author: Finch, J.

text:
    In the Matter of the Application of Charles S. Whitney et al., Relators, App’lts, for a Writ of Mandamus to George Kunkel et al., Supervisors of County of Kings, Resp’ts.

      (Court of Appeals,

      Filed June 5, 1894)

    1. Assembly districts—Division.
    The apportionment of a county into assembly districts should be based upon the citizen, and exclude the alien, population.
    2. Same.
    But an error, in this respect, does not necessarily require that the apportionment should be set aside, if no appreciable harm has resulted therefrom.
    Appeal from order of the general term of the supreme court in the second judicial department, made February 12,1894, which affirmed an order of special term denying a motion for a writ of mandamus.

    The relators applied for a mandamus directed to the board of supervisors of the county of Kings, requiring it to convene and divide said county into assembly districts, claiming that an apportionment heretofore made should be set aside on the ground that the population upon which it was based included aliens.
    The facts, so far as material, are stated in the opinion.

      Jesse Johnson, for app’lts; Almet F. Jenks, for resp’ts.

       Affirming, 59 St. Rep. 156.

   Finch, J.

It appears to be conceded on all sides that the apportionment of Kings county into assembly districts should have been based upon the citizen population and have excluded aliens. That is undoubtedly the correct rule, and the return admits that it was not observed. It does not necessarily follow, however, that the apportionment made should be set aside for that error. If no appreciable harm has resulted from adopting the wrong measure of population as a basis for the division made we ought not to grant a mandamus to compel a change, at least, under circumstances such as exist in the present case. An apportionment was first made in 1892. It was unequal and vicious on its face; a palpable violation of the constitutional provisions, and of a character subversive of all true principles of government, and which cannot be too severely condemned; but that apportionment was also based upon the population swollen by the inclusion of aliens. Mo objection was taken on that account. The question was not raised, and our order for a new apportionment consequently made no allusion to the subject and gave no direction about it, 138 N. Y., 96; 51 St. Rep. 690. The supervisor’s then proceeded to make a new apportionment, which, on the relation of Baird, we have just upheld. It is not a perfect one by any means. The relator claims that considerations of political advantage still infect the work done, and that the problem has been how much of partisan injustice this court would feel itself bound to bear. But the division has seemed to us a reasonable approach to equality, and under all the circumstances of the case a substantial obedience to the writ. Some discretion we are bound to concede to the apportioning board, and we have already determined in the Baird Case that such discretion has not been so abused or exceeded as to require a second judicial interference. Having once ordered a new apportionment with no complaint made as to the selected basis of population, and that order having been obeyed, we ought not now to intervene on the new ground asserted unless we can clearly see that the error established did, in fact, make the apportionment much more unequal than it appeared to be upon the basis adopted. In People ex rel. Carter v. Rice, 135 N. Y., 473; 47 St. Rep. 702, it was alleged as a ground of attack upon the senate districts that persons of color not taxed were included in the representative population, and we held that unless the class wrongly included were shown to be located in seriously different proportions in the different districts, the error was harmless and should not occupy the time of the court. We cannot presume a material disproportion in the distribution of aliens, and the proof given in this case tends to show that their distribution through the districts formed is in a proportion quite near to the citizen population, and varying so little from it that the same and an identical apportionment with that now before us might be made, based upon the citizen population alone, and we should feel bound to permit it to stand. And so we think that the error relied upon does not furnish a sufficient reason for setting aside the apportionment.

The order should be affirmed.

Order affirmed.

All concur.


source: Caselaw Access Project

author: O’Brien, J.

license: Public Domain

text:
    Marvin Lane, as Administrator, etc., Resp’t, v. The Town of Hancock, App’lt.

      (Court of Appeals,

      Filed June 5, 1894.)

    1. Towns—Liability for injury.
    Under chap. 700 of 1881, the town is liable for the negligence of the commissioner of highways only in the cases where he was liable himself before the statute was enacted.

      2. Same.
    To impose such liability, the proximate cause of the injury must be an omission on the part of the commissioner to use ordinary care, under all the circumstances, in the performance of his duties, viz. : such as a reasonable and prudent person would ordinarly have exercised under those circumstances.
    3. Same—Limit of duty.
    The limit of duty on the part of a town with regard to the condition of its highways falls far short of making them absolutely safe, under all circumstances, even for those who use them properly.
    Appeal from judgment of the general term of the third judicial department, entered upon an order made February 15, 1893, which affirmed a judgment in favor of plaintiff entered upon a verdict.
    The nature of the action and the facts, so far as material, are stated in the opinion.
    ■ Isaac H. Maynard, for app’lt; T. F. Bush, for resp’t.

      Reversing 51 St. Rep. 112.

   O’Brien, J.

The plaintiff was the husband and is the administrator of Sarah A. Lane, who was killed on the 28th of March, 1888, by an accident resulting, as is claimed, from a defect in one of the public highways of the town. It is claimed that the defendant is responsible for the damages resulting from the death, and this action was brought to enforce the liability. The plaintiff recovered a verdict for $1,000 upon which judgment was entered and it has been affirmed at the general term. By chapter 700 of the Laws of 1881, the primary responsibility for injuries to person or property resulting from defects in the highways was transferred from the commissioner of highways to the town. The negligence of the commissioner is still the basis of the liability, and the town is now liable for his neglect only in the cases where he was liable himself before the statute was enacted. He is still liable over to the town for any judgment recovered against it by reason of his negligence or want of care in the performance of the duties imposed upon him by the statute. So that now, as before, the inquiry is in regard to the conduct of the commissioner and the manner in which he has performed his duties. Actions to recover damages resulting from injuries caused by defects in the public highways are of comparatively modern origin. As late as the case of Garlinghouse v. Jacobs, 29 N. Y. 297, the whole subject of the liability of the commissioner in such cases was elaborately examined,- and it was held that he was not liable under any circumstances. Subsequently the court receded from this position in Robinson v. Chamberlain, 34 N. Y. 389, and in the case of Hover v. Barkhoof, 44 N. Y. 113, the liability of the commissioner for such injuries when resulting from his own negligence was asserted and established. Such actions are now quite common as indicated by the numerous cases to be found in recent reports. Ivory v. Town of Deerpark, 116 N. Y. 476; 27 St. Rep. 643; Maxim v. Town of Champion, 50 Hun, 88; 23 St. Rep. 949; 119 N. Y. 626; 28 St. Rep. 978 ; Bryant v. Town of Randolph, 133 N. Y. 70 ; 44 St. Rep. 85 ; Clapper v. Town of Waterford, 131 N. Y. 388; 43 St. Rep. 316; Glasier v. Town of Hebron, 131 N. Y. 447; 43 St. Rep. 319. While, in theory, the town is not liable except in cases where the commissioner was or would be liable himself, yet it cannot be doubted that the practical working of the statute has been to enable parties in some cases to recover verdicts against the town where none would have been rendered against the commissioner personally on the same facts. Although by the second section of the act the commissioner is made liable over to the town for any judgment that it has been compelled to pay in consequence of his misconduct or neglect, yet such actions are seldom if ever brought or if brought are not successful. In reviewing this judgment the liability of the commissioner as it existed before the statute, and as it now exists, when a recovery has been had against the town, must be held to be the true test. The judgment cannot stand unless the facts show or tend to show that the commissioner was guilty of such negligence in the performance of his official duty as would render him liable to the town for the judgment which has been recovered against it. Courts and juridical writers have often attempted to give a comprehensive definition of the term negligence as used in the law. But no definition has yet been given, and it is obvious that none can be given, accurate and comprehensive enough to apply to the varying facts and circumstances of every case. When applied to a commissioner of highways, and for all the purposes of this case it may be defined as the omission on his part to use ordinary care, under all circumstances, in the performance of the duty imposed upon him by law, which was the proximate cause of the accident resulting in the death of plaintiff’s intestate. Ordinary care in its application to this case denotes such care and conduct on the part of the commissioner as a reasonable and prudent person would ordinarily have exercised under the circumstances of the situation. Baltimore, etc., R. Co. v. Jones, 95 U. S. 439. In order to determine whether in this case- the commissioner was guilty of negligence or exercised such care, the whole situation and all the facts and circumstances must be kept in view. There were three commissioners and upwards of two hundred and thirty miles of road, about eighty miles of which was along dug ways and up steep ravines. There were one hundred and sixty-nine plank bridges and several hundred sluices. The road where the accident occurred passed through a mountainous wooded section, and is used mainly for drawing heavy loads of lumber and wood, and but two or three families live upon it for a distance of some five miles, The road had been built more than twenty years before under contract,- and accepted by the commissioners, and no claim is made that it was not properly constructed. It ran along the side of- a steep hill, with a perpendicular retaining wall from four to six feet high along the lower side, and a dugway bank rising above it at the upper side. A spring of water came out of the hill at the upper side a few rods above the point where the accident occurred, flowed down the hill and was conducted across the road near the foot of the incline diagonally, by means of a waterbar, and discharged over the lower bank and retaining wall. This bar had been constructed about eight years before, and it is not claimed that it was in any respect defective or unsuitable for the purpose for which it was made. On the lower line of the road and over the retaining wall, guards dr fenders, consisting of logs sixteen inches in diameter,-.were placed, leaving space enough for the discharge of the water that was conducted acros's the road by the bar to be discharged without accumulating on the bank ; but for a space of about twenty-five feet at the point of the accident the road had become filled up with earth, either by the working of the road or the action of water from the hill above, or from the waterbar, so that the surface was raised up to the top of the guard, or nearly so. This change in the surface had neutralized the utility of the logs for that space, at least to a great extent, as guards. The road at this point was from twelve to fifteen feet wide, and there was a slope from the upper to the lower side of about eighteen inches, the lower wagon track being about four feet from the log guards or fenders. The accident occurred at the foot of the hill, where' the road was comparatively level. For twenty-five feet above the bar the fall is but one foot five inches, or one foot for every eighteen ; and for sixty-eight below the bar the fall is only three feet, or about one in twenty-two. Twenty feet above the bar the rise is more rapid, being about one foot in seven and a half, for about ten rods. It was not claimed that the commissioners, or any of them, had any actual notice of the defects in the road, if there were any, but the proof tended to show-that the road was in this condition for about eight years before the accident, and the verdict was based upon the doctrine of constructive notice. Ice had formed upon the waterbar and upon the surface at the point where it was discharged over the bank caused by the freezing of the water from the spring. A short time before the accident there had been a very severe snow storm, which is familiarly known as the “ great blizzard ” of that year. On the day'of the accident the snow that had drifted into the road over the dugway was deep and soft from recent thawing, and the lower sleign track on the side of the road had gradually been worn or pushed down to within a few .inches of the point where the guards or logs had been placed. This was due to the action of persons driving loaded teams seeking to avoid the deep ruts cut into the snow by the use of lock chains or brakes upon the runners of the sleighs. On the day of the accident the deceased, with the" driver of the team, came down the hill to this point upon a load of logs loaded upon two bobs about sixteen feet long. There were three large logs, each about twenty inches in diameter, placed side by side and projecting about eighteen inches beyond the runner, and the upper runner of the hind bob was locked. The driver was sitting alone on the forward end of the logs and the deceased and her companion were seated upon the lower side. At the point where the bar crosses the road, being within a few inches of the bank, the natural slope of the road, the ice and snow upon the bar caused the rear bob to slide down to the edge of the bank, and the soft snow packed at that point gave way and the lower runner worked below the point where the log had been placed. The king bolt connecting the bobs gave way or come out and they became detached, the rear from the forward bobs, which remained in the road, the load was overturned, the driver and the other man jumped off and escaped injury, but the deceased, incumbered as she was by her clothing, was crushed under the load. I have thus attempted to state the facts and circumstances leading up to the death of the plaintiff’s intestate with some detail because they are important in .the determination of the question of law. There may be and probably are some shades of difference in the statements of witnesses, but they are not material. The facts stated are substantially tindisputed upon the record, and upon the argument there was no real controversy as to the facts established by the evidence. The learned counsel for the plaintiff rested his case upon the proposition that the absence of the log or guard at the place of the accident for the space of about twenty-five feet, due to the circumstances already stated, was the proximate cause of the death, and was evidence tending to prove negligence on' the part of the commissioners, which was properly submitted to the jury. The elements which enter into the question of negligence are generally of such a nature as to make it a question of fact Even where the general tacts are not in dispute, as here, but the inference to be drawn from them is not clear and certain, but doubtful, the case must be submitted to the jury. But in every case there is always a preliminary question for the court as to whether there is any evidence upon which a jury could properly find a verdict for the party producing it, and upon whom the burden of proof is imposed. If there is not the court must direct a nonsuit or a verdict as-the case may require. Pleasants v. Faut, 22 Wall. 116, 120; Linkauf et al. v. Lombard, 137 N. Y. 417; 51 St. Rep. 63; Hemmens v. Nelson, 138 N. Y. 517; 53 St. Rep. 94; Filer v. N. Y. C. R. R. Co., 49 N. Y. 47. So that the practical question in this case is whether the commissioners were guilty of negligence in not observing the fact that a log fender placed upon the edge of this mountain road, passing through the woods, had been removed or had decayed, or its utility destroyed by the accumulation of earth or dirt on the surface from the cause referred to, or by its sinking below the roadbed from any other cause. Could a jury reasonably find that such a defect in the road, for the time mentioned, without actual notice, was actionable negligence under all the circumstances of the case ? The town was divided into numerous road districts, over each of which an oves» seer was appointed under the law whose duty it was to keep 'the roads in repair. The country roads in this state are maintained: by local assessments upon the property owners in the district either in labor or money, and the direction of" the work is committed by the statute to the overseer. The commissioners h^ve, of course, supervisory charge, and while it maybe that the neglect of the overseer might not excuse them, yet, in determining the question of their negligence, the general system for the care of the highways contained in the statute must be considered. To keep all the roads in a large town under constant personal inspection is altogether impracticable, and necessarily the commissioners must place some reliance upon the care and vigilance of the local overseers in the several districts. Then the extent of the town, the character of the country, the climate and the danger of accidents from the elements must be considered. Giving due weight to all these elements entering into the problem can it fairly be, said in this case, conceding that the absence of the fender was the proximate cause of the accident, that the commissioners were guilty of such negligence as to render them personally liable be-' fore the statute and now liable over to the town for this judgment. If so it is difficult to imagine any case where an accident on a country highway occurs resulting in death or personal injury that they would not be equally liable, and this reasoning, carried to its necessary and logical result, must prevent any prudent man from accepting the office of commissioner of highways in any town of the state, unless at the peril of financial ruin. The judgment in this case implies a measure of duty and liability u pon commissioners of highways far beyond anything contemplated when the statute was passed, and beyond what it ought to be in reason or justice. These officers are a part of the system of town government in this state. Their compensation is small, in-some towns almost nominal. It was never intended that they should be obliged to devote their whole time to the care of the roads in the town, and if they did they would not be' able to prevent all accidents." Ho accident had ever occurred on this road before, and there was nothing to indicate tha,t such an accident as this would be likely to occur. There was such a combination of circumstances, all concurring at the time to produce it, that no reasonable man could impute negligence to the commissioners because they did not foresee it in the absent guard or fender on the edge of the road. It would Ipe exacting from a commissioner of highways such a degree of vigilance atid foresight as would be" impossible for the average man chosen - to perform the duties of that office reasonably to attain. Such an accident followed by such results is so rare and unlikely to happen that it would be unreasonable to impute negligence to any one simply because he failed to foresee and guard against it. The limit of duty on the part of the town with regard to the condition of its highways falls far short of making them absolutely safe, under all cii> cumstances, even for those who use them properly. Hubbell v. City of Yonkers, 104 N. Y. 434; 5 St. Rep. 730; Glasier v. Town of Hebron, 131 N. Y. 447 ; 43 St. Rep. 319; Monk v. Town of New Utrecht, 104 N. Y. 552 ; 6 St. Rep. 484; Clapper v. Town of Waterford, 131 N. Y. 382; 43 St. Rep. 316; Wilson v. Town of Granby, 47 Conn. 59.

The remarks of Judge Peckham in the case of Ilulbell v. City of Yonkers, supra, apply with great force to the facts disclosed by this record. “ That which never' happened before, and which in its character is such as not to naturally occur to prudent men to guard against its happening at all, cannot, when in the course of years, it does happen, furnish good ground for a charge of negligence, in not foreseeing its possible happening and guarding against that remote contingency.

It is not an unfair test of liability in this "case to keep always in view the possible liability of the commissioners to the town in case it is obliged to pay the judgment. Are the commissioners who were elected a few weeks before this accident liable, or are their predecessors during the time that the road at the point of the accident was in the condition described, or are they all liable? Hone of them had any actual notice of the defect, but the verdict of the jury indicates that all of them should have known that the log was absent. Although the jury have found that the town was liable solely through the negligence of the commissioners, it is not certain that even the same jury upon the same facts, in an action by the town against the commissioners, to reimburse itself for the loss occasioned by such negligence, would reach the same conclusion. It is obvious that unless the provision’of the statute making the commissioner liable over to the town for his negligence in such cases is to remain a dead letter, as it probably has, one view of duty may be taken in actions by injured parties against the town, and quite a different view in actions, by the town against the commissioners, whereas, in both cases the conduct of the commissioners should be measured by the same standard. We think that this is a case where the town could never be able to recover against the commissioners upon the facts disclosed by the record and that a recovery ought not to be had, and, for the same reason, no recovery should be had by the plaintiff against the town. The |)roof was not sufficient to charge the commissioners with personal negligence in the performance of the duties imposed upon them by law, and the motion for a nonsuit at the close of the case should have been granted. The verdict was extremely moderate in amount. Indeed it is out of all proportion to the unfortunate results of the accident if the defendant was liable at all. If no other interests were to be affected save that of the parties to the action, the verdict would have no significance beyond an expres: sion of sympathy for the family of the deceased, in which, as individuals, -we all share. The case, however, involves a principle of great public importance, far-reaching in its operation and effect, which must be determined by the application of -settled rules of law.

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

All concur, except Bartlett, J., not voting.

Judgment reversed.


author: Van Brunt, P. J.

text:
    William H. Fletcher et al., as Executors, etc., App’lts, v. Massachusetts Benefit Life Association, Resp't.

      (Supreme Court, General Term, First Department,

      Filed May, 1894.)

    Pleadings—Demurrer—Stipulation.
    A stipulation that the complaint is in proper form, bars the defendant from demurring upon the ground that the complaint does not state facts sufficient to constitute a cause of action.
    Motion for a new trial by the plaintiff upon exceptions ordered to be heard in the first instance at the general term.

      Lewis Marshall, for motion; J. K. Heyward, opposed.
   Van Brunt, P. J.

The question involved upon this motion depends upon the construction of the stipulation entered into between the parties during the pende'ncy of this action and before its trial. This action was brought by the executors of one George S. Stringfield to recover upon a policy of insurance issued by the defendant upon the life of said Stringfield. And the question which is now urged is that the cause of action upon the policy of insurance does not residé in the plaintiffs. By the policy which forms the basis of the action, the defendant agreed to pay to Annie L. Stringfield, the wife of the assured, if living—if not, to the heirs of the insured—in sixty days after due proof of death. The contract of insurance also provided that no suit should be brought thereon unless such suit should be commenced within one year and sixty days from the termination of the life of the party to whom it was issued ; it being an expressed condition thereof that all rights of action thereunder were limited to said period of One year and sixty days. ,

The defendant in this action was a Massachusetts corporation, and it is claimed upon the part of the plaintiffs that the contract in question is a Massachusetts contract, and that, under the Massachusetts law, actions of this character must be brought by the executors of the assured. It is urged upon the part of the defense, however, that the rules governing the bringing of action in tbi¿ State must control, and that such action must be brought by the parties in interest, namely, the heirs at law of the assured. After the action was at issue, the parties entered into a stipulation by which,the defendant made certain admissions to be used upon the trial, provided that the trial did not take place prior to the first of January, 1894—a date at1 which . the right to bring an)' action upon the policy would have expired under the limitation above mentioned—and, among other things, admitted that the complaint herein is in proper form.

Upon the trial this stipulation was admitted in evidence, and the other facts necessary to a recovery were proved. Whereupon the complaint was dismissed upon the ground that a recovery could not be had by the plaintiff. And upon this appeal it is urged that, although in Massachusetts an action might be brought by executors upon a contract of the description above mentioned, such action cannot be maintained in this State. The plaintiffs, although not admitting the truth of this contention, yet evidently feeling its force, contend that such an objection was waived by the stipulation which was entered into as a condition for the postponement of the trial until after the 1st of January, 1894, that the complaint was in proper form. The object of postponing the trial until after the 1st of January, 1894, is apparent, and that is that no other action could be brought against the defendant upon this policy; and if it was paid to the plaintiffs, although they, perhaps, were not the real parties in interest, no other person could come upon them for repayment, the limitation of the time for bringing an action having expired: It is also perfectly clear that the plaintiffs, in procuring the stipulation that the complaint vvas in proper form and consenting to postpone the trial, supposed that they were eliminating the question as to the proper parties being before the court.

What does the phrase, “The complaint is in proper form,” mean? Can it mean anything except that the complaint states a cause of action in the plaintiffs against the defendant—in other words, is not demurrable? It appears upon the face of the complaint that this action is brought on this policy by the plaintiffs as the executors of the assured.. The contract between the insurance company and Stringfield is made part of the complaint, and, therefore, the objection as to the action not being brought by the proper parties appears upon the face of the complaint. How, a party having stipulated that the complaint is in proper form, can he be allowed to demur upon the ground that the complaint does not state facts sufficient to constitute a cause of action ? If so, what does the stipulation mean? Evidently nothing. The parties supposed that they were stipulating in respect to something, undoubtedly, when they so entered into it. It seems to us that the only construction to be placed upon this stipulation is that the complaint was in proper form, intended to admit that a cause of action in favor of the plaintiffs was set out therein. And it did that as a condition of being relieved from any embarrassment by reason of other suits being brought; there being some question as to who was the party wdio might maintain the same.

We think, therefore, that, under these circumstances, the court erred in dismissing the complaint upon the ground that the plaintiffs had no cause of action.

The exceptions should be sustained, and a new trial ordered, with costs to the plaintiffs to abide the event.

Folleto and Parker, J. J., concur.


text:
    Charles E. Foster et al., Resp’ts, v. John H. Bookwalter, App’lt.

      (Supreme Court, General Term, First Department,

      Filed May, 1894.)

    1. Principal and agent—Proof.
    Agency cannot be proved by the declarations of an agent.
    3. Attorney and client—Continuance of retainer.
    Where a retainer has been once given and apparently continued, charges for services under such retainer may be made.

      3. Services—Bill rendered—Enlarging amount.
    Though a party may not he bound b)r A bill rendered in jespect to the amount of the charges therein when he brings suit, yet, unless it is plainly apparent that the services were worth the sum sued for in excess of that charged in the bill, it shows a discreditable motive in enlarging the amount for the purpose of the suit. “
    4. Appeal—Evidence.
    Judgment, in this case, was reversed as against the weight of- evidence.
    Appeal from judgment on report of referee.

      George Hoadly, for app’lt; F. W. Wilson, for resp’ta
   Van Brunt, P. J.

This action was brought by the plaintiffs, who were solicitors in patent cases and attorneys and counselors-at law, residing and doing business in the city of Washington, D. •0., to recover from the defendant the sum of $8,555.44 and interest, the balance alleged to be due for certain professional services which they alleged that they had rendered to the defendant relative to applications for and the obtaining of certain patents and matters relating thereto.

Annexed to the complaint was a bill of particulars setting out the services rendered and the charges made therefore in detail.

The answer of the defendant admitted the performance of certain of the professional services mentioned in the bill of particulars annexed to the complaint; and in respect to these he denied, upon information and belief, their value. The answer further alleged payment for said services and denied that any other of the-services or disbursements described in the bill of particulars annexed to the complaint were rendered to or paid for him or at his request, and also denied all liability therefor.

. An amended and supplemental answer was served by the de-' fendant, in which he repeated the allegations of his original answer, and alleged certain payments, which were in full of all services up to certain dates. The answer further admitted the rendition of certain services, and then pleaded a tender and a pay-' ment of the same into court.

The case coming up for trial at a circuit cotirt, for the city and county of New York, a motion was made upon the pleadings that the same be referred, and a reference was ordered and a trial had before the referee, who reported in favor of the plaintiffs for the sum of $7,885.44 with, interest. A judgment having been entered upon said report from such judgment the present appeal is taken.

The only question which is presented upon this appeal is whether the conclusion at which the referee arrived is against the weight of evidence ? It is admitted that the tender made upon the part of the defendant was insufficient to liquidate all the claims which the plaintiffs had against the defendant; and that the referee was justified in finding that a considerable amount was due from the defendant for professional services rendered by them to him. But it is claimed upon this appeal that "there was no evidence justifying the greater part of the recovery allowed, such services having been rendered to a company who had become the assignee of the defendant in respect to the patents which formed the subject matter of the original retainer, of the plaintiffs by the defendant .

A record has been presented upon this appeal of over thirty-five hundred folios, and so-called briefs have been submitted, upon the part of the appellant, one hundred and nineteen pages in length, and upon the part of the respondent fifty-seven pages in length. In view of this plethoric condition of the record, it is manifest that within the limits of this opinion mere general statements only can be indulged in, tending to disclose the reasons which bring the court to the conclusion at" which it has arrived. There is, comparatively speaking, very little oral testimony contained in this record, the most of it being made up of correspondence between the defendant and the plaintiffs and the defendant’s alleged agents ; and ,the dignity of the contentions of the appellant almost necessarily depends upon the conclusions arrived at from a reading of this correspondence.

It is to be observed that the referee has without doubt based his judgment very largely upon the fact that he considered that the evidence established that W. E. Lown was the agent of and authorized to speak for the defendant, In this, we think, the referee manifestly erred. There is no evidence in this case tending to show that Lown was the agent of the defendant except the assumptions of the plaintiffs. It is undoubtedly true that the plaintiffs sent communications to Lown which they expected the defendant to see. But it is also equally true that in none 'of the correspondence, or the assertions of the" defendant as specifically testified to, is there any recognition upon the part of the defendant of the right-of Lown to bind him in any particular. Lown swears that he was not the agent of Bookwalter, the defendant; and it requires something more than the written assertions of Lown, if it is claimed that he made them, to furnish evidence that he, Lown, was the agent of the defendant. Agency cannot be proved by the declarations of an agent. And it is probable that this erroneous view of the relations which the evidence established as existing between Lown and the defendant had great weight with the referee in bringing him to the conclusion at which he arrived. And we might very well say, without considering any other question in the case, that this error having entered into the judgment must necessarily be reversed.

It may, perhaps, be not without profit that we should consider a little more in detail a few of the peculiar features of this case. It appears, as has been above stated, that the plaintiffs were co-partners, doing business as solicitors in patent cases and counselors at law in the city of Washington, and had prior to May, 1888, been employed by the defendant to secure patents for various inventors, the services being charged to him personally and paid by him; and that the transactions out of which this action grew commenced with a contract dated the 19th of March, 1888, but executed prior to that time, between the defendant Bookwalter and Lown and Morris, whereby they undertook to secure and develop certain inventions of which the defendant Bookwalter and one Robert were the owners, an interest in the inventions owned by Robert having been assigned by him to a French corporation. This agreement also contained a provision that they were to organize a corporation, for the purposes above mentioned and for carrying on the business of manufacturing iron and steel under these patents. And Bookwalter agreed, “without express consideration other than the several provisions of this contract, to convey and assign to said company, to be incorporated as aforesaid, the letters patent of the United States for his discoveries and inventions as aforesaid, together with all improvements he may hereafter make or discover.”

Following this agreement, on the 12th of March, 1888, these three gentlemen, upon the one part, made a contract with Robert and the French corporation, upon the other part, by which the latter, upon certain conditions, granted to the former the right to certain improvements for the United States in the art of making and manufacturing iron, steel, and castings, and agreed to convey to a person, to be nominated by the defendant, letters patent to be issued in the United States upon them; and the defendant, Bookwalter, agreed to grant to Robert and the French corporation the exclusive right to use in Continental Europe certain improvements in the art of making iron, steel, and castings patented by him.

On the 26th of May, 1888, the plaintiffs received a letter from Thompson & Boult, of London, with drawings, for an application for a patent in the name of Robert, and also for an .application in the names of Walrand & Delattre, with a request to get the applications on file with the least possible delay, and that Mr. Bookwalter, upon his return to the United States, would call and settle with .them directly for their fees. These instructions were confirmed by the defendant in a letter to the plaintiffs,, dated New York, June 21st, 1888, and the plaintiffs proceeded to carry them out, and rendered services in connection therewith. On the 6th of December, 1889, in pursuance of the agreement of the 12th of March, 1888, above referred to, Robert and the French corporation conveyed to the defendant Bookwalter, who -was his own nominee, the interest in Robert’s inventions described in the foregoing contract. On the 18th of December, 1888, in pursuance of the provisions of the contract of March 19th, 1888, the Bookwalter Steel and Iron Company was organized, of which the plaintiff bad notice. During all this period of time the plaintiffs had been rendering services to Bookwalter in reference to these applications for patents. On the 22d of March, 1889, Norris assigned one-tenth of his interest in the» enterprise to the plaintiffs ; and on the 9th of Aprjl all of those interested in these patents and inventions, to wit: the defendant, Bookwalter, Down, Norris, and the plaintiffs, Foster & Freeman, made a proposition to convey to the Bookwalter Steel and Iron Company their interests in the patents and inventions under the above mentioned contract in consideration of the issue of certain stock' of the corporation. This proposition was accepted by the corporation in April, 1889, and on the 7th of May the stock was issued in bulk to the associates, jointly in payment of the ti'ansfers. On the 22d of June Bookwalter transferred to the company, by a formal deed of assignment, the letters patent in the United States issued upon the Walrand and Delattre inventions, of which Robert had been the assignee, and also the patents issued in the United States for Robert’s invention and his own; and on the 25th of June the stock was reissued in separate lots, according to the interests of the parties. It further appears from the evidence that Bookwalter and Lown were directors of the corporation, Bookwalter attending to tlxe patents and Lown to the office business.

It is to be observed that the assignment to the Bookwalter Ii’on and Steel Company simply covered the American patents, the foreign patents still remaining the property of the defendant Bookwalter; and it is conceded upon the part of the defendant that all services rendered by the plaintiffs in respect to those patents were properly chargeable to him. It also appeal’s from the evidence that during all this time the defendant was corresponding with the plaintiffs in respect to the question of these patents, urging dilligence on their part and substantially calling the business his own, and as late as the 4th of September, 1889, urging them to “lay aside at once all other of my matters,” and proceed with the one referred to in the letter. Prior to the 7th of October, 1889, and to the assignment of the patents to the corporation by Bookwalter, certain interferences had been declared by the Patent Office in respect to the Robert patent, and services had been rendered by the plaintiffs in relation thereto. On said last mentioned day the plaintiffs wrote a letter to W. E. Lown, inclosing a bill against Bookwalter for all these services which had been rendered up to the date of the bill in respect to those patents and intei-ferences, in which they stated; “ We presume that the charges for the interferences should be made against the company, but we have had no authority to do so Please advise us whether the company assumes the charges for the application to be made hereafter was well as for the interference business.” On the 9th of October, Bookwalter wrote to the plaintiffs: “ Mr. Lown has shown me the account you have rendered the B. S. & I. Compaxxy. How I ñnd you have my personal account mixed up with it; and I desire to keep things separate. You will please make out new accounts: one confined wholly to items concerning the B. S. & I. Company, and the other to those appertaining to my matters. In my personal account there should be included all expenses of applications for my patents in foreign countries, the chum device, the button hook, cost of- examining R. R. tie, &c. If you will send to me pei’sonally my account so made out I will remit amount due.” On the 11th of October, 1889, the plaintiffs wrote to Lown, stating among other things; “We also enclose Bookwalter’s account separated as required. As regards future charges, we are willing to make them against the company, but we must have instructions to that effect from the company itself." On the 12th of October Lown replied to this letter, stating: “I have handed Mr. B. the acccounts. The smaller one he took to the other office, and, I presume, will send you a check to-day. And it further appears that Bookwalter left at the office of the company the other account. On the 16th of October Bookwalter wrote to the plaintiffs as follows: “Find inclosed draft for $895, in full of account rendered the 10th inst.” And on the 17th of October the plaintiffs returned the bill receipted to Bookwalter in a letter commencing: “Your favor, inclosing check to pay the inclosed receipted bill, at hand, for which accept our thanks,” and saying nothing about the bill which related to services for the corporation. Subsequent to this time correspondence took place between Bookwalter and the plaintiffs, and additional services were rendered both in respect to the foreign patents belonging to Bookwalter and also in respect' to those ■which had been transferred to the corporation.

It is claimed on the part of the defendant that Bookwalter was not responsible for any of the services rendered subsequent to the transfer of the patents on the 22d of Juqe, 1889; also, that he was not liable for any services ordered by Lown ; that he was not liable for the plaintiff’s charges in respect to the interferences; and that he certainly was not liable for any services rendered subsequent to the 9th of October, 1889, when the agency was expressly terminated by the defendant. Various other points are made which it is not necessary now to consider.

Certain authorities are cited for the purpose of supporting the proposition that in consequence of the change in the relations previously existing between all the parties, by the transfer of the patents from Bookwalter to the corporation on the 22d of June, 1889, in order that Bookwalter should be held personally liable thereafter, a further retainer should have been established. We do not think, however, that the- authorities cited support the proposition contended for. They seem simply to establish the proposition that where there is a change of condition and new interests come in, the new interests cannot be charged without an express retainer; and therefore do not seem to have any relation to the question as to whether, a retainer having been once given and apparently been continued, charges for services under such retainer may not be made.

In respect to the charges for services ordered by Lown, it seems to us that they cannot be at all sustained, because, as has been already observed, there does not seem to be sufficient evidence going to show that Lown bore such relations to defendant as authorized him to bind the defendant by atiy order or contract which he might make. ' '

It is not necessary in this connection to discuss the question as to the charges for the interferences. But it is apparent that from the 9th of October, 1889, the plaintiffs bad notice from Bookwalter 'that their relations towards him in respect to those patents in which he had a personal!nterest, were different from those which existed ,iu respect to the patents which he had assigned to the company. They were distinctly notified by Bookwalter at this time that he considered those charges as against the company, although he apparently did not notice the fact that the bills were made out to him. He returns them as bills made out against the company, and states that his personal matters have been mixed up with the accounts rendered against the company — not that the company’s accounts have been mixed up with those which had been rendered to him — and he requests a separation, and, when separated, he pays his personal account and leaves the other in the office of the company, of which these plaintiffs have notice. It seems to us, under these circumstances, that, if the plaintiffs went on rendering these services, they did so at their peril. They knew that Bookwalter had no personal interest in any of these controversies in respect to the United States patents. They knew that he was interested in the foreign patents, and in those only. They knew that he was an officer of the company, and that he was looking after these patent devices, and that all he did in this respect was for the benefit of the corporation, and not for himself individually.

It is urged upon the part of the plaintiffs that in the contract of the 12th of March, 1888, Mr. Bookwalter agreed to assign to the company to be formed in pursuance of that agreement all letters patent for the United States for his discoveries and inventions, together with all improvements he might thereafter make or discover ; and that he thereby undertook to assign letters patent for those improvements, and that as there was nothing to show that any other person than the defendant was to pay the expenses that necessarily preceded the granting of these letters patent, it is to be presumed that he was to pay for the same. We think this is a very forced construction of the language of the agreement. He agreed to assign the letters patent for his discoveries and invention, and also to assign all the improvements which he might thereafter make or discover. He was not interested in the question of letters patent; he agreed to make over the improvement, and although the inventor may have to make the application for the patent, yet there was no undertaking on his part that any letters patent should be procured at his expense.

And furthermore, throughout all the correspondence, even before the 9th of October, 1889, and noticeably in the letter of that date where they admit that the interference charges should be made against the company, the plaintiffs are continually referring to the company and they are corresponding with Lown, the representative of the company, in reference to the services to be performed by them; and when they want money for the purpose of prospective disbursements they apply to Lown, as the representative of the company, and they get money loaned by Bookwalter to the company and are notified by Lown that the company is short of money in consequence of the condition of the money market and that he hopes it will let up. And in the course of his examination Mr. Freeman testifies: “I said one after another, throughout a long list of items which Mr. Chappell read to me, that they were rendered at the request of Mr. Bookwalter and that the amounts were reasonable ; it was not always a separate request for every item—of course not; we never received such a request from one of our clients ; we are requested by our clients, and especially Mr. Bookwalter requested us, over and over again, to do everything, spend any money that was necessary to carry on these cases, to fight them to the bitter end,” etc. Here it was evident that Freeman had in mind that he had other clients besides Mr. Bookwalter in.respect to this matter; because he associates Mr. Bookwalter with his other clients, namely, the B. S. & I. Company. Ag'ain, when additional counsel are engaged, it is through Mr. Lown that the engagement is made; and the payment due the counsel is made by the company, of which the plaintiffs had notice. And furthermore, when they are seeking evidence in the interference cases, they propose to get a witness employed as the engineer of the company and paid by the company, who would be valuable to the company in the giving of testimony. It was not Bookwalter that they proposed should do these things, but the company. And so throughout the whole of this transaction, certainly subsequent to the 7th of October, 1889, they are continually writing about the company’s interest to Mr. Lown, with whom they have no interest in corresponding, unless they suppose that he was representing the company , because they certainly had no legal reason to suppose that he represented the defendant any more than Mr. Bookwalter was acting for the company.

There are circumstances in this case which do not tend to impress the court with the entire ingenuousness of these plaintiffs. We find that for a number of services they had rendered bills for certain amounts. When they come to sue, they double each one of these items, and the referee finds that the original amount was a fair compensation for these services. Although a -party may not be bound by a bill rendered in respect to the amount of charges therein when he brings suit, yet unless it is plainly apparent that the services were worth the sum sued for in excess of that charged in the bill, it certainly shows a discreditable motive in enlarging the amount for the purposes of the suit.

But there is another feature in this case which certainly shows that but little credit is to be given to any statements 'that these plaintiffs may make in respect to their beliefs or their intentions where their interests are involved. It appears from the plaintiffs’ case that they considered themselves the personal solicitors of Bookwalter in respect to all of these patent enterprises. It also appears that they considered Mr. Lown to be Bookwalter’s agent —both, therefore, bound to look after Bookwalter’s interest in respect to these matters. Mr. Bookwalter became depressed in regard to the future of these enterprises; seemed to be anxious to dispose of his interest in the case, and then these plaintiffs proposed to Lown to take advantage of Bookwalter’s state of mind for the purpose of getting a contract out of him for the sale of his interests, in order that the plaintiffs might make one hundred thousand or two hundred thousand dollars out of it. And they went so far in the carrying out of this design that when the opinion of an expert, who had been employed in respect to one of these patents, was sent to Bookwalter, which, by the omission of a word, conveyed an exactly opposite impression from that which the expert interided—of which fact they were aware—they urged upon Lown that Bookwalter be permitted to remain under the ipipression that the opinion of this expert had been adverse to his claim, when they knew that it was in his favor, in order that they might further depress him in price as well as in feeling. Such a proposition from a solicitor in respect to the interests of his clients seems to make it apparent that but little faith can be placed upon any asseveration or claim made by him. And even if there was no relation of trust between themselves and Bookwalter, they were willing to debauch his agent for the purpose of their own profit, because, according to the evidence in this case, they believed Lown to be his agent, and made this proposition of suppression to him in the hope of getting an advantageous contract out of Bopkwalter.

The judgment should be reversed and a new trial had before another referee, to be appointed in the order to be entered thereon, with costs to the appellant to abide the event.

We should not, however, dispose of this appeal without a word of commendation as to the manner in which the appellants have made up the case. They have presented to us an intelligible index—a rarity in our experience where there are any number of exhibits—and they have also indicated at the top of each page the nature of the contents thereof, thus greatly facilitating us in our examination of the testimony and exhibits, and we hope to see the good example set followed by other appellants.

Follett and Parker, JJ., concur.


author: Follett, J.

text:
    The Southern Cotton Oil Company, Resp’t, v. The Prudential Fire Association of New York, App’lt.

      (Supreme Court, General Term, First Department,

      Filed May, 1894.)

    1. Insurance—Fire—Condition as to ownership.
    The provision in a policy as to ownership relates to the ownership of the subject of the insurance at the date of the policy, and not to the subsequent changes of ownership.
    8. Same—Change oe ownership, etc.
    _ Under a clause in an insurance policy as to any change in the interest, title or possession of the object-matter, without, consent of the company, the word “ interest ” embraces both legal and equitable rights in the insured property.
    3. Same.
    The facts, in this case, were held to constitute such a change in the interest of the insured in the property as would invalidate the policy.
    Appeal from a judgment entered on a verdict directed by.the court.
    This action was begun July 23d, 1891. to recover on a policy of insurance, executed September 26th, 1889, by which the defendant insured the plaintiff against loss by fire in the sum of $5,000 on its cotton seed oil, stored in its tanks at Atlanta, Georgia, for one year, from noon September 19th, < 1889, until noon September 19th, 1890. The policy contains the following clause, over the construction and effect of which this litigation arises: “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 and sole ownership ; * * * or if any change, other than by death of an insured, take place in the interest, title or possession of the subject of insurance (except change of occupants without increase of hazard), whether by legal process or judgment, or by voluntary act of the insured, or otherwise.”
    In June, 1890, the plaintiff contracted to sell to, Armour & Co., Chicago, a large quantity of cotton seed oil at an agreed price per gallon, to ,be delivered at Chicago, freight paid, with the right of the purchaser to inspect and reject in case the quality of the oil tendered was inferior to the grade of oil contracted to be sold. Part of the oil1 was delivered. On the 11th of June, 1890, the plaintiff had not delivered 104,980 gallons of the oil contracted to be sold, and on that date it executed and delivered to Armour & Co,, Chicago, four receipts, of which the following is a copy, except as to quantity and number of tank in which the dil mentioned in the receipt was stored. Receipt No. 1:
    “Atlanta, Georgia, June 11th, 1890.
    “We have in store and will hold, subject 'to the ■ order of Ar mour & Company, Chicago, Illinois, 23,560 prime summer yellow cotton seed oil, stored in tank No. 1, in oil house of Southern Cotton Oil Company, Atlanta, Georgia.
    “The Southern Cotton Oil Company,
    By L. W. Haskell, Manager.
    “Insured under our policy,
    “The Southern Cotton Oil Company,
    “Alan H. Harris, Treasurer.”
    Receipt No. 2 was for 23,560 gallons, stored in tank No. 2; receipt No. 3 was for 23,560 gallons, stored in tank No. 3; receipt No. 4 was for 34,300 gallons, stored in. tank No. 4; the total quantity of oil mentioned in the four receipts being 104,980 gallons.
    On the 13th of June, 1890, the plaintiff mailed these receipts to Armour & Co., and drew a sight draft on them for $28,479.88, the price agreed to be paid for the $104,980 gallons, less freight from Atlanta to Chicago, which draft was paid.
    Between the date of these receipts and July 10th, 1890 (the date of the fire), 1,608 gallons of oil were added to each of the tanks numbered 1, 2 and 3, and 43,904 gallons of oil to tank No. 4, making 48,728 gallons of oil added to the four tanks between the date of the receipts and the date of the fire.
    July 10th, 1890, 198,546 gallons of refined cotton seed oil, of the value of $56,585.61, and 1,186 gallons of crude cotton seed oil of the value of $2,217.20, were destroyed by fire, making the total loss on oil $58,802.81. The refined oil was stored in tanks, numbered from 1 to 5 inclusive, and in two clarifying tanks. The crude oil was stored in tank No. 6 and in two refining tanks.

      September 30th, 1890, the plaintiff repaid Armour & Co. the price of the oil—$28,479.88.
    The litigants have stipulated that in case the plaintiff is entitled to recover for all of the oil burned in tanks Nos, 1 to 4 inclusive, —153,708 gallons—its recovery will be $5,071.71, with interest; or, in case the plaintiff is not entitled to recover for 104,980 gallons, represented by the receipts given Armour & Co., but is for the remainder—48,728—(153,708 minus 104,980 equals 48,728), that it is entitled to recover $3,025.91.

      John E. Parsons,-for app'lt; W. W. McFarland, for resp’t.
   Follett, J.

The sentence “ 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 and sole ownership,” relates to the ownership of the subject of the insurance at the date of the policy, and not to subsequent changes of ownership. When the policy was issued, the insured was the unconditional and sole owner of the oil insured and burned, and the policy was not void, but took effect as a legal contract. The sole question presented by this appeal is, did the contract between the plaintiff and Armour h Co. annul, in whole or in part, the policy ? The question arises under the following clause of the policy: “ This entire policy, unless otherwise provided by agreement indorsed hereon or added hereto, shall be void, * * * if any change other than by the death of the insured, take place in the interest, title or possession of the subject of the insurance (except change of occupants without increase of hazard), whether by legal process or judgment, or by voluntary act of the insured, or otherwise,”

The important words in this sentence are, “ possession,” “ interest” and “title.” The defendant does not assert that there was any change in the possession of the oil. The word “interest” is broader than “ title,” and embraces both legal and equitable rights in the oil, and if there was a change “ in the interest ” of the insured in the subject of the insurance the plaintiff cannot, under the terms of the policy, recover for its loss.

In the letter of June 7th, 1890, written by the plaintiff’s president to Armour & Co., he stated : “We have been letting the oil at Atlanta remain in tanks, as it is improving daily in its condition, and we will be glad to accomodate you and let it remain there until you may want it—say for the next sixty days—without storage charge, providing it is at your risk and insurance expense. We have some obligations to meet, and we want funds for this oil for that purpose. If it is satisfactory to you, we will draw with warehouse receipt attached and covered under our policies as to fire risk, or have the fire insurance policy made in your name, as you may elect. Please wire if this is satisfactory. It would be entirely agreeable for us to draw for, say, fifteen tanks next week and the balance early the week following. We can designate same, giving you the number of tank in which the oil is stored. We will have no other oil there but the lot -sold youn -

On the 10th of J une, Armour & Co. replied to this letter by a telegram, sayi,ng: “You can draw for balance of oil due, without additional expense, and we will take as soon as possible.”

On the 11th of June, 1890, Armour & Co. wrote, in reply to plaintiff’s letter of June 7th, saying: “We will honor your draft with warehouse receipts for the oil and send our cars for same as soon as possible. In the meantime same to be stored and insured free óf expense.”

The plaintiff’s president, in his testimony, gave his own construction of the meaning of the term, “your risk and insurance expense.” He testified it meant “risk of leakage, risk of deterioration in quality sometimes. If you keep it a certain time, it oxidizes and becomes rancid, sometimes in stress of weather or what ■ not, deteriorates. Any gentleman will understand that; and that is what we mean in that sense of risk. By buyers’ expense of insurance we mean he takes the fire risk and pays for the insurance.” The president of the plaintiff also testified (fol. 93), that, when the receipts were issued, they embraced all the oil then in the tanks. In the letter of June 7th he wrote: “We can designate same, giving you number of tank in which the oil is stored. We will have no other oil there but the lot sold you.” Under this correspondence and the receipts, taken in connection with the fact that this oil was paid for, it seems to us that Armour & Co. acquired an iterest in the oil stored in those tanks; that the plaintiff became the trustee of Armour & Co., who acquired not only an insurable interest in this particular oil, but such an interest as would have entitled them, in'case the plaintiff had failed, to have taken the oil from its receiver or assignee.

The previous dealings between the plaintiff and Armour & Co. might be important to aid in the interpretation of an ambiguous contract, but the definite agreement made on this occasion, vwhich is evidenced by the receipts, the letters and telegrams, cannot be controlled or limited by the former contracts and course of dealing between the parties.

The mere fact that Armour & Co. had the right to inspect and reject any oil tendered by the plaintiff at Chicago did not deprive them of an interest in the oil stored in the four tanks.

It seems to us that there was a change of interest, not only in the 104,980 gallons represented by the receipts, but in all the oil contained in the tanks at the time of tl|e fire. When the policy was issued the insured owned every gallon stored in the four tanks, but at the time of the fire it had ceased to be the owner of any particular part of the oil. It was the fault of the plaintiff that other oil was added to these tanks between the date of the receipts and the fire, and was in violation of its letter of June 7th, in which it said: “We will have no other oil there but the lot sold you.” The plaintiff is not entitled to recover for the loss occasioned by 'the destruction of any part of the 153,708 gallons of oil burned.

The judgment should be reversed and a new trial granted, with costs to-the appellant to abide the event.

Yak Brunt, P. J., and Parker, J., concur.


author: Follett, J. Van Brunt, P. J.

text:
    Bernard Wintermeyer, Resp’t, v. Mary E. Sherwood, as Executrix, etc., App’lt.

      (Supreme Court, General Term, First Department,

      Filed April 13, 1894.)

    1. Limitation—Disputed claim.
    Where a claim against decedent consists of independent items, and the executor rejects some of them, the six months’ limitation commences to run against the rejected items from the time of rejection.
    3. Same—Rejection.
    Rejection of a claim by an attorney under the executor’s direction is sufficient.
    Appeal from a judgment in favor of the plaintiff.

      James R. Marvin, for app’lt; Joseph G. °Rosenbaum, for resp’t.
   Follett, J.

The plaintiff’s second cause of action embraces twenty-nine independent items for money loaned on different dates, every one of which is contained in claim No. 1, Exhibit 0, presented by the plaintiff to the defendant in September or October, 1890. This claim also included a promissory note for $500, given by the testator to some person other than the plaintiff (which he had acquired), and other items not embraced in claim No. 2, which was presented September 30, 1891. It is undisputed that in October or November, 1890, the defendant offered to pay the note, and afterwards did pay it, but refused to pay the other items of the claim. Notwithstanding the refusal to pay these items, the referee refused to find the following request, preferred by the defendant: “Seventh. After the production of those checks, Mr. Marvin, in behalf of the defendant, and by her instructions, in the fall of 1890, informed the plaintiff personally that defendant, as executrix aforesaid, rejected his claim, and refused to pay it, and the claim was then disputed and rejected by defendant.”

Construing this refusal by the referee’s opinion, as this court may, it is plain that the request was refused on the theory that part of the claim could not be admitted and paid and the remainder of the items rejected, so as to set the short statute running as to items so rejected. The referee said in his opinion: “The facts, so far as they relate to the short statute of limitations, are in substance as follows: In or about September, 1890, the plaintiff presented an account, unverified and without vouchers, to James R. Marvin, who was the attorney and counsel of the defendant and the estate she represented. Thereafter Mr. Marvin asked the plaintiff if he had any vouchers. In response to this inquiry the plaintiff produced a number of checks and left them with Mr. Marvin. Included in this original claim of the plaintiff was a note for $500, which has become known in the case as the ‘Hopfner Note.’ Some time in October, 1890, Mr. Marvin informed the plaintiff that he could do nothing with the account; that the defendant disputed and rejected it. At the same time it appears that Mr. Marvin informed the plaintiff that the defendant would pay the Hopfner note. * * * The difficulty in this case, so far as the defendant is concerned, is that the whole claim originally presented was not rejected or disputed, the defendant conceding apart of it to be just, and offering at all timesffo pay it. To invoke the statute as to the original claim, the defendant should have absolutely disputed and rejected the whole claim, and then left the plaintiff to such remedy as he might see fit to pursue; and she would not on the second presentation of a claim, have entertained it at all, and again rejected it. Hot having done so, and having testified to a willingness at all times, down to the presentation of the claims in September, 1891, to pay the $500 note included in the first claim, presented in 1890, the time within which the action might be brought had not run when the action was commenced.

The conclusion of law of the referee follows, the opinion, and holds that the statute did not begin to run until September 30, 1891. The holding that, in case a claim which consists of independent items is presented to the representative of a decedent, one item cannot be admitted and the remainder rejected, so. as to set the short statute running as to those rejected, does not seem to this court to be sound. Such a rule would be inconvenient to claimants and to representatives, and would often prevent the former from being promptly paid demands conceded to be just; and, on the other hand, would expose estates to suits which could be defended only in part. If some of the independent items of a claim cannot be admitted and paid and others rejected, so as to set the statute running as to the latter, the final'settlement of estates can be indefinitely postponed by the presentation of claims partly just and partly unjust, which would necessarily delay final settlements, until the six-year statute had applied as a bar to the rejected claims, and defeat the very purpose of the short statute, which was passed to facilitate the early settlement of decedents’ estates. The record does not show whether the defendant has or has not published a notice to creditors to present their claims, and it was held in Salomon v. Heichel, 4 Dem. Sur. 176, that, under ,§ 1822 of the Code of Civil Procedure, the short statute does not run against a rejected claim unless the notice to present claims' has been published. This seems toms to be a misconstruction of the section. The object of the publication of .a creditors’ notice is to advise claimants when and where claims may be presented, and to enable estates to be promptly settled, and their representatives protected in payments which may be made. If this section is to' be literally construed, the statute would not run against a claim presented while a creditors’ notice was being published. It reads: u Where an executor or administrator disputes or rejects a claim against the estate of the decedent, exhibited to him either before or after the commencement of the publication of a notice requiring the presentation of claims,” etc. When a claim has been presented and rejected, there is no occasion for a potice to that creditor, and the short statute begins to run as to it though nó notice has been published. Field v. Field, 77 N. Y 294; Code Civ. Proc., § 1822. Three witnesses, not interested in the result of this action, testified that the items embraced in the second clause of action were disputed or rejected by the attorney of the defendant more than six months before this action was begun, and but one (the plaintiff) testified to the contrary, and he admitted that the defendant refused to pay those items, and returned to him his claim, with his vouchers, more than six months before the action was begun. It seems to this court that the finding that the items recovered in this action were not disputed nor rejected in October or November, 1890, is against the weight of evidence, and that a new trial should be had, to the end that it may be found, not merely whether or not the entire claim originally presented was rejected (about which there is no dispute), but whether any or all of the items which this action is brought to recover were disputed or rejected in October or November, 1890. When the representative of an estate directs an attorney to reject a particular claim,-as in the case at bar, the rejection by the attorney for the representative is as effectual as though the representative had personally notified the claimant of the rejection. Selover v. Coe, 63 N. Y. 438. * The presentment and rejection of the second claim on the 30th of November, 1891,—more than six months after the rejection of some of the items in the first one,—was not a waiver of any rights acquired by the first .rejection and the lapse of time. The judgment should be reversed on the law and the facts, with costs to the appellant to abide the event, and a new trial ordered before a referee to be appointed by the court upon the entry of the order anew.

Van Brunt, P. J.

I concur, and think that the judgment should also be reversed because the referee assumed that the giving of a pheck imported a loan. Sternfeld’s evidence is conclusively shown to be utterly unreliable. The referee also erred in granting costs.

O’Brien, J., concurs.


author: Parker, J.

text:
    Horace Anderson, as Substituted Trustee, etc., Pl’ff, v. Juan Ramon Martinez Hernandez el al., Def’ts.

      (Supreme Court, New York Special Term,

      Filed May, 1894.)

    1. Fraudulent conveyance—Trustees. "
    A conveyance from a trustee to another party, given as part of a scheme for the benefit of either or both, is voidable as against the beneficiaries at their election or that of a substituted trustee on their behalf.
    3. Same—Notice.
    If one, who purchases a title, subject to an outstanding equity, has knowledge at that time of any fact sufficient to put him upon inquiry, he is chargeable with actual notice of the equity, if he fails to prosecute the inquiry with diligence.
    3. Same—Agent.
    Whatever facts come to the knowledge of an agent while engaged in such purchase, are regarded as having come to the personal knowledge of the purchaser.
    Action by newly appointed trustee to set aside deeds made by the late trustee to Alexander Melhado, and by him, through mesne conveyance, to defendant Fannie K. Koss.

      v Harold Swain (Francis L. Wellman^ Alfred G. Reeves and Ambrose G. Todd, of counsel), for pl’ff; George Bell, for def'ts Hernz and Melhado ; Thompson <& Eoss {F. Ellery Anderson, of counsel), for def’ts Blood and Koss.
   Parker, J.

Although the sale of the premises at public auction was in all respects regular in form, I have no doubt but that the purchase by Waddell was a collusive one. It is apparent he did not bid with any idea of purchasing for himself. He paid nothing, made no preparations for paying anything, was not asked to pay anything, anc) was never given any deed. Evidently, the scheme was that he should bid off the premises, if they went for a less figure than they were considered worth ; that no payment should be then exacted, but that the premises should be at once sold at private sale, and whatever advance could in this way be obtained should be shared as profits by those in the scheme. The subsequent, accounting of the trustee, by which he credits the estate with the amount bid at the public sale, $32,500 only, and his conveyance to Melhado for that figure, well knowing that he was-receiving from Mrs. Blood $40,000 for the same property, the fact that there was no transfer of Waddell’s interest as purchaser to Melhado, nor any pretense that he had succeeded to Waddell’s rights as a purchaser in the usual course of business, all show that Hernz and Melhado were the real schemers, and that Waddell was a mere assistant to them in carrying it out. A conveyance from the trustee to Melhado, under the circumstances, would, as against them, clearly be avoidable at the election of the beneficiaries, or of the plaintiff in this action on their behalf. Pom. Eq. Juris., §§ 958, 1075, 1077 ; Scholle v. Scholle, 101 N. Y., 171.

If Mrs. Blood, who took the conveyance from Melhado, was a purchaser for value and in good faith, she acquired a title from Melhado that cannot be avoided, even though the title, as against him, could have been set aside on account of fraud. Pom. Eq. Juris., §§ 738, 739, 743. She was undoubtedly a purchaser for value. The serious question is, was she a’ purchaser in good faith ? It is not claimed that she was a party to the original scheme of Hernz and Melhado, or that she had actual knowledge of it. But it is claimed that she had notice of such facts concerning the transfer from Hernz to Melhado. as preclude her from assuming the character of a purchaser in good faith. It seems to be well settled that if one who purchases a title, subject to an outstanding equity in another person, has knowledge at that time of any fact sufficient to put him upon inquiry as to the existence or extent of such equity, it is his duty to prosecute the inquiry with diligence, and if he omits to do so he is chargeable with actual notice of the equity, and can, therefore, acquire no better title than his grantor actually had. If, after a diligent inquiry, he fails to discover the existence of such equity, he is protected against it. Pom. Eq. Juris., 753 ; Williamson v. Brown, 15 N. Y. 354. Very many cases in this state have adopted and applied that rule, but as none of them assumed to change it, and in none is. it more clearly stated, further citation is unnecessary.

In determining whether Mrs. Blood had knowledge of facts sufficient to put her upon inquiry as to whether there was not an outstanding equity against Melhado’s title, it is important to distinguish exactly what that equity was and the grounds upon which it rested.

The conveyance by which Melhado took title was given as part of a scheme arranged between himself and the trustee, by which, under the guise of a fair sale at public auction, a profit could be made out of the trust property, for the benefit of Melhado at least, if not for the joint benefit of both. It was as much a fraud upon the beneficiaries for the trustees to conspire with Melhado, and assist him in making $7,500 out of the trust property, as if he was himself .to share in it, and it was a fraud in which Melhado knowingly participated. Much more was it a fraud if Melhado was the attorney for the trustee and the beneficiaries, and conspired with, him so that they both could make a profit out of the estate. Therefore, as against Melhado, the title which he took by the deed from Hernz was subject to an equity existing in favor of the beneficiaries to have it adjudged fraudulent and void.

At the time Mrs. Blood purchased the property from Melhado three different persons acted as her agents in negotiating the purchase and in investigating the title—her. brother-in-law, George Blood; her attorneys, Mr. Lobenthal and Mr. Wandell—and whatever facts came to the knowledge of either of such persons, while engaged in that business, must be considered as having come, to her own personal knowledge. Pom. Eq. Js., § 666; Holden v. N. Y. & Erie Bank, 72 N. Y. 286; Constant v. University of Rochester, 111 N. Y. 604; 20 St. Rep. 211. Charging her with knowledge of the facts which she and her several agents learned in that transaction, can there- be any doubt but that she had knowledge of facts which should haye suggested to her the question whether the property of the estate was not being unfairly disposed of ? '

There was something more apparent to her than a mere sale, at an advanced price, by one who had himself purchased at public auction. She knew that the property had been owned by Hernz only as a trustee for others, and that, notwithstanding the public sale, he still held the title. It was apparent from the way the business was transacted with her that, although Waddell had bid off the property, neither he nor Melhado had made any payment on such purchase; that he expected to obtain the amount of the price so bid from the sale to herself, and that the trustee was holding the title, and waiting for his pay until a resale could be made. She knew that as soon as the property was bid off, the purchaser at once put it on the market for a resale, with the offer to sell at a bargain to a quick buyer, and that the price that it had been bid off for was but $32,500. She knew, therefore, that Waddell or Melhado would take $7,500 out • of the property without advancing any money whatever. And she also knew that the trustee was not only aware of that fact, but was actually assisting them to do so. Moreover, she knew that both Melhado and Waddell were personal friends of the trustee. That the property when sold at pub-lie sale was subject to an outstanding lease that was clearly calculated to lessen the price for which it could be so sold: And that such lease was promptly canceled in order to make a sale to her, and that the property was really worth rather more than the sum she was giving for it. Now, concede that she did not know that Melhado was the attorney for trustee or beneficiaries, or that he and the trustee had agreed before the public sale that the property should, if possible, be bid off by a friend of theirs at a low bargain and resold at an advanced price for their mutual benefit, 'and that Melhado acquired his title only in pursuance of and for the purpose of carrying out such plan. Nevertheless, the facts of which she did have knowledge suggest such a scheme. A trustee does not ordinarily allow his friend to bid off trust property at $7,500 less than its value, and wait for the first payment until he can advertise and negotiate a resale at an advanced price. The sale to Waddell, and the conveyance subsequently to Melhado simultaneously with his conveyance to her, could not have appeared to Mrs. Blood and her agents as an ordinary business transaction, and certainly not one in which a trustee, acting in good faith, would be likely to join. It certainly suggests the query: For what reason does the trustee force upon the market, at public sale, this property, upon which there is an outstanding lease for three years? And why does he allow those interested in the lease to-bid it in at so inadequate a price; And why, instead of compelling-them to perform their contract and close the bargain by December 30th, as under his bid Waddell was obliged to do, does he. wait for him to make - a resale at an advanced price? What are the-.necessities that require the trustee to sell the trust property in such-a manner at such a sacrifice ?

She made no -inquiry whatever, but took the title offered her,, and under such circumstances, in iny judgment, she does stand in. the position of a purchaser in good faith. The title in her is,, therefore, subject to the right of the beneficiaries to have it adjudged void as against them, and as the defendant, Mrs. Koss, is-but a mere donee of Mrs. Blood, the title in her is also subject to the same equity. Ten Eyck v. Witbeck, 135 N. Y. 40; 48 St. Rep. 251.

These considerations force me to the conclusion that the' relief, asked for by the plaintiff in this action should be granted.