 102 id., 650; Reilly v. Lee, 41 St. Rep., 559, 562.

It is plain therefore that no error was committed in withholding any particular question of fact from the jury, since all questions of fact were withdrawn from the jury by the parties themselves. In such a case the only questions reviewable on a motion for a new trial are those raised by exceptions taken on the trial, and the question whether the decision of any question of fact, necessarily involved in the direction of a verdict, was without evidence to support it. Gregory v. Mayor, 113 N. Y., 416; 22 St. Rep., 703 ; Kirtz v. Peck, 113 N. Y., 222; 22 St. Rep., 733; Provost v. McEncroe, supra. Manifestly in such a case it is not open to either party on appeal, or on a motion for a new trial, to complain that there was any question of fact in the case which should have been submitted to the jury.

In this case the only question of tact which was really litigated on the trial, or which is suggested by the plaintiff as an open question on this motion, is the question whether the plaintiff was a holder in good faith and for value of the promissory note in suit, and this is the question which the court at special term held should have been submitted to the jury.

For the reasons stated it is evident that the motion for a new trial should not have been granted on that ground, and we find no other ground in the case which justifies the granting of the motion.

The order must, therefore, be reversed, with costs, and judgment directed for the defendant on the verdict.

Lewis, Macomber and Haight, JJ., concur.


text:
    Thomas Budd, Resp’t, v. John J. Allen, App’lt.

      (Supreme Court, General Term, Fifth Department,

      Filed June 23, 1893.)

    1. Schools—Taxes.
    Plaintiff was the owner of a farm of 75 acres lying within school district No. 10 of the town and resided on an adjoining parcel of 15-acres lying in district No. 11. The entire farm of 90 acres was worked together, and assessed on the last assessment roll of the town as one lot, and plaintiff’s hired man lived on the first named parcel. Feld, that the entire farm was taxable for school purposes in district No. 11, and the trustee of district No. 10 was without jurisdiction to assess any part thereof for taxes in that district.

      2. Same
    The farm being occupied and improved by plaintiff himself, § 71 of the statute had no application to the case.
    8. Same—Costs.
    The justice made return that it did not appear that defendant had acted in good faith; that defendant had obtained his signature to a paper which he afterwards understood was a certificate of good faith, but which he did not so understand when he signed it, and which if it were such was untrue. Held, that such return was not equivalent to the certificate required by.§ 3244 to exempt defendant from costs.
    Appeal by the defendant from a judgment of the county court of Monroe county, affirming the judgment of a justice of the peace of the town of Webster, rendered on the verdict of a jury in favor of the plaintiff.

      S. D. Bentley, for app’lt; Hugh McKay, for resp’t.
   Dwight, P. J.

The action was to recover the value of personal property of the plaintiff, sold under direction of the defendant, in the collection of a school tax levied by the latter, in the year 1891, as sole trustee of joint school district Mo. 10 in the towns of Ontario, in Wayne county, and Webster, in Monroe county, upon certain farm lands of the plaintiff of about seventy-five acres lying within the bounds of that district, and in the town of Ontario.

The plaintiff for about three years before, and at the time of the levying of the tax in question, lived on a parcel of land of about fifteen acres situate in the town of Webster, and within the bounds of school district Mo. 11 of that town. The two parcels of land adjoined each other, the east line of the fifteen acres coinciding with the west line of the seventy-five acres for a distance of sixteen rods along the center line of the highway, which lay on the town and county line, and the whole ninety acres was used " and worked as one farm by and under the direction of the plaintiff. His hired man lived on the seventy-five acres, and was paid yearly wages in addition to the use of a house and garden spot. In the years 1889 and 1890 and 1891 the whole ninety acres was assessed as one lot in the town of Webster, and no part of the same was assessed in the town of Ontario in either of those years.

The foregoing are all the facts which are essential to the disposition of the main question in this case, viz.: whether the seventy-five acres of the plaintiff’s farm which lay within the joint district Mo. 10 of Ontario and Webster were taxable for school purposes in that district. Tlie question is one purely of statutory construction, and the statutory provisions to he construed are found m the consolidated school act of 1864, Laws of 1864, chap. 555, as amended by chap. 828 of the Laws of 1889.

By § 66 of that act, as so amended, Birdseye, p. 567, § 149,. it is provided as follows, viz.: “ School district taxes shall be apportioned by the trustees upon all the real estate within the boundaries of the district which shall not be by law exempt from taxation, except as hereinafter provided, and such property shall be assessed to the person or persons or corporation owning or possessing the same at the time such tax list shall be made out, but land lying in one body and occupied by the same person, either as owner or agent of the sanie principal, or as tenant under the same landlord, if assessed as one lot on the last assessment roll of the 'town after revision by the assessors, shall, though situated partly in two or more school districts, be taxable in that one of them in which such occupant resides."

The case before ns seems to be brought precisely within the latter and exceptional provisions of this section by the facts above stated. The 90 acres of land lies in one body ; is occupied by the same person, as owner; was assessed as one lot on the last assessment roll of the town in which the owner lived, and, therefore, though situated partly in two school districts, was, it would seem, taxable in that one of them in which such occupant resided.

But the appellant contends for the application to the ease of § 71 of the same statute, Birdseye, p. 568, § 154, which reads as follows:

“ Every person owning or holding any real property within any school district, who shall improve and occupy the same by bis agent and servant, shall in respect to the liability of such property to taxation be considered a taxable inhabitant of such district, in the same manner as if he actually resided therein."

It is very plain, we think, that this section has no application to the case before us. The distinguishing fact contemplated by the provision is that the land referred to is occupied and improved by an agent or servant of the owner, and that fact does not exist when it is occupied and improved by the owner himself. The section clearly has application only do land belonging to an owner who does not reside upon it, but occupies it by an agent or servant who lives upon it and works it for the owner; such agent or servant being distinguished equally from the owner of the land and from a tenant who works it for his own account. The plaintiff is not a nonresident owner, but lives upon, occupies and works his own farm and the whole of it. The fact that his hired man lives on the other side of the district line can have no effect upon the status of the owner as a taxable inhabitant of the one district or the other.

The foregoing examination of the statute leaves, we think, no room for doubt that the whole of the plaintiff’s farm of ninety acres was taxable for school purposes in district No.. 11 of Webster, and that no part of it was taxable in joint district No. 10 of Webster and Ontario. This seems to be the construction which 1ms been uniformly put upon the statute by the department of public instruction, as shown by decisions of several superintendents to which our attention is called by counsel for the respondent; and the quotation made by counsel for the appellant from a note to § 71, supra, contained in the code of public instruction, published by the superintendent in 1887, at page 353, is, we think, quite to the same effect.

The construction here given also brings the statute in question into harmony with the general statute in respect to. the taxation of lands divided by town and county lines, 1 B. S., 389, §4; Laws of 1886, chap, 315, § 1; Birdseye, 2961, § 52, and with the decisions of the courts which have passed upon the effect of these provisions of law. Saunders v. Springsteen, 4 Wend., 429; Ward v. Aylesworth, 9 id., 281; People ex rel. Vanderveer v. Wilson, 52 Hun, 388; 24 St. Rep., 892; Hampton v. Hamsher, 46 Hun, 144; 10 St. Rep., 769.

Such being the law of the case, defendant acted without jurisdiction in assessing any part of the plaintiff’s land for taxation in district Ho. 10, and by issuing his warrant and directing the levy upon and sale of the plaintiff’s property to pay such tax was guilty of a trespass, for which a recovery was properly had in the justice’s court

The only other question in the case which seems to require consideration arises upon the denial by the county court of the defendant’s motion to strike out the allowance of costs in the judgment appealed from.

We are asked to review this order, apparently, upon the assumption that the record shows a certiñeaté made by the justice of the peace to the effect that it appeared upon the trial before him that the defendant acted in good faith in the matters out of which the cause of action arose. Code Civ. Pro., § 3244. But this assumption is a mistaken one. The record contains no such certifi cate, nor any evidence that such a certificate was ever presented to the county court. On the contrary, it does appear that counsel for the appellant on the hearing of the appeal in the county court moved for and obtained an order requiring the justice to make a special return certifying whether or not it appeared on the trial before him that the defendant in the acts complained of acted in good faith; and that the justice made such return certifying that such fact did not appear. It is true the justice went further in his return and narrated a transaction between himself and the defendant, in which his signature was obtained to a paper which the justice afterwards understood was a certificate of good faith, but which he did not understand to be such when it was signed, and which, if it were Such, was untrue.

It is apparent why this return could not have been regarded by the county court as equivalent to the certificate required by the statute, § 3244, supra, as a condition of exempting the defendant from liability for costs.

The judgment and order appealed from should be affirmed.

Judgment and order of the county court of Monroe county appealed-from affirmed, with costs.

Lewis, Macomber and Haight, JJ., concur.


author: Per Curiam.

text:
    Benedickt Fischer et al., Resp’ts, v. Berthold Blank, App’lt.

    (Court of Appeals,

      Filed June 27, 1893.)

    Appeal—Correction op judgment by court op appeals.
    Upon an appeal from an order of the general term denying a motion for a new. trial under §1001 of the Code, after a trial without a jury, where the sole error appearing consists in the allowing of greater relief than the successful party is entitled to upon the facts found, this court may correct the judgment and make it conform to the findings, and is not limited to a reversal of the order of general term and direction of new trial.

      Motion for recall and amendment of remittitur.

      Charles Goldzier, for app’lt; Rowland Cox, for resp’ts.

       See 52 St. Rep., 339.

   Per Curiam.

Upon the decision of this appeal we held that the trial court had erroneously granted a greater measure of relief than the findings or pleadings would permit, and we, therefore, directed the interlocutory judgment to be modified by restricting the recovery within proper limits, and no other error appearing, the judgment, as thus modified, was affirmed.

As the case came here upon an appeal from an order of the general term denying a motion for a new trial under § 1001 of the Code, the appellant insists that this disposition of his appeal was unauthorized, and that this court had no jurisdiction to direct an amendment of the judgment, but was required upon the discovery of an error of law to reverse the order of the general term and grant a new. trial, and he now moves to recall the remittitur and amend it accordingly. Whatever jurisdiction the supreme court possessed in the premises this court could exercise, and whatever order that court ought to have made we have the power to direct to be entered. But the point of the appellant’s argument is that the general term was destitute of authority to modify the judgment so as to cure the manifest error in the record, and thereupon deny the motion for a new trial.

We cannot assent to this view of the powers of the court below. It has general jurisdiction, and upon the review of the proceedings upon a trial had therein without a jury, where the sole error appearing consists in the allowance of greater relief than the successful party is entitled to upon the facts found, it may correct the judgment and make it conform to the findings, unless there is some statute expressly limiting its power in this respect.

Section 1001 contains no limitation of this kind, and there is no provision of the Code that we can find which, either in terms or by necessary implication, prohibits such a procedure. We are referred to § 1317, which authorizes the general term upon an appeal from a judgment or an order to modify the judgment or order appealed from, and it is argued that the fair inference from this express grant of power is that without it the authority to modify would not exist, and as it is there limited to appeals from judgments, it cannot be extended to cases where the rightfulness of the judgment is brought under review by a motion for a-new trial, as it is under § 1001. But so far as it affects the jurisdiction of the supreme court, § 1317 is not an enabling act, but simply declaratory of the power which the court has always possessed, whenever it has been invested with a general authority to review its own judgments entered upon a trial without a jury either before the court or a referee.

The appellant is not aggrieved by the adoption of the practice. All that he can justly demand is the correction of any error of law appearing in the record to which he has duly excepted; and where the error does not consist of any prejudicial ruling during the course of the trial, but only appears in the conclusions of law which lead to an excessive recovery, it is the duty of the general term to direct the correct judgment to be entered, and a new trial cannot be demanded as a matter of right. It is claimed that the appellant has not jet had a review of the interlocutory judgment upon the facts, and that when final judgment is entered he may, if he deems himself aggrieved, appeal therefrom to the general term, and again bring up for review the interlocutory judgment under § 1316, and so possibly secure a reversal upon the facts, and thus the anomaly would be presented of the supreme court reversing a judgment which this court had directed to be entered. Whether such a result may happen, or whether the defendant, by ■electing to review the interlocutory judgment under § 1001, has not precluded himself from a further review thereof upon an- appeal from the final judgment, if one should be taken, we are not now required to determine. The question is not involved in this motion, and the possibilities which it suggests cannot, therefore, be here considered.

There may have been a technical inaccuracy in the form of the remittitur sent down in this case. It should have stated that the ■order of the general term was modified by inserting therein a direction to modify the judgment in accordance with the views expressed in the opinion of this court, and that as so modified the order was affirmed, without costs to either party in this court. But as the variance is one of form and not of substance, it is not necessary to recall the record for the purpose of amending it in this respect

The motion must be denied, with ten dollars costs.

All concur.


author: Peckham, J.

text:
    The People, Resp’ts, v. Edward Geoghan, App’lt.

      (Court of Appeals,

      Filed June 30, 1893.)

    Homicide—Murder nr the first degree.
    Defendant, who had- threatened to shoot his wife unless she returned home, followed her to her mother’s house and on her refusing to come home with him took out his revolver and, in the presence of his sister-in-law, fired at her. The sister ran for assistance and heard three shots fired, and saw defendant running. She had him arrested, and the wife, after identifying him as the one who did the shooting, lingered a few hours and died. Held, that these facts made out a clear case of murder in the first degree.
    Appeal from judgment of the court of oyer and terminer of Saratoga county, convicting defendant of the crime of murder in the first degree.

      J. Grattan McMahon, for app’lt; Jas. W. Ridgway, for resp’ts.
   Peckham, J.

After a careful of the whole record in this case we fail to find any reason for a reversal of the judgment of conviction.

The evidence shows the deliberate killing of a defenceless woman, and that woman the wife of the murderer.

The couple had been married but about one year and a half, and the record shows that frequently during that time the defendant had ill-treated the deceased, so that she had left him and come home to her mother for protection from his violence. They had one child about five months old, and but a short time before the-death of the wife the defendant had come to her mother’s house,, where the wife had fled, and had taken the child in his arms and threatened to shoot both the child and the mother unless she came home again. The occurrence which resulted in the death of the deceased took place about midday on the 8tli of September, 1892. The wife had taken refuge with her mother a day or two before and was in a room with her baby, when the door was broken in by the defendant. He asked the deceased if she would come home-with him, and upon her refusal, he took out his revolver and in the .presence of a sister of the deceased, and while the deceased had her baby in her arms, he fired at her.

The sister then ran out to summon assistance, and while gone she heard three other shots fired, and then the defendant ran out of the room, down the stairway and out into the street, pursued by the sister. He was arrested while thus running, and the policeman who arrested him, assisted by another, took him back to the house under the guidance of the sister, and he was there confronted with the deceased. She identified him as the one who did the shooting, and he was then taken to the jail. He had been drinking, but was not drunk. The child in the mother’s arms was slightly hit by one of the pistol bullets and its dress was scorched by the powder from the weapon. The woman lingered for a few hours and then died. The evidence was such as not to leave the slightest possible doubt that the defendant did the shooting. The defense was insanity. The evidence upon that point was so weak as not to call for any discussion in regard to it. The crime was-undoubtedly the result of the anger and passion of the defendant, caused by the refusal of the deceased to return home with him.

Ho intelligent and honest jury could upon the evidence disclosed in this record have come to any other conclusion than that, the defendant was guilty of murder in the first degree. The charge of the learned judge who presided on the trial was a correct statement of the law applicable to the case. He charged as requested by the counsel for the defense, and there was not an exception taken to any part of the charge. There is nothing in the whole course of it to which exception could have properly been taken. The one or two exceptions taken in the course of the-trial to the ruling of the court upon questions of evidence are too plainly frivolous to warrant further notice.

Upon a careful review of the whole record we find no error of law, and upon the merits we find no ground for interference. In this case we can plainly see that justice does not require a new trial.

The judgment should be affirmed.

All concur.


text:
    The Mayor, etc., of the City of New York, App’lt, v. James M. Smith, Impl’d, Resp’t.

      (Court of Appeals,

      Filed June 30, 1893.)
    Appeal—Judgment—Vacation of on account of unauthorized appearance.
    The control possessed by courts of original jurisdiction over their judgments and orders, as well as in reference to the fact or the sufficiency of a notice of appearance in the action, is absolute and beyond any review by this court, unless it appears that there was an abuse of discretion.
    Appeal from order of the New York superior court, general term, affirming order vacating judgment as to the defendant Smith.
    This action was begun in 1868 against the sureties on a lease made to one Allerton, who at that time was solvent, but has since become irresponsible. An attorney appeared for all the defendants, the notice being entitled in the supreme court Nothing further was done until February, 1890, when notice of application for judgment by default was served, but the motion was abandoned ; in 1892 plaintiff filed a judgment roll, reciting the appearance of the defendants by attorney, but containing no proof of service.
    Upon learning of this judgment, defendant moved to vacate the same as to him on the ground that no process had ever been served upon him; that he no knowledge of the action until the service of the notice of application for judgment in 1890, which was abandoned, and that he had never authorized any one to appear for him; which motion was granted.

      David J. Dean, for app’lt; Wm. H. Newman, for resp’t.

       See 48 St. Rep., 586.

   Per Curiam.

Whether, under the circumstances disclosed, the court below should set aside the judgment as to this respondent was a matter which rested in its discretion. The circumstances were such as to warrant the action taken, in our opinion; but, irrespective of that opinion, there can be no doubt that the control possessed by courts of original jurisdiction over their judgments and orders, as well as in reference to the fact, or the sufficiency, cf a notice of appearance in the action, is absolute and beyond any review by this court, unless it appears that there was an abuse of discretion.

The appeal should be dismissed, with costs.

All concur.


author: O’Brien, J.

text:
    The People ex rel. John A. Roeblings Sons’ Company, App’lt, v. Edward Wemple, Comptroller of the State of New York, Resp’t.

      (Court of Appeals,

      Filed June 30, 1893.)

    1. Taxes—Foreign corporation—Manufacturing within the State— Exemption.
    Relator’s charter, obtained under the laws of New Jersey, contemplated that its manufacturing operations should be carried on within that state and not elsewhere. The building occupied by it in New York city was not used as a factory but for its office and general place of business and storage of its goods. On each of the floors two or three men were employed in adapting the manufactured articles to such purposes as might be required, such as attaching loops to wire ropes, for use as switching rods ; attaching hooks and loops to wire cables for various purposes, but no wire or wire rope or any oilier article was manufactured there. Held, that relator was not engaged in the business of manufacturing in this state, and was not entitled to exemption from taxation under the statute.
    3. Same.
    When it is apparent that all that is done here by a foreign corporation, organized for manufacturing purposes and engaged in such business in the state of its creation, consists of some incidental additional work to its manufactured products sent here from the other state where its actual manufacturing operations are authorized by its charter and carried on, such as may be conveniently and suitably added at the place where the goods are exposed for sale, this is not carrying on the business of manufacturing within the meaning of the statute.
    „ 3. Same.
    Such a corporation cannot send its manufactured products here in an incomplete state, and then by putting the several parts together and by adjusting them to each other or by performing some comi paratively slight operation upon the article or on the parts of which it is composed, though it may involve necessary labor before suitable for use or sale, entitle itself to exemption on the ground that it is carrying on a manufacturing business.
    Appeal from judgment of the supreme court, general term, third department, affirming decision of comptroller assessing taxes upon relator under the corporation tax laws for the years 1880 to 1889, inclusive.

      Duncan Edwards, for app’lt; S. W. Rosendale, atty. gen., for resp’t.

       Affirming 44 St. Rep., 708.

   O’Brien, J.

The court below has confirmed the action of the state comptroller in assess .g taxes under the Corporation Tax Law, upon the relator, for ie years 1880 to 1889, inclusive, and the question presented by . ¡is appeal is whether the record discloses any error of law in t! 5 proceedings. The relator is a manufacturing corporation, created by the laws' of the state of New Jersey. It has an office and place of business in the city of New York, and its real estate there has an assessed value of 572,000. The principal, if not the sole, ground urged in support -of the appeal is, that during all the years for which the tax complained of was imposed by the comptroller, the relator was a manufacturing corporation carrying on its manufacturing business within this state. If this contention be sustained as matter of fact, then it would follow that the tax in question was improperly imposed, for the reason that corporations so engaged are expressly ■exempted from the tax by the terms of the statute. The relator’s charter, obtained under the laws of New Jersey, contemplated that its manufacturing operations should be carried on within that state and not elsewhere. The articles of incorporation state, •“That the city of New York, in the county and state of New York, is the place where said company may have an office and store for the sale of their manufactured, goods, and for the transaction of other business connected therewith," and by a subsequent amendment made thereto in 1888, it was further provided that the portion of relator’s business which may be carried on out of that state “ is the buying and selling of materials, the making •of contracts, the sale of the manufactured, products of the said company, and the transaction of business incident thereto.”

The charter of the corporation is the measure of its powers, and from these provisions it would appear that it could not in fact have been engaged in manufacturing within this state during the years mentioned without disregarding the limitations upon its powers imposed by the law of its creation. While this consideration may not be conclusive in the determination of the question, yet it may well be presumed, in the absence of clear and satisfactory evidence to the contrary, that the relator is not engaged in a "business in this state in violation of its charter, and which would .subject it to dissolution in the jurisdiction of its creation. The business for which the corporation was organized, as appears from the certificate of incorporation, is “ the manufacture, buying and ¿selling of iron, steel, wire, wire rope, and all other materials used in connection therewith.” In the petition for the writ of certiorari the relator does not allege that it manufactures any iron, steel or wire within this state. It does allege in a very general way that ■during the years referred to it has been engaged in carrying on manufacturing here, where “wire rigging, endless chains, etc., etc., ■and other useful articles have been manufactured.” If these operations could be held to constitute manufacturing within the meaning of the statute they would cover a little more than one per cent of its whole business. The comptroller in his return to the writ state? with more precision just what these operations con.sist of. It is there alleged that the building which the relator ■occupies in the city of New York is not occupied or used as a factory, but for its offices and general place of business and the .storage of its goods. That on each of the storage floors two or •.three men are employed in adapting the manufactured articles to such purposes as may be required, such as attaching loops to wire ropes for use as switching rods, attaching hooks and loops to wire cables for various purposes, and that no=wire or wire rope cr ¿any other article is manufactured here. On the relator’s own showing the wire is all manufactured in New Jersey and sent to New York in coils, and there some operations are performed ■involving the employment of labor to fit the goods for the market. There is but little if any conflict between the statements of the petition and the return, and the latter may be considered as an amplification of the former, and in this court the ¡return is conclusive. People v. Fire Commissioners, 73 N. Y. 437.

On these facts we think it cannot be held that the relator is engaged in the business of manufacturing in this state within the true intent and meaning of the statute, and hence was not entitled to the exemption from taxation which the statute grants to corporations so engaged. When it is apparent that all that is done here by a foreign corporation, organized for manufacturing purposes and engaged in such business in the state of its creation, -consists of some”incidental additional work to its manufactured products sent here from the other state where its actual manufacturing operations are authorized by its charter and carried on, such as may be conveniently and suitably added at the place where the goods are exposed for sale, this is not carrying on the business of manufacturing within the meaning of the statute. Such a corporation cannot send its manufactured products here in an incomplete state, and then by putting the several parts together, and by adjusting them to each other, or by performing some comparatively slight operation upon the article or on the parts of which it is composed, though it may involve necessary labor before suitable-for use or sale, and thereby entitle itself to exemption on the ground that it is carrying on a manufacturing business. The courts, will not give to the language of the statute which confers the. exemption any strained or unnatural construction, but it must be made to appear that actual manufacturing operations are carried on here in the ordinary sense and meaning of the law. People ex rel. Seth Thomas Clock Co. v. Wemple, 133 N. Y., 323; 45 St. Rep., 234. While there is no reason to impute bad faith to the-relator or any intent to evade the statute, yet we think that the court below correctly held upon the facts that it was not entitled to the benefit of the exemption. The tax assessed upon the relator for the ten years was $9,403.79. The jurisdiction to taxand not the naeasui’e of taxation was the question presented to the comptroller. The relator had full opportunity to be heard as teethe amount of the tax before it was imposed, and even after that upon an application for a readjustment on the ground that it was excessive, but it does not appear that it made any complaint on that ground before the officer whose duty it was to make the assessment, with the exceptions which will be presently referred to. His determination as to the amount of the tax should not be disturbed now unless it clearly appears to be erroneous. People ex rel. Am. Con. & Dredging Co., 129 N. Y., 558; 42 St. Rep., 400; People ex rel. Southern Cotton Oil Co., 131 N. Y., 64; 42 St. Rep., 632;. People ex rel. Seth Thomas Clock Co., supra.

The basis of the tax was the amount of the relator’s capital employed within this state. This was ascertained by computing the-value of the stock in trade here during the year in question, its other personal property, the average monthly bank balance, the-rentals paid and the value of the real estate owned and used in its business hera These were all proper elements to be considered in determining what portion of the capital was employed within this state. Without regard to the details from which the basis of the tax was made up, we think it sufficient to say that in the relator’s petition it appears that but two objections were made to the manner in which the capital stock employed in this state-was ascertained. These were: (1) That the comptroller eri-ed in estimating the capital stock so employed at the actual value of the property instead of the value of the shares at par; and (2). that the value of the real estate was fixed, not according to the assessment made by the local assessors, but according tó the judgment of the comptroller himself, which is said to be an arbitrary estimate. In determining the actual capital of a corporation for the purpose of general taxation, the true value of its corporate assets, less the debt, and obligations, and not the market value of the shares is the rule of assessment. People v. Coleman, 126 N. Y., 433; 38 St. Rep., 237.

IE the statute under which the comptroller proceeded prescribes a different method, it does not appear that its adoption would result more favorably to the relator or that an excessive .tax has resulted from the course pursued. With respect to the real estate he was not bound by the value placed upon it by the local assessors. He is made by the statute an assessor himself, and he had a right to estimate its value according to such information as he could obtain or upon his own judgment. Moreover, it should be observed that the relator neglected or refused to comply with the statute which requires it to make annual reports to the comptroller. The first report made was in 1891, and then only under the coercive measures adopted by the comptroller and which did not in any material particulars comply with the statute.

The position of the relator was that it was not subject tp taxation for any sum whatever, and the comptroller was thus obliged to get at the facts as best he could. The statute proceeds upon the theory of permitting corporations in the first instance to assess themselves by their annual report. If this is fairly made, in compliance with the law, the comptroller should, and, no doubt, in most cases does, adopt it, and he proceeds to make the assessment himself only in those cases where no report isanade or where he has good reason to believe that it is not correct. When the corporation makes a fair report at the time required by law, it has no reason to fear any unjust or oppressive action on the part of the state, but when, after the lapse of ten years, the officer charged with the duty of collecting the tax is obliged to make the assessment and obtain the necessary information, his action should not be disturbed unless it clearly appears to be unjust or based upon some erroneous principle. The relator has never given to the state authorities its own estimate of the burden which should be imposed under the law, except to deny all liability whatever, and after a careful examination of the record, we are not able to say that any legal principle has been violated or any injustice done.

For these reasons, we think the order appealed from should be affirmed, with costs.

All concur, except Maynard, J., not sitting.