text:
    Horace H. Moore, Pl’ff, v. The Village of Fairport et al., Def’ts.

      (Supreme Court, Monroe Special Term,

      Filed January, 1895.)

    1. Highways—Obstructions.
    Chap. 568 of 1890 requires simply, as a condition precedent to the removal of highway obstructions by the commissioners, that the owner or occupant of the premises, in front of which such obstructions exist, should first have the opportunity to remove the same without the intervention of the commissioners, and to this end, that a notice, specifying the extent and location of such obstructions and requiring the owner or occupant to remove the same within a specified time, not more than sixty days after the service of the notice, should be served.
    2. Same.
    The provision, which enables the person responsible for an obstruction by denying the same to obtain a writ of inquiry and thus to submit his rights to a jury of twelve freeholders, no longer exists.
    3. Villages—Trustees—Sidewalks.
    The legislature has empowered the trustess of defendant to cause any obstruction to the sidewalk or highways of the village to be removed.
    4. Same.
    Such authority is limited only by the requirement that it shall be exercised with a reasonable degree of judgment and discretion.

      William F. Cogswell, for pl’ff; Walter S. Hubbell, for def’ts.
   Adams, J.

A careful consideration of the evidence in this case forces me to the conclusion that the north line of Church street, in the village of Fairport, as established by the Skinner survey and as located upon both the Skinner and Peacock maps, is the one which must be adopted as the true line. There are some facts and circumstances, as for instance, the former location of the lot fences, which militate somewhat against this conclusion, but nevertheless the balance of proof, upon this issue, seems clearly with the defendants, and with this fact once established, it is impossible for me to see upon what theory the plaintiff can maintain his action, for whatever right he has must now rest upon the following facts which, save in the one particular already adverted to, are practically undisputed.

The trustees of the village of Fairport, by virtue of certain power and authority conferred upon them by the charter of that municipality, have assumed to establish a line and grade for the construction of a -new sidewalk in front of plaintiff’s premises upon the north side of Church street, and have directed plaintiff to construct such walk upon the line and grade so established, which it now appears are within the boundaries of the street. In defiance of this direction thg plaintiff has seen fit to locate his walk upon the line of a former walk and a few feet south of the line designated by the trustees, where upon the latter ordered him to remove, the same within three- days to the location established by them. Their power to do this is denied by the plaintiff, and whether or not he is justified in making this contention is the only question to be considered. In the view of the case which the learned counsel for the plaintiff appears to entertain, and which is so adroitly presented as to barely fail of conviction, the sidewalk in question can only be removed from the place where the plaintiff has located it upon the assumption that it is an encroachment upon, or an obstruction to, the highway itself, and even then such removal must be accomplished by the,means provided by the statute relating to penalties for obstructing a highway, as it existed prior to the amendment of the highway law in 1890. This position I am persuaded however, is untenable for reasons which further examination will make manifest.

In the first place if the assumption that this walk must be treated as an obstruction and its removal accomplished by virtue of the power and authority residing in the trustees as commissioners of highways be adopted, it would yet be capable of demonstration, I think, that in their effort to compel a removal, they have substantially complied with the requirements of the existing statute, which, Í take it, must control their action. This statute, which in several essential particulars, is a modification of the provisions of the former statute, requires simply as a condition precedent to the removal of highway obstructions by the commissioners, that the owner or occupant of the premises, in front of which such obstructions exist should first have the opportunity to remove the same without the intervention of the commissioners, and to this end, that a notice should be served specifying the extent and location of such obstructions and requiring the owner or occupant to remove the same within a specified time, not more than sixty days after the service of the notice. Laws 1890, chap. 568 § 105. As has been stated, the trustees did serve a notice upon the plaintiff which required him to remove his sidewalk to the line and grade established by them within three days, which in view of the fact that, he knew when he constructed the walk, what action had been taken by the trustees would seem to afford him ample time and opportunity to comply with their requirements, and inasmuch as he built the walk himself, any specific description thereof would hardly be necessary to apprise him of its extent and location. Town of Sardinia v. Butler, 78 Hun, 527 ; 61 St. Rep. 380.

It will be observed that the provision which enabled the person responsible for an obstruction by denying the same to obtain a writ of inquiry and thus to submit his. rights to a jury of twelve freeholders, no longer exists. The elimination of this remedy and the simplifying of the notice which highway commissioners are required to serve in cases of obstruction were obviously designed by the legislature to afford a more summary method of dealing with cases of this character than existed under the former provisions, and if this be true, the courts should not be over anxious to so construe the statute as to defeat the object sought to be obtained.

But as already intimated, in my opinion, the charter of the village of Fairport furnishes ample justification for the action taken by its trustees without compelling any resort to the highway laws. Among the powers conferred upon these officers by the provisions of such charter, the following may be enumerated, viz.:

“To cause and direct the manner of making and repairing sidewalks, crosswalks and highways in said village.” Laws 1881, chap. 638, § 29, subd. 13.

_ “ To prevent the incumbering or obstructing, of any street, highway, crosswalk, sidewalk, sewer, ditch, gutter or sluice in said village * * * and to cause such obstructions to be removed and to assess the expense of such removal ” upon the premises of the person responsible for the same. § 29, subd. 14. “ To cause the sidewalks in any street, highway or lane to be graded, graveled, flagged, planked or repaired and to prescribe and determine the manner of doing the same." § 43.

“In the event of the failure of the owner or occupant of premises to construct or repair such sidewalk within the time and in the manner specified, to cause the same to be done and to collect the expenses thereof by suit or assessment.” § 44.

Thus it will be seen that the legislature has not only clothed defendant’s trustees with full authority to compel the construction of sidewalks in such manner and of such material as they may deem proper, but it has likewise empowered them to cause any obstruction to the sidewalks or highways of the®village to be removed.

As was said by Denio, C. J., in the case of Walker v. Caywood, 31 N. Y. 51, 60, “ the power seems sufficiently broad to embrace this case; no notice to the proprietors is required'; it may be said to be an extraordinary power, and one which might be readily abused; the defendants however seem to have proceeded with reasonable deliberation and indulgence and * * * if the locus in quo had been indisputably within a known and acknowledged street, probably no doubt could be entertained but that (they) were fully justified.”

This case is therefore amply authority for the proposition hereinbefore advanced that with the fact of the north line of Church street established in accordance with defendant’s contention nothing, remains for plaintiff to rest his case upon.

Possibly the application of a simple test will operate as an additional demonstration of the correctness of that postulate.

Suppose, therefore, that instead of constructing the sidewalk where he did, plaintiff had followed the line and grade to which his attention was directed with the single exception that at either end of the walk he had deflected it two or three feet to the south so as to bring it out of line with the adjoining walk? It will hardly be contended, I assume, that the trustees would not in that case, have the power under the provisions of the charter herein-before quoted, to compel him to straighten his walk, and in the-event of his refusal to do so, to straighten it at his expense, and if so then why should they not be able to compel the removal of- the-entire walk the samé distance? The truth is, this charter, like all similar charters as well as the general act for the incorporation of villages, confers upon the trustees of such municipalities authority over their highways and sidewalks which is only limited by the requirement that it shall be exercised with a reasonable degree of judgment and discretion, and were this act so, it would be exceedingly inequitably to impose upon them the duty and responsibility of keeping the highways, walks and alleys free from obstruction and in a good state of repair. The plaintiff having failed to sustain his cause of action must submit to a dismissal of the complaint upon the usual terms.


source: Caselaw Access Project

author: McAdam, J.

license: Public Domain

text:
    James P. Witherow, App’lt, v. John D. Slayback et al., Resp’t.

      (New York Superior Court, General Term,

      Filed March 4, 1895.)

    1. Corporation—Trustees—Liability.
    Where the annual report is filed before the claim against the company accrues, though after the statutory time, no liability on the part of a trustee is established.
    2. Same.
    The fact that such report is false, does not affect the defense.
    3. Same—When claim accrues.
    Where the company is an indorser on a note, the claim does not accrue within the statute, until the proper steps have been taken to fix its liability.
    4. Same—When duty to pibe ceases.
    After the corporation has abandoned its business and franchises, or has passed into the hands of a receiver, there is no duty imposed upon the trustees to file any report.
    5. Same—False report.
    No liability attaches against officers of a corporation for a false report, unless it appears that the report was filed before the credit was given.
    Appeal by plaintiff from judgment entered on direction of trial judge dismissing the complaint.

      William C. Holbrook, for app’lt; H. Bacon and C. Strauss, for resp’ts.
   McAdam, J.

The action is to recover $11,072.68, with interest, from the defendants as officers of the Port Henry Steel & Iron. Company, Limited, upon a note alleged to have been indorsed by that corporation for the accommodation of one Thomas F. Wetherbee. The corporation was formed under the business corporation act of 1875 as a limited liability company ; and the defendants, together with Thomas F. Witherbee and Andrew Dickey, were its officers.

The plaintiff alleges five grounds of liability, making each a. separate cause of action. These grounds are as follow :

I. Failure to file a report within twenty days after January 1, 1886.

II. Failure to file a report within twenty days after January 1, 1887.

III. Failure to file a report within twenty days after January 1,. 1888.

IY. The filing in January, 1887, of a false certificate of the full payment of stock.

Y. The making of the following statements in an annual report, filed February 16, 1887, which were alleged to be false: (a) That the capital stock of said corporation had been actually and fully paid in cash; (6) that the existing assets of the corporation were none ; (c) that one T. F. Witherbee was a stockholder of the corporation.

The liability sought to be enforced was based on a note made by T. F. Witherbee in October, 1886,-and indorsed “Andrew Dickey, Treasurer,” which by its terms became due April 6,1887. Assuming for present purposes that the act of Dickey bound the corporation, its obligation was, that if Witherbee did not on April 6, 1887, pay the note upon presentation at the place where it was-payable, and if it was duly notified of the presentation of the note- and the failure of Witherbee to pay, then the corporation would pay. This was not an absolute engagement to pay, but a conditional one, and would have been avoided if the maker had paid, the note at maturity, or if the plaintiff had failed to present it at. the time and place fixed for its payment, and neglected to follow the default by notice to the corporation as indorser of such presentment and non-payment. The report filed in February, 1887, was, therefore, filed two months before any claim against the company accrued to the plaintiff, and consequently no liability of the defendants was established on either of those grounds. L. 1885, chap. 611, sec. 18; Torbett v. Goodwin, 62 Hun, 407 ; 42 St. Rep. 323 ; Garrison v. Howe, 17 N. Y. 458; Oviatt v. Hughes, 41 Barb., 541; Victory Webb Co. v. Beecher, 26 Hun, 48; aff’d, 97 N. Y. 651; Gold v. Clyne, 134 N. Y. 262; 47 St. Rep. 770. The sufficiency of the defence arising upon these facts to the first and second causes of action is not affected by the alleged falsity of the-report, even if such falsity had been established. Bonnell v. Griswold, 80 N. Y. 128; Whitney Arms Co. v. Barlow, 68 N. Y. 34.

Another complete answer to the failure to file report in 1887 is, that in August, 1886, the corporation had abandoned its business" and franchises, and after that there was no duty imposed upon the trustees to file any report. The cessation of business by the corporation to the extent proven was tantamount to its dissolution. Losee v. Bullard, 79 N. Y. 404; Bruce v. Platt, 80 N. Y. 879: Kirkland v. Kille, 99 N. Y. 390.

The company passed into the hands of a receiver in June, 1887, .and for this and the reason previously assigned there was no obligation to make a report in 1888.

Those three alleged causes of action having been disposed of, and the fourth having been waived, the fifth remains to be considered. As to this there was not sufficient evidence to go to the jury, and hence "the trial judge properly dismissed the complaint.

Another reason which seems to justify the conclusion reached is, that the fifth alleged cause of action relates to the falsity of the report filed February 16, 1887, and, while the liability of the corporation as indorser on the note did not become complete until April 6, 1887, the debt represented by it, and presumably owing by Witherbee, the maker, was contracted in October, 1886. The statute being highly penal, and therefore one which must receive a strict construction, no liability attaches against officers of a corporation for a false report, unless it appears that the report was filed before the credit was given. Torbett v. Goodwin, supra. For the purpose of the report is that the public may be correctly informed of the financial condition of the corporation, in order that it may judge whether credit should be given it or not. As to debts contracted or liabilities incurred before the filing of the report, clearly no one could be misled to his prejudice; and the plaintiff being in no manner injured cannot complain.

Flie judgment appealed from must be affirmed, with costs.

Sedgwick, 0. J. and Beekman, J. concur.


author: Davy, J.

text:
    The Berwind-White Coal Mining Company, Pl’ff, v. George S. Ewart, Def't.

      (Supreme Court, Livingston Special Term,

      Filed February, 1895.)

    1. Corporations—Stockholders—Liability.
    Under the saving clauses in the General Corporation Laws of 1890 and 1892, the legislature intended to protect corporations then existing and thgir stockholders in every act done, and to hold them responsible for every liability incurred.
    2. Same.
    The legislature has the power, without violating the Federal Constitution, to repeal or amend laws pertaining to business or stock corporations, organized under the laws of 1875, and . o prescribe the liability of stockholders in such corporations to its creditors for all debts contracted after the act was repealed or amended.
    ■3. Same—Dividend.
    The directors have no right to pay any dividend, either in stock or money, unless it leaves the capital stock unimpaired.
    4. Same—Insolvent—Transfer.
    Under the stock corporation law of 1892, a corporation, which shall have refused to pay any of its notes or other obligations when due, shall not transfer any of its property to any of its officers, directors or stockholders, directly or indirectly, for the payment o' any debt, or upon any other consideration than the full value of such property paid in cash ; and any director or other officer, who receives property from the corporation under such circumstances, must account therefor to its creditors.
    5. Same—Release.
    Where the sheriff has made a valid levy upon corporate property under a judgment against the corporation, taken possession and advertised it for sale, the judgment creditor has no right to abandon it at the request of the directors, without the consent of the stockholders, unless he is willing to release them from the statutory liability.

      John F. Connor and E. A. Nash, for pl’ff; J. B. & G. B. Adams and John R. Strang, for def't.
   Davy, J.

The action is brought against the defendant as a stockholder in the Livingston Salt Company, Limited, to recover a portion of a debt due from the company to the plaintiff, on the ground that the increased capital stock of the company had not been paid in full and a certificate filed as required by law.

The corporation was organized 1883, under chap. 611, Laws of 1875, witli a capital stock of fifteen thousand dollars, which was paid in full and a certificate duly filed as required by § 37'of said Act. In 1884, tire capital stock was increased to fifty thousand dollars, of which $37,800, was issued and paid in full.

The plaintiff contends that at the time that his debt wras contracted with the company the whole amount of its increased capital stock had riot been paid in and that no certificate of the full payment of the increased stock had ever been filed as required by the provisions of the aforesaid act.

The defendant claims that at the time the indebtedness was incurred that the statute of 1875 had been repealed by chap. 567, laws of 1890, and chap. 687, laws of 1892, and that stockholders under the last named act were only liable to creditors of the company, in case the whole amount of the capital stock issued and outstanding at the time the debt was contracted had not been paid in full and that no certificate was necessary to be filed. I am inclined to think that the defendant might claim protection under the last named act unless § 37 of chap. 611, Laws of 1875, pertaining to the liability of stockholders, has been preserved by the saving clauses in the repealing acts of 1890 and 1892. That question must be determined by the intent of the legislature. Laws are presumed to be passed with deliberation and with a knowledge of all existing laws on the subject. Courts, therefore, must interpret the statute so as to .carry out what appears from the context of the act to be the general policy and intent of the law maker.

The business corporation law of 1890, chap. 567, repealed § 37 of the laws of 1875, and § 22 of that act provides that the repeal of a law or any part of it specified in the annexed schedule, which includes § 37 of the act of 1875, shall not affect nor impair any act done or right accruing, accrued or acquired, or liability, penalty, or forfeiture, or punishment incurred prior to May 1, 1891, under and by virtue of any law so repealed, bnt the same may be asserted, enforced, prosecuted or inflicted as fully and to the same ■extent as if such law nod not been repealed.

The general corporation law of 1892, chap. 687 repealed all of the remaining sections of chap. 611, Laws of 1875, which had not. been repealed by the act of 1890 and § 35 of said repealing act contains a saving clause similar to § 22 of the act of 1890.

It is quite evident from the saving clauses in the above named statutes that the legislature intended to protect corporations then existing and their stockholders in every act done and to hold them responsible for every liability incurred. The corporation by increasing its capital stock under chap. 611, Laws of 1875 did an act that imposed a liability upon every stockholder and made them personally liable for the debts of the corporation thereafter incurred until the increased capital stock was all paid in and a certificate filed, as required by § 37 of said act.

In the case of Cameron et al. v. N. Y. & Mt. V. W. Co. et al., 133 N. Y. 341; 45 St. Rep. 212, it was held that where an agreement for the consolidation of certain companies had been made three-days before the repeal of an act authorizing such consolidation that the proceedings thus commenced represented rights accruing which were passed and could be enforced as fully as if no repeal had been enacted for the reason that the agreement was preserved by the saving clause in the repealing act.

It was held in Christie v. Bowne, 63 St. Rep. 805, Brown, P. J., writing the opinion of the court that a stockholder is liable personally for the corporate debts unless a certificate that the stock is paid in full has been filed. He also says that the repeal of the act of 1875 by chap. 687, Laws of 1892, does not affect the plaintiff’s cause of action that it was preserved by § 35 of the saving clause of the repealing act. Jones v. Mail & Ex. Publishing Co., 62 St. Rep. 61; 30 N. Y. Supp. 335; Cochran et al. v. Wiechers, 119 N. Y. 402; 29 St. Rep. 388.

In Dobbins v. First National Bank, 112 Ill., 553, it was held where a statute on the same subject repeals the former law with a saving clause in the repealing section as to an existing suit or litigation that the saving clause includes the issuing of an execution, because it is the final step in the suit.

The final step to be taken by the corporation in this case to» protect the stockholders from liability is the filling of a certificate which cannot be done until the increased capital stock is paid for in full.

The learned counsel for the plaintiff also contends that when the corporation was organized the stockholders mutually agreed to-contribute their money for carrying on the business, and that that, agreement constituted a contract within the meaning of the Federal Constitution which provides that no state shall pass any law impairing the obligation of contracts, and therefore the legislature could not constitutionally repeal the Act of 1875 so as to relieve-the stockholders from personal liability for the debts of the company until all of the increased capital stock was paid for and a certificate filed as required by sec. 37 of said Act. Upon this point I do not fully agree with the views of the learned counsel which have been so ably and ingeniously presented.

It appears that when the corporation was organized it took its charter subject to the provisidns of sec. 1, art. 8 of the State constitution which provides that “Corporation may be formed under the General Laws, but shall not be created by any special act «except for municipal purposes, and in cases where, in the judgment of the legislature, the object of the corporation can not be attained under General Laws. All General Laws and Special Acts passed pursuant to this section may be altered from time to time or repealed.” It also took its charter subject to the provisions that were contained in title 3, of chap. 18, of the first part of the Revised Statutes which provides that “The charter of every corporation that shall hereafter be granted by the legislature shall be subject to alteration, suspension or repeal, in the discretion of the legislature.” Under this reserved power it has been held to be within the province of the legislature to impose liabilities upon stockholders even where the act under which the corporation was organized expressly exempted the stockholders from liability. In re Lee's Bank of Buffalo, 21 N. Y., 9 ; Mayor et al. v. Twenty-Third St. R. R. Co., 113 N. Y., 311; 22 St. Rep. 958.

It is true that the legislature has no right to deprive a corporation of its property or to cancel its contracts with third persons. But as remarked by Judge Earl in the case, last cited, “it may take away its franchise to be a corporation, and may regulate the exercise of its corporate powers. As it has the power utterly to deprive the corporation of its franchise to be a corporation, it may prescribe the conditions and terms upon which it may live and exercise such franchise. It may enlarge or limit its powers, and it may increase or limits its burdens.” The legislature, therefore, had the power, without violating the Federal constitution, to repeal or amend laws pertaining to business or stock corporations organized under the Laws of 1875, and to prescribe the liability of stockholders in such corporations to its creditors for all debts contracted after the Act was repealed or amended. I am unable to discover that the repeal of the Act of 1875 affected any vested rights of the stockholders. But independent of the reserve power of the legislature to repeal or amend the charter of a corporation the saving clauses in the repealing Acts preserved all the rights of the Livingston County Salt Co., and its stockholders that had accrued prior to the repeal of the Act of 1875. People v. O'Brien, 111 N. Y., 1; 19 St. Rep. 173.

There is another point that was urged by the learned counsel for the plaintiff which is entitled to consideration. He contends that the stock dividends issued to the stockholders for §7,200, was unauthorized for the reason that the accumulated earnings of the corporation did not amount to that sum. There can be no question but what the directors had a legal right under the statute to declare a dividend providing the corporation had accumulated and added to its capital stock money or property equal in value to the full par value of the stock issued and distributed among the stockholders as a dividend. They had no right however, to pay any dividends, either in stock or money, unless it left the capital stock unimpaired.

It appears from the evidence that the directors made an inventory of the company’s property and it is conceded that they, acted in good faith in estimating its value. In performing this duty-conferred upon them by statute they acted upon their best judgment and knowledge as to the real value of the accumulated property. In making the estimate they took into consideration the large sums of money that had been expended in sinking an additional well and in purchasing machinery and in improving the plant, and the prospect of making money in the business.

Judge Earl in Williams v. Western Union Telegraph Co., 93 N. Y., 190, says, that if a company “Can issue stock in payment of property to be obtained by it as a part of its capital for its legitimate uses, why may it not issue stock to its stockholders in payment for property in effect purchased of them and added to its permanent capital, which they relinquish the right, to have dividend." He also says that “ So long as every dollar of stock issued by a corporation is represented by a dollar of property, no harm can result to individuals or the public from distributing the stock to stockholders. All that can be required in any case is that there shall be an actual capital in property representing the amount of shares of capital stock issued.” So that, the question presented upon this point is whether the value of the accumulated property ef the corporation was equal to the par value of the stock divibonds, or whether the actual value of the stock was so disproportionate to the par value of the stock as to show a gross over valuation of the stock making the transfer fraudulent in law. I think it can not be said in view to the circumstances, and the evidence in this case, that the directors arbitrarily and with knowledge overestimated the value of the property upon which the stock dividends were declared, especially when the directors shortly thereafter asked an English syndicate $75,000 for the plant.

It was remarked by Reynolds, C. in Schenck et al. v. Andrews, 57 N. Y. 147, that “ There is no exact mathematical value which can be applied to mines or minerals in the bowels of the earth, or-to mechanical contrivances, or manufacturing establishments, when their development is sought for by associated wealth. It is a matter of the commonest observation, that the most intelligent and conscientious of men, upon such questions, entertain widely different opinions.” He also says that it' would be a very harsh rule that would subject the stockholders to personal liabilty for the debts of the company if it could be maintained that the trustees had formed an erroneous judgment as to the value of the property received as a part of the capital. The rule as to what may be taken into consideration in estimating the value of the property is very clearly stated by Judge Peckham in Gamble v. Queens County Water Co. et al., 123 N. Y. 91; 33 St. Rep. 88. He says: “ When viewing the completed work and in endeavoring to place some value upon it, we are not to be confined to the mere cost of material and the value of the labor contained in and expended upon it. A fair profit to the contractor is to be included, and.the inquiry should be, whitf, under all the circumstances is the fair value of the property to the company considering its proposed use, and the general purpose for which the company is organized ?” There are cases which hold that, in the absence of any-affirmative evidence of fraud, mere over valuation of the increased corporate property upon which the stock dividends were declared will not render the stockholders liable to the creditors of the corporation for: the deficiency. Schenck v. Andrews, supra, Lake Superior Iron Co. v. Drexel, 90 N. Y. 94.

There are also cases holding that where there was a plain case of excessive and gross over valuation with full knowledge of the fact, that such a transaction was fraudulent in law on its face. Boynton v. Andrews, 63 N. Y. 96.

It was held in Douglass v. Ireland, 73 N. Y. 104, that “ A deliberate and advised over valuation of property thus purchased and paid for is a fraud upon the law, and a violation of the condition upon which the exemption of stockholders from liability under the provisions of the original statute is made to depend. The learned judge who wrote the opinion of the court says at page 104 that, “ The fraud is consummated by the issue of stock as full paid stock, which has not been fully paid for in value by the> property for which it is issued, and it does not depend upon any fraudulent intent other than which is evidenced by the act of knowingly issuing stock for property to an amount in excess of its value. All that is necessary to establish the legal fraud is to prove two facts. First, that the stock issued exceeded in amount the value of the property in exchange for which it was issued ; and, second, that the trustees deliberately, and with knowledge of the real value of the property over valued it j and paid in stock for it an amount which they knew was in excess of its actual, value.” Lake Superior Iron Co. v. Drexel, supra; Williams v. Western Union Telegraph Co. supra; The National Tube Works Co. v. Gilfillan, 124 N. Y. 302 ; 35 St. Rep. 357; Griffith v. Green 129 N. Y. 517; 42 St. Rep. 101 ; Blake v. Griswold, 103 N. Y. 436 ; 4 St. Rep. 221.

In the case of the National Tube Works Co. v. Gilfillan, supra, cited by the learned counsel for the plaintiff, does not conflict with the above rule. Judge Vann, in bis opinion, says “ The substantial issue in this action was, whether the property procured in exchange for stock was purchased at an over valuation, not through error of judgment, but in bad faith and to evade the statute.” Citing the case of Douglass v. Ireland, supra, in support of his position. But in disposing of this point I am confronted with the fact that both sides consented to submit the question of the value of the Livingston Salt Company’s plant on the first day of April, 1886, to the jury, who found that it was only worth $35,-000. Taking that sum as a basis of value, I am compelled to hold, regardless of my own views, that the directors grossly overestimated the value of the company’s property at the time that ' the stock dividends were issued and that the stock issued and distribued as a dividend greatly exceeded in value the accumulated property of the corporation.

There is another important question in this case which I am called upon to consider and that is, after the evidence was closed and the case summed up and submitted, the defendant made a motion upon an order to show cause for leave to serve an amended or supplemental answer and to re-open the case for further proofs. It was finally agreed between counsel that the affidavits used for and in opposition to the motion might be considered by the court as a part of the evidence upon the trial and that the answer might be amended to conform to the proofs and findings of the court.

It appears from the affidavits and the evidence that on the 20th day of December, 1892, there became due and payable to the plaintiff from the Livingston Salt Company the sum of $862.06, and on January 20, 1893, the further sum of $1,837.98, and on February 20, 189'3, the sum of $1,228.98; that a promissory note was given to the plaintiff by the company for $962.05, payable February 20,1893, which was protested for non-payment February 23, 1893. It also appears from the evidence that on that day a .special meeting of the board of directors was held who passed a resolution to transfer a quantity of the salt in block No. 2, to T. Nelson Shattuck which was to be applied in part payment of a precedent debt due him from the company. At the same meeting another resolution was adopted by the board transferring to Shat-tuck a number of accounts which the company held against various parties to the amount of $962.64. Out of this sum $334.04, was to apply on Shattuclc’s account. The salt transferred to Shattuck remained in the possession of the company until it was levied upon by the sheriff upon an execution issued by the plaintiff upon his judgment obtained against the company April 26, 1893. The salt was advertised for sale by the sheriff, but before the day of sale the directors entered into a contract with the plaintiff that if he would release his levy on the salt and prosecute the stockholders for the amount of his claim they would pay him $3,000 on his judgment against the company providing he failed to recover that amount from the stockholders. After the agreement was executed the levy on the salt was released and the execution by request of the plaintiff was returned unsatisfied except the sum of $426.97, which was realized out of other property belonging to the company. I am inclined to the opinion that the sale and transfer of the salt to Shattuck, who was a director of the company, was illegal and void under the Stock Corporation Law of this state, chap. 688, Laws of 1892, § 48, which provides that “No corporation which shall have refused to pay any of its notes or other obligations when due, shall transfer any of its property to any of its officers, directors or stockholders, directly or indirectly, for the payment of any debt, or upon any other consideration than the full value of such property paid in cash. No conveyance, assignment or transfer of any property of any such corporation by it or by any officer, director, or stockholder thereof, nor any payment made, judgment suffered, lien created or security given by it or by any officer, director, or stockholder when the corporation is insolvent or its insolvency is imminent, with the intent of giving a preference to any particular creditor over other creditors of the corporation shall be valid.” The statute also provides that “every person receiving by means of any such prohibited act, any property of the corporation shall be bound to account therefor to its creditors or stockholders or other trustees." It also provides that “every transfer or assignment or other act done in violation of the foregoing provisions of this section shall be void.” The day the company transferred the salt to Shattuck the plaintiff’s note for $962.05, against the company was protested for nonpayment. It also had other contract obligations that were past . due. These facts establish conclusively that the corporation, when it transferred the salt to Shattuck, was financially embarrassed and unable to meet its obligations as they matured, and that it was insolvent, or that its insolvency was imminent. It would be difficult to imagine how any transaction could be brought more explicitly within the statute. The legislature has very wisely provided that no corporation which shall have refused to pay of its notes or other obligations when due, shall transfer any of its property to any of its officers, directors, or stockholders, directly or indirectly, for the payment of any debt or upon any other consideration than the full value of the property paid in cash. This restriction continues as long as the corporation remains in default of paying its debts; and any director or other officer who receives property from the corporation under such circumstances must account therefor to its creditors.

Judge Andrews in Throop v. Hatch Lith. Co., 125 N. Y. 531; 35 St. Rep. 816, says, that “The statute provides for two cases: first,-where the corporation has. refused payment of its notes, or other evidence of debt, and is in default, it prohibits any subsequent assignment or transfer by the corporation or any of its officers, directly or indirectly, of any of its property, to any officer, or stockholder, in payment of a debt; and, second, it prohibits any transfer or assignment whatever on any consideration to an officer, stockholder in payment of a debt; and, second, it prohibits any transfer or assignment whatever on any consideration to any officer, stockholder or other person in contemplation of insolvency.” The learned judge, at page 533, says: “ The refusal of a corporation to pay its notes or obligations at maturity, is generally a suggestion of insolvency. But whether such refusal results from a disability of a corporation to meet its obligations, or is based on other reasons, will, ordinarily, be best known to the officers and stockholders, and the law for the protection of the body of creditors against favoritism, interdicts the corporation and its officers, while the default continues, from making preferential transfers of the corporate assets to officers or stockholders in payment of a debt irrespective of the fact whether the corporation is then solvent or insolvent.” Cole v. Millerton Iron Co. et al., 133 N. Y. 164-168; 44 St. Rep. 512; French v. Andrews, 81 Hun, 272; 62 St. Rep. 759; Atkinson v. Rochester Printing Co., 114 N. Y. 168-174; 23 St. Rep. 155; Salt v. Ensign, 79 Hun, 107; 61 St. Rep. 139; Kingsley v. First Nat. Bank of Bath, 31 Hun, 329.

While the provision of the Revised Statutes upon which Judge Andrews’ reasoning in the case of Throop v. Hatch Lith. Co., supra, is based, has been repealed, yet, § 48 of the Laws of 1892, chap. 688, has been substituted in its place which contains the same provisions in substance that the Revised Statutes contained. The defendant also contends that the plaintiff might have satisfied his execution out of the corporate property upon which the levy was made and therefore, the return of the execution was unauthorized and not in compliance with the requirements of the statute. The Stock Corporation Law of 1892, chap. 688, § 55, provides that “No action shall be brought against a stockholder for any debt of the corporation until judgment therefor has been recovered against the corporation, and an execution thereon has been returned unsatisfied in whole or in part.

A creditor who sues a stockholder is required to allege in his. complaint that a judgment was obtained against the corporation, and that execution has been issued and returned unsatisfied in-whole or in part This provision of the statute contemplates that the creditor should first exhaust his legal remedy against the corporation before "resorting to the personal liability of the stockholder. Handy v. Draper, 89 N. Y. 384.

It was held in Hardman et al. v. Sage et al. 124 N. Y. 33; 35 St. Rep. 54, that “The proceeding against the corporation is only required for the benefit of stockholders, as a part of the immunity against a primary personal liability vouchsafed by law to corporators shielding them from action until a bona fide attempt has been made and exhausted to obtain payment from the corporate property.” Braem et al. v. Merchants’ Nat. Bank, 127 N. Y. 513 ; 40 St. Rep. 327.

When the plaintiff released his levy upon the salt and caused the execution to be returned unsatisfied in pursuance of a void agreement which he had entered into with the directors, it was an act extremely prejudicial to the defendant and other stockholders of the corporation.

Judge Finch, in Cole v. Millerton Iron Co. et al. supra, says: “The assets of a corporation are a trust fund for the payment of its debts upon which the creditors have an equitable lien both as against the stockholders and all transferees, except those purchasing in good faith and for value.

Shattuck was not such a purchaser. He parted with nothing. He participated as one of the directors in the illegal transaction to deprive the creditors of the assets of the corporation held in trust for their benefit. So that the defendant is at liberty, in this action, to contend that the transfer of the salt was void and that the plaintiff might have satisfied his execution out of the corporate property and upon which the levy was made. It was a valid levy and possession had been taken under it by the sheriff, who advertised it for sale and the plaintiff had no right to abandon it at the request of the directors without the consent of the defendant and the other stockholders of the corporation unless he was willing to release them from the statutory liability.

The complaint, therefore must be dismissed, with costa


text:
    Mary G. Krulder, as Administratrix, etc., Resp’t, v. William H. Woolverton, as President, etc., App’lt.

      (New York Superior Court, General Term,

      Filed March 4, 1895.)

    1. Negligence—Contributory.
    A party cannot be held guilty of contributory negligence per se, where the injury results exclusively from the carelessness of another person
    3. Same—Question oe eact.
    Where the question of negligence is connected with a disputed state of facts, or facts from which, if not disputed, different minds may honestly draw different conclusions, the whole matter must be left to the jury.
    3. Master and Servants—Fellow.
    Employes are not fellow-servants unless they are all under the control and direction of a common master.
    4. Damages—Personal injuries.
    The fact that the deceased at the time of his death was thirty-nine years of age, in sound health, sober and industrious, earning on an average fifteen dollars per week, and his wife was seven years younger, is sufficient to warrant the jury in awarding the full statutory amount of damages.
    Appeal by defendant from judgment entered on verdict of jury in favor of plaintiff, and from order denying motion for a new trial.

      John L. Hill for app’lt; Edgar Whitlock, for resp’t.
   McAdam, J.

This action is founded on the statute to recover for injuries sustained by the plaintiff’s husband resulting in his death, by reason of the negligent act of one Reilly, the defendant’s servant. The plaintiff’s intestate, Cornelius Krulder, on June 15, 1891, was at work on a ladder sixteen feet high, putting up shades under a horizontal skylight in the ferry house of the Mew Jersey Central Railroad, at the foot of Liberty street, this city, when Reilly wheeled a loaded baggage truck against the ladder on which deceased was standing, by reason of which he was upset and thrown to .the ground, receiving injuries from which he died.

The deceased was where he had a legal right to be; his work called him there, and no accident would have happened if the defendant’s employe had not run against the ladder. Even if Krulder had reason to believe that persons with baggage trucks would pass and repass, he had a right to act on the assumption that they would exercise at least ordinary care, and thus avoid doing him damage. Newson v. N. Y. C. R. R. Co., 29 N. Y. 383-390; Germann v. Suburban R. T. Co., 37 St. Rep. 360; aff’d, 128 N. Y. 681; and cases collated in Shear. & Redf. on Neg., 4th ed., sec. 92.

In no phase of the case can it be held that the decedent was ’"guilty of contributory negligence per se, for that term implies some active cause which co-operates in bringing about the injury, and here the damage seems to have resulted exclusively from the carelessness of' the defendant’s servant. If plaintiff’s intestate had fallen from the ladder, or it had toppled over by reason of his weight or movements while upon it, negligence per se might have been imputed to him. Marsh v. Chickering, 101 N. Y. 396. But such is not the case. He was apparently secure upon the structurc, and for all that appears would have finished his work in safety, if Reilly had not by running his truck as he did precipitated him to tne ground.

Where the question of negligence is connected with a disputed state of facts, or facts from which, if not disputed, different minds may honestly draw different conclusions, the whole matter must be left to the jury; and to warrant the court in withholding the case from the jury or instructing them that the plaintiff is guilty of contributory negligence, the evidence must be such as to allow no other inference to be drawn therefrom. Wells, on Questions of Law and Fact, sec. 265; Lee v. Troy Citizens Gas L. Co., 98 N. Y., 115; Chisholm v. State, 141 N. Y. 246; 56 St. Rep. 811; Greany v. L. I. R. R. Co., 101 N. Y. 419; Feeney v. L. 1. R. R. Co., 116 N. Y. 375; 26 St. Rep. 729; Stackus v. N. Y. C. & H. R. R. R. Co., 79 N. Y. 464; Beach, on Contrib. Neg., sec. 33. This is not a case which could have been withheld from the consideration of the jury under the rule stated.

The questions of the negligence of the defendant’s employe, on the one hand, and freedom from fault of the decedent, on the other, were, therefore, properly left to the jury, and were submitted to them under a clear and impartial charge, and they found adversely to the defendant on both propositions. These findings, amply sustained by the evidence, may, therefore, be regarded as conclusively establishing the facts to be as found by the verdict.

The point urged by the defendant in the request to charge, that the accident was occasioned by the act or omission of a fellow-servant, is founded on a mistaken theory. It is argued that the neglect imputed was the failure of one Werz to notify Reilly of Krulder’s presence on the ladder, or in diverting Reilly’s attention from Krulder. This point needs no other answer than a reference to the fact that Reilly was distinctively in the employ of the defendant ; while Werz was an employe of the Mew Jersey Central Railroad, and the decedent a workman of one Carpenter. Employes are not fellow-servants unless they are all under the control and direction of a common master. Shear and R. on Neg., 4th ed., sec. 225, and cases cited; Svenson v. Atlantic Mail S. S Co., 57 N. Y. 108; Sanford v. Standard Oil Co., 118 N. Y. 571 ; 29 St. Rep. 855.

The deceased at the time of his death was thirty-nine years of age, in sound health, sober and industrious, earning on an average fifteen dollars per week. His wife was seven years younger. Mo immutable guide for estimating and measuring damages- under the statute has as yet been declared ; much must necessarily be left to the good sense and intelligence of the jury, and the elements presented were sufficient to warrant their awarding the full statutory amount of $5,000, the extent of the recovery here. Lockwood v. N. Y., L. E & W. R. R. Co., 98 N. Y. 523 ; Bierhauer v. N. Y. C. & H. R. R. Co., 15 Hun, 559; aff’d, 77 N. Y. 588 ; Houghkirk v.D. & H. C. Co., 92 N. Y. 219.

We find no error in the rulings, and the judgment and order appealed from must be affirmed, with costs.

Sedgwick, C. J. and Beekmar, J., concur.


text:
    Matilda Wallace, App’lt, v. Joseph W. Reinhart, Resp’t.

      (New York Superior Court, General Term,

      Filed March 4, 1895.)

    1. Deposition—Examination before trial.
    Where the attorney for a non-resident defendant agrees to, and does» by his authority, accept personal service for him of the papers for examination before trial, upon a condition which is assented to, jurisdiction over the defendant in the proceeding is acquired.

      2. Same.
    Where a party has complied with all the requirements of the Code, he becomes entitled to the examination of the adverse party, and cannot be deprived of it, even on affidavits on the part of the latter that he can give no information.
    Appeal from order vacating order for examination of the defendant as a witness before trial.

      Dittenhoefer, Gerber & James, for app’lt; Eugene L. Richards Jr., for resp’t.
   McAdam, J.

This plaintiff sues to recover $50,000 damages from the defendant for publishing a statement purporting to give the financial condition of the Atchison, Topeka and Santa Fe Railroad Company, of which the defendant was then president. Plaintiff claims that, relying on said statement, she was induced to and did purchase 1,500 shares of the capital stock of said company, which would have been very valuable if the facts represented therein had been true, but which stock proved to be worthless owing to the insolvency of the company at the time, the representations made being false and fraudulent.

The defendant answers denying the material allegations of the complaint. The plaintiff thereafter procured an order requiring the defendant to appear before a referee and submit to examination as a witness before trial concerning the matters at issue.

The defendant resided in Mew Jersey, but his attorneys agreed to, and did by his authority, accept personal service of the papers for him, upon the condition, which was assented to, that the examination would not proceed until the middle of November, 1894. Jurisdiction over the defendant in the proceeding, therefore, attached, and the reason for vacating a similar order against a nonresident in Witcher Tribune Association, 59 N. Y. Supr. Ct. R., 224; 38 St. Rep. 364; 14 N. Y. Supp., 290, obviated. The case was clearly brought within the provisions of sec. 886 of the Code, which permits the examination of a party as a witness before trial, provided he ‘can be found within the jurisdiction of the court, though he be a resident of another state. Witcher v. Jones, 23 St. Rep., 1007; Hesse v. Briggs, 45 N. Y. Supr. Ct. R., 417 ; Dudley v. Press Pub. Co., 53 Hun, 347; 25 St. Rep. 32. The objection to the jurisdiction of the court is, therefore, without force.

This brings us to the real question involved, and that is whether the examination before trial was material to establish the plaintiff’s right of action. It will certainly be necessary, in order to make out the plaintiff’s cause of action, to prove that the company was in a precarious or insolvent condition at the time the defendant published the statemant representing it to be prosper-pus, and its stock as affording opportunities for investors more inviting and safe than other listed securities. As the defendant had been successively auditor, director, vice-president, and president of the company, and had in his statement assumed to possess full knowledge of its condition and resources, even to- details, he above all others that might be named would naturally appear to be a most important witness at the trial of an issue involving the company’s financial status, and the plaintiff had a right to his testimony before trial so as to prove her case.

As the plaintiff is conceded to have complied with all the requirements' of the Code, she became entitled to the examination sought, and cannot be arbitrarily deprived of it even on affidavits on the part of the defendant that he can give no information. Davis v. Stanford, 37 Hun, 531; Matter of Nolan, 70 Hun, 536 ; 53 St. Rep. 737 ; Greene v. Carey, 81 Hun, 496 ; 63 St Rep. 332. She did not seek a production or an examination of the books of the company, and the fact that they are not now under the defendant’s control, furnishes no reason why his examination as a witness should not proceed.

For these reasons the order appealed from must be reversed, with costs, and the examination directed to proceed at a time to be fixed in the order.

Sedgwick, C. J. and Beekman, J. concur.


author: O’Brien, J.

text:
    In the Matter of the Estate of Sophia Lynch, Deceased.

      (Supreme Court, General Term, First Department,

      Filed December 14, 1894.)

    Executors, etc.—Discovert or assets.
    A proceeding to discover property of a decedent must be dismissed, where the party cited flies an answer stating that he is the owner of the property, or is entitled to its possession by virtue of a lien, etc.
    Appeal from an order, directing the examination of a person as to property alleged to be withheld from the administrator.

      W. Wickham Smith, for app’lt; Horace Graves, for resp’t.
   O’Brien, J.

This proceeding was brought under §§ 2706-2714 of the Code of Civil Procedure, as amended by chapter 686 of the Laws of 1893. The petition of the administrator sets forth that there were in the possession of one John H. Lynch and the appellant, George W. Lynch, and wrongfully withheld from him, the following classes of property: (1) Household furniture and carriages; (2) stock certificates of the Fulton Market Fishmongers’ Association; and (3) a stand in the Fulton fish market. “The appellant interposed awritten answer,duly verified, which set forth: (a) As to the household furniture and carriages, that they were not and never had been, in his possession, (b) As to the stock certificates of the Fulton Market Fishmongers’Association, that he was entitled to the possession thereof by virtue of a lien thereon and special property therein; and he also set forth the nature and circumstances of his lien, and, upon information and belief denied that Sophia Lynch was the real owner thereof at the time of her death, (c) As to the stand in the Fulton fish market, that he was the owner thereof. Upon the interposition of this answer, appellant .moved to dismiss the proceeding, but his motion was denied, and an order was made directing his examination as to the shares of stock of the Fulton Market Fishmongers’ Association only. From this order the appeal is brought to this court.”

The Code provides a means for the discovery of the property ■of a decedent held by a third person, and, upon a proper petition, authorizes the citation and examination of such person touching •such property. It further provides that, upon the attendance of such person, he must be sworn to answer questions touching the inquiry prayed for in the petition, and he may be examined fully and at large respecting any money or other property of the decedent of which the decedent had possession at the time of or within two years before his death. It is further, provided, however, that: “If the person cited shall interpose a written answer, duly verified, that he is the owner of said property, or is entitled ■to the the possession thereof by virtue of any lien thereon or special property therein, the surrogate shall dismiss the proceedings as to such property so claimed.” Code Civ. Proc. § 2710.

Here the person sought to be examined interposed a written" answer, duly verified, alleging that he was entitled to the possession of the shares of stock of the fishmongers’ association concerning which a discovery was sought, and concerning which the surrogate directed his examination by virtue of a lien thereon and special property therein, setting forth the particulars of such claim. By the express language of the Code, the interposition of such an answer required that the surrogate should dismiss the proceeding. The construction of this section has been involved in several cases in this court, and that contended for by appellant has been consistently followed. Thus in Doyle v. Doyle, 15 St. Rep. 318, it is said: “Section 2710 of the Code provides, by the amendment of 1881 (Laws of that year, c. 535), that in case a person cited as one having property of the deceased shall interpose a written answer, duly verified, that he is the owner of the property "the possession of which is charged upon him, or that he is entitled to the possession thereof, by virtue of any lien thereon or special property therein, the surrogate shall dismiss the proceedings as to such property so claimed. Such an answer was interposed on this application, and it became the duty of the surrogate to dismiss the proceedings, in accordance with the provisions of thp section to which reference has just been made. He had no power to investigate the verity of the denial thus made, and the order should be reversed, with ten dollars costs and disbursements.”

And in Re Cunard's Estate, 27 St. Rep. 128; 7 N. Y. Supp. 553, it is said: “The petitioner entirely misconceives the purpose and scope of sections 2706 to 2714 of the Code of Civil Procedure. These sections were not intended as a substitute for ordinary civil remedies in cases where the latter are alone appropriate. The object was to provide a summary means of discovery, and, in case of a mere naked possession of the decedent’s ‘money or other personal property,’ to compel delivery to the legal representative. "* * * Even where there is a withholding, the statutory proceeding must be dismissed upon the filing of a duly-verified answer, setting up ownership or possession by virtue of a lien or special property. Section 2710.”

In regard to language so clear it is unnecessary to multiply authorities. Here the appellant set forth the particulars of his lien, and he was entitled to have the proceeding dismissed, His answer showed, not a naked possession, but a lien upon, and special property in, the stock referred to, and it was not within the province of the surrogate to pass upon the validity, sufficiency, or extent of this lien. As said in Re Knittel, 5 Dem. Sur. 371: “Those sections were designed to afford a simple and summary procedure whereby the executor or administrator of a decedent might obtain an order for the surrender and delivery of such money or other property belonging to such decedent’s, estate as should be discovered to be in the hands or under the control of some person or persons not lawfully entitled to the possession thereof.”

We think that the order was wrong, and should be reversed, with $10 costs and disbursements. All concur.


author: O’Brien, J. Parker, J.

text:
    The People ex rel. Commercial Mutual Insurance Company, App’lt, v. Tax Commissioners of the City of New York, Resp’t.

      (Supreme Court, General Term, First Department,

      Filed December 14, 1894.)

    1. Taxes—Review.
    A recital of what took place before the tax commissioners, while proper and necessary, is not all that the petition should contain, if the question of illegality is sought to be reviewed ; a specification of the grounds of the illegality is expressly required.

      2. Same.
    Where the only error specified is overvaluation, the right to exemption, as a ground of illegality, cannot be considered.
    Appeal from an order quashing the writ of certiorari.

      Esek Cowan, for app’lt; James M. Ward, for resp’t.
   O’Brien, J.

Generally speaking, it is correct to say that a petition and return upon certiorari proceedings are like pleadings in an action ; but from this it does not follow that in all cases the rules of construction applicable to pleadings will be applied in such proceedings. It has been many times held that in all special statutory proceedings the statutory directions must be complied with, or the proceedings will not be effectual. Here the power of the court to grant a writ of review is limited by the provisions of chapter 269 of the Laws of 1880, section 1 of which act reads as follows r “A writ of certiorari may be allowed by the supreme court on the petition, duly verified, of any person or corporation assessed and claiming to be aggrieved, to review an assessment of real or personal property for the purposes of taxation made in any town, ward, village or city of this state, specifying the grounds of the alleged illegality, or is erroneons by reason of overvaluation, or is. unequal. * * *”

Where the relief sought is based upon the ground of overvaluation or inequality, such a statement is sufficient to present the question to the court for review. But it will be noticed that where the basis upon which relief is sought is the illegality of the assessment, then the act provides that the petition must specify “the grounds of the alleged illegality.” And this difference between the contents of a petition upon an erroneous or unequal assessment, and one that is illegal is enforced, so far as the county of New York is concerned, by chapter 311 of the Laws of 1885, amending section 821 of chapter 410 of the Laws of 1882 so that the latter should read: “Sec. 821. A certiorari to review or correct the merits of any decision or action of the commissioners * * * shall be allowed by the supreme court or any judge thereof, directed to the said commissioners on the petition of the party aggrieved, but only on the grounds which must be specified in such petition, that the assessment is illegal, and giving the particulars, of the alleged illegality, or is erroneous by reason of overvaluation."

It is certain, therefore, that unless a proper petition is presented,, the court is without jurisdiction to entertain the proceeding.

In the petition under review we find a statement of what occurred before the tax commissioners, which is entirely proper, because necessary to show that the relator was diligent in asserting its claim, and for the additional reason that evidence should be offered that the grievances now complained of are the same as those urged upon the assessing officers ; the rule being that only such can be corrected on certiorari. In this connection the petition states : “That prior to the 1st day of May, 1889, the said corporation petitioner duly protested, claimed, insisted, and demanded from said commissioners of taxes and assessments that all the personal property and bank shares of the said corporation was on the second Monday of January, 1889, by the laws of the state of New York, exempted, and now is exempt, from assessment or taxation, * * * upon the ground that all the. personal property and bank shares of the said corporation is exempted from assessment or taxation by the laws of the state of New York.”

The petition further recites that, notwithstanding the proceedings had before the commissioners, they duly transmitted, as required by law, the assessment rolls of real and personal estate to the board of aldermen, which latter board received the same, and thereafter directed the commissioners to proceed with the levying of the tax, which they did by publishing notice to the effect that the assessment rolls had been finally completed and delivered to the board of aldermen, and that they would remain open to public inspection in the office of the clerk of the board of a period of 15 days. Then follows what we regard as the crucial and controlling part of the petition, viz: “And your petitioner shows that the said assessment upon the said valuation of personal property and bank shares for the purpose of taxation, and said assessment, is illegal, invalid, and void and erroneous, and that your petitioner will be injured by such illegal and erroneous, assessment; and your petitioner specifies the following grounds of illegality and error: That the said commissioners have overestimated the valuation of scrip representing the capital and surplus for the purpose of taxation, and illegally and erroneously included in their valuation of the personal property of the said corporation on said roll the following sums, to wit,” etc.

It will thus be seen that all the recitals in the petition lead up to the one last quoted, in which the errors sought to be reviewed by certiorari upon this proceeding are clearly and specifically pointed out. That the relator did not intend to raise the question of illegality, but only that of overvaluation, plainly appears, not •only from what follows in specifying the respects in 'which there was an overvaluation, but in omitting to specify any grounds of illegality, which would be necessary if it were intended to raise such question. Though it is clear that if the relator were held to a statement of his grievances which he thus desires to present by the writ, he could not test the illegality, because the grounds are not specified, it is insisted that there is sufficient in the statement of what took place before the tax commissioners to enable the court to review the question of the illegality of the assessment. The answer to this seems to us to be patent. Whatever questions were raised before the tax commissioners, the relator had the right to waive any, or to waive some .and insist on other, objections there presented. Thus, by way of illustration, though they had sought exemption on the three grounds of inequality, overvaluation, and illegality, they could waive any of these; and in determining the questions sought to be presented for review resorc must be had to that portion of the petition which sets forth just what injury or injustice has been done that the relator seeks to have reviewed. If we apply, this test to the petition here, it will be seen that, whatever question may have been raised before the tax commissioners, the relator intended to waive all except that of overvaluation; and the raising ■of the question of illegality upon this petition was clearly an afterthought, the result of a decision by the court of appeals favorable to the exemption claimed by insurance companies. It is immaterial, therefore, what took place before the tax commissioners, except as showing what was there urged entitling the relator, if he so elected, to present by proper averments in his petition the same questions to the court 'for review. If we assume that the averments in the petition were sufficient to show that the question of illegality was one of those presented to the tax commissioners, this at best but gave the right to the relator, if he -assigned illegality as an error, to present by proper averments the same questions to the court for review. Our conclusion, therefore, is that, while a recital of what took place before the tax commissioners is proper and in- one respect that we have pointed out necessary, this is not all that the petition should contain if the question of illegality is sought to be reviewed, the statute expressly requiring for this purpose a specification of the grounds of illegality. It is unnecessary to resort to definitions as to the meaning of the word “grounds,” as used in the law of 1885, because the law of 1882 (chapter 410, § 821), which was in force at the time the present writ was sued out, removes all doubt on the subject by providing in express language that the relator in the petition must give “ the particulars of the alleged illegality.” Mo general statement, therefore, is sufficient; the particulars or specifications of the illegality being required. The intention of the legislature in thus requiring .a specific, as distinguished from a general, statement, is clear. It was to apprise the assessors of the true ground of the grievance, •and not to permit a relator, by concealing this, to await the action ■of the commissioners, and then, upon some indefinite statement susceptible of different meanings, to bring up their action for review. Applying these tests to the petition, we think it was insufficient, and for the reasons stated by the learned jiidge at special term. The order should be affirmed, with costs.

Van Brunt, P. J., concurs.

Parker, J.

(dissenting).—The commissioners of taxes of the city of Mew York, in the year 1889, assessed the petitioners for a large amount of personal property, which it claims is by statute exempt from taxation. In due time the petitioner appeared before the commissioners, and insisted upon such exemption, and requested that the assessment for personal property and bank shares be strilren from the rolls. Its claim for exemption was rejected by the commissioners, who refused to correct the assessment roll in the manner requested. The petitioner thereupon presented to the court a petition, under chapter 269 of the Laws of 1880, praying for a writ of certiorari to review the proceedings of the tax commissioners. A writ was granted, which was subsequently quashed at special term upon motion of the respondent, upon the ground that the petition was insufficient to raise the question whether the assessment was invalid, because the personal property of the corporation was not taxable. It was the view of the court at special term that, inasmuch as the statute requires that the petition shall “ specify the grounds of illegality,” the petition was defective in that it did not state in effect that the petitioner was by law exempted from taxation on its personal property. It is said by the court of appeals in Re Corwin, 135 N. Y. 245-252 ; 48 St. Rep. 238, in discussing the office of the petitioner under the statute of 1880, that “ it is in the nature of a pleading, and only conclusions of fact need be stated, and not the evidence necessary to support them." The plan of the statute unquestionably justifies the position of the court. While the proceeding is to review the decision of the taxing officers, and brings up all the facts of which they had, or must be presumed to have had, knowledge at the time of making the assessment, the office of the petition- is to present those facts as the relator understands them to be. To this petition, if required by the granting of a writ, the respondent makes return •as to the facts ; and if by it none of the facts alleged in the petition are put in issue, the court must determine whether the taxing •officers committed error. If the return denies any of the„allegations of the petition, then a referee may be appointed by the court to take the evidence, that the court may determine what was the real fact about which the petition and return make issue. Thus it appears that the office of the petition and return is precisely like that of the complaint and answer. If the facts alleged in the complaint or the petition are not controverted, the court must make such judgment or order as the law requires from the uncontroverted facts. If, on the contrary, the. answer or return does put in issue one or m.ore of the material allegations of fact contained in the complaint or petition, or method is provided by which the real facts are to be determined, whereupon judgment follows in accordance with the law. It is not only not required, but it is not permissible, to state conclusions of law in a pleading. And it does not seem to us that the word “grounds,” in the connection in which it is used, justifies the court in holding that it was the intention of the legislature that the petition, under this statute,, should differ from pleadings in actions and petitions in other proceedings, in that, in addition to a statement of facts, it should contain the legal conclusion which the relator should claim as necessarily following from the facts alleged. Such a construction is only possible by reading the word “ grounds ” as if it were “ reasons.” It is occasionally used in that sense, but not frequently. At least one lexicographer omits to give it as a definition of the word “ ground.” It is ordinarily used in the sense of “ foundation," “basis,” “support.” And where facts are stated in a petition'which requires a determination that the action taken therein by the taxing officers was illegal, it furnished “ foundation,” “support,” “ grounds ” for an adjudication of illegality.

So far we have proceeded on the assumption that the petition did not in fact inform the .court of the legal inferences which should be drawn from the facts stated. But we think even the legal inferences were brought to the attention of the court by the petition. The. petition states, in effect, that after the assessment was made the petitioner appeared before' the tax commissioners, and there insisted that the tax was unauthorized, because its personal property was exempt from taxation under the laws of this state, for the reason that the petitioner was a fire insurance company. This was treated by the special term as a mere recital of action taken by the petitioner, and not a positive statement of fact essential to the relief sought by the petitioner. It does not so impress us. It was just as essential to the relief demanded, by the petitioner that it should show that it appeared before the tax commissioners, and demanded a correction of the assessment, assigning proper reasons therefor, as that it should show that the assessment was illegal. This proposition is stated by Judge Andrews in People ex rel. Mutual U. Tel. Co. v. Commissioners, 99 N. Y. 257, as follows : “The act of 1880 gives a remedy by certiorari to review and correct an illegal, excessive, or unequal assessment. But it would, we think,-be an unwarrantable construction of the statute to permit a party complaining of an assessment to lie by, without availing himself of the opportunity to remedy his grievance by application to the tax commissioners, under the statute of 1859, and, after the assessment had become confirmed by lapse of time, to arrest the collection of the tax by a proceeding under the law of 1880.”

To cause it to appear that the tax commissioners illegally, assessed the petitioner was not sufficient to entitle it to relief; it had to show, in addition, that it called the attention of the commissioners to the illegality in time for them to have made correctio'n. As it must appear from the petition that upon ail the facts before the tax commissioners the petitioner was entitled to the relief which it demanded from them, it necessarily follows that the statement of what took place before the commissioners touching the demand for the correction of the assessment was as material and essential a statement as any other statement contained in the petition. The orders should be reversed, with $10 costs and printing disbursements.


author: Follett. J.

text:
    Aaron M. Klaw, App’lt, v. Samuel W. Ehrich et al., Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed December 14, 1894.)

    Hastes and sebvant—discharge.
    The evidence was held to he sufficient to require the submission to the jury of the question whether plaintiff was discharged from the defendants’ service.
    Motion for a new trial on exceptions ordered to be heard at general term in the first instance.
    This action was begun April 11, 1892, by an employe against his employers, to recover damages for an alleged wrongful discharge from their service. The defendants are partners, under the firm name of Ehrich Bros., and are dealers in dry goods at the corner of Sixth avenue and Twenty-Third street, in the city of Hew York. On the 15th of December, 1891, the litigants entered .into a written contract, of which the following is a copy:
    “ Agreement made this fifteenth day of December, 1891, between Ehrich Brothers and Aaron M. Klaw. Ehrich Bros, agree to and hereby engage said A. M. Klaw as confidential clerk for the period of one year, commencing January 1, 1892, and terminating December 31, 1892; and further agree to pay him a salary of four thousand dollars ($4,000) per annum in equal monthly installments. Aaron M. Klaw agrees to and hereby accepts engagement as above, and further agrees to faithfully perform the duties of the position to the best of his ability, and to use all efforts to further the interests and business of said Ehrich Brothers. In witness whereof, we have hereunto attached our signatures, the day and date first above written.
    “Ehrich Bros.
    “Aaron M. Klaw.”
    On the 1st day of January, 1.892, the plaintiff, pursuant to this contract, entered defendants’ service as confidential clerk, and continued therein until April 1, 1892, when he left their service. He was paid for services under the contract $833.32, which is $166.-67 less than the amount due for three months’ services. Between April 1, 1892, and January 1, 1893, the plaintiff solicited, personally and by advertisements, other like employment, but failed to secure an engagement. The foregoing facts are alleged in the complaint, and admitted by the answer, except as to the amount paid and the seeking of employment elsewhere, which were testified to by the plaintiff, and not disputed. The plaintiff alleges in his-complaint that he was wrongfully discharged, and sustained damages by reason thereof to the amount of $3.166.67, the difference between the annual salary of $4,000 and the amount which had been paid to him. The defendants, by their answer, deny that they discharged the plaintiff, and allege that he voluntarily left their service about April 1, 1892, and has since that date refused to discharge his duties and perform the contract. The defendants also allege, by way of counterclaim, that the plaintiff has failed to perform his contract, to their damage in the sum of $5,-000, which allegation the plaintiff denied in his reply. No evidence was given in support of the counterclaim, the complaint being dismissed at the close of the plaintiff’s case, upon defendants’ motion. The plaintiff asked to have submitted to the jury the question whether he was wrongfully discharged by the defendants from their service, which was denied, and an exception taken.

      Morris J. Hirsch, for pl’ff; Samuel W. Weiss, for def’ts.
   Follett. J.

No exceptions were taken to the admission or exclusion of evidence, and the only questions presented on this motion are those raised by the plaintiff’s exceptions to the dismissal of the complaint and the refusal of the court to submit to the jury the question whether the plaintiff was discharged by the defendants. The plaintiff testified, and in this he was not disputed: My duties (from January 1 to April 1,1892) were to direct the interior working of the business, to see that the employes did their duties, and to take charge of the office and the office force of the employes in the office. On the 1st of April, 1892, Samuel W. Ehrich, one of the defendants, wrote the plaintiff, stating, in effect, that his services bad not been profitable, and, “ taking it altogether, as a question of self-interest, I feel as though it does not pay us to have you fill your present position, and I feel entirely too friendly towards you to have you sacrifice your time, with the knowledge that there is no future for you with us. So, if we can bring our relations to a close in a manner thoroughly pleasant and agreeable to yourself, I should like to do so.” On the following day, the plaintiff and Samuel W. Ehrich had an interview, in which he said to the plaintiff: “No; the expenses of the business are high. Mr. Leghorn is going to stay, and be superintendent, and I am going to put Mr. Mansfield in the office; and I am willing to make some sacrifice, but I want you to have the best of feeling towards the house, and think of me personally as a--of a good fellow.” Mr. Mansfield was the superintendent, and Mr. Leghorn was the assistant superintendent of defendants’ business. Later in the day of April 2d the defendants wrote the plaintiff as follows : Agreeable to our conversation of this afternoon, will you kindly get your memorandum, papers and desk ready to turn over to Mr. Mansfield on Monday.” On Monday another conversation occurred, in which the defendants said: “How will $500 strike you as a fair thing ?” The plaintiff replied that he preferred to carry out his contract, and on the same day he wrote the defendants to that effect. Later in the day, Samuel. W: Ehrich came to the plaintiff’s desk, and the following occurred: “I (Samuel W. Ehrich) want you to get your papers ready to give up your desk to Mr. Mansfield to-day.’ I (plaintiff) did not reply to that, and he went away. In the afternoon of that day, about five o’clock, Mr. Sporburg, one of the employes of the house, comes in, and said that Mr. Samuel W. Ehrich told him to tell me to give him the keys of my desk.” Later in the day, the plaintiff delivered to Mr. Samuel W. Ehrich the keys, who replied, “ All right." The next morning the plaintiff went to defendants’ store, and found Mr. Mansfield occupying th.e desk which he had previously occupied. On this occasion both parties spoke of taking legal advice, each claiming, to have a good case. On the 5th of April, the plhintiff consulted, counsel, who wrote the defendants, the letter being delivered by the plaintiff to Mr. Samuel W. Ehrich. On that occasion Mr. Ehrich said: “ You cannot occupy my office.” The plaintiff asked: “ What have you got for me to do ?” The defendant replied : “ I have nothing for you to do.” On the same day the plaintiff wrote the defendants, referring to the fact that he had been told that defendants had nothing for him to do. About this time the defendants consulted counsel, and, on the 7th of April, wrote the„plaintiff : “ I am willing to give you the work that your contract calls for, and will give you until to-morrow to present yourself, and return to work, arid do what you are told to do. If you do not by that time return to your duties, I shall conclude that you have no wish to do so, and prefer to earn your salary by means of a lawsuit rather than by work.” Other correspondence ensued between the 7th and 11th, which is not very important, as it, on the part of the plaintiff, simply shows that he was insisting that he had been discharged, and the defendants were insisting that he had not been. The litigants, under the advice of their"respective counsel, were maneuvering for advantageous legal positions. On the morning of the 11th the plaintiff called on the defendants, and the following conversation occurred: “ ‘I (Samuel W. Ehrich) have other and different work for you to do.’ I said: ‘Do you wish to restore me to my original position ?’ He said ; ‘ No; I have got other and different work for you to do; and, if you don’t want to do it, I think you want to make your money through Blumenstiel and Hirsch, instead of working for it. I will give-you until two o’clock to-day to consider.’ ” The plaintiff left the store, and has not been there since. Considerable other evidence was introduced in behalf of the plaintiff; and, taking it altogether, it seems to us that it was sufficient to require the submission to the jury of the question whether he was discharged from the defendants’ service, and that the court erred in refusing this request and in dismissing the complaint. The plaintiff’s' exceptions-should be sustained, and his motion for a new trial granted, with, costs to him to abide event. All concur.