text:
    Susan B. Anthony et al., App’lts, v. The American Glucose Company, Resp’t.

      (Supreme Court, General Term, Fifth Department,

      Filed January 18, 1893.)
    Corporations—Combination in new company—Liability op latter to
    STOCKHOLDERS OP OLD COMPANIES.
    Where a corporation is created on the practical dissolution of other cor-

      porations, with the consent of the latters’ stockholders, but without any further surrender of their rights, and under circumstances showing that such rights were actually to he preserved, it maybe called upon to respond directly to the stockholders of the old companies.
    Appeal by the plaintiffs, Susan B. Anthony and Mary S. Anthony, from a judgment entered in Monroe county on the 24th day of February, 1891, upon the report of a referee, dismissing their complaint with costs.

      John Van Voorhis, for app’lts; John &. Milburn, for resp’t.
   Macomber, J.

This action was brought to compel the defendant to issue to the plaintiffs certificates of the defendant's stock, and to recover the amount of certain dividends declared since the year 1883, together with other earnings properly distributable upon the plaintiffs' stock, though not declared as dividends.

On and prior to the 21st day of February, 1883, the plaintiffs were the holders of forty shares of the capital stock of the Leavenworth Sugar Company; and, in the year 1869, by assignment from Daniel R. Anthony, they became the owners and holders of fifty ■other shares of such capital stock, making ninety shares in all, which they now possess.

There existed on the 21st day of February, 1883, a corporation , organized under the laws of New Jersey, known as the Firmenicli Sugar Refining Company, having its principal office in the city of Buffalo, N. Y.; and the Buffalo Grape Sugar Company and the 1 American Grape Sugar Company, each of which was organized under the laws of the state of New York, having, respectively, their principal business in the city of Buffalo ; the Peoria Sugar Refinery, a corporation organized under the laws of Illinois, having its principal office in Peoria, Illinois, and the Leavenworth Sugar Company, organized under the laws of Kansas, having its principal office in Leavenworth, Kansas. Each of these corporations was the owner of a plant for the manufacture of glucose and grape sugar, and each of them was engaged in the business of making and selling those articles. On the 21st day of February, 1883, these five corporations entered into an agreement in writing, with the assent of all the stockholders of each of them, including the plaintiffs and their assignor, Daniel R. Anthony, for the formation of a new corporation to be organized under the laws of the state of New Jersey, to be called The American Glucose Company, with a capital stock of $15,000,000, divided into 150,000 shares, of the par value of $100 each. That company is the defendant.

By this agreement all the real estate, buildings, engines, boilers, tools, machinery and fixtures, including everything properly covered by the description of “plant,” and all horses, mules, carts, wagons, harnesses, sleighs, and the appurtenances thereof, together with all letters patent and licenses, rights, trade-marks and contracts of every nature belonging to each of the parties, was to be vested in the new corporation by proper instruments, and by perfect title, by the 10th day of March of that year, or as soon thereafter as possible. The new corporation, The American Glucose Company, the defendant, was, by the terms of the agreement, vested with a perpetual license to use any processes or machinery in use in any of the factories of the five above mentioned corporations, whether owned by such corporations or by any stockholder thereof.

Of the capital stock of the defendant 125,000 shares, being at par value $12,500,000, were allotted to be applied towards the acquisition of the property of the five corporations, and was to be divided as follows : 25,000 shares to the Firmeuich Sugar Refining Company, and 100,000 shares to the remaining four corporations; the residue of the stock, namely, 25,000 shares, was to be retained in the treasury of the defendant.

The defendant became the purchaser in pursuance of this agreement of all of these plants, properties, rights and franchises, together with the materials and supplies, exclusive of the manufactured stock and stock in process of manufacture, of each of t.these five corporations, at the current market value thereof. It had also the right to purchase the material in process of manufacture in each of these factories, by paying therefor at the rate of two and one-half cents per pound, reduced to finished, merchantable goods, with a gravity of forty degrees Beaume, taken at a temperature of 100 degrees Fahrenheit; together with all manufactured merchantable goods, inclusive of starch in the starch department of the Buffalo Grape Sugar Company, at a given price. A clause was inserted providing for the contingency of opposition to this scheme by any stockholder of any of the five old con 1 panies to this arrangement; but no opposition seems ever to ha\ j been made by any of the stockholders. Provision was made for a working capital of the defendant in the sum of at least one million of dollars, for which bonds were to be issued bearing interest at the rate of seven per cent, per annum, payable semiannually, in the sum of $100 each, or multiplies thereof, amounting in all to the sum of $1,250,000. Payment of these bonds Was secured by mortgage of the new company upon all and singular the property acquired of the old companies, or to be acquired thereafter.

The defendant assumed by this agreement all contracts theretofore made in good faith by any of the five corporations, for the sale of glucose, syrup, grape sugar, starch or feed, but did not assume any contracts for the sale of mixed or mixing sugar, or any contract involving the testing of any patents or improvements. It also assumed any or all contracts theretofore made- in good faith by any of the five corporations or by Cicero J. Hamlin, William Hamlin and Harry Hamlin, or any of them, for the services of any employe, agent or broker, in the factories of either of said corporations or in their business.

This agreement, which contained other provisions not necessary to be recited in this connection, was consummated on the 17th day of March, 1883, by proper transfers and conveyances executed by these five corporations to the defendant, covering all property, real and personal, of the character and description above mentioned; and thereupon the defendant became the absolute owner thereof.

The learned referee has found as a fact that the defendant issued and delivered to the Firmenich Sugar Befining Company 25,000 shares of its-capital stock, and to the Buffalo Grape Sugar Company, the American Grape Sugar Company, the Peoria Sugar Be-finery and the Leavenworth Sugar Company, the 100,000 shares of its capital stock, as provided for in the contract. But this finding, so far as it relates to the Leavenworth Sugar Company, is not supported by the evidence in the broad sense in which the finding is made. It is necessary, therefore, to ascertain in what way and to what extent, if any, this important finding is supported by the facts ; for, if the Leavenworth Sugar Company had actually received all of the stock of the defendant to which it or its stockholders were entitled under the agreement, and the same had been delivered in good faith, to wit, as an existing corporation having functions to perform, and resting under obligations and duties to stockholders, it might, indeed, be true, as the learned referee has declared, in his opinion, that the remedy of the plaintiffs was not to be sought in an action against this defendant, but in an action against the Leavenworth Sugar Company to compel it to turn over to them their proportionate share of the capital stock of the defendant so received under the agreement.

But it is shown, and the fact is found by the referee, that Cicero J. Hamlin, William Hamlin and Harry Hamlin were the owners of all the capital stock of the American Grape Sugar Com'pany and of the Buffalo Grape Sugar Company, and of all the stock of the Peoria Sugar Refinery, excepting a small portion thereof owned by one Edward F. Easton, and of all the capital stock of the Leavenworth Sugar Company, excepting a small portion thereof which was owned, by Mr. Loclce, and excepting also the ninety shares which were owned by the plaintiffs and their brother, Daniel R. Anthony. The whole of the capital stock of the Leavenworth Sugar Company was $150,000, at par, in shares of $100 each. William Hamlin was, at all of these times, and for years afterwards, the secretary of the American Grape Sugar Company, and secretary and treasurer of the Buffalo Grape Sugar Company, the secretary and treasurer of the Peoria Sugar Refinery, and the secretary and treasurer of the Leavenworth Sugar Company. The Messrs. Hamlin arranged, in a manner satisfactory to Locke and Easton, for the number of shares of the new company which they should receive in place of those then held by them. They failed, however, to make any effective arrangement -with the plaintiffs or with Daniel B. Anthony in this regard. This failure to bring about an adjustment with the Anthonys arose from the fact that the Messrs. Hamlin insisted, as a condition of a delivery to them of their share of the defendant's stock, that the Anthonys should pay the sum of $11,818.78, being, as was claimed by the Hamlins, an equitable proportion which their stock bore to the whole of the indebtedness of the Leavenworth Sugar Company, which, as they averred, amounted to $196,896.48. But the evidence adduced to establish such a large indebtedness is very meagre, as the referee holds, and is by no means satisfactory.

The referee’s finding upon this last named matter is ambiguous. If he intended to decide, as a matter of fact, that Daniel R Anthony had agreed with the Hamlins to surrender the ninety shares of stock and pay the $11,813.78, and to receive therefor nine hundred shares of the capital stock of the defendant, we do not think he is supported by the evidence. It is true, that the Messrs. Hamlin assumed that Daniel R. Anthony and his sisters would act in the premises under their dictation, as the other stockholders of the old companies had acted. There were, accordingly, issued by the defendant, a certificate for the nine hundred shares of its capital stock in the name of Daniel R. Anthony; but it was received by William Hamlin who refused to surrender it or any part of it to Daniel R. Anthony who was acting for his sisters as well as for himself, except upon the conditions above mentioned. But the name of Daniel R. Anthony was entered upon the books of the defendant as one of its stockholders to this amount, and notices of subsequent dividends were from year to year sent to him as such stockholder.

Certificates of stock of the defendant were issued to the stockholders of the Firmenich Sugar Refining Company in exchange for their shares in the last named corporation. This was done, as is found by the learned referee, upon the certificate or statement made by the Firmenich Sugar Refining Company.

In the month of October, 1883, after a dividend of two and one-quarter per cent of the capital stock of the defendant had been declared, and notice thereof given to Anthony, payment of Anthony’s share was withheld by the direction of the Messrs. Hamlin subject to an expected settlement between them and Anthony. After the final failure of such negotiations for a settlement, the Messrs. Hamlin caused the said dividend declared upon the said certificate of stock of the defendant, issued in the name of Daniel R. Anthony, to be credited to themselves in three parts, one-third each to Cicero J. Hamlin, William Hamlin and Harry Hamlin.

Subsequently the capital stock of the defendant was reduced from $15,000,000 to $1,500,000, notice of which was given to Anthony, with a request that he authorize the cancellation of the 900 shares of the stock which stood in his name, and take in place thereof ninety shares of the reduced capital stock; but to this notice and request Anthony paid no attention. Afterwards other dividends were declared by the defendant upon this capital stock, notices of some of which were given to Anthony, and the same have remained unpaid, and have been held in the defendant’s account known as unpaid dividend account. All other stockholders of the defendant have been paid their dividends.

The Messrs. Hamlin acquired their stock and controlling interest in The Leavenworth Sugar Company on the 5th day of June, 1882, and immediately thereafter, at a meeting of, the stockholders of that company, held at Leavenworth, Kansas, they caused themselves to be elected officers and directors of that company. Immediately after their election as trustees they adjourned their meeting as directors of said company to their office in Buffalo, M. where a meeting was held by Cicero J. Ilamlin, William Hamlin and Harry Hamlin, and Franklin D. Locke, as directors of said company, on the 10th day of June, 1882, and where all the subsequent meetings of the directors of the said company were held, and where all the meetings of the said four Hamlin companies, so called, were held after the Messrs. Hamlin gained control of them. But no formal meeting of the directors of any of the four Hamlin companies has been held since the making of the agreement by the five corporations to form a new company, and the transfer of the property of said companies to said defendant in pursuance of said agreement of February 21, 1883.

The learned referee has dismissed the complaint of the plaintiffs upon the ground that they cannot maintain this action because no contract relations of any nature exist between the defendant and any of the stockholders of the five corporations entering into the agreement for the organization of the defendant. He says : “ The American Glucose Company became a medium through and by which the five companies effected a re-organization, not by a consolidation of the several" companies and a surrender of their franchises, but by creating another separate and distinct corporation or entity, in which it was agreed that the title to the several properties of the parties should be vested, and to which the business of the several companies should be transferred, and for which each should receive the agreed proportion of the stock of the new company, the Firmenich an agreed portion, and the four companies collectively another portion, which, as between them, the law should imply an agreement to divide the same equitably, or in proportion to the value of the property and business each conveyed to the defendant. By the terms of the contract to which the defendant corporation, when created, became a part}', it was required to issue and deliver its certificates of stock to the Firmenich and to the other four companies, in proportions agreed. It could not deal with the stockholders of the five companies as such, nor issue its stock to them. Its contract to take the property of the five corporations and deliver stock in payment therefor was solely with them as such. The rights of the stockholders in the property of their corporation is well settled. They have no right to any of the property of the corporation except in the form of dividends declared by the directors, or in case of dissolution to receive or obtain what may remain of the assets after a settlement of its affairs. For any injury impairing the value of the shares of the stockholders through the invasion of their corporate or collective rights, their remedy must be obtained by or through the corporation. Morawetz on Private Corporations, Chapter on rights and remedies of shareholders.” The referee also cites the cases of Beveridge v. N. Y. E. R. Co., 112 N. Y., 1 ; 20 St. Rep., 962, and Harkness v. Manhattan Ry. Co., 54 Superior Ct., 175 ; 11 St. Rep., 732. Upon these authorities he chiefly relies for his ultimate conclusion.

Under ordinary circumstances, and in the usual course of corporate business and dealings, the views expressed by the learned referee touching the rights of stockholders may be assented to. Where two or more corporations make contracts with each other to carry on business, and while the corporations continue to perform their legitimate functions, a stockholder of one of them has not the right to intervene for the purpose of obtaining from the corporation of which he is not a stockholder what might come to him as a stockholder of one of the contracting parties. But this principle and the authorities above mentioned, cited by the referee, are applicable only when the contract contemplates the continued existence of the contracting parties, and not where, by the very terms of the agreement, the contracting parties should pass out of existence entirely as corporate entities, and their property, business and franchises transferred bodily to the new creature contemplated by the agreement. This agreement, as between the contracting parties and their stockholders, on the one hand, and the defendant on the other hand, provided for, and was conditioned upon, the non-user of the franchise of each of the five old corporations, and was a blotting out by contract of their existence. It was followed by an actual discontinuance of the business of each of them. After the absorption by the defendant through the Messrs. Hamlin of the Leavenworth Sug’Slr Company in 1883, down to the beginning of this action, there was no meeting held of the stockholders or directors in the state of Kansas or elsewhere. But the company was treated by the Messrs. Hamlin and by this defendant as something that had ceased to exist as a matter of fact.

All the parties tó this action have assumed throughout the validity of the agreement of February 21, 1883, and as effective, binding and unimpeachable the subsequent transfers and conveyances of the property and franchises of the old corporations to the defendant, made in pursuance of that agreement.

The action and defense are both based upon the assumption that, as there was no reason for the contracting parties longer to exist, they had in fact ceased to exist for all business purposes.

But it is argued that if there is any remedy over, against any parties, it is against the Messrs. Hamlin, or against the Leavenworth Sugar Company, as a corporation. But the difference between the operations of this defendant and those of the Messrs. Hamlin, in the premises, is not very marked. These gentlemen have had full control of the defendant since its incorporation, as they had of four out of the five contracting parties before the defendant was brought into existence. If the attitude and the argument of the defendant in this case can be maintained, then for aught that appears, the défendant could not be compelled to issue the stock to anybody. It is idle to contend that any of the Ilamlm companies, as they are called, would take any action to compel this defendant to deliver over any of the stock. Why, then, should the plaintiffs be turned over to the necessity of suing the directors of the Leavenworth Sugar Company for misconduct, or to compel the Hamlins to distribute the stock which has already been issued by it to Mr. Anthony, but which it now refuses to deliver.

It is further argued by counsel that the referee has found, as a fact, that the hundred thousand shares of the defendant's stock, which the four Hamlin companies collectively were entitled to, were delivered to those companies in performance of the contract, and that, consequently, the obligation of the defendant under that contract had been performed. •

This we deem to be a vital error. We need, however, concern ourselves only with the stock that, under the agreement, was to be distributed to the stockholders of the Leavenworth Sugar Company. The officers of the defendant, namely, the Messrs. Hamlin, have made a practical construction of this agreement entirely different from the contention now made by counsel. And this practical construction accords with its true construction. It is entirely erroneous to suppose that the stock of the defendant was to be delivered to the old corporations as owners; for the latter were not entitled to it and never claimed it, and they could not have held it for a moment as against their respective stockholders. Article three of the agreement contains the provision for the distribution of such stock.

By its terms, the stock of the new company was to be “ allotted and applied towards the*'’acquisition" of the property and franchises purchased. ■ Twenty-five thousand shares were “ allotted” to-the Firmenich Company, .and one hundred thousand shares were “ allotted” to the four other parties to the agreemeht, merely as a convenient mode of designating and identifying by the name of their companies the stockholders to whom such stock was to belong. This view finds much support in the sixth item of the agreement, where it is provided that in case of opposition of any stockholder of either company to the transfer of that company’s property and franchises to- the defendant, the stock, otherwise distributable to that company, shall be withheld; also in item second of schedule A, annexed to the agreement, where individuals, and not the old corporations, were assumed to be the stockholders of the new company. But perhaps a still stronger corroboration is found in defendant’s exhibit 4, signed by the Messrs. Hamlin, being the proposed contract with Daniel R. Anthony, and where it is declared by the Hamlins as follows: Of the stock of the American Glucose Co., issued for division among the stockholders of the Leavenworth Sugar Co., Mr. Anthony shall receive nine hundred (900) shares in full of the interest represented by him and his family in the stock of the Leavenworth Sugar Co., being ninety shares of such stock of the Leavenworth Sugar Company.”

The defendant actually entered the stock to Anthony upon its books, thus taking the primary step towards carrying to a practical conclusion the necessary result of the agreement of February 21, 1883. Shall it now be heard to say that it is under no obligation to deliver the stock, when it has already entered it upon its books as belonging to Anthony, declared dividends upon it payable to Anthony, and when its refusal to deliver it has been placed solely upon the non-payment by Anthony of the sum of $11,813.78, alleged to be equitably owing by Anthony, not to the defendant, but to a third party? For all practical purposes of this litigation, the defense comes down to this: that the defendant had a right, through its officers, to refuse to deliver to Anthony his stock until the latter had paid an indebtedness which had been incurred by the Messrs. Hamlin through the name of the Buffalo Grape Sugar Company. The plaintiffs’ case need not necessarily be worked out under the doctrine of Lawrence v. Fox, 20 N. Y., 268, as the respondent’s counsel fears may be attempted. Mor is the idea tenable of a valid consolidation of the five corporations into the defendant company, by which the stockholders of the old companies became stockholders of the new company, for the reason, as stated by the referee, that there can be no consolidation of corporations de jure, except by virtue of some enabling statutory law. Morawetz Corps., § 940, and cases there cited.

The ground of the plaintiffs’ right to recover is, that by the terms of the agreement of the 21st of February, 1883, the five corporations should in fact go out of existence for the benefit of the defendant, when organized; and that the defendant is conclusively bound by that contract, inasmuch as it received all the property and franchises of the five old corporations, with full knowledge of the agreement, thus, by its own act, making the agreement effective. The defendant should now be held to be estopped to claim that any of the old corporations are in existence for any purpose. Under the circumstances disclosed, its defense is technical' and unconscionable, and ought not to prevail, unless there be some inexorable rule sustaining it; and there is no such rule applicable to this case, because the defendant, by its acts, has put it out of its power successfully to invoke it.

The rights of the several stockholders of such companies were, by necessary implication, preserved by the same agreement. For nearly ten years the old companies have ceased to exist. Mobody connected with these transactions had claimed that they existed for any purpose until this defense was made that Daniel R Anthony should not recover the stock allotted to him unless he pay to the Hamlins the $11,813.78. The case did not, therefore, come under the general rule as stated by the referee, but under a different principle, namely, that where a corporation is created on the practical dissolution of other corporations, with the consent of the latters’ stockholders, but without any further surrender of their rights, and under circumstances showing that such rights were actually to be preserved, it may be called upon to respond directly to the stockholders of the old company. It is true, that The Leavenworth Sugar Company has not been dissolved by any judgment of a competent court; but for the purposes of enforcing the contract in question it must be deemed to be dissolved so far as the defendant can be heard to say.

Treating the case, therefore, as under the facts it must be treated, as one to compel the defendant to deliver to the plaintiffs the ninety shares of the reduced capital stock, standing in the name of Daniel R Anthony, and for the payment of accrued dividends and distributable earnings, it may be maintained.

The judgment appealed from should be reversed and a new trial granted.

Judgment appealed from reversed and a new trial granted, with costs to abide the event.

Dwight, P. J., concurs; Lewis, J., not sitting.


source: Caselaw Access Project

author: Macomber, J.

license: Public Domain

text:
    Jacob Koons et al., Resp’ts, v. Andrew N. Martin, App’lt.

      (Supreme Court, General Term, Fifth Department,

      Filed January 18, 1893.)

    Business corporations—Stockholders—Jurisdiction op county court. A county court has not jurisdiction of an action for contribution from stockholders, undér chap .611, Laws of 1875, and in an action in such court against a stockholder by the assignee of a judgment against the corporation, the execution having been returned unsatisfied, it appearing that plaintiffs were stockholders in such corporation at the same time as defendant, the complaint should be dismissed.
    Appeal by the defendant, Andrew N. Martin, from a judgment of the county court of Monroe county, entered May 20, 1892, on the decision of the county judge sitting without a jury.

      John J. Snell, for app’lt; M. H. McMath, for resp’ts.
   Macomber, J.

On the 3d day of May, 1890, a judgment was recovered against the Webster Preserving Company, Limited, a corporation organized under the laws of the state of New York, and succeeding by name the Curtice Preserving Company, limited, upon two promissory notes, bearing date the 1st day of September, 1888, one of them in the sum of $1,000, and the other in the sum of $500. Executions against the corporation having been returned unsatisfied, this action was begun against the defendant on the 9th day of April, 1891, charging him with liability to the extent of $500, being the amount of the shares of the capital stock of the corporation held by him, being five shares at the par value of $100 each.

The learned trial judge has found that the defendant was such stockholder in the amount named from the 16th day of November, 1886, to the 11th day of April, 1889, and that he was a stockholder of such corporation wdthin two years before the beginning of this action. The facts disclosed by the evidence clearly sustain this conclusion.

The plaintiffs are assignees, by an instrument in writing, of the judgment so recovered by Fred D. Bancroft. It appears, however, that they were, at all of the times covered by the dealings of Bancroft with the corporation, down to the beginning of this action, themselves stockholders of that corporation, and during a portion of the time officers thereof. The question is, therefore, whether they can maintain this action in the county court.

It is properly assumed on both sides that the county court has not jurisdiction of an action for contribution from stockholders, under chapter 611 of the Laws of 1875, in pursuance of which this corporation was organized. For the purpose of such contribution by all of the stockholders to one or more who have compulsorily paid debts that the whole number should have paid, the stockholders must be deemed substantially to be co-partners. Corning v. McCullough, 1 N. Y., 47; Clark v. Myers, 11 Hun, 608.

The plaintiffs, therefore, were jointly indebted with the other stockholders of the concern for the whole amount of the judgment obtained by Bancroft. It matters not, for the purpose of fixing their rights, whether they were compelled by process of law to pay the Bancroft judgment, or whether they voluntarily paid the same. So long as they appear to be stockholders of the corporation, their rights to recover against a co-stockholder can be worked out only through an equitable action for contribution. But this action is purely one at law. It is to recover absolutely of the defendant, as a stockholder, the whole amount of the face of his stock at par. Each one of the plaintiffs is liable for contribution in proportion to the stock held by him for this very claim now made by them against this defendant. The defendant had the right to take the position at the trial which he did: that the county court had not jurisdiction of this action because he could not bring into the case other stockholders equally liable with himself, and compel contribution among all of them, including the plaintiffs. Any other view would lead to the anomalous conclusion of permitting a recovery at law in this action of the whole sum of $500, with liability on the part of the plaintiffs to this defendant to pay back the same, or a portion thereof, in a suit for contribution.

For this reason the complaint should, we think, have been dismissed at the trial.

Judgment of the county court of Monroe county appealed from reversed, and a new trial granted, with costs to abide the event.

Dwight, P. J., and Lewis, J., concur.


text:
    John D. Forward, Pl’ff, v. The Continental Insurance Company, Def’t.

      (Supreme Court, General Term, Fifth Department,

      Filed January 18, 1893.)

    Insurance (Fire)—Conditions—Knowledge of agent.
    The knowledge, by the agent of a fire insurance company, of a fact communicated at or before the time of the issuing of a policy, inconsistent with the condition of the policy itself, is to be imputed to the company issuing the policy.
    Motion by the defendant, the Continental Insurance Company, for a new trial on exceptions taken at the Genesee circuit, June 28, 1892, at which trial a verdict was rendered by the jury in favor of the plaintiff for $1,950 upon a policy of fire insurance issued by the defendant to the plaintiff in the sum of $2,300. Sanford M North, for pl’ff; Myron H. Peck, Jr., for def’t.
   Macomber, J.

The defendant issued a policy of fire insurance to the plaintiff on the 23d day of April, 1891, in the sum of $2,300, covering his store, stock and fixtures in the town of Alabama, N. Y. As the result of a fire which occurred Sept. 27, 1891, the loss sustained by the plaintiff was ascertained by the agent of the defendant to be the sum of $1,950. Subsequently, the defendant refused to pay the amount of the loss, claiming that there had heen a forfeiture of the policy upon the ground that, contrary to the plaintiff’s statement contained in the application, the plaintiff had, about two months before the policy was issued, given a bill of sale to his brother on the stock of goods and fixtures covered by the policy.

Under proper evidence laid before them, the jury found that this bill of sale, though executed and filed, did not have any valid existence, even as between the parties thereto; and further, that at the time of the negotiation for the policy, and the agreement between the plaintiff and the defendant’s agent, the latter was expressly informed of its existence and how it came to be given, and upon such facts the agent, being of the opinion that it had no valid, subsisting existence, issued the policy.

This policy is the one known as the Standard Fire Insurance Policy of the state of New York, prepared by the superintendent of insurance, in pursuance of chapter 488 of the Laws of 1886. It contained, among other things, the following provisions: “ This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void, * * * if the interest of the insured be other than unconditional sole ownership, * * * or if the subject of insurance be personal property and be or become incumbered by a chattel mortgage.

“ In any matter relating to this insurance no person, unless duly authorized in writing, shall be deemed the agent of this company. * * * This policy is made and accepted subject to the foregoing stipulations and conditions, together with such other provisions, agreements, or conditions, as may be indorsed hereon, or added hereto, and no officer, agent or other representative of this company shall have power to waive any provision or Y condition of this policy, except such as by the terms of this policy may be the subject of agreement, indorsed hereon, or added hereto, and as to such provisions and conditions no officer, agent, or other representative of this company shall have such power, or be deemed or held to have waived such provisions or conditions unless such waiver, if any, shall be written upon or attached hereto, nor shall any privilege or permission affecting the insurance under the policy exist or be claimed by the insured unless so written or attached.”

The question is not whether the plaintiff can avail himself of an unauthorized waiver, by the defendant’s agent, of any provision contained in the policy. It is rather, whether the knowledge of the existence of the chattel mortgage, brought home to the company in this manner, through its agent who procured the policy, effects a waiver of any ground set up for avoiding liability. Two recent cases in the court of appeals seem to have settled this question in favor of the contention made in behalf of the plaintiff, namely, Berry v. The American Cent. Ins. Co., 132 N. Y, 49 ; 43 St. Rep., 400; Cross v. Nat'l Fire Ins. Co., 132 N. Y., 133; 43 . St. Rep., 482.

In the case of Berry v. American Cent. Ins. Co., the agreement provided that the policy should be void, if, without notice to the company and permission therefor, in writing, indorsed thereon, the interest of the insured be less than the entire unconditional and sole ownership of the property insured. It also contained a prohibition against the power of an agent to waive any condition of the policy, together with the following: “Ho notice to, and no consent of, or agreement by any agent of this company, shall be binding on this company until such notice, consent or agreement, as the case may be, is clearly expressed, and indorsed in writing hereon, signed by such agent.” Liability in that case was sought to be avoided by the company on the ground that the insured did not own the property covered by the policy, but was in possession of it only under a verbal agreement with his son, the true owner, to occupy the same during life, with an obligation on the part of the life tenant to keep the buildings insured. The defendant’s agents had knowledge of this fact when they issued the policy, and a recovery was sustained by the court upon the ground that the knowledge of the agent obtained at the time of allowing the policy was the knowledge of the company itself.

The case of Cross v. National Fire Ins. Co, supra, arose upon an allegation and proof that the building insured was unoccupied at the time of the issuance of the policy, contrary to the terms of the policy. But it being shown that the agent was aware of this fact at the time of the application, and at the time the policy was issued, a recovery was had, notwithstanding the fact that the policy provided that the agent did not have power to waive any condition.

In both of these cases, it is true, the agent was the general agent of the insurance company. But this circumstance can make no difference, because the ground upon which liability of the company is sustained is that the knowledge which was imparted to the agent at the time of the application and at the time that the policy was issued was necessarily the knowledge of the corporation itself. See, also, Van Schoick v. Niagara Fire Ins. Co., 68 N. Y., 434; Woodruff v. The Imperial Ins. Co., 83 id., 134; Wood on Ins., § 88, and cases there cited.

The principal case relied upon by the learned counsel for the defendant is that of Quinlan v. P. W. Insurance Co., 133 N. Y., 356; 45 St. Rep., 200. This, however, was a case of a violation of a provision by the insured occurring subsequently to the issuing of the policy. The policy contained a clause to the effect that the beginning of a foreclosure proceeding invalidated the policy unless saved by agreement properly indorsed upon the policy. In that case, a mortgage, which was sought to be foreclosed, was not given until after the policy had been written, and the foreclosure was not begun until nearly two years afterwards; and the agent upon whose alleged knowledge the claim of waiver was made had ceased to be the company’s agent before the beginning of the foreclosure proceedings. So, also, of the case of Messellback v. Norman, 122 N. Y., 578; 34 St. Rep., 549. The waiver there relied upon was not made at the time of the application for and the issuing of the policy, but afterwards. The policy bore date June 9, 1883. The defense arose upon the provision of the policy against liability if the buildings became vacant.

The building insured was occupied until April 17, 1884, and was destroyed on the 26th day of that month. The waiver relied upon was one tirade by the agent April 17th.

These cases do not affect the general principle as we understand it to exist, which is, that the knowledge by the agent of a fact communicated at or before the time of the issuing of the policy of fire insurance, inconsistent with the condition of the policy itself, is to be imputed to the company issuing the policy; for otherwise, it must be assumed, the insured would not have accepted such policy.

It follows, that the defendant’s motion for a new trial should be denied.

Defendant’s motion for a new trial denied, with costs, and judgment ordered for the plaintiff on the verdict.

Dwight, P. J., and Lewis, J., concur.


text:
    Ida C. Kurz, Resp’t, v. Henry Fish, Impleaded, App’lt.

      (Supreme Court, General Term, Fifth Department,

      Filed January 18, 1893.)

    Bills and notes—Bona eides.
    In an action upon a promissory note, transferred by the payee to the plamtiff before maturity, the defense was want of consideration, and that it grew out of a Bohemian oats swindling transaction. On the trial the evidence showed the note to have been so obtained. To show the dona fldes of plaintiff in the purchase of the note, a witness w>,s called and testified that he was present at the time of the purchase; that the note was offered by the payee to plaintiff’s husband in exchange for clothes, and he was told that it was “ perfectly good,” he replied that he would consult his wife and went out, and on Iris return stated that she would take it. Held, that this testimony was sufficient to justify the trial court in directing a verdict for plaintiff.
    Appeal by the defendant, Henry Fish, from a judgment entered in Monroe county, April 1, 1892, upon the verdict of a jury at a circuit, directed by the court in March, 1892.

      A. Rice, for app’lt; George D. Beed, for resp’t.
   Macomber, J.

This action was brought upon a promissory note in the sum of fifty dollars, dated September 6, 1888, made by the defendant, Henry Fish, payable to one William J. Curtiss (also named as a defendant) or bearer, on the 1st day of December, 1889. The note was indorsed and transferred by the payee to the plaintiff before maturity. The defense is, want of consideration; that the note was procured from the defendant, Fish, by the fraud of Curtiss and others, and that it grew out of the usual Bohemian oats swindling transactions; and that the plaintiff was not a purchaser in good faith of the note for value before maturity.

Upon the trial, the customary evidence relating to Bohemian grain transaction was given, from which the jury would undoubtedly have adduced the conclusion, if permitted to do so, that the note obtained inception by fraud, and as between the parties thereto could not be enforced.

The sole question worthy of consideration at the circuit was, whether there was any evidence, or any deduction to be made from the evidence, which it was incumbent upon the court to submit to the jury, touching the bona fides of the plaintiff in the purchase of the note from Curtiss. The testimony of Mr. Kurz, the husband of the plaintiff, who acted in behalf of his wife, together with that of the plaintiff herself, was probably under the decisions in the cases of Vosburgh v. Diefendoif 119 N. Y., 357; 29 St. Rep., 448, and Canajoharie National Bank v. Diefendorf 123 N. Y, 191; 33 St. Rep., 389, such as to require the case, if the plaintiff’s right to recover had rested wholly upon this evidence, to be submitted to the jury, on the ground that the bona fides of the plaintiff and the credibility of herself and her husband were questions for the jury; but this was by no means the only testimony in the case. A witness, John Pote, was called, and testified that he was present at the time of the purchase by the plaintiff’s husband of the note in question ; the witness being a cutter in the plaintiff’s shop in Rochester. This conversation was in the latter part of August, 1889, before the maturity of the note. He says that Curtiss, and a man by the name of Keller, who was with him, offered this and two other notes of like amount in exchange for three suits of clothes; that they said that the notes were “gilt edged notes,” and were perfectly good, arid that the makers were responsible people, and Mi'. Kurz thereupon replied that he would consult with his wife in regard to them, and went out of the room, and on his return stated that he had seen his wife, and that she would take the notes.

This testimony was undisputed, and was given by a disinterested witness, whose character as a witness was not attempted to be impeached; and it was, we think, sufficient to justify the learned justice at the circuit in directing a Verdict for the plaintiff. f

It follows that the judgment appealed from should be affirmed.

Judgment appealed from affirmed.

Dwight, P. J., and Lewis, J., concur.


author: McGown, J.

text:
    Albert De Cernea, Resp’t, v. Russell R. Cornell et al., App’lts.

      (City Court of New York, General Term,

      Filed December 7, 1892.)

    Evidence—Custom.
    Where the contract in question is clear, unequivocal and free from any ambiguity or doubt as to the meaning of the language used, evidence of an alleged custom of the trade, to modify the written agreement, is inadmissible.
    Appeal from a judgment in favor of the plaintiff, entered upon a verdict of a jury, directed ata trial term.
    The plaintiff, doing business in the city of Philadelphia, Pa., under the name of Albert DeCernea-& Co., entered into a written agreement with defendants, who constituted the firm of Cornell & Ward, in the city of Hew York.
    The agreement was executed, on the part of the defendants, by their agent, E. P. Arnold, and was as follows:

      “Philadelphia, Dec. 28, 1891.

      11 Messrs. Cornell & Ward, 150 Duane Street, New York City:

    “ Dear Sirs—Please make and ship us at once 1,000 reams of 20x30 light bakers’ straw paper, 16 lbs. to 100 sheets; to be put up in 5 ream bundles. Price to be 19 cents per ream, f. o. b. Philadelphia, less 2 per -cent cash, ten da^s from delivery. Paper must be in every respect equal to sample submitted by your representative, Mr. B. P. Arnold.
    “ Yours very truly,
    “Albert DeCernea & Co.
    (“ Dictated)
    “Accepted by E. P. Arnold,
    “ Representing Cornell & Ward.”
    (Being plaintiff’s Ex. A.)
    Defendants failed to deliver.
    Plaintiff made demand, which was refused.
    He, thereupon, went into open market and purchased the paper at thirty-eight cents per ream, a loss of $190 on the quantity named in the contract, at the price named therein.
    The defendants, in their answer, admit substantially all the material allegations of the complaint; and, for a defense, by way of avoidance, allege that the execution of the contract was procured by fraud on the part of plaintiff, and further set up an alleged custom of trade, to modify the written agreement, and allege “ that said plaintiff fraudulently procured said Arnold to sign said writing, knowing that it did not contain said terms previously agreed upon, and with the intent to deceive.”
    After the testimony was closed, plaintiff’s attorney asked the trial justice indirect a verdict for the plaintiff.
    “The Court: The defendants seek to avoid a contract signed by them, and seek to avoid the responsibility on the ground that they did not read the contract. That is no defense. I, therefore, instruct you to find a verdict for the plaintiff for the sum of $190.00."
    “ Defendants’ Attorney : I ask your honor to let the case go to the jury, on the question of fraud on the part of the plaintiff in procuring the defendants’ agent to sign that contract. Motion denied. Exception taken.”

      Reeves & Todd, for app’lts; Edward Wells, Jr., for resp’t.
   McGown, J.

The making of the contract (Plff’s Ex. A) was admitted, and the defense set up was that the contract in question was drawn in reference to a certain trade custom, and that the said plaintiff fraudulently procured Arnold, the representative of the defendants, to sign the contract, knowing that it did not contain the terms previously agreed upon, and with the intent to deceive said Arnold.

The defendants sought to introduce evidence of the existence of such trade custom, which evidence was properly rejected by the trial justice.

The contract in question was clear, unequivocal and free from any ambiguity or doubt as to the meaning of the language therein used.

The size of the paper was therein stated to be 20x30 inches, thus clearly indicating the size of the paper ordered and required by the plaintiff, and there is no evidence of any conversation between the parties at the time of or prior to the signing of the contract, wherein paper of the size of 15x20 was mentioned or referred to.

There was no evidence of any fraud on the part of the plaintiff, in procuring Arnold’s signature to the contract, to be submitted to the jury, and no errors committed by the trial justice in the rulings made by him.

Judgment appealed from must be affirmed, with costs to the plaintiff and respondent.

Van Wyck and McCarthy, JJ., concur.


author: McCarthy, J.

text:
    Robert L. Harrison, Resp’t., v. The Vermont Manganese Co., App’lt.

      (City Court of New York, General Term,

      Filed December 7, 1892.)

    Corporations—Services performed at request of incorporators.
    Some time after the charter of defendant was granted plaintiff was requested by some of the incorporators to call a meeting of the shareholders for the purpose of organization and election of officers, which he accordingly did. Held, that the services so performed being for the benefit of the company and having been accepted by its incorporators on the authority of its officers, it was liable therefor.
    Appeal from judgment in favor of plaintiff.

      R. H. Smith, for app’lt; R. L. Harrison, for resp’t
   McCarthy, J.

This is an appeal frorii a judgment entered in favor of the plaintiff against the defendant for the sum of $276.78 and is for services claimed to have been performed by the plaintiff in the month of September, 1889, for the defendant.

The defendant’s organization sprang into existence in March or April, 1889, that being the date of the charter under which the incorporators met.

The purposes of the organization are fully set out in the evidence. Among its incorporators were W. W. Flanagan (who was also connected with another company), a Mr. Russell P. Hoyt, who was elected its president shortly after the first meeting of the incorporators, and a James Grwatkin, another incorporator, who was secretary.

About August 27, 1889, at the request of some of these incorporators, the plaintiff was directed to call, a meeting of the shareholders of the defendant, which was done by the plaintiff, and such meeting took place on September 16, 1889, and the organization then, so far as the election of its officers and the performance of some other routine business, was completed.

Defendant had, from the time of the granting of the charter, become a corporation for all intents and purposes. Its incorporators would be liable from that time for all acts, whether it had a president or other officer.

The officers are only the medium through which it acts, and the incorporators could delegate its power to any of its members or require all to act together.

The services performed were clearly for the benefit of the defendant, and were accepted by its incorporators. 30 N. Y, 83.

It was on the authority of all the officers.

The defendant having, by its motion to dismiss at the close of the case, left the matter with the court, and the plaintiff thereupon having moved for a direction in his favor, the question became one of fact for the court.,

V From the evidence in the case, we find no error, and think the judgment was properly rendered in favor of the plaintiff, and, therefore, should be affirmed, with costs.

McGown and Van Wyck, JJ., concur.


text:
    Amelia Westphal, App’lt, v. Matilda Carter, Resp’t.

      (City Court of New York, General Term,

      Filed December 7, 1892.)

    Executors and administrators—Personal liability.
    An executor or administrator who assigns a mortgage belonging to the estate by an instrument containing a clause to the effect that he will hold himself personally responsible for the payment of the mortgage or any deficiency, becomes individually bound thereby.
    Appeal from a j udgment in favor of the defendant, dismissing the complaint herein.
    The defendant is the sole executrix of Delia Bathgate, deceased, and, as such, she executed an assignment to the plaintiff of a mortgage held and owned by the said Delia Bathgate during her lifetime, made by one Ann McKiernan to the said Delia Bathgate.
    The assignment (plff’s Ex. E.) bears date and was executed on the 16th day of July, 1890.,
    In the assignment, the said defendant (who was formerly Matilda Bathgate), describes herself as “Matilda Bathgate, as sole executrix of Mrs. Delia Bathgate, deceased,” and it was executed by her as said “ Matilda Bathgate, sole executrix of Mrs. Delia Bathgate, deceased.”
    The consideration of said assignment was the sum of one thousand dollars ($1,000), being the amount paid by the plaintiff for the assignment of said mortgage.
    In said assignment the following words are contained:
    “And I hold myself personally responsible for the payment of the said mortgage, or any deficiency thereunder, or arising upon the foreclosure thereof, in view of the said mortgage being now past due, and no interest being paid upon the last six months up to date.”
    The complaint .alleges that in an action thereafter brought in the supreme court by plaintiff herein, said mortgage was foreclosed, and that upon the foreclosure there was a deficiency of $1,411.86; that judgment was duly given to plaintiff therefor, and that plaintiff was duly permitted by said supreme court to bring this action.
    This allegation, however, was denied by the defendant in her answer.
    Ko oral evidence was offered on the part of plaintiff; who offered in evidence:

      First. A certified copy order permitting plaintiff to bring this action. (Plff’s Ex. A.) ■

      Second. The decree of foreclosure in Westphal against MeKiernan. (Plff’s Ex. B.)

      Third. The referee’s report on above foreclosure, and order confirming his report of sale. (Plff’s Ex. C. & D.)

      Fourth. The assignment of the mortgage by the defendant. (Plff's Ex. E.)
    The admission of the above was objected to by the defendant’s counsel, and exceptions taken to their admission by defendant’s attorney.
    After admission of above evidence, the plaintiff rested his case; thereupon defendant’s attorney made a motion to dismiss as follows : “ I move to dismiss on the ground that there is no evidence that she bound herself individually.”
    Which motion was granted by the trial justice, to which ruling the plaintiff excepted.

      Michael Fennelly, for app’lt; Howe & Hummell, for resp’t.
   McGown, J.

Inasmuch as the action was dismissed by the trial justice, we must assume that it was dismissed on the only ground stated by defendant’s attorney on his motion, viz.: “ That there is no evidence that she (defendant) bound herself individually,” and it is, therefore, unnecessary to consider any of the exceptions in the case other than that taken by plaintiff to the ruling of the trial justice in granting the motion to dismiss.

The defendant, in the assignment of the mortgage (Plff’s Ex. E.), expressly stated that she held herself personally responsible for the payment of any deficiency. And it was clearly her intention to become personally responsible, although she executed the paper in a representative capacity.

She could not, as'executrix, bind or make the estate she represented responsible for any deficiency; and it was not necessary that she should go through the mere form of executing the paper in her individual name, after she had executed the same in her name as executrix, in order to make herself personally responsible.

Her intention was, undoubtedly, as therein expressed, to make herself personally responsible for any deficiency; and she could not bind the assets she represented by any act of hers done in her representative capacity.

The rule must be regarded as well settled, that the contracts of executors, although made in the interest and for the benefit of the estate they represent, if made upon a new and independent-consideration between the promisee and the executors as promisors, are the personal contracts of the executors, and do not bind the estate; notwithstanding the consideration moving from the promisee is such.that the executors could properly have paid for the same from the assets, and been allowed for the expenditure in the settlement of the estate.

The addition of an official character to the signature of executors and administrators, in executing written contracts and obligations, has no significance, and operates merely to identify the ¡Den-son, and not to limit or qualify the liability. Schmittler v. Simon, 101 N. Y, 554.

The rule is laid down in Parsons on Bills and Rotes, vol. 1, p. 161, that “An administrator or executor can only bind himself by his contracts; he cannot bind the assets of the deceased.”

The exception to the ruling of the trial justice in dismissing the complaint was well taken.

V And the judgment appealed from must be reversed, with costs to the appellant to abide the event of the action.

Van Wyck and McCarthy, JJ., concur.


author: McGrown, J.

text:
    David S. Paige, App’lt, v. Nathan A. Chedsey et al., Resp’ts.

      (City Court of New York, General Term,

      Filed December 7, 1892.)

    Appeal—Verdict.
    In an action for moneys alleged to be due plaintiff, the answer set up a counterclaim for the value of legal services performed by defendants for plaintiff, and it was stipulated by plaintiff that if defendants were entitled to their counterclaim the value of the services should be fixed at a / certain sum. The court charged, that before a verdict could be found for defendants, it must be found that plaintiff agreed to pay them a proportionate sum in the suit mentioned, viz.: the sum named in the stipulation, and the jury returned a verdict for said sum. Held, that the verdict would not be disturbed.
    Appeal by the plaintiff from a judgment recovered against him by the defendants for the sum of $5,989.08, on their counterclaim, entered on the 15th day of January, A. D., 1892, upon the verdict of a jury, and from an order denying plaintiff’s motion for a new trial.
    Plaintiff sued to recover the sum of $475, an alleged balance of certain moneys which had been paid into the hands of the defendants as the proceeds of a certain action brought by the plaintiff against one William E. Waring, in which action the above defendants were attorneys for the plaintiff, the complaint alleging the amount to have been found, and agreed upon, upon an accounting had on Rovember 11, 1886.
    The defendants, for their answer, denied that any balance was found or agreed to be due to the plaintiff, and set up a counterclaim for $5,639.54 against the plaintiff for the value of legal services rendered by them as attorneys* for the plaintiff in a certain action brought by him against one Frederick W. Waring and one John Kellagher, for the recovery of certain real property, and for which services said plaintiff agreed to pay.
    Upon the trial, the following stipulation was made on the part of the plaintiff : “It is stipulated upon the part of the plaintiff that if the jury find the defendants are entitled to their counterclaim, as set up by them against the plaintiff, the value of their services under such counterclaim, shall he fixed at the sum of $5,639.54.”
    At the close of the case, the same was submitted to the jury, who rendered their verdict for the defendants for the sum of $5,639.-54, on their counterclaim.

      Louis J. Grant, for app’lt; Henry W. Norton (Charles Strauss, of counsel), for resp’ts.
   McGrown, J.

It is conceded by the plaintiff’s counsel in his brief submitted that there were but two issues before the jury.

First. Was the plaintiff entitled to recover the $475 ?

Second. Was there any special agreement between the parties as to the ejectment suit, following the action for the award, as set up in the counterclaim?

And these were the only issues and questions of fact raised by the pleadings which it was necessary for the jury to determine from the evidence submitted to them.

The jury by their verdict found against the contention of the plaintiff as to his claim for $475, and found upon the first issue above mentioned that the plaintiff was not entitled to recover the said sum of $475.

At the request of plaintiff’s counsel, the trial justice, after concluding his charge to the jury, further charged as follows: “ Third. Before the jury can find a verdict for the defendants, they must find that the plaintiff agreed on November 11, 1886, to pay them a proportionate sum in the ejectment suit, namely $5,-639.54,” thereby expressly instructing the jury to pass upon the second issue above mentioned as requested by plaintiff’s counsel.

The jury, by their verdict, found that the plaintiff had agreed to pay defendants for their services, and rendered their verdict in favor .of defendants for the said sum of $5,639.54, which plaintiff’s counsel, by his stipulation conceded to be the .value of defendants’ services, in case the jury should find for the defendants on their counterclaim.

The trial justice, in his charge, fairly and clearly submitted the case to the jury.

We have examined the exceptions taken by the plaintiff’s counsel to the rulings made by the trial justice during the course of the trial, and find no errors which require correction.

The jury rendered their verdict upon evidence somewhat conflicting, yet we think that the verdict was fully justified by the evidence.

The policy of our laws tends to make the jury the sole arbiters of conflicting evidence, and hence their verdict ought, as a rule, to be accepted as conclusively establishing the disputed questions they are called upon to decicTe.

The jury have settled the facts in this case adversely to the plaintiff, and we can see no good reason why we should disturb their verdict.

The verdict of a jury will only be disturbed when it is clearly against the weight of evidence, or where there has been any improper conduct on the part of the jury affecting the impartiality, regularity or purity of their verdict.

The judgment and final order appealed from must be affirmed, with costs to the respondents.

Van Wyck and McCarthy, JJ., concur.


text:
    David S. Paige, App’lt, v. Nathan A. Chedsey et al., Resp’ts.

      (City Court of New York, General Term,

      Filed December 7, 1892.)

    1. Verdict—Presumptions.
    The presumption is that a jury, in the proper'discharge of its duty, followed the instruction of the court, especially where the verdict is for the identical amount named in the charge.
    3 Same—Jurors cannot be heard to impeach.
    Jurors cannot be heard by affidavits or otherwise to impeach their verdict.
    Appeal from an order made at special term, on September 27, 1892, denying a motion made on the part of the plaintiff. That the court take such proceedings as in its discretion it may deem advisable, to inquire into the matter in question, and to set aside the verdict herein, and direct a new trial,” and for other relief.

      Louis J. Grant, for app’lt; Henry M. Norton, for resp’ts.
   McGown, J.

The trial in above action was had at a trial term, held in January, 1892, there being but two issues before the jury. . !

. First. Was the plaintiff entitled to recover the sum of $475, the amount claimed ?

Second. Was there the special agreement between the parties as to the ejectment suit following the action for the award as set up m the counterclaim?

The trial resulted in a verdict for defendants in the sum of .$5,639.54, the amount set up in defendant’s answer as a counterclaim, the sum admitted by the plaintiff’s attorney upon the trial to be the value of the services claimed by defendants, in case the jury found that the defendants were entitled to recover upon such counterclaim.

The jury, by their verdict, disallowed plaintiff’s claim, finding that the defendants were not indebted to the plaintiff in the sum of $475, as claimed in plaintiff’s complaint.

Upon the trial, the court, among other questions left by it to the jury, charged, at the request of plaintiff’s attorney, as follows :

Third. Before the jury can find a verdict for the defendants, they must find that the plaintiff agreed on November 11, 1886, to pay them a proportionate sum in the ejectment suit, namely, $5,639.54. _ ,

_ , The attorney for the plaintiff, in his moving affidavit, claims that the jury did not consider at all the directions of the trial justice, above cited.

The presumption is that the jury, in its proper discharge of its duty, followed the instruction of the court, and it is clear that it followed such instructions from the fact that it rendered its verdict (after disallowing plaintiff’s claim) for the identical amount named by the trial justice in his charge, and thus found that the plaintiff made the agreement referred to in the charge.

The affidavits of the jurors attached to plaintiff’s moving papers were evidently disregarded by the justice before whom the motion was made, and properly so, as the principle is well established that jurors cannot be heard by affidavits or otherwise to impeach their verdict. See Clum v. Smith, 5 Hill, 560 ; Williams v. Montgomery, 60 N. Y., 648.

Order appealed from must be affirmed, with costs to the respondents.

Van Wyck and McCarthy, JJ., concur.


text:
    George O. Walbridge et al., Resp’ts, v. James F. Graham, App’lt.

      (City Court of New York, General Term,

      Filed December 7, 1892.)

    Verdict—Weight of evidence.
    Where the witnesses on the trial consisted of the parties and one other witness on each side, and the defendant did not move for a non-suit or verdict, and took no exception to the charge, a verdict in favor of plaintiff will not he disturbed on the ground that it is against the weight of evidence.
    Appeal from judgment in favor of plaintiffs, entered upon a verdict.

      Brooke & Brooke, for app'lt; A. Gruber, for resp’ts.
   McCarthy, J.

This action was brought for goods, wares and merchandise, sold and delivered to the defendant on and between April 21, 1891, and October 31, 1891, of the value of §1,539.33, on account of which was paid the sum of §1,300, leaving due and owing to plaintiff from defendant the sum of $239.33, with interest from October 31, 1891.

The defendant, by his answer, admits as follows, to wit:

That on and between the 21st day of April, 1891, and October 31, 1891, the plaintiffs performed certain work and labor, and supplied certain material, but denies that the same was worth $1,539.33, or that that amount was agreed upon between the parties, and denies that any sums whatsoever are due on account of such goods and services, and the defendant, further answering, avers substantially to the effect that the work, services and materials furnished by the said plaintiffs were inferior to that agreed upon and contracted for.

The plaintiffs, at the trial, produced two witnesses, George O. Walbridge, one of the plaintiffs, and Patrick Flynn, an employee of the plaintiffs, and the witnesses produced for the defense were the defendant and Frank A. Kirtland. Their testimony constitutes all the evidence in the case.

The kind of goods sold to the defendant was fireplace gratings and seats, mantels, tiling and wainscoting, etc. This the plaintiffs contracted to place in in a thoroughly workmanlike and proper manner, and to furnish proper and suitable materials, and whether or not such contract was substantially complied with was the only issue presented at the trial.

This case involved a question of fact, and was fairly submitted to the jury^ who rendered their verdict for the sum of $246.50.

After this verdict, the defendant’s counsel moved for a new trial, on the ground that the same was against the weight of evidence, and upon all other grounds specified in § 999 of the Code of Civil Procedure, which was denied, and exception taken.

Upon the trial, the defendant did not move the court for a non-suit, or ask the court to direct a verdict for the defendant.

No exceptions were taken to the judge’s charge.

We find no errors committed on the trial, and the judgment' should be affirmed, with costs.

Van Wyck and McGown, JJ., concur.


author: Ehrlich, Ch. J.

text:
    The Henry Huber Co., Resp’t, v. Henry W. McAllester, App’lt.

      (City Court of New York, General Term,

      Filed December 22, 1892.)

    Pleading—Sham answeb.
    An answer may be stricken out as sham where it is apparent that the object was merely to create delay, annoy the plaintiff or trifle with the court.
    Appeal from order striking out defendant’s answer as shown.

      D. S. Decker, for app’lt; Langbein Bros. & Langbein, for resp’t.
   Ehrlich, Ch. J.

The proofs on the part of the plaintiff clearly show that the defendant never supposed he had any defense to the action.

He practically acknowledged the debt in a letter written after suit was threatened, and promised to make no trouble, but confess the debt. .

The defendant’s affidavit, in answer to the motion, fails to point ■out any defense.

He ought, under the circumstances, to have disclosed something meritorious in answer to the motion for judgmént.

Though courts seldom grant motions to strike out sham defenses, the power exists, Code, § 538, and may be exercised where it is apparent that the object of the plea was merely to ■create delay, annoy the plaintiff, or trifle with the court. Hadden v. Silk M. Co., 1 Daly, 388. While such power exists, it must be sparingly exercised; it was not abused in this instance, and the ■order appealed from must be affirmed, with costs.

Newbueger, J., concurs.


author: Fitzsimons, J. Ehrlich, Ch. J.

text:
    William Gauld, Resp’t, v. Julius Lipman et al., App’lts.

      (City Court of New York, General Term,

      Filed December 22, 1892.)

    Honey had and beceived—Equitable assignment oe eund.
    Defendants became obligated to advance moneys in instalments to one H., who gave plaintiff orders on them, which they agreed to pay out of certain instalments, but subsequently refused to pay on demand being made. Held, that if the amount was due at the time under the builder’s loan contract the orders amounted to an equitable assignment of the fund to that extent, and an aclion for money had and received would lie therefor.
    (Ehrlich, Oh. J., dissents.)
    Appeal from judgment in favor of plaintiff entered .upon verdict.

      C. E. L. Jelliffe and George W McAdam, for app’lts; Jacob Fromme, for resp’t.
   Fitzsimons, J.

The appellants were obligated to advance to one Hamilton, who was building houses, a sum of money payable in instalments when said buildings reached certain stages in the course of their erection.

Hamilton gave plaintiff two orders, each one dated 29th September, 1891, directed to defendants to pay him $1,000; these orders they agreed to pay as follows: One for $500 when the ■eleventh payment became payable under a certain building loan contract, and the other one for $500 when the last payment under ■said contract was due. On September 19, 1892, plaintiff demanded payment of said $1,000 from defendants, which was refused.

This action was then commenced, which resulted in a verdict dor plaintiff by direction of the court for $1,000, both parties having moved for a verdict.

If, on September 19, 1892, when the demand for said $1,000 was made, defendants owed that amount under their builders’ loan ■contract to Hamilton, then the orders given by him to plaintiff •operated as an equitable assignment of his claim against defendants to that extent. Lawrence v. Fox, 20 N. Y., 268. There was sufficient evidence to justify the trial justice in deciding that such a sum was due Hamilton at that time, and we are not inclined to ■disturb that finding; that being so, this action was properly brought.

An action for money had and received may be brought where a person holds in his hands money to which another is equitably ■entitled.

This form of action is the one adopted by common law courts to enforce an equitable obligation.

The scope of this remedy has been gradually extended to embrace many cases originally cognizable only in a court of equity.

Wherever one person has in his hands money which he cannot •conscientiously retain from another, the latter may recover in this form of action. Roberts v. Ely, 113 N. Y., 128-131; 22 St. Rep., 185.

The motion made by both sides for a verdict entitled the trial justice to direct a verdict as he did.

No error was committed, and the judgment must be affirmed, with costs.

Newburg-er, J., concurs.

Ehrlich, Ch. J.

(dissenting.)—The action for money had and received is equitable in its nature, and maintainable wherever the plaintiff is ex aequo et bona entitled to the money claimed, Chapman v. Forbes, 123 N.Y., 532 ; 34 St. Rep., 351; yet it is founded on the theory that the defendant has received money which, of right, belongs to the plaintiff.

There is no evidence that the defendants ever received any moneys, to or for the use of the plaintiff, to which these principles can be applied.

I gather from the proofs, that the defendants made a building loan contract with one Hamilton, by which they were to advance him money as certain buildings in course of erection progressed, and the orders drawn by Hamilton on the defendants, were accepted by them payable when the eleventh payment became due under the loan contract.

The complaint being for money had and received, omitted all allegations touching the progress of the buildings or that the eleventh advance had become due, so that the defendants could not take issue in respect to these material matters.

To recover, the plaintiff was obliged to prove facts not alleged, and while this may be done in the action where a defendant receives money which equitably belongs to a plaintiff, I do not think the rule can be extended to a case where a defendant never received money to and for the use of another, but merely agreed, as in this ease, to advance certain money of his own.

The defendants objected all the way through the case to the proofs offered under the complaint, insisting that they must conform thereto, and that as the allegation did not conform to the proofs, they were not admissible.

The objection was in each instance overruled, as the action was not technically one for money had and received.

I think the exceptions to the admission of the evidence well taken, and that the action should have been on the transaction, alleging it in the manner in which it was required to be proved.

This conforms to the rule laid down in Riggs v. Chapin, 27 St. Rep., 268, as well as in the recent case of Shrimpton v. Dworsky, decided by the common pleas, general term, 49 St. ■ Rep., 129.

For these reasons, the judgment appealed from should be reversed, and a new trial ordered, with costs to the appellants to abide the event.

Judgment affirmed, with costs.


author: Ehrlich, Ch. J. Fitzsimons, J.

text:
    William F. Howe et al., Resp’ts, v. Isabella Schweinburg, Adm’rx, App’lt

      (City Court of New York,, General Term,

      Filed December 22, 1892.)

    Trial—Direction oe verdict—Witness.
    In an action to recover a balance claimed to be due under an alleged contract by defendant’s intestate to pay for legal services, the testimony of plaintiffs’ clerk as to the contract was full, clear, positive and uncontra-

      dieted. Held, that it was not necessary that his testimony should be submitted to the jury, and that the court properly directed a verdict.
    (FiTzsnKms, J., dissents.)
    Appeal from judgment in favor of plaintiffs, entered on verdict directed by the court.

      Abram Kling, for app’lt; David Leventritt, for resp’t.
   Ehrlich, Ch. J.

The plaintiffs declared upon and proved a special contract, by which the intestate, prior to his death, agreed to pay the plaintiffs a specified sum of money, as a fee, if they succeeded in accomplishing certain results, which they ultimately brought about after the expenditure of time and labor.

The plaintiffs received part of the fee, and the trial judge directed a verdict in favor of the plaintiffs for the balance.

The evidence of Moss, the plaintiff’s clerk, as to the contract, relied upon, is full, positive, clear and uncontradicted, and the witness stood unimpeached.

Within the rule, therefore, that where an unimpeached witness •gives testimony uncontradicted, either by other witnesses or by •circumstances, and, moreover, natural, plausible and probable, such testimony is conclusive, must be accepted by the court, and need not be submitted to the jury. Kelly v. Borroughs, 102 N. Y., 95; 1 St. Rep., 161; Lomer v. Meeker, 25 N. Y, 361; Plyer v. German Am. Insurance Co., 121 id., 692; 31 St. Rep, 836.

There is no merit in the exceptions,, and no error requiring a .new trial.

It follows that the judgment must be affirmed, with costs. »

Hewburger, J., concurs.

Fitzsimons, J.

(dissenting).—The witness Moss, who testified as to the contract between plaintiffs and defendant’s intestate, upon which this action is based, sustains toward plaintiffs an extremely close, intimate, trusted and confidential relation, such as partners usually occupy towards one another; so much do they confide in him, that they permitted him to argue the matter, for which the fee in suit was promised, before the governor of this state, and upon the success of his effort depended the plaintiffs' right to said fee, amounting to $1,000, no small matter. He is an intelligent, capable, faithful, valuable and valued assistant, earning $4,000 a year, and as such, takes such an interest in the plaintiffs’ law business as to be practically interested therein and be identified therewith so deeply and intimately as to bring him within two classes of witnesses where testimony must be submitted to a jury, even though uncontradicted, because of their bias and interest. Cleveland v. Nellis Co., 45 St. Rep., 288.

I think that the trial justice should have submitted plaintiffs’ testimony to the jury for their verdict, and that it was error for him to direct a verdict thereon in their favor.

Judgment should be reversed and a new trial ordered.

Judgment affirmed, with costs.


author: Fitzsimons, J.

text:
    D. Edgar Codding et al., Resp’ts, v. Samuel C. Scott et al., App’lts.

      (City Court of New York, General Term,

      Filed December 22, 1892.)

    Costs—Plaintiff entitled to but one bill of.
    The fact that the defendants appear by different attorneys and serve separate answers does not authorize the plaintiff to tax more than one bill of costs.
    Appeal from order severing the action and granting two bills of costs to plaintiffs.

      Douglas & Minton, for resp’ts; Leonard S. Wheeler, for app’lt, Howard; George C. Comstock, for app’lt, Scott.
   Fitzsimons, J.

This action is based upon an undertaking given to obtain a warrant of attachment.

The defendants were the sureties, they appeared by different attorneys, filed separate answers, made motions separately, and, finally, made separate offers of judgment, which were accepted by plaintiffs.

Plaintiffs then obtained an order severing the action, and granting two bills of costs.

From said orders this appeal is taken.

The plaintiffs had the right to tax only one bill of costs. The fact that defendants appeared by different attorneys and served separate answers does not alter this rule. 16 St. Eep., 904.

The same rule does not apply to parties defendant. The Code, in certain cases, authorizes the taxation of more than one bill of costs against parties plaintiff in favor of parties defendant.

The orders appealed from are reversed, without costs.

For our power to reverse said orders without costs, see 26 Hun, 518.

Ehrlich, Ch. J., concurs.


author: Earl, J.

text:
    The People, Resp’ts, v. William Henry Parker, App’lt

      (Court of Appeals,

      Filed January 17, 1892.)

    1. Homicide—Evidence.
    The prosecution on a trial of defendant for murder proved that during the affray one K., using the same pistol with which defendant fired the fatal shot, shot at and wounded one H. It was not objected to on the trial. Meld, that the evidence was of no importance, could not have been harmful to the defendant, and was competent as one of the circumstances attending the homicide.
    2. Same—Credibility of witness.
    Defendant’s counsel, sworn as a witness on his behalf, on cross-examinatian was- asked “ whether he had anything at stake in the trial,” and answered that he had wagered ten dollars that he would acquit defendant. Meld, that it was competent to show the interest of witness in the result of the trial and as bearing on his credibility.
    3. Jury—Code Crim. Pro. , § 427.
    After the jury had been brought into court and instructed by the judge, they again sent word to him that they desired further instructions, and he informed them that he could not give them further instructions as defendant’s counsel was absent. Meld, that this was not a violation of Code Crim. Pro., § 427.

      Appeal from judgment of the Miagara oyer and terminer, convicting defendant of murder in the first degree.

      A. A. Mosell, for app’lt; P. F. King, dist. atty., for resp’ts.
   Earl, J.

The defendant was convicted of the crime of murder in the first degree in killing John Eitslco at Miagara Falls, in March last. The crime was committed while the defendant and two companions, Charles Kelley and William Chambers, were making an assault upon a dwelling occupied by Eitslco and other Poles. There was some conflict in the evidence as to the circumstances of the homicide. But we think the proof is very clear and. satisfactory that the fatal shot was fired by the defendant. The prosecution proved that during the affray Kelley, using; the same pistol that killed Eitslco, shot at and wounded Anthony Hoy, and the counsel for defendant now calls our attention to this* evidence, and claims that it was incompetent. It was not objected! to. Kelley and the defendant seemed to be acting in concert, and! the assault by Kelley upon Hoy was during the same affray in which Eitslco was killed. The evidence was of no importance and could not have been harmful to the defendant, and it was competent as one of the circumstances attending the homicide.

The prosecution put in evidence certain incriminating letters written by the defendant in the prison where he was confined. It is claimed' that they were improperly admitted in evidence, because it was not sufficiently shown that they were in the handwriting of the defendant. We think that the evidence that the defendant wrote and sent the letters was sufficient for submission to the jury.

The defendant’s counsel was sworn as a witness on his behalf and gave evidence at the trial. On his cross-examination, he was asked “ whether he had anything at stake in the trial,” and he answered that he had wagered ten dollars that he would acquit the defendant. This cross-examination was not objected' to. But the evidence was competent to show the interest of the witness in the result of the trial, and as bearing upon his credibility.

After the jury had retired to deliberate upon their verdict they were brought into court, and at the request of the defendant’s counsel were further instructed by the judge. They again retired, and, after some time, they sent word to the judge by an officer that they desired further instructions, and he informed them that he could not give them further instructions, as the defendant’s counsel was absent. It is claimed that in making this communication to the jury he violated § 427 of the Code of Criminal Procedure. A refusal to make a communication is obviously not a communication within the meaning of that section. It certainly was not error for the court, having fully charged the jury, and again further instructed them, to refuse to procure the attendance of the defendant’s counsel that he might give still further instructions to them. Whether he would give further instructions rested in his. discretion. The case was a simple one, and it does not appear that the defendant could have been harmed for the lack of further instructions to the jury.

We see no reason to doubt that the conviction of the defendant ■was right, and the judgment should be affirmed.

All concur.


author: Finch, J.

text:
    The United States Telegraph Co., App’lt, v. Hugh J. Grant, Sheriff, Resp't.

      (Court of Appeals,

      Filed January 17, 1893.)

    1. Taxes — Electric companies — Action to restrain collection — Laws 1884, oh. 534; 1885, ch. 499; and 1886, ch. 503.
    A telegraph company, assessed under the statute for its share of the expenses incurred in building a subway under the streets of the city and placing its wires there, has an adequate remedy at law and cannot maintain an action in equity to restrain the collection of the assessment. If the statutes are unconstitutional the state officer is liable for any action he takes thereunder in the way of seizing plaintiff’s property.
    3. Same.
    If the statutes are valid, and the officer disobeyed and varied from their terms, and did not lawfully and regularly make the assessment, the plaintiff had an ample and sufficient remedy by certiorari.

    Appeal from judgment of the supreme court, general term, first department, affirming judgment entered upon decision of the court at special term, dismissing complaint.

      Andrew Wesley Kent, for app’lt; S. W. Rosendale, att’y-gen., for resp’t.

       Affirming 45 St. Rep., 701.

   Finch, J.

This action was brought in equity to obtain an injunction restraining the sheriff of the city and county of Hew York from executing a warrant of collection issued by the comptroller of the state to enforce the payment of an assessment imposed upon the plaintiff under and by virtue of the act of 1884, chap. 584, and that of 1885, chap. 499, amended in 1886, chap. 503. The assessment was for the plaintiff’s share of the expenses incurred in building a subway under the streets of the city, and placing therein the electric wires which overhang such streets and imperil the safety of the people. The complaint has two aspects. .It alleges, first, that the statutes whose authority was invoked are unconstitutional; and second, that if not, their directions have been materially disregarded in the action taken under them, and the grounds, on which equitable relief is sought are that there is no adequate remedy at law, that a collection of the warrant, as threatened, will produce an irreparable injury to the plaintiff's business, and that the money, when collected and paid into the treasury of the state, cannot be recovered back. The complaint was dismissed, and that judgment has been affirmed by the general term.

I think the decision was right. There was an adequate remedy at law, and no sufficient ground for the demand of equitable relief. If the subway statutes are unconstitutional, they are null and void for every purpose, and simply do not exist as authority for any act, and the plaintiff may resist, in the ordinary way, any trespasser who interferes with its property. There is no such authority in a state officer as to protect him from the fate of a trespasser when he directs the seizure of the citizen’s property without the shadow of a legal right, and he is no more safe when he acts under a void statute than when he acts without any. Where he has an authority but deviates from it erroneously, and when acting judicially, he has protection, but he cannot act judicially where he has no authority to act at all. In Merritt v. Read, 5 Denio, 352, the liability of an officer issuing process absolutely void was explicitly and fully recognized, and in Bellinger v. Gray, 51 N. Y., 610, we held a supervisor liable as a trespasser for issuing an illegal and unauthorized tax warrant.

Hot only the comptroller issuing the void process, but the sheriff, also, -would have been liable for a seizure of the plaintiff's property. The protection given to the collecting officer is where his-process emanates from a competent judicial authority and is regular on its face. He is not bound to look beyond it and may assume its validity. But the comptroller has no general judicial authority so as to bring his warrant within the rule of Hallock v. Dominy, 69 N. Y., 239, where the officer was protected under-process regular on its face, although the law under which it was issued was unconstitutional, because the magistrate had a' general judicial authority. Here the warrant was void on its face, if' plaintiff’s theory is correct. It recites, in terms, the authority upon which it was founded, as being the act in question, and the comptroller had no general judicial power under which to pronounce it constitutional. Ho law made him the judge of that question. In Patrick v. Solinger, 9 Daly, 151, the rule was correctly stated, that when it appears on the face of the process that the court or officer issuing it had not jurisdiction of the subject-matter of the suit, and of the person of the party, it is void, not only as against the court or magistrate and party suing it out, but affords no protection to the officer.

In Woolsey v. Morris, 96 N. Y, 311, the officer was protected because some of his process was valid, and he could justify a mere levy under that. Here the process issued to the sheriff was void on its face, if the authority which it recited was merely an unconstitutional law, and where the process is so void it gives no protection to the officer. Van Rensselaer v. Witbeck, 7 N. Y, 517. Beyond that, if the plaintiff’s property should be sold on the warrant the purchaser would get no title unless he could show constitutional authority for the issue of the warrant, and the plaintiff by replevin or action of trespass could' retain his property or recover its value, and the action would bring up the precise question of the constitutionality of the acts assailed. Lennon v. Mayor, 55 N. Y., 361. There was thus a complete and adequate remedy at law. Hothing in the complaint or in the facts shows that the mere collection of the warrant would be an irreparable injury to the plaintiff’s business. To hold that would be to expose every execution to an injunction. Hor is it of any consequence if the state could not be sued for a restoration of the money collected. The cases in the federal circuit court, of which Woolsey v. Dodge, 6 McLean, 142, is an example, in which injunctions were issued to restrain the collection of a tax imposed by an unconstitutional law, went distinctly upon the ground that the levy would be an annually occurring grievance until the state law should be repealed, and involve a multitude of suits at law. Nothing of the kind exists here. The assessment is not a tax, nor is it annual, nor is there any collision between state and federal adjudication to complicate the situation. Assuming, therefore, what we are very far from admitting, People v. Squire, 107 N. Y., 593; 12 St. Rep., 832; 145 U. S., 175, that the acts assailed were unconstitutional and void, no case was made for equitable relief..

As it respects the second ground of the action, which Concedes the constitutional validity of the. statutes, but urges that the officer disobeyed and varied from their terms, and did not lawfully and regularly make the assessment, it is sufficient to say that the plaintifi had an ample and sufficient remedy by certiorari. Code, § 2140; Mayor, etc., v. Davenport, 92 N. Y., 604; D. & H. Canal Co. v. Atkins, 121 id., 246; 30 St. Rep., 928. It is no answer to urge that the allowance of the writ is discretionary. That discretion is not arbitrary, and it must be assumed - that the writ will always issue where there is a proper subject for review.

There was no sufficient ground for a suit in equity, and the complaint was properly dismissed.

The judgment should be affirmed, with costs.

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