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

text:
    Henry A. Root and Newell Martin, Resp’ts, v. Frederick P. Olcott, Rec’r of the Wall St. Bank, App’lt.

      (Supreme Court, General Term, First Department,

      Filed December 30, 1886.)

    1. Banks—Power of cashier to retain counsel to collect claims of.
    The cashier of a hank, by virtue of his office, has power to collect moneys due the hank, and for that purpose to retain counsel without specific authorization thereto by the hoard of directors. Brady and Daniels, JJ.
    Where a bank has its duly authorized attorney and counsel, appointed by the hoard of directors, to’take charge of its law business, the cashier has no general authority which empowers him to retain other attorneys or counsel at his discretion. Where, under such circumstances, a cashier has assumed to employ another attorney, it must be shown that his act has been recognized or approved by the board in some way amounting to a ratification of the act. - Davis, J.
    2. Same—Services before retainer are not entitled to compensation.
    Services rendered by attorneys before retainer are not entitled to compensation.
    Appeal from a judgment entered upon the report of a referee.

      Edward H. Hobbs, for appl’t; Ira D. Warren, for resp’ts.
   Brady, J.

This action was brought to recover from the receiver of the Wall Street Bank a sum claimed to be due for services rendered by the plaintiffs as counselors-at-law, and upon a retainer of the Wall Street Bank before its dissolution. The questions involved are, first, whether the plaintiffs were retained by the Wall Street Bank in such manner as to make that corporation liable, and if yea, what was the value of the services rendered.

It appears from the record that the plaintiffs, prior to August 13, 1883, were the attorneys of Cecil Ward & Co., and as such had commenced a suit against one Ducker. On that day the firm just named failed, heavily indebted to the bank, but having large claims against one Stedman, one Saunders, and others, the failure of the firm being caused by Stedman. On the next day, namely, August 14, 1883, the plaintiff Root went to the Wall Street Bank and saw the cashier, John B. Dickenson, with whom he had a conversation about the assets of Cecil Ward & Co., and the result seems to have been that Mr. Dickenson, who appears to have had entire charge of the relations of the bank with the broken firm, effected an arrangement by which Cecil & Ward turned over to the bank all their assets, including the claims against Ducker and the Stedmans, when, according to the testimony on behalf of the plaintiffs, the latter were by Mr. Dickenson directed to collect or prosecute the claims for the bank, for which service the bank would pay them. The plaintiffs, upon this retainer, rendered services and made disbursements, acting in many matters under the direction of Messrs. Shearman & Sterling, the general counsel of the bank, who, it seems, were to some extent, authorized to control movements of the plaintiffs, and who ultimately took upon themselves the management of these claims as of the other affairs of the bank. It is not understood that there is any dispute as to the retainer in the-manner stated, the contention being that the cashier had no authority to bind the bank unsupported by the concurrence of the directors, either by resolution or knowledge of and acquiescence in the acts of the plaintiffs in behalf of the hank.

As will have been observed from the statement of_ facts just made, the cashier retained the plaintiffs without authority by any resolution of the board of directors and without the knowledge of any of the officers of the bank. Was it within the scope of the general authority of the cashier to employ an attorney for the purpose of collecting outstanding claims due the bank? If it was, then the liability of the bank is established beyond peradventure, inasmuch as the evidence warrants the finding as to the retainer, and there is no reason, therefore, for interfering with the conclusion expressed in that regard.

The power and authority of a cashier have been stated, discussed or defined in many cases. “He .is,” says Justice Swayne, “the executive officer through whom the financial operations of the bank are conducted. He receives and pays out its moneys, collects and pays its debts, and receives and transfers its.financial securities.” Merchants’ Bank v. State Bank, 10 Wall., 604, 650. See also to the same effect: Bridenbecker v. Lowell, 32 Barb., 9, 17; Wallace v. First Parish of Townsend, 109 Mass., 263. It has also been quaintly observed that, contrasted with the directors, he was the hands and they the mind of the corporation, And again, the directors have been likened to the judges, and the cashier to the clerk of a court—the former adjudicating and directing, and the latter executing the mandate. Chemical Bank v. Kohner, 8 Daly, 530. And it has also been said not only that much of his authority must be implied from the nature of his business, its necessities, its customs and usages (F. and M. Bank v. B. and D. Bk., 26 How. Pr. , 5, 7); but that for many purposes the officers and agents of the corporation of which he is one, may employ persons to perform services for it; and such employment being within the scope of their duty, binds the corporation. Hooker v. Eagle Bank, 30 N. Y., 83, 85. Arid it has been expressly declared that a managing officer or cashier has authority, without a formal vote of the board of directors, to employ counsel. Taylor on Stock Corporation, § 202; Wallace v. First Parish of Townsend, supra. To the same effect see: American Ins. Co. v. Oakley, 9 Paige, 496; Peterson v. The Mayor, 17 N. Y., 449; Mumford v. Exchange Bank, 5 Denio, 355, 359; Bristol Bank v. Keavy, 128 Mass., 298; S. P. Frost v. Domestic Sewing Machine Co., 133 id., 563; Western Bank v. Gilstrap, 45 Mo., 419; Southgate v. Atlantic and Pacific R. R., 61 id., 89, 94.

In Wallace v. First Parish of Townsend, supra, it was said of the treasurer of the parish that it was his duty to collect the notes and other securities belonging to the parish, and he had the incidental power-to commence a suit on them and for this purpose to employ counsel.

And in Bristol Bank v. Keavy, supra, it was held that it would be a great obstacle to the management of savings banks and other corporations if no suit for the collection of a debt could be instituted except by a vote of the directors or trustees; and indeed in all the cases cited the power was recognized and commended or approved, as it should be.

It would be a very easy task to array a variety of reasons why such a power should not only be regarded as incidental but indispensable for the protection of - the property of corporations. Its abuse, if any should exist, can be speedily remedied by the removal of the indiscreet officers. The reported cases falling into line on this subject could be-multiplied if necessary.

There are a series of decisions, it is true, which would seem to militate against the existence of the power mentioned, but they do so, df at all, only inferentially. For example, a cashier has no power to assign or transfer non-negotiable paper without authority of the directors, duly given (Barrick v. Austin, 21 Barb. 241); or to make an agreement that an indorser of a promissory note shall not be liable, Bank of U. S. v. Dunn (6 Pet., 51), Bank of Metropolis v. Jones (8 id., 12), Bank of Whitehall v. Tisdale (18 Hun, 151), affirmed 84 N. Y., 655); or by reason of his official position to bind the bank as an accommodation indorser, West St. L. Sav. Bk. v. Shawnee County Bank (95 U. S., 557), or to settle an account, taking private notes and drafts and giving a receipt in full, Sandy River Bank v. Merchants’ Bank (1 Biss. 146), or to bind the bank by a bond of indemnity to the sheriff, to save him harmless in executing process in favor of the bank, Watson v. Bennett (12 Barb., 90); or to bind the bank as a gratuitous bailee. All these prohibitions, however, clearly do not relate to powers incidental to the authority to collect the debts of the bank. They relate to the disposition of its property, absolutely or by compromise, or to contracts absolute and independent in themselves, and totally distinct from that which is designed to insure such collection, and undoubtedly not within the usual duties of the cashier, discharged without special resolution of the directors. The power and duty to collect necessarily include authority to set the legal machinery in motion to accomplish that result, and debts, it may well be conjectured, must be lost, if, in some emergency requiring the utmost dispatch, the cashier could not act until the board of directors crept together to debate and to decide upon what was to be done.

The first question is thus successfully answered for the plaintiff and renders the discussion of a collateral proposition unnecessary, namely, whether, if the cashier exceeded his authority, the bank was not liable on an implied contract, about which much more may be said in favor of the plaintiff.

The remaining question is, whether the plaintiffs were entitled on the proofs given, to the amount awarded by the referee. From an examination of the evidence bearing on this subject, the conclusion has been reached that the whole amount of the claim should not have been allowed. The statements of the plaintiffs are not in entire harmony and their difference leads to uncertainty, The services rendered as to the Ducker claim were in part performed before the retainer by the bank, and there should be no doubt that the sum earned in that way was deducted from the claim. It was variously estimated at from fifty to one hundred and twenty-five dollars. It is true the plaintiffs insist that Mr. Sanxay, who was examined on behalf of the defendants, is a hired expert; but if so, that does not justify the inference of partiality. He seems to have testified cautiously, and with the intention of giving to the plaintiffs all they deserved. The amount they claim rests, it must be said, upon their evidence, and although a lawyer may be the best judge of the value of his own services, he may, nevertheless, under or over estimate it, and his judgment cannot in all cases be regarded as conclusive. Here the impression left on the mind, in consideration of all the proof on the subject, is that the sums stated by Mr. Sanxay, in all amounting to $960, should have been adopted by the réferee, in addition to the disbursements proved to have been made, namely, sixty-one dollars and forty-one cents, making in all $221.41.

The judgment should be modified, therefore, by reducing the finding to that amount and interest thereon, and as so modified the judgment should be affirmed, without costs to either party.

Daniels, J.

On the theory maintained as to the effect of the evidence, there should be a new trial. But it was in conflict on the subject of value, and the referee does not seem to have erred in following that given for the plaintiff, and that entitles them to an affirmance.

Davis, P. J.

Where a bank has its duly authorized attorney and counsel, appointed by the board of directors, to take charge of its law business and affairs, the cashier has no general authority which empowers him to retain other attorneys or counsel for the bank at his discretion or pleasure. The action of the board of directors in appointing the attorney and counsel of the bank takes away from the cashier all implied authority to do the same thing with respect to every portion of its business.

Where a cashier under such circumstances has assumed to employ another attorney, it must be shown that his act has been recognized or approved by the board in some form that amounts to a ratification of the act. I dissent, therefore, from the opinion of the court and its conclusion, but as my brother Daniels is for affirmance, and my brother Brady for affirmance with a modification, I concur in the modification proposed by my brother Brady, which result, therefore, is an affirmance of the judgment as modified.


source: Caselaw Access Project

author: Churchill, J.

license: Public Domain

text:
    The Gallatin National Bank, Resp’t, v. The Nashville, Chattanooga and St. Louis Railroad Company and The Louisville and Nashville Railroad Company, App’lts.

      (Supreme Court, General Term, First Department,

      Filed December 30, 1886.)

    1. Practice—Pleadings—Complaint—Allegation op making op agreement BY CORPORATION, IN EPPECT, IS ALLEGATION OP AGREEMENT BY AGENT AUTHORIZED THERETO.
    An averment in a complaint that an agreement was made between the plaintiff and a corporation is, in effect, an averment that the agree ment was made by an officer or agent of the corporation acting by its authority.
    3. Same—Answer—Denial—Specific.
    An answer alleged and admitted that a person then president of the corporation defendant signed certain papers, held, that this admission was speci. c, and did not include an admission that the person so signing was, either as president or otherwise, authorized to execute the papers for the corporation.
    8. Same—Answer—Denial—What is good general denial op allegations not specifically denied.
    After certain admissions the answer concluded, “and except as herein specifically alleged and admitted, the defendants deny the allegations contained in the third section of said complaint; and they deny the validity and existence of any agreement as is in said section alleged.” Held, that this -was a good general denial under the Code of whatever had not been specifically admitted.
    4. Taking case prom jury—When error.

      Held, that a ruling that the agreement had been admitted upon the pleadings and the taking of the question from the jury was erroneous.
    Appeal from a judgment in favor of the plaintiff, entered on a verdict after trial at the circuit; and from an order denying a new trial, made upon the minutes of the justice before whom the action was tried.

      John L. Cadwalader and William Allen Butler, for app’lts; Everett P. Wheeler and Thomas G. Shearman, for resp’ts.
   Churchill, J.

The complaint in this action, in its third section, averred that on or about October 20,1879, a certain agreement was made between the plaintiff and the Nashville, Chattanooga and St. Louis Railway Company, a railroad corporation created under the laws of Tennessee. This was in effect an averment, among other things, that the agreement in question was made by an officer or agent of the corporation, acting by its authority. Partridge v. Badger, 25 Barb., 146, 176.

The answer alleged and admitted that on or about that day one E. W. Cole, then president of that corporation, signed two certain papers, copies of which were annexed, and that the plaintiff signed another paper, a copy of which was also annexed. These admissions were specific and did not include an admission, that Cole, as president or otherwise, was authorized to execute the papers for the corporation.

The answer after these admissions concluded as follows: “And except as herein specifically alleged and admitted, the defendants deny the allegations contained in the third section of said complaint; and they deny the validity and existence of any agreement as is in said section alleged.” This was a good general denial under the Code of whatever had not been specifically admitted. Griffin v. Long Island R. R. Co., 101 N. Y., 348, 354; Burley v. German-American Bank, 111 U. S., 216; Clark v. Dillon, 97 N. Y., 370.

The plaintiff was not misled by it, since it gave in evidence on the trial as a part of its case the resolutions of the corporation, which were claimed to authorize Cole to sign the papers and make the agreement in question, and various other resolutions and acts of the corporation, which were claimed to show acquiescence in and adoption or ratification of the agreement made by its president.

The learned justice before whom the case was tried, held the making of the agreement admitted under the pleadings and took the consideration of the question from the jury. This was error.

On the motion for a new trial on the judge’s minutes, the same learned justice held that the motion must be denied, because, even if the answer was held to deny Cole’s authority, the evidence showed that the corporation had ratified his acts. In the Case of Wehrhane et al., ex’r, etc., against these same defendants—an action brought upon this same contract by another party to it, the appeal in which was argued at the same time with this—the trial justice on substantially the same evidence received in this case dismissed the complaint, on the ground that the plaintiffs had failed to show Cole authorized to make the contract, or that his acts had been ratified by the corporation. A new trial has been granted in that case, upon the ground that the question of ratification upon the evidence was not for the court but for the jury, and should have been submitted to them. The same must be held here.

The judgment and order appealed from should be reversed and a new trial granted, with costs, to abide the event.

Brady and Daniels, JJ., concur.


author: Daniels, J.

text:
    Frank R. Stearns, Appl’t, v. The St. Louis and San Francisco Railroad Company, Resp’t.

      (Supreme Court, General Term, First Department,

      Filed December 30, 1886.)

    1. Former judgment—When a bar to a subsequent action.
    To defeat a subsequent f ction by the determination of a preceding litigation between the same parties, the subject matter of the second suit must have been directly or indirectly included in and passed upon by the former judgment.
    3. Contract—Consideration—What is sufficient.
    A benefit to each of the p rties to an agreement not previously provided for or secured is a sufficient consideration to support the agreement.
    3. Same —How a paroi contract may be modified.
    An agreement not under seal may he modified by a subsequent simple agreement.
    4. Laws of other states—Must be proved as facts.
    Without evidence of the fact the enactment of a statute relating to contracts for the sale of real property in another state similar to the one in force in this state will not be presumed. The common law of another state is presumed to be the same as in this, but no court takes judicial notice of the laws of a foreign country, they must be proved as facts.
    K Pleadings—Contruction of language in.

      Held, that where the word “agreed” was used in a complaint it imported the making of a legal agreement, and the court is not at liberty to infer an agreement insufficient to support the plaintiff's right of action.
    Motion by defendant for a re-argument of the appeal taken in this action.

      John E. Burrill, for def’t; James Donne, for app’lt.
   Daniels, J.

The motion for the re-argument of the appeal has been made upon grounds considered in its disposition as well as others now urged upon the attention of the court. It has been insisted that a misapprehension existed as to the identity of the contract upon which the action , has been brought, and the one upon which the action in the state of Missouri proceeded and was decided, between the same parties. But a further examination of the case excludes the possibility of mistake upon this ground. For while it is true that the action in the state of Missouri proceeded upon the contract made between the Atlantic and Pacific Railroad Company and the defendant on the 8th of September, 1876, it is still equally so that this action has not been brought to recover damages for the breach or non-performance of that agreement. That agreement has been set forth in the complaint in this action for the purpose of presenting and disclosing the rights and obligations of the parties under it, and of the defendant which afterwards assumed the performance. But it is more in the nature of an inducement, or introduction, to the real controversy in the case, then the legal groundwork of that controversy. For after the complaint proceeded to say that the defendant had become bound for the performance of that agreement, it was then alleged that the plaintiff had acquired the ability to dispose of the lands mentioned in the contract^ upon profitable terms to himself, and that information of this fact was communicated to the president of the defendant, accompanied with a proposal to pay cash for the land, if the defendant would approve of the sale proposed to be made, instead of delaying such payment to the time specified in the agreement made between himself and the Atlantic and Pacific Eailroad Company. It was further alleged that the president of the defendant was satisfied with and approved of this proposal, and that it was agreed in case the pláintiff made the sale that the defendant 1 would approve of said sale immediately upon its being made to the parties mentioned by the plaintiff.” It was further alleged that relying on the promises of the president of the defendant, and believing the same to be true, the plaintiff at great cost and expense to himself, took the parties proposing to buy, to the lands in question, who became satisfied with them and agreed to purchase them and would have done so at a great profit to him had it not been for the unlawful acts of the defendant afterwards mentioned, consisting in part of its refusal to comply with the agreement so entered into. The allegations of misconduct on the part of the defendant were broader than that required to present the non-performance of this alleged agreement between the plaintiff and the defendant. But that circumstance in no manner detracted from his right to maintain the action for damages upon proof of the agreement alleged, and the failure of the defendant to perform it. This cause of action was in no manner involved in the suit in the state of Missouri. The complaint in that action contained no reference to it, either directly or indirectly. Nor was' it a subject in any form essential to the determination of the action pending in that state. And it was not within the principle proceeded upon in .Pray v. Hegeman (98 N. Y., 351), for it in fact in no manner or form entered into the litigation in the state of Missouri, but was a subject entirely extraneous to the controversy upon which that action proceeded. And the judgment in that state, was therefore, no bar to the plaintiff’s right to recover in this suit for a breach of this agreement. For it has been held, and such seems to be the settled law, that to defeat a subsequent action by the determination of a preceding litigation between the parties, the subject-matter of the second suit must have been directly or indirectly included in and passed upon by the former judgment. Kerr v. Hays, 35 N. Y., 331; Davis v. Tallcot, 2 Ker., 184.

The further position has been taken that what was alleged in the complaint in this action did not disclose an agreement by which the plaintiff by any possibility could recover. But the allegations in the complaint set forth the facts that the negotiations were with the president of the defendant. They related to its business and were within the scope of the authority ordinarily possessed by the president of a corporation, and resulted in an agreement relating to this business. And they proceeded upon a legal consideration, for the obligation to pay cash for the property before the time mentioned in the preceding agreement and the assurance that the plaintiff could act upon the assent of the defendant, expressed through its president, supplied a consideration for the alleged new agreement. It contemplated a benefit to each of the parties not previously provided for or secured, and that in judgment of law was a consideration upon which the alleged agreement could be made.

This agreement was not deprived of its binding force or effect under the authorities cited relating to the modification of a sealed instrument by a subsequent agreement not under seal. For the preceding agreement, as it has been set forth in the case, was not under the seal of the corporation nor of either of its officers subscribing it, and in no part of it does it import the fact that it was intended to be, or was made under seal. It was a simple contract capable of being modified by such an agreement as the plaintiff alleged in his complaint to have been made. These authorities, which have been collected and cited in support of the application for a reargument, consequently have no application whatever to the case.

Neither does the objection that the contract was within the statute of frauds and could not be modified or changed by a simple verbal agreement. For the complaint has alleged that it was agreed that the defendant corporation would approve of the sale immediately upon its being made to the parties mentioned by the plaintiff, and this word “agreed,” so employed in the pleading, imported the making of a legal agreement. The court is not at liberty to infer that it was no more than a verbal agreement for the purpose of defeating on that inference the plaintiff’s right of action. But this agreement related wholly to the sale of lands in the state of Missouri, and it was not within the statute of frauds of this state. It was there to be performed by a corporation created and existing under the laws of that state and related to real property situated in that state. And without evidence of the fact that a similar statute relating to contracts for the sale of real property had been enacted in that state, to the statute existing upon this subject in the state of New York, the fact could not be presumed to be so. In the administration of the law the courts of this state presume that the common law of another state is the same as that prevailing here, but this presumption has- not been extended to the statutory laws of other states or countries. The rule, on the contrary, is that no court takes judicial notice of the laws of a foreign country, but they must be proved as facts. 1 Greenl. on Ev. (7th ed.), § 485; Monroe v. Douglass, 1 Seld., 447; White v. Knapp, 47 Barb., 549.

Whether the plaintiff will be able to maintain this action must depend not so much on the state of the pleadings as on the proof which may be adduced in support of his allegations upon the trial. For the purposes of the action the complaint is required to be liberally construed. And without indulging in such freedom of construction as will transcend the language employed to allege the facts, it is sufficient to say that upon an issue joined, as that has been done in the action, the plaintiff will be at liberty to prove upon the trial that such an agreement was made as he has alleged upon the basis in part of the preceding contract, by which the defendant through its president obligated itself to approve of the sales of the land which the plaintiff should make and accept payment for them in cash before the time mentioned in the preceding agreement. And that after the plaintiff had acted upon that agreement the defendant refused to be bound by "its terms or to contribute by its act to carry it into execution. And by offering to prove on the trial all the facts alleged in the complaint, the plaintiff did propose to make out a cause of action under these allegations. This evidence should not have been rejected and the complaint dismissed as it was upon the trial. But for the reasons stated in the preceding opinion, as well as here added and repeated, the judgment dismissing the complaint was erroneous, and the motion for a reargument of the appeal should be denied, with costs.

Davis, P. J., and Brady, J., concur.


text:
    The People ex rel. Nicholas Haughton and John J. Morris v. William S. Andrews and John Van Glahn.

      (Supreme Court, General Term, First Department,

      Filed December 30, 1886.)

    Commissioners of excise—Appointment of in the city of New Yonk— MADE BY THE MAYOR.
    Laws of 1870, chapter 175, re-enacted in part by Laws 1879, chapter 145, section 2, and again by Laws 1882, chapter 410, section 109, known as the “Consolidation Act,” provide that the commissioners of excise of New York city must be nominated by the mayor and confirmed by the aider-men to make their appointment to office legal and complete. Held, that these provisions were superseded by Laws 1884, chapter 43, entitled “An act to center responsibility in the municipal government of the city of New York,” providing that “all appointments to office in the city of New York now made by the mayor, and confirmed by the board of aldermen, shall hereafter be made by the mayor, without such confirmation.”
    Case submitted for the decision of the court upon an agreed statement of facts.

      A. J. Dittenhoefer and Elliott Sandford for pl’ffs; Chas. W. Dayton, for def’t.
   Daniels, J.

The relators, with another person, were appointed by the mayor and aldermen of the city of New York, as commissioners of excise, for a term of three years from the 1st of May, 1883, and until other commissioners should be appointed in their places. On the 1st of May, 1886, the mayor of the city of New York appointed William S. Andrews a commissioner of excise for the city, in place of Nicholas Haughton, and Charles H. Woodman in place of William P. Mitchell, and John Von Glahn' in place of John J. Morris. The relators deny the power of the mayor himself to make these appointments. They were made by him under the authority of chap. 43 of the Laws of 1884, entitled ‘ ‘An act to center responsibility in the municipal government of the city of New York.” This act took effect on the first day of January, 1885, and by its first section it was directed that “ all appointments to office in the city of New York now made by the mayor, and confirmed by the board of aldermen, shah hereafter be made by the mayor, without such confirmation. ”

That appointments to the office of excise commissioners were, previous to the enactment of this law, made in the city of New-York, has not been denied by the plaintiffs. Neither can it be denied that such appointments were made by the mayor and confirmed by the board of aldermen. And that would seem to bring the offices strictly within this act, even though the counsel may be right in the position taken, that they are officers appointed to execute state authority.

The law providing for this manner of appointment was enacted by chap. 175 of the Laws of 1870. This act by its second section, provided for the appointment of commissioners in. each of the cities of the state, except the cities of New York and Brooklyn, by the mayor of such city himself, but in the cities of New York and Brooklyn, it was required that “the mayor should nominate three good and responsible citizens, to the board of aldermen of such cities respectively, who should confirm or reject such nominations. In case of the rejection of such nominees, or any of them, the mayor, it was directed, shall nominate other persons as aforesaid, and shall continue so to nominate until the nominations shall be confirmed.” This enactment was in like manner carried into and repeated in section 2 of chapter 145 of the Laws of 1879, and it was again in the same language re-enacted by section 109 of chapter 410 of the Laws of 1882, know as the “Consolidation Act.” Under all these laws, the commissioners of excise in the city of New York, were required to be nominated by the mayor, and confirmed by the aldermen, to make their appointment legal, or complete, to these offices. The object of the first of these laws as that was considered in Board of Excise v. Garlinghouse (45 N. Y., 240), was to make the commissioners of excise when so appointed, boards of the city in which their appointments should be made. This was declared to be the effect of the enactment contained in the Law of 1870. For there it was said that the purpose of the act “ seems to have been to change the excise boards from county boards to town, village and city boards, so that each locality would be assured of that personal knowledge, supervision and vigilance, deemed to be indispensable to the proper discharge of the important duties committed to their charge, in determining the proper persons to whom licenses should be granted, as well as the circumstances justifying the exercise of that power. Id., 251.

But whether these laws had the effect of changing commissioners of excise appointed in the cities, to city officers or no, it is unnecessary further to discuss or determine. For under the statutes preceding the Law of 1884, whatever may have been their official standing, they were required to be nominated by the mayor and confirmed by the board of aldermen when the appointment should be made in the city of New York. And it was to change the tenure of office, or mode of appointment, in this respect, that the act of 1884 was passed. And it was enacted to include all appointments to offices in the city of New Y ark made by the mayor and confirmed by the aldermen. The appointments of commissioners of excise were such appointments to office as in this statute in this manner has been mentioned. And as it was made to include all such appointments as might previously be' made by the mayor and confirmed by the board of aldermen, it necessarily included the offices of commissioners of excise. The mayor accordingly without the confirmation of the board of aldermen, was empowered by this act of 18-84, to make the appointments for excise commissioners which he did. And it follows, that judgment should be directed for the defendants, without _ costs,_ upon the case submitted by the parties for the consideration and decision of the court.

Davis, P. J., and Beady, J., concur.


text:
    Alfred A. Cohen, Resp’t, v. John W. Ellis et al, App’lts.

      (Supreme Court, General Term, First Department,

      Filed December 30, 1886.)

    1. Contract—Fraudulent representations—Eight to rescission op CONTRACT INDUCED BY.
    It was admitted by a demur-cr to the complaint in this action that the plaintiff was induced to subscribe an agreement to purchase stock and bonds by fraudulent representations made by the defendants conc:-rning the property, condition and solvency of the com;.any issuing the stock and bonds. And that the plaintiff, in ignorance oí the affairs of the company, relied upon his belief in diese representations. Keld, that ordinarily, these facts would entitle the plaintiff to a judgment vacating the purchase, as full justice could be done to tlie deienuants by deducting ihe amount received upon the coupons from the sums of money whicn plaintiff would be entitled to receive upon the rescis.ion of the sales.
    2. Same—When vendors act as principals they are personally liable.

      Held, that if it were averred in the complaint that the defendants acted as principals though in fact no nivre than agents, or if such conclusion could fairly be drawn from the complaint, then they would be resi onsible personally for the consequences of their actions. That a vendor or purchaser dealing in h.s own name without disclosing the name of his principal is personally bound by his cm tract.
    3. Same—What allegations are necessary to support the action.

      Held, that an action could not be maintained against the defendants as agents in the transaction to rescind the sale and re. over back the pm chase pr.ee paid for the bonds and stock, it not having been averred in the comXilaint, directly or indirectly, that those moneys remained under tne control of the defendants. That in the absence of such averment it was to be presumed that the moneys did not remain in the defendant’s hands.
    4. Same—Necessary parties defendant.

      lkld, that the defendants having acted merely as agents, and having under their agreement with the principal, paid over the money received, and that principal having tlierealter become insolvent, it could not be reached or recalled by a simple action against them, but the receiver of the insolvent principal was a necessary party.
    5. Same—The principal object of the action failing, incidental RIGHTS MUST ALSO FAIL.
    The defendants received certain commissions for effecting the sale here mentioned, which might fairly be assumed to remain iu their hands at the commencement of this action. Held, that to the extent of those commissions they would be personally accountable to the plaintiff, but that this liability was no more than an incident to the right to the rescission of the agreement and purchase m: de thereunder, and that the principal object of the action failing the incidental right must also fail.
    Appeal from an interlocutory judgment overruling a demurrer to the complaint, and from an order vacating and resettling such judgment.

      B. F. Bristovj, Hugh L. Cole and Joseph H Choate, for app’lts; William G. Choate, forresp’t.
   Daniels, J.

No special attention will be required for the disposition of the appeal from the order vacating and resettling the interlocutory judgment. For as that was first entered broader than the' court designed it should be, it was clearly within its province to vacate and correct it as it" did, particularly as its action was so near the time of the entry of the judgment itself. As to that appeal, it has no meritorious grounds for its support, and the order from which it has been taken should be affirmed.

The more important controversy in the case depends upon the sufficiency of the complaint itself, and the disposition which should be made of the objection that the action is defective for want of additional parties. It was brought to vacate the purchase of bonds and stock, of the New York, West Shore and Buffalo Railway Company. The agreement for the purchases was made in the early part of December, 1882, and the first purchase which was made included bonds amounting to the par value of $100,000 and two hundred shares of the stock of the railway company. The second was made in the spring of 1883 for a like amount of bonds and stock of the company. As the foundation of the plaintiff’s action, it has been alleged in the complaint that he was induced to subscribe the agreement for these purchases and to take and pay for the stock and the bonds by fraudulent representations made by the defendants to him concerning the property, condition and solvency of the railway company, and for that reason claiming that the contract should be rescinded, the bonds and stock returned and the moneys paid by him as their purchase price, less the amount afterwards received upon interest coupons, should be returned to him. These allegations are all admitted to be true by the demurrer, and so are those affirming that the plaintiff in ignorance of the condition and insolvency of the railroad company and the state of its property, relied and acted upon his belief in the truth of these representations. And, ordinarily, that would be sufficient to maintain such an action, inasmuch as full justice could be done to the defendants by deducting the amount received upon the coupons from the sums of money the plaintiff would be entitled to receive from the rescission of the sales. Allerton v. Allerton, 50 N. Y., 670; Neblett v. McFarland, 92 U. S., 101.

And actions for relief upon allegations of this description are so common that other authorities than the cases last cited need not be referred to in support of the right of the court to entertain them. The difficulty in the case does not arise out of the insufficiency of these allegations, but it is presented by the manner in which the business itself was transacted.

The plaintiff has nowhere averred in his complaint that the defendants either were the principals in the sales, or acted or represented themselves as acting in such a manner, as to lead him to believe that they were contracting with him in their own behalf. If that had been done, or the complaint by its fair construction would support the conclusion that they acted in the sales as principals, although in fact no more than agents, then they would be responsible for all the consequences, and the suit might well be maintained against them personally. For, as was stated by the chancellor in Mills v. Hunt (20 Wend., 431), the law must be considered as settled that a vendor, or purchaser, dealing in his own name, without disclosing the name of his principal, is personally bound by his contract. And this role was followed in Holt v. Ross (54 N. Y., 472). ¡But the complaint has failed to bring the plaintiff case within this legal role. His averments connecting the defendants with the transactions are that about the 1st of December, 1882, “his attention was called to the fact that the said defendants were about forming a syndicate for the purchase of a portion of an issue- of fifty millions of mortgage bonds of a corporation called the New York, West Shore and Buffalo Railway Company.” And he then adds, that “the said defendants then and there proposed to the plaintiff that he should become the purchaser' of some of said mortgage bonds.” In this interview, the terms upon which the purchase could be made were disclosed, and they were stated to include “a commission of $1,000, to be paid by the plaintiff to the said defendants.” In the same interview, it is related that he was informed that an option would be given to him to make a further like purchase upon the terms set forth,” which also included “a commission of $1,000, to be paid by said plaintiff to said defendants.” The facts so averred that the purchases were to be made by the intervention of a syndicate, and that the defendants were to receive a commission upon the sales made by them, were an indication that they weie acting or proposed to act in the transaction of the business as agents and not as principals. And it is further averred in the complaint, that in the purchase of the two parcels of bonds and stock, that this commission of $1,000 for "each of the purchases was paid to the defendants by the plaintiff.

But the fact that the defendants were acting as the agents of a corporation called the Construction Company in the sale of the bonds and stock does not exclusively depend upon the effect of these averments, for it is further stated in the complaint that an agreement was produced, made between the construction company and the defendants, and the persons who should subscribe it as purchasers, and that the plaintiff subscribed this agreement. A copy of it is annexed to and made a part of the complaint, and from this copy it appears that the bonds and the stock were to be sold for the construction company through the intervention , of the defendants, and that the proceeds of the sales, after deducting a commission, also to be reserved by them therefrom, were to be paid over to the construction company, to be applied to the construction of the railroad of the railway company, and to other specified expenditures. This agreement by the stipulations or covenants contained in it, relating to these and other subjects, very clearly indicate that the authority designed to be exercised under its provisions by the defendants, was that of an agency, and nothing beyond that. And this design has not only been disclosed by these pro visions of the agreement, but was in its language clearly expressed, for in one of its recitals it was stated that: “And whereas, the firm of Winslow, Lanier & Company, the parties hereto of the second part, have been appointed the financial agents and transfer agents both of the said New York, West Shore and Buffalo Railway, and of the Cob.struction Company, and have agreed to act as such agents, and also to perform certain services on behalf of the said companies in connection with the syndicate subscription hereby made, and are to receive therefore a compensation to be paid to them by the said companies, as has been agreed, between them; and the said firm of Winslow, Lanier & Company, have also consented to act as the bankers for the syndicate subscriptions hereby made upon the terms of this agreement, it being understood that the said Winslow, Lanier & Company, are also to become themselves subscribers to the said syndicate, upon the terms hereof.”

And this very clearly defined the position of the defendants to be that of agents in the negotiation and sale of the bonds and the stock. It is true, that it is further alleged in the complaint, that the defendants had the exclusive right to purchase the bonds and stock mentioned in the syndicate agreement down to and including the 7th of Decembei, 1882, but it does not appear by any averment in the complaint, that they ever did purchase under that right. On the contrary, as the case is presented, in their negotiations and business with the plaintiff, they acted in their capacity of agents and not otherwise. That they intended so to act, and that the plaintiff understood that to be their design, quite clearly appears from the allegations of the complaint, and the stipulations and provisions contained in the agreement, which the plaintiff states was produced to, and subscribed by him. It is true that the plaintiff alleges in his complaint, that his health was somewhat impaired at the time of these transactions and in consequence of that circumstance he was not able “to properly or thoroughly understand the contents thereof, though he realized that it was an agreement that gave great power and authority to the said defendants. ”

But it is nowhere alleged in the complaint that he failed to discover from the agreement when he perused it and before he subscribed it, that the defendants were acting in the sale of the bonds and stock as the agents of the Construction Company. And from that omission it is to be inferred that while his health was impaired, as he states it to have been, that he was still able to, and did, discover from the agreement the true relations of the defendants to this business. This inference is strengthened by the fact that no special amount of attention or mental exertion would be necessary to discover this relation of the defendants to the business, for it not only' plainly appeared from the stipulations contained in the agreement, but was clearly stated in the language employed in that part of its recitals which have been already transcribed. What the plaintiff designed to disclose by the reference made to the condition of his health was to excuse himself on that account for not having investigated the condition of the bonds and stock, or of the railway company, or its title to the property represented to have been acquired by it and owned by it. And for that reason it is stated that he informed the defendants that if he became the purchaser of the stock and bonds, “he would do so relying solely and exclusively on the recommendations and assurances of the said defendants and their statements• to him in that behalf.” And, so far, according to the complaint, he did rely upon what was represented by them, and become the purchaser of the bonds and stock “because of his confidence in their statements, as he had not then sufficient physical strength or ability to make the necessary inquiries for himself.” But as these averments were made they wholly fail to maintain the conclusion that the plaintiff did not become fully aware from his examination of the syndicate agreement, of the fact that the defendants were acting in the sales as the agents of the Construction Company. And if he did not acquire .that knowledge, the fact should have been so stated by him, for it was an essential circumstance standing at the foundation of his right to maintain his action against them, for the rescission of the sales through which he became the purchaser of the bonds and stock. It was one of the facts forming a part of his right of action, if it existed at all, and should have been averred in the complaint in some manner indicating the truth to be that he had dealt with them as principals instead of agents, as their relation to the business is disclosed by the complaint and the recitals and stipulations of the agreement. It is true that the agreement is intricate and obscure in some of its provisions, but that is not the case as to the disclosure of the fact that the defendants were acting as agents and not as principals in the sales made to the plaintiff and others coming in under the syndicate agreement. And as such agents an action to rescind the sales and recover back the purchase price paid for the bonds and the stock cannot be maintained against them, for it has not been averred in the complaint, either directly or indirectly, that the moneys paid by the plaintiff as the purchase price remained in the hands or under the control of the defendants.

If it did, that was one of the facts required to present a cause of action for the rescissions of the sales in the plaintiff’s favor, and it should have been alleged in the complaint, but that was not done, and as the case has been set forth, the presumption is warranted that the money did not remain in the defendant’s hands at the time this action was commenced. For by the agreement wrhich was made, and under which these parties acted, the Construction Company was entitled to the moneys received from time to time as it should become available, to be used by it in defraying the expenses of the construction of the railway and making payment of other charges. The plaintiff after he had made his purchases and in the latter part of January, 1884, discovered the fact that he had been imposed upon by fraudulent representations, and in that manner induced to make these purchases. And to preserve and maintain his rights he served a notice in writing upon the defendants, electing to rescind such purchases, but this action was not commenced by him for this purpose, until October, 1884, after the Construction Company had become insolvent, and a receiver of its property is stated to have been appointed. These facts in the absence of any averment to the contrary in the complaint, very cogently support the presumption that the moneys received from the plaintiff had passed out of the hands of the defendants under the agreement with the Construction Company, and that they were no longer available to them for the purposes of this action. The disposition which they had made of the money was that for which it had passed into their hands, and it could not be reached or recalled by a simple action against them, but the receiver of the company should have been made a party to the action, and that relief demanded against him.

It is true that the defendants received the two items of commissions of $1,000 each, which may be assumed to have remained in their hands at the time when the suit was brought, and to that extent they would personally be accountable to the plaintiff. But that liability is no more than an incident of the right through the intervention of the action, to rescind the agreement and the purchases made under it. And as long as the action for the rescission cannot be maintained as it has now been prosecuted, this incidental right must necessarily fail with the principal object of the suit to which it is in this manner connected.

As the complaint has been framed the case of McMillan v. Arthur (98 N. Y., 167), although differing in its facts, is an authority against the plaintiff. And so is the general rule mentioned in Williams v. Bankhead (19 Wall, 563) that, where a person will be directly affected by a decree, he is an indispensable party, unless the parties are too numerous to be brought before the court, when the case is subject to a special rule. ” For if a judgment could be recovered in the plaintiff’s favor, the right would necessarily arise on behalf of the defendants to call upon the Construction Company or its receiver for the return of this money.

Upon the facts which have been stated in the complaint, the plaintiff by some additions made to it, will be entitled to maintain his action against the defendants for the recovery of the damages sustained by him through the purchases he was induced to make by their misrepresentations of the solvency and condition of the railway company. But as the complaint has been framed it was not designed to include that right of action. Neither is it any part of the relief which in their demand for judgment the plaintiffs have asked for. Edson v. Girvan, 29 Hun, 422; Swart v. Boughton, 35 id., 281.

As the case is made to appear by the complaint, the right of action relied upon had not been maintained, and the judgment from which the appeal has been taken should be reversed and a judgment entered sustaining the demurrer with costs of this and the appeal from the order, to abide the event of the action, and with liberty to the plaintiff to amend within twenty days on payment of the costs of the demurrer.

Brady, J., concurs._


text:
    Minna DeKay, App’lt, v. Charles H. Bliss et al., Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed December 30, 1886.)

    1. Contract—Construction of—What included in terms of contract.
    The application and specification of the defendant B. to the Bureau of Buildings did not state that fire escapes were to form part of the building, but contained an agreement or statement adopted as part of them, that in the construction of the building therein described the provisions of the building law would be complied with whether specified or not. Held, that one of the requirements of the building law in regard to fire escapes not having been complied with, the building was not completed according to the specifications.
    3. Conveyances—What will not serve to set aside—Action for damages.
    The failure to perform a stipulation contained in a contract for the conveyance of property when the act is not to precede the conveyance its-. If cannot be relied upon as a condition to annul the conveyance, but will supply the legal groundwork of an action for damages for the non-per formance of so much of the agreement.
    3. Condition precedent.
    Where the performance of one act is to precede that of another the legal obligation to perform the latter is dependent upon the performance of the former as a condition precedent.
    4. Escrow—Delivery in escrow to an agent becomes absolute.
    A mortgage cannot be delivered in escrow to an agent of the mortgagee. Such delivery would be absolute in the judgment of law.
    Appeal from judgment recovered on trial at special term.

      Luther B. Marsh, for app’lt; G. L. Bives, for resp’t.
   Daniels, J.

The action was brought mainly to vacate and cancel a deed of premises situated on the southwest corner of Broadway and Fifty-seventh street, in the city of New York, known as the Rutland. The building upon the land is eight stories in height, erected as an apartment house, and designed to be occupied by forty-eight different families, in addition to their domestic servants. It was divided into three principal apartments, each forming a part of the entire building. The deed in question was made for the nominal consideration of $810,000, for the purpose of performing an agreement made between the defendant Bliss, and Sidney DeKay, acting for the plaintiff, in the purchase of the property. At the time when the contract was entered into, which was the 23d of January, 1884, the building was in an unfinished condition. By its terms the deed was to be executed and delivered to the defendant Stephen H. Olin, as trustee, and the consideration for it was a mortgage already upon the property for the sum of $410,000, and $250,000 by the execution and delivery to the defendant Bliss, of a warranty deed of premises situated on Broadway and Greenwich streets, in the city of New York, and $75,000 in three mortgages executed upon the Rutland to secure the bonds of Sidney DeKay, and plaintiff’s husband. The residue of the purchase price was payable in cash at the time of the execution of the contract, and afterward according to the stipulations contained therein. At the time when the deed was executed and delivered, as it was to the trustee, the sum of $35,000 was left unpaid, as that had been provided for in the agreement, placing the right of the defendant Bliss to the money upon his performance of the agreement, by the completion of the building. This, it was contemplated, would be done by the 1st of May, 1884, but if not, then this sum of money was made payable when the building should, in fact, be completed.

What was to be done to complete the building according to the contract was specified and declared only in the most general manner in the agreement, but it was clearly the intention of the parties that the building- should be finished and completed before the right of the defendant Bliss should accrue to the payment of this final sum of $35,000. And as the event of finishing the building was to precede the right to receive the money, it was a condition precedent to the performance of the obligation to make the payment by the purchaser.

In the conclusions of fact upon which the judgment has been entered, it has been found and stated that the building was substantially completed on or about the 15th of June, 1884, and was then ready for occupancy by tenants, and on or before the first of the following September it was fully and in all respects completed. To these conclusions exceptions have been taken on the ground that they were not warranted by the evidence given upon the trial. In support of these exceptions reliance has been chiefly placed upon the omission of the defendant Bliss to provide the building with fire escapes, and it is conceded, as the evidence proves the fact to be, that no fire-escapes were provided for, or attached to, the building. And the evidence further tended to establish the fact that these fire-escapes could not be constructed and placed upon the building for an expenditure of less than the sum of $4,800. If, therefore, the builder was obligated to place fire-escapes upon the building, to finish or complete it, then he had not, as a matter of fact, performed his contract at the time when the action was heard and decided, but was in default under this part of his agreement.

In the application and specifications of the defendant Bliss to the bureau of buildings of the city of Mew York, it was not stated that fire escapes were to form a part of the structure, but they contained an agreement or statement adopted as a part of them, by the defendant Bliss, agreeing ‘ ‘that the provisions of the building law will be complied with in the construction of the buildings herein described, whether the same are specified herein or not” And in the notice issued as a part of the proceedings to owners, architects and builders, it was stated that “outside fire escapes are required on all tenement, flat and apartment houses, office buildings, lodge bouses and factories, and the balconies of such fire escapes must take in one window of each suite of apartments, all to be constructed as follows,” etc. The architect, as a witness upon the trial, testified that he did not see that fire escapes were marked on any part of the papers, as they turned out in fact to have been. But this was not important, as he himself had subscribed the agreement adopted by the defendant Bliss to comply with the provisions of the building law. The making of this agreement required them to consult that law, and to ascertain from it what its obligations were in the case, and if they did not do so they could not disregard its provisions by reason of such neglect on the part of one or both of them. The obligation still remained to observe and comply with the provisions of the building law. And as that was at that time in force, it was contained in section 499 of chap. 410 of the Laws of 1882, providing that “any dwelling house now erected, or that may hereafter be erected, more than two stories in height, occupied by, or built to be occupied by, two or more families, on any floor above the first, and all buildings now erected, or that may be here.after erected, more than four stories in height, occupied, or built to be occupied, by three or more families above the first story, and any building already erected, or that may hereafter be erected, more than three stories in height, occupied or used, or built to be occupied or used as a hotel, boarding or lodging house, * * * shall be provided with such fire escapes, alarms and doors as shall be provided by the fire department.” And what such fire escapes should be was specified in the notice to owners, etc., already mentioned. And the agreement to comply with the building law, notwithstanding the inside stairways, obligated the defendant Bliss to place such fire escapes upon the building, and in failing to do so, he failed to perform the obligations of the agreement entered into between himself and the plaintiff, through the agency of her husband, for the completion of the building. For while it may have been in a condition to be occupied by tenants, it was not in that condition which the law required it should be for that purpose at the time when this action was heard and determined. And so far as this failure to perform extended, the defendant Bliss was, as he has continued to be, in default under his agreement.

But the error in finding as a matter of fact that the building had been completed will not lead to a reversal of the judgment. For that part of the agreement which the defendant Bliss failed to perform in this manner was not an essential part of the agreement providing for the execution and delivery of the deed, or the bonds and mortgages, or the conveyance of the Broadway and Greenwich street property. These deeds were neither of them rendered subject to any condition in the contract which included this obligation of finishing and completing the building. Its condition was known and understood at the time by each of the parties, and it was not expected that the buildings would be finished by the 15th of February, 1884, the time designated for the completion of the contract, subject to the reservation by the purchaser of the sum of $35,000, already mentioned. But the obligation was created and imposed upon the defendant Bliss to convey the property by warranty deed, subject only to the incumbrance already stated, on the 15th of February, 1884, and on the husband of the plaintiff to execute and deliver the conveyance of the Broadway and Greenwich street property, and on the part of the trustee to execute the three mortgages of $25,000 each, to secure the bonds of Sidney DeKay, the plaintiff’s husband. As the evidence was given upon the trial, the deed executed and delivered for the Rutland to the defendant Olin as trustee, was in no manner made conditional by anything contained in the agreement, or in the declaration of trust afterwards executed by him, but it was a complete and absolute conveyance of the property to him for the benefit- of the plaintiff principally in its then unfinished condition. And the deed to the defendant Bliss of the Broadway and Greenwich street property was executed and delivered hi like manner to him. Neither was made subject to the future performance of the agreement by the defendant Bliss for the completion of the building, but the parties appear to have intended and to have been satisfied to deliver and receive the conveyance as the Rutland then was. And the moneys which were paid at or about the time of the execution and delivery of the deed were in like manner passed over unconditionally, as the contract required that to be done.

But it was affirmed in support of the action that the three mortgages of $25,000 each had not, in fact, been delivered in this manner, but that they had been placed in the possession of the defendant Montgomery, in escrow to await the finishing and completion of the building. And the plaintiff’s husband who acted in her behalf in what was done to perform the agreement, stated that such was the arrangement, that the mortgages were to be held by Montgomery until the building was completed, and upon his cross examination he added that they were to be held in escrow. But even if it should be held that this testimony was entitled to be adopted as controlling evidence supporting this fact, this condition would be unavailing to the plaintiff, for the mortgages were delivered to the defendant Montgomery, who, it was testified by DeKay, was acting £or Mr. Bliss, and was to hold them in his safe until the completion of the building;- For this evidence showed the relation existing between Montgomery and Bliss to be that of an agency, and it appears to be the law, that instruments of this description cannot be delivered to the agent of the party finally entitled to receive them, subject to a condition of this character. That point was considered hi Worrall v. Munn (1 Seld., 229, 238), where it was concluded under the authorities that such a delivery to an agent would be absolute in judgment of law. The subject was further conceded in Wallace v. Berdell (97 N. Y. 13), without questioning the soundness of this preceding decision.

But it is not important that this part of the present case should be disposed of under the control of this legal principle, for the learned judge presiding at the trial has found as a fact that the mortgages were not received by Montgomery upon any understanding or agreement that they should become operative only on the completion of the building, and the evidence was such as to present this as a question of fact for his decision. That which was given by DeKay, himself, was not entirely consistent with what took place at the time when so much of the transaction was consummated as included the execution and delivery of the deeds and these bonds and mortgages. For by the declaration in trust executed by himself and the defendant Olin, they were mentioned as a portion of the instruments required to be made and delivered as part of the consideration payable for the conveyance of the land. And after that the recital expressed the fact to be that, “the whole of the said consideration has been paid as above mentioned and received by the said Charles H. Bliss, except the sum of $35,000, which is payable on the completion of the buildings as above specified.” While if the bonds and mortgages had been conditionally and not absolutely, delivered, it is only reasonable to suppose that a statement of that fact would have been inserted in this part of the agreement, but it was not. And beyond that, all that is stated to have been left dependent upon the condition of completing the buildings, was the final payment of this sum of $35,000. This subject was again before the parties for their consideration after the 1st of May, 1884, when Sidney DeKay advanced to the defendant Bliss the sum of $2,000 out of the $35,000. These bonds and mortgages then received the attention of the parties, but not as being-dependent in their delivery upon the performance of any condition, but as instruments whose terms of payment might require to be extended beyond the 1st day of September, 1884, by reason of the failure of the defendant Bliss to complete the building. The same omission as to the assertion of any condition appears by the receipts for moneys paid by Sidney DeKay to Bliss. They were taken for so much money paid on different occasions on the mortgages, without being qualified in any manner by reference to the existence of the condition insisted upon at the trial. The same omission is significant in the answers which were interposed by Sidney DeKay in the actions brought to foreclose these mortgages. The fact of the defendant Bliss having failed to complete the building, as that was provided for in his agreement, was made the foundation of counter claims, or defences, in at least two of the foreclosure suits, but no reference was made to the alleged fact that the mortgages had been only conditionally delivered. If that were the fact, the time to assert it was when these actions for the foreclosure of the mortgages were pending. For if they had been delivered in escrow, to take effect only upon the completion of the building, as it had not then been completed, that would have supplied a complete defence to the foreclosure suits. A like failure to assert the existence of such a condition is observable in the testimony of DeKay upon the trial of one of the foreclosure actions, for he there testified that he was incapable of relating any specific statement which took place at the time when the deeds and the bonds and mortgages were passed over. And if it had then been agreed that the delivery of the bonds and mortgages was to be conditional upon the completion of the building, that was a specific fact which ought to have been remembered and mentioned. The evidence of the plaintiff herself, relating the conversation which took place with her husband upon this subject, in no way increases the weight to be given to his evidence, for a conversation between these two persons could have no tendency to establish the making of an agreement between the plaintiff’s husband and the defendants Bliss and Montgomery. It is true that the witness Martin corroborates Sidney DeKay in the statement that the bonds and morgages were delivered in escrow. But the conversation stated to have taken place Concerning this fact, as well as the fact itself, is denied by the defendants Olin, Bliss and Montgomery, who participated in the performance of this part of the agreement. And that is sufficient under the rule controlling the decision of questions of fact made upon trials before the court, or a referee, to prevent this conclusion from being disturbed or interfered with by the court on this appeal. For it leaves the case without any such preponderance of evidence in favor of the plaintiff’s side as will support the conclusion, to a reasonable degree of certainty that the court erred in its decision. Beard v. Mayor, 96 N. Y., 567, 576-577. In the disposition of the case, therefore, this court is required to assume the fact to be that the evidence did not pro've that these bonds and mortgages had been conditionally delivered to the defendant.

Beyond that it was made to appear that Sidney DeKay as the agent of the plaintiff, as well in this respect as of the trustee himself, entered into the possession of the property conveyed, receiving and disposing of the rents paid by the tenants. And this possession seems to have certainly continued down to or near the time when the actions were brought for the foreclosure of the mortgages.

These facts exclude the right to rescind the contract and annul the deeds and mortgages because of the failure of the defendant Bliss to finish and complete the building. Neither of these instruments was made conditional upon that performance, but the title to the property, so far as it was on either side conveyed, was absolutely and unqualifiedly conveyed, and that which was purchased was in like manner incumbered by these mortgages. The only condition created by any portion of the agreement or declaration of trust, or any other instrument, was that which included or reserved the sum of $35,000, and the right of the defendant Bliss to that money was dependent upon the condition that he should finish and complete the building. But even that was waived by the payment from time to time of this sum, or nearly all of it, by the agent and husband of the plaintiff to the defendant Bliss. But if it had not been, the failure to perform the condition could not have the effect of entitling the plaintiff to annul the residue of the transaction, for by the agreement which was made, the condition extended no farther than to include this sum of $35,000. It was but a small part of the consideration for the sale and conveyance of the property, and the language made use of by the parties clearly shows that the failure to complete the building was not to overreach or annul the papers executed and delivered, but at most was to exclude the defendant Bliss from the right to receive this sum of $35,000. The condition went to but a small part of the consideration to be paid for the conveyance of the property.

And when that is the nature of the agreement entered into, and the act is not to precede the conveyance itself, the failure to perform the stipulation cannot be relied upon as a condition to annul that conveyance, but it will supply the legal ground work of an action for damages for the nonperformance of so much of the agreement. The rule upon this subject has been considered in Bennet v. Pixley (7 John., 250), Philadelphia, etc., R. R. Co. v. Howard (13 How. U. S., 307, 339-40), Pepper v. Haight (20 Barb., 430,439, 40), and McCullough v. Cox (6 Barb., 386). But as stated in these authorities, it is subject to the qualification that so far as an act is to precede the performance of another, the legal duty to perform the latter will be dependent upon the preceding performance of such prior act as a condition precedent. Grant v. Johnson, 1 Seld., 247; Mansfield v. N. Y. Central, etc., 102 N. Y. 205.

And under this limitation of the rule, the law is settled, as it is stated to have been, the right to the $35,000 was ah that was made conditional and dependent upon the finishing and completion of the building. The parties having stated the condition in this manner, and limited it to this sum evinced their intention to be that the failure to perform should have no other or greater effect than that which was expressed by this part of the agreement made by them. While, therefore, the defendant Bliss had failed to perform so much of his agreement as obligated him to finish and complete the building, it did not have the effect of entitling the plaintiff to annul and set aside the entire transaction, but her rights on account of it were restricted to this sum of $35,000, which, if it had not been paid, could not have been legally demanded from her by the defendant Bliss. The action consequently cannot succeed under the proof as it was given upon the trial, in securing the annulment of the deed made for the plaintiff to Olin, as her trustee, or the vacating of the mortgages, or the charging of the value of the Broadway and Greenwich street property upon the Rutland. So far as it denied this relief the judgment was right, although the court erred in finding the building to have been completed before the 1st of September, 1884. The judgment, so far as it depends upon these findings, must be set aside or modified, which will leave the plaintiff at liberty to seek redress in an action for damages against the defendant Bliss, not now included in her complaint, for the failure to perform this part of his agreement. And as so modified the judgment should be affirmed without costs to either party.

Davis, P. J., and Brady, J., concur.


author: Davis, P. J.

text:
    The People of the State of New York, Resp’ts, v. John C. Stott, Appl’t.

      (Supreme Court, General Term, First Department,

      Filed December 30, 1886.)

    1. Abduction—Elements essential to the chime—Penal Code, § 3.'2.
    It is provided by Penal Code, section 282, that: “A person who takes, receives, employs, harbors or uses, or causes, or procures to be taken, received, employed, harbored or used, a female under the age of sixteen years, for the purpose of sexual intercourse, * * * is guilty of abduction, and punishable by imprisonment for not more than five years or by a fine of not more than $1,000, or both. Held, that the crime was complete whenever a female under sixteen years was taken, received, employed, harbored, used or caused to be, for such purpose, and that the intercourse need not be proved if the purpose were otherwise show n, but that if it actually occurred it might be shown as an element or incident tending to establish the purpose,
    2. Verdict—When supported by sufficient evidence cannot be disturbed.
    Where the .evidence for the people, if accepted as true^ established every element necessary to the crime: Held, that the determination of the jury rendered thereon could not be disturbed.
    3. Official duty—Neglect to perform will not be presumed.
    Upon an appeal from a conviction, it did not appear whether or not, at the time that the defendant was arraigned, he was caudoned before making his statement as required by the Code. Held, that as this was a duty of the magistrate, it would not be presumed that it was not performed.
    4. Testimony—Irreqular admission op, how cured.
    Ho attempt was made to prove the contents of such record by paroi, but as far as material, it was shown by a letter admitted by the prisoner to have been written by him, the genuineness of which was not disputed at the time. Held, that the admission of the testimony, even if an irregularity, was wholly cured by the testimony of the defendant, which left no doubt of the genuineness of the letter.
    5. Opinion of expert.

      Held, that the opinion of a doctor that the genitive organs of the female had been penetrated within a week was properly received. It did not embody the character of the penetration.

      Appeal from judgment of the court of sessions on conviction for abduction.

      Howe & Hummell, for appl’t; McKenzie Semple, for resp’ts.
   Davis, P. J.

The appellant was indicted, tried and convicted of the crime of abduction under the provisions of section 282 of the Penal Code.

The first subdivision of that section is as follows : “A person who (1) takes, receives, employs, harbors or uses, or causes or procures to be taken, received, employed, harbored or used, a female under the age of sixteen years, for the purpose of sexual intercourse, or without the consent of her father, mother, guardian or other person having legal charge of her person, for the purpose of marriage * * * * is guilty of abduction and punishable by imprisonment for not more than five years or by a fine of not more than $1,000, or by both.”

This statute was intended to throw absolute protection around females of less than sixteen years of age, against the evil of sexual intercourse to which their tender years may be exposed, whether under the form of marriage or without marriage, and without regard to the consent of the female, or of her father, mother, guardian or other person having legal charge of her. The crime created by this statute is quite independent of the fact whether there be actual seduction or fornication, or forcible intercourse, and the commission of neither of those offenses is material, except when the crime is merged in the higher felony of rape.

The crime of this section of the Penal Code is complete whenever a female under sixteen years is taken or received or employed, or harbored, or used, or caused so to be, for the purpose of sexual intercourse, or for the purpose of marriage; and neither the intercourse nor the marriage need be proved, if the purpose of taking be otherwise shown; but either of them may be proven when it has actually occurred as an element or incident tending to establish the purpose.

The objects of this statute are most beneficial in the interests of public and private morality, and it is the duty of courts to see that its provisions are respected and enforced; and whoever was instrumental in procuring its enactment is entitled to commendation, and not to censure.

The learned and able recorder who presided at the trial of the appellant in this case gave to the statute under which he was indicted its correct construction. He gave to the accused a fair and impartial trial, and he submitted to the jury the questions of fact upon which the guilt or innocence of the accused depended with a clearness which could not have been misapprehended. The female whom the appellant, was charged with having abducted was shown to have been under sixteen years of age. There was no doubt from the evidence that she was taken to the appellant’s room in the first place by him, and that she afterwards visited his room with another female at his request, or on her own suggestion, for some purpose, either innocent or guilty. The evidence of the people, if believed by the jury, showed the purpose to have been a guilty one, for it proved actual fornication either with or without the consent of the female. The testimony of the doctor called by the people tended to sustain the fact of sexual intercourse. There was also abundant corroboration, if believed by the jury, of the testimony of the female.

This testimony was sought to be discredited by the explicit denials of the appellant, and by strong evidence of his general good character, as well as by testimony of other-witnesses contradictory of that on behalf of the people. The jury were instructed to give to these their full weight and not to convict the appellant unless the whole evidence of the case convinced them beyond reasonable doubt that the girl was taken or induced to come to his room with the-intent or for the purpose on his part of having sexual intercourse with her.

We can see nothing in the facts of the case to justify us in concluding that the verdict was not supported by sufficient evidence, or was against its clear weight, or that there-was any failure in establishing any necessary element of the crime, if the jury accepted the people’s evidence as true. We are not at liberty, therefore, to disturb the verdict on any question of fact.

The questions of law were rightly disposed of. The evidence of the statements of the appellant, when arraigned before the accused, related chiefly to his admission that the letter purporting to have been written by him to the girl was genuine. It does not appear affirmatively that he had been cautioned by the magistrate before making his statement, as required by the Code; but it does-not appear that he had not been. As that was a duty of the magistrate, it will not be presumed that it was not performed. It has been doubted in some cases whether such a statement is admissible in evidence, except when taken by the magistrate in the prescribed form, in which case it must be proved by the record itself.

In this case there was no attempt to prove the contents of such record by oral evidence, but so far as it was material to prove that the witness showed him, the prisoner, a letter while he was being examined, and that “he said that it was his handwriting; that he wrote the letter.” In this connection it is material to notice that the genuiness of the letter was not disputed at the trial. The defendant himself when on the stand admitted it, and attempted to explain the letter so as to disarm it of any guilty interpretation. In our opinion, there was no fatal error in admitting the testimony under all the circumstances of the case, and if there might have been some taint of irregularity, it was wholly cured by the defendant’s own testimony, which left no room, for doubt of the genuineness of the letter. Nothing else material to the case was shown by his declarations made at that time. The construction and intent of the letter under the conflicting evidence were questions for the jury. The other alleged error most strenuously urged, is that of allowing the doctor to express an opinion that the genitive organs of the female had been penetrated with force within a week. That opinion was proper. It did not embody an opinion as to the character of the penetration, or whether by sexual connection, or otherwise, but a mere opinion that from the manifest injuries, there had been some sort of penetration by force. It was of the same nature as the very common testimony that the appearance of a wound showed that it had been inflicted by some instrument and some degree of force.

We have not neglected to consider all the other questions raised in the case, and none of them impresses us with the idea that there was any material error committed by the court. Our attention has been called to the case of the People v. Mondon, lately decided by the court of appeals, and reported in No. 7, Vol. 4, of Central Reporter. That case announces no new law, but simply recognizes and enforces an existing rule. It does not show that the admission of confession of handwriting at an examination is fatal to a conviction, where on the trial of an indictment the genuineness of the letter thus admitted is not in dispute, but is freely again admitted by the defendant. This latter fact distinguishes the case from the one just referred to.

We think the judgment must be affirmed.

Daniels and Brady, JJ., concur.


author: Barrett, J.

text:
    In the Matter of the Application of the New York District Railway Company, for the appointment of Commissioners, etc.

      (Supreme Court, General Term, First Department,

      Filed December 30, 1886.)

    1. Constitutional law—Street railroads—Term includes railroad UNDERNEATH THE STREET—CONSTITUTION, ART. 3, § 18.
    The State Constitution, article 3, section 18, provides that no law shall authorize the construction or operation of a street railroad except upon the condition that the consent oí the owners of one-half in value of the property hounded on, and the consent also of the local authorities having control of that portion of a street or highway upon which it is proposed to constiuct or operate such railroad be lirst obtained, or in case the consent of such property owners cannot be obtained, the general term of the supreme court, in the district in which it is proposed to be constructed, may upon application appoint three commissioners who shall determine, after a hearing of all parties interested, whether such railro ‘d ought to be constructed or operated, and their determination, confirmed by the court, may be taken in lieu of the consent of the property owners. Held, that a railroad constructed beneath the surface of the street was a street railroad within the meaning of the section.
    2. Same—Tunneling act. Laws 1880, chap. 582, is unconstitutional.

      Held, that Laws of 1880, chapter 582, which substituted the favorable determination of the commissioners when confirmed by the general term, for the consent of both the local authorities and property owners, was unconstitutional.
    Motion on the part of the corporation above named for the appointment of three commissioners to determine whether its railroad ought to be allowed to be built.

      Grosvenor P. Lowrey and Charles Francis Stone, for the motion; Robert Sewell and Charles P. Daly, for the N. Y. Arcade Railway Co.; Thomas P. Wickes, for the City of New York; Horace Russell and. Jabish Holmes, Jr., for Henry Hilton and other opposing property owners; Henry D. Sedgwick, for the N. Y. Underground Railway Co.; O. Vandenburqh, for the Broadway Underground Connecting Railway Co.
   Barrett, J.

The main question presented by this application is, whether an underground railroad, such as that which the petitioner contemplated constructing under what is commonly called the tunneling act of 1880 (chap. 582) is a street railroad within the meaning of article 3, section 18 of the constitution. If it is, then the petitioner concedes that that part of section 1 of the act of 1880, which substitutes the favorable determination of commissioners, when confirmed by the general term, for the consent of both the local authorities and property owners, is unconstitutional; that is, unless the provision can be severed and the substitute confined to the consent of the property owners. If unconstitutional, the application, being within the exception suggested in the Thirty-fourth Street Case (102 N. Y., 343), should be denied, for certainly legal machinery should not be set in motion to bring about a result forbidden by the organic law.

The question has been very ably and exhaustively treated by the learned counsel for the petitioner, and I confess that his argument has induced me to subject my first impression to rigid analysis. After full consideration, however, I am satisfied that a broader view should be taken of the amendment of 1874 than is thus contended for, and that it was never intended to limit the wholesome provisions of article 3, section 18, to surface and elevated railroads.

Underground railroads in cities are quite gigantic enterprises, and involve as valuable franchises and as important public and private interests as any surface or elevated railroad. The mischiefs aimed at by the amendment apply-with equal and, in some respects, with greater force to underground railroads. The local authorities have a greater interest in the sewerage, water and gas systems beneath the surface than in anything upon the surface likely to be affected by a railroad. The property owners upon the line have also a deep interest in the protection of their vaults, the security of their buildings, the safety of the street surface and in the methods to be adopted, for ventilating the tunnels. The latter question is especially important in a case where, as authorized by this act (§ 1), surface openings are adopted and the ordinary street use is correspondingly limited.

And why is not an underground railroad a street railroad within both the letter and the spirit of the constitution? The petitioner says, because it is not within the popular conception of the term nor within the conception of the term drawn from legislative or official action. But the popular conception of a street railroad and the intention with which the amendment was framed and voted for, are entirely different things. The same rules of construction which are applicable to statutes govern in constitutional interpretation. The intent is to prevail over the literal meaning of words. The general purpose of the constitutional amendment, the evils which existed and-the remedy which was sought, are all to be considered. People v. Potter, 47 N. Y., 375. Now, it would be not only a narrow construction, but a very loose, uncertain and varying one, which would limit the phrase “street railroad” as embodied in this amendment to what the petitioner terms “the image responsive to the phrase ” which each voter must have had in his mind.

The intention could not have been thus to impair the usefulness of the measure, nor to limit its beneficial operation by a literal definition of the term “street railroad.” It was rather within any fair view of the entire subject to embrace every kind of street railroad, surface, elevated or underground, in the existence or non-existence of which the local authorities and the property owners might have an interest. It contemplated not only such structures and systems as had been or were then in existence, but such also as the future of science and enterprise might call into existence, however novel and however foreign to the present conception of the voter.

Looked at accurately and free from the confusion of popular phraseology, an underground railroad is not beneath the street. It is beneath the surface of the street, but it is upon the street. Any depression from the surface would be equally within the reasoning that a railroad which does not rest upon the surface is not a street railroad. Whether the cut be of six inches or of six feet, whether open or closed, whether tunneled by the entire or partial retention of the surface as a vaulted ceiling, would only raise a question of degree. It is true that in the illustration of an open cut, there would be a loss to the people of the ordinary surface use, but the illustration serves when xve are in substance asked to interpolate in the amendment after the term street railroad the words “resting on the surface of the street.” There is, therefore, nothing in my judgment in the argument, from popular conception, which militates against the view that all structures making use of or resting anywhere upon the street, from the surface downward, are within the constitutional provision.

But little light is thrown upon the question by the historical reference to which our attention has been called. If the solution depended upon the phraseology of past legislation, we should say that the references which the industry of counsel has placed before us about balance each other. But the present question is not concluded by phrases in legislative acts and official reports, any more than it is by popular images responsive to the term “street railroad.” It is, indeed, of very little consequence whether the legislature in speaking of street.railroad uses the words “in the street,” or the words “upon the street.” We find the words “in,” “through,” “along,” and “upon,” running almost equivalently through past legislation. It is also natural, to find existing structures classified in particular language. But it by no means follows that it was intended to limit the operation of the amendment to structures covered by such classification. What is more important than these legislative definitions, as bearing upon the present question is the course of legislative action with regard to the consent of the local authorities and the property owners. It was to fix these vital rights, sometimes conceded and sometimes denied, to place them beyond the power of legislative infringement, that the people acted. It may safely be asserted that these were the “images” which the voters had in their minds rather than any particular motive power or style of railroad structure or system of transportation.

It was the great principle of restricting corporate aggression and expanding popular rights that was voted for and adopted. Limitation of the subjects upon which such great and wholesome principles were to operate, would have been wholly inconsistent, under all the circumstances with the declaration of the principles themselves.

The doctrine of legislative exposition is also invoked by the petitioner. This is a doctrine peculiarly applicable to cases of doubt (which we do not find here),-and one which should certainly not be expanded to the extent of practically clothing the legislature with judicial functions. Where the legislation is almost contemporaneous with the constitutional provision, it is, of course, entitled to greater weight than an act passed, as was that under consideration, five years later. Indeed the only act which comes within the contemporaneous principle is the rapid transit act of 1875, and there, underground roads as well as elevated and surface roads are treated as within the constitutional amendment in question. It is fair to assume that the legislature, Avhen thus considering the great rapid transit scheme, with the amendment just adopted before it, required the same conditions to be performed by all railroads, whether above, upon or beneath the surface, because, in its judgment, the constitutioli required all such railroads to be treated alike.

Having thus concluded that the act of 1880, in the particular discussed, is unconstitutional, I do not think that the petitioner’s case is. within the principle that where part of an act is constitutional and part unconstitutional, that part which is valid should be upheld, provided it is separable from that which is invalid.

This principle would enable the petitioner to proceed under the act up to the point where an application for the appointment of commissioners is essential. It may obtain the consent of the local authorities and of the requisite number of property owners. These provisions are valid and separable frbm what follows. But when an application for the appointment of commissioners becomes necessary, the petition must take the provision on that head as it is. The court cannot sever the effect which the act gives to the confirmation of the commissioners’ judgment. We cannot say that there shall be a constitutional -effect when the act declares that there shall be an unconstitutional one. This question is not affected by the petioner’s present disclaimer.

The act does not substitute the confirmation of the commissioners’ judgment for the consent either of the local authorities or of the property owners, but for that of both. The court cannot be asked to produce this result merely because the _ petitioner protests that it will not insist upon the unconstitutional half, especially as the petitioner by no means concedes the unconstitutionality of this half, but on 4he contrary, in contending that its railroad is not a street railroad at all within the amendment, necessarily assumes; the position that the legislature was not constitutionally bound to require either the consent of the local authorities or of the property owners, or any judicial substitute for the latter.

In other words, that as to underground railroads in cities, the people are as completely at the mercy of the legislature (except as to special legislation) as they were before the constitutional amendment was adopted.

For these reasons I am of opinion that the application for the appointment of commissioners should be denied.

Brady, J., concurs._