text:
    Adolfo Hegewisch, Rec’r, App’lt, v. John S. Silver, Resp't.

      (Court of Appeals,

      Filed December 19, 1893.)

    1. Receiver—Proof of filing of bond.
    In an action brought by a receiver the plaintiff cannot be nonsuited on the ground of failure to prove the filing of his bond, where the order appointing him required a bond to be filed, and it appears that the same court and ,,udge subsequently authorized and empowered him to bring suit upon the claim in question, and that he subsequently resigned, the presumption being that the court when it granted the order to sue had ascertained that he had qualified.
    3. Same—Substitution of successor not necessary.
    The appointment of a successor to the original receiver pending an action brought by him does not suspend the prosecution of the action until the substitution of the successor; the substitution is not jurisdictional, but the action may be continued in the name of the original plaintiff under § 756 of the l ode.
    Appeal from an order of the supreme court, general term, first department, reversing an order made by the trial judge granting a new trial on the minutes.
    The complaint averred the making of the note, its indorsement by the defendant, its delivery for value before maturity to the United States Rolling Stock Company, its presentation and demand for payment when due, the refusal of the maker, the Decatur and Nashville Improvement Company, to pay the same, its-protest, and the service of notice on the defendant. It also alleged the appointment by the circuit court of the United States for the southern district of New York, on the 25th day of November, 1890, of the plaintiff as receiver of the United States Rolling’Stock Company, in an action pending therein, the ownership of the note by the plaintiff as receiver, and that on the 9th day of February, 1891, before the commencement of the action, an order was duly made by the court by which the receiver was appointed, authorizing him to commence an action on the note in the supreme court of the state of New York, and the complaint, contains other formal allegations with a demand of judgment .against the defendant.
    The answer admitted the making and delivery of the note, and that notice of protest was given to the defendant, and denied any knowledge or information sufficient to form a belief of the appointment of the plaintiff as receiver of the United States Rolling Stock Company. The answer for another defense set up substantially that the note was indorsed by the defendant for the accommodation of the United States Rolling Stock Company and without consideration. On the trial there was no attempt to sustain the defense last stated. The defendant gave no evidence and there is no dispute upon the evidence that the note was a valid claim in. the hands of the Rolling Stock Company.
    On the conclusion of the testimony the defendant’s counsel - moved to dismiss the complaint upon several grounds separately stated. The proceedings on this motion are stated in the record and are as follows:
    “ Mr. McKewan.—I move to dismiss the complaint on the-ground that the plaintiff has not proven facts sufficient to constitute a cause of action. I move to dismiss the complaint on the further ground that the plaintiff in this action is not the real party in interest.
    “I move to dismiss the complaint on the further ground that the plaintiff has omitted to prove the filing of his bond as-receiver.
    “ I move to dismiss the complaint on the further ground that the United States court has no jurisdiction to make an order permitting this action to be prosecuted in this court.
    “ The Court.—The motion is denied. Exception by the defendant.
    “ Counsel.—I move to dismiss the complaint on the further ground that the evidence discloses the fact that the said party in-interest and the present receiver is Mr. William G. Lane instead, of Mr. Hegewisch, the party suing.
    “Mr. Guthrie argues in opposition to the motion to dismiss.
    “ Motion to dismiss granted.
    “Exception by plaintiff.
    “Jury discharged.”
    The plaintiff’s counsel thereupon moved for a new trial upon the minutes. The trial judge subsequently granted the motion, and from the order granting the motion the defendant appealed to the general term, which reversed the order, and from the order of reversal the appeal is taken.
    Other facts are stated in the opinion.

      Charles Steele, for app’lt; J. B. KcKewan, for resp’t.

      Reversing 50 St. Rep., 448.

   Andrews, Ch. J.

It is insisted in behalf of the plaintiff that the complaint was dismissed at the trial on the sole ground that, he was not the real party in interest, and that the only question, which can now be considered arises on the exception taken by the plaintiff’s counsel to the ruling of the trial judge upon this-point. If there were other grounds stated in the motion which were well founded, these, it is insisted, cannot be considered, because, having been overruled, and being such that if the motion, had been entertained the objection might have been obviated by further evidence, it would be unjust to entertain them now for the purpose of sustaining the order of the general term. On the other hand, it is contended in behalf of the defendant that the final ruling-of the trial judge dismissing the complaint proceeded upon a reconsideration of all the grounds originally urged, and was not based alone upon the ground last stated in order upon the motion to dismiss, and that, therefore, all the questions raised were before the general term. It is not necessary to consider this point, since we are of opinion that the two grounds upon which the defendant now relies to sustain the order originally made dismissing the complaint are neither of them tenable.

These grounds are (1) that there was an absence of evidence tending to show that the plaintiff had filed a bond as receiver and perfected his title thereby, so as to enable him to bring an action, and (2) that a successor having been appointed intermediate the commencement of the action and the trial, the action could not be further prosecuted until the new receiver had been substituted in place of the original plaintiff. In respect to the first ground, it is to be observed that it was presented as a ground for non-suit, and, therefore, if there was any evidence which would have justified an inference that the plaintiff had filed a receiver’s bond, a non-suit on this ground could not be sustained. The order of th'e United States court appointing the plaintiff receiver contained the usual provision that upon filing a bond, approved by the court or a judge thereof, in the penalty and with the conditions specified, he should take and hold possession of the property of the corporation of which he was appointed receiver. There was no direct ■evidence that a bond was filed, but it appeared that on the 9th day of February, 1891, nearly three months after the order appointing the plaintiff had been made, upon application made to the same court and judge before whom the original proceeding was taken, the plaintiff was authorized and empowered to prosecute an action in the supreme court of the state upon the claim now in question, and pursuant to such authority this action was .■subsequently commenced.

There was no suggestion in the course of the trial that the bond had not been filed until the motion to dismiss was made at the conclusion of the evidence. It seemed to have been assumed up to this time by both parties that the plaintiff had duly qualified. The defendant himself brought out the fact that the plaintiff had resigned his position as receiver, and that he ceased to be receiver on the 20th of January, 1892, implying that up to the time of his resignation he was the duly qualified receiver of the corporation. It is a reasonable inference that the court, when it granted the order to sue, was apprised of the facts affecting the plaintiff’s right to bring the action, and ascertained that he had duly qualified as receiver. He was the officer of the ■court, and the order made pre-supposes that he had perfected his title by filing a proper bond. So, also, his continuing as receiver, and the fact that the position became vacant by' his resignation more than a year after his appointment, implies that he had qualified. The question is not as to the weight of the evidence, but -whether there was any evidence tending to show that the bond was filed. We think there was, and that a non-suit could not properly have been granted upon the ground suggested. It is unnecessary to consider the contention of the plaintiff that the defendant could not take the objection. It is generally true that an order appointing a receiver prescribes that a bond shall be filed before the receiver assumes to intermeddle with the property to which the receivership relates, and unless this provision is waived by the court, or by a party in interest having power to dispense with the bond, the receiver, before he undertakes the execution of the trust, must give security. In re Christian Jensen Co., 128 N. Y., 550; 40 St. Rep., 621, and cased cited.

But as there was evidence here justifying an inference that the bond had been filed, the point that the defendant could not raise the objection is not involved.

The other ground upon which the dismissal of the complaint is sought to be justified proceeds upon the theory that the appointment of a successor to the original receiver pending the action, suspended its further prosecution until the new receiver should be substituted as plaintiff. This is not the rule in such a case. Section 766 of the Code is relied upon to sustain the contention of the defendant. There are two decisive answers. The section applies to statutory receivers only, and there is no suggestion that the appointment of the receiver in this case was by virtue of any statute, and not an exercise by the court of its general equity jurisdiction, independent of any statute. In the next place, if § 766 applied to the case, the substitution of the new receiver was not jurisdictional, but the case could be prosecuted in the name of the original plaintiff, unless one of the parties applied for a substitution under that section. This was the construction of an analogous provision under the Revised Statutes. Section 14 tit. 1, ch. 7, pt. 3, 2 Rev. St., and ch. 299, § 3, Laws of 1832 ; Colegrove v. Breed, 2 Den., 125 ; Manchester v. Herrington, 10 N. Y., 164 ; Board of Excise v. Carlinghouse, 45 id., 249; Griggs v. Griggs, 56 id., 504. But this case is directly within § 756 of the Code, which declares that “ in case of a transfer of interest or devolution of liability, the action may be continued by or against the original party, unless the court directs the person to whom the interest is transferred, or upon whom the liability is devolved, to be substituted in the action, or joined with the original party, as the case requires."

We think the complaint was improperly dismissed on the trial, and that the order granting a new trial was proper.

This leads to a reversal of the order of the general term, and an affirmance of the order granting a new trial.

All concur.


source: Caselaw Access Project

author: Maynard, J.

license: Public Domain

text:
    Anna T. Geyer, App’lt, v. Edward L. Snyder et al. Ex’rs, Resp't.

      (Court of Appeals,

      Filed December 19, 1893.)

      1. Executors and administrators—Sale of assets—Fraud.
    One of several executors has authority to make a sale of the assets, and the fact that the other executors who joined in the transfer were members of the purchasing firm cannot destroy the efficacy of the transfer.
    2. Same.
    In the absence of proof of actual fraud, or a suppression of the truth, or of any undue advantage taken of the beneficiary the rights of the parties would not be affected by the fiduciary relation.
    3. Same.
    Defendants’ testator was interested in business with his two sons and another, in which business the bulk of his estate was invested. His sons and a son in law were his executors. In 1878, by an agreement consented to by all the legatees, the legatees sold the interest of testator in the firm to the surviving partners for $120,000, and subsequently plaintiff received her portion estimated on that sum and executed a general release. In an action to set aside the sale and for an accounting on the ground of fraud, it appeared that testator’s interest was stated on the firm books to be $138,000; that the discrepancy between that sum and the price paid was not such as to show an inadequacy of price; that the sale was neither void nor voidable, and that from plaintiff’s long silence there was a presumption of fair dealing which overrides any presumption of wrongdoing arising out of the trust relations of the parties.
    Appeal from judgment of the supreme court, general term second department, affirming judgment in favor of defendants.

      Edward B. Merrill, for app’lt; Lewis Hurst and Arthur Hurst, for resp’ds.

      Affirming 53 St. Rep., 53.

   Maynard, J.

The plaintiff was entitled to a one-twenty-eighth share of the estate of her grandfather, Phillip W. Engs, who died May 19th, 1875. The executors of his will, who qualified, were his sons Samuel F. and George Engs, who were each entitled to one-seventh of the estate, and his son-in-law, Henry A. Bostwick, whose wife was also entitled to one-seventh. Apparently the bulk of the,-- estate was invested in a business carried on' by the testator and the two sons and a nephew, Henry Snyder, Jr., who was also entitled to a share of the estate under the will. By an agreement made April 28th, 1876, to which the executors and the surviving partners were parties, the interest of the testator in the firm was fixed and liquidated at the sum of $120-000, upon the payment of which, in specified instalments, the surviving partners who had formed a new firm for the continuance of the old business became the owners of his share in the partnership business and property. Annexed to this agreement and forming a part of it was the written consent and approval of every legatee under seal, witnessed and acknowledged, including the plaintiff and her husband, by the express terms of which they ratified and confirmed it.. May 7th, 1879, the plaintiff executed to the executors a general release and discharge under seal, and acknowledged, of all claims and demands against them as executors, and of her interest in the estate. The consideration of this release was the payment in money of $5,852 by the executors, of which a balance of eighty-four dollars was paid at the time of its execution, and the instrument recited that this sum had been accepted and received by the plaintiff in full payment and settlement of the balance due her from the estate or the executors, and that such payment and settlement' should have the same force and effect as if made pursuant to a decree of the surrogate upon a final accounting by the executors. Thirteen years after the execution of the release and sixteen years after the execution of the agreement of sale and of plaintiff’s consent thereto, and after the death of all the executors; the plaintiff brings this action against their personal representatives, to set aside all of these instruments and to have an acoounting of the estate of Philip W. Engs, upon the ground that she was overreached" in the transaction; that the consideration paid by the surviving partners for the interest of the testator was grossly inadequate to the value of the interest conveyed; and that the executors perpetrated a fraud upon her by misrepresenting the value of such interest and concealing from her the true condition of the estate. ' The material allegations relating to the fraud and fraudulent concealment and inadequacy of price are all denied in the answer of the defendants.

The plaintiff entered no proof in support of the allegations of her complaint except the original articles of co-partnership to which the testator was a party, and the articles entered into by the surviving partners for the formation of a new firm, the execution of which was not denied by the defendants. The defendants offered no evidence except the general release executed by the plaintiff, and the receipt which the executors gave the new firm for the $120,000 paid upon the sale of the testator’s interest in the old firm ; and they admitted that his interest in the assets and business of the firm at the time of his decease, as stated in the books of the firm, was $138,242. In this situation of the pleadings and proofs the plaintiff insists that she was entitled to judgment for the relief demanded. The court below has held otherwise, and, as we think, correctly. Upon the facts disclosed by this record it must be held that the agreement for the sale of the testator’s interest in the old firm to the surviving partners was neither void nor voidable. Its efficacy as a legal transfer of title was not destroyed because two of the surviving partners were also executors. Upon the death of the testator the title to the firm property vested in the surviving partners for the purposes of liquidation. From that time the testator’s interest therein was limited to his share of the net proceeds after liquidation. One of the executors was not a member of the firm. As his wife was a legatee his interest was adverse to that of his co-executors in the transaction. He had the strongest of motives for not consenting to a sacrifice of the property, and for endeavoring to obtain its full value, and the best possible price. In this case there was no conflict between self-interest and duty, and the legal presumption is that he was faithful to his trust. This executor alone had authority to make the sale ; for it has been held that one of two or more executors has power to dispose of the assets of the estate even if his co-executors do not join in the transfer. Williams on Executors, 851-2.

His signature, therefore, to the agreement of sale was sufficient to pass a title, which cannot be questioned solely upon the ground that the other executors unnecessarily made themselves parties to the instrument. But this transaction was in effect a sale by the legatees, including the plaintiff, to the surviving partners of property which must be disposed of in order to effect a settlement and distribution of the estate. They united in the agreement of sale, and made themselves parties to it; and the purchasers thereby acquired an unimpeachable title. It is true that two of the purchasers were executors of the estate; but in the absence of proof of actual fraud, or a suppression of the truth, which is equivalent to it, or of any undue advantage taken of the beneficiary, the rights of the parties would not be affected by the fiduciary relation.

The plaintiff, in the brief of counsel submitted, seems to assume that upon the bare proof of a transaction with the executors, by virtue of which, for an apparently good consideration, her interest in the estate was released or transferred to them, fraud will be presumed, and that the burden -is at once cast upon them to show that no undue advantage was taken of her. This position is not supported by any principle of law or rule of equity which we have been able to find. If the beneficiary is competent to contract, the trustee may deal with him without necessarily incurring the suspicion of bad faith. But if he buys an interest in the trust property, or secures from the beneficiary a release to himself, and it is shown that the price was inadequate, or that he has made a profit out of the transaction, the law presumes fraud, or concealment, or undue influence, or some conduct inconsistent with loyalty to his trust, and places upon him the burden of proving that he disclosed to the beneficiary every circumstance relating to the condition of the property which he ought to know in order to form a correct judgment of its value; and that he exerted no undue influence to obtain the assent of the beneficiary to the bargain. It is here that the fatal weakness of plaintiff’s case is to be found. She gave no proof of inadequacy of price, or tending to show that the executors had made a large profit out of the property purchased. Had she shown that they obtained property of the estate worth $280,000 for $120,000, as she now alleges; or that for $5,000 she released an interest in the estate which was of the value of $10,000, that fact alone would have given rise to a very strong presumption that she had been defrauded by the executors, from the consequences of which they could not escape, except by very satisfactory proof that no material information was withheld, and that the sale was her own free, intelligent and deliberate act.

The plaintiff insists that the articles of copartnership entered into between the executors and other surviving partner, afford some evidence that the actual value of the testator’s interest was $280,000. Such an inference cannot, we think, be justly drawn from the recitals in this instrument. On the contrary, it appears that the value of the interest was then unknown and uncertain, and that it would for some time be unascertainable. The parties, therefore, fixed upon a sum which each should be regarded as contributing to the capital out of the estate of the deceased partner for the purposes of the capitalization of the new firm and the distribution of dividends. As each had an interest in the estate, and the addition made to each share was in proportion to such interest, it is evident that the actual value of the estate was not important. It is further urged that the finding of the trial court that the nominal and unliquidated share of the testator’s interest as stated on the books of the firm was the sum of $138,242, is some evidence of inadequacy of price, and that the executors made a profit of upwards of $18,000 by the purchase. .But this is not a finding that the sum named was the cash value of the testator’s share. The contrary is to be inferred. It is oa statement of the nominal and unliquidated amount of his share. It would be subject to the payment of debts and the shrinkage which almost inevitably occurs upon the conversion of firm assets into money. The disparity between this sum and the actual amount paid is not such as to indicate that the testator’s interest was sold for less than its true value.

The trial court has refused to find that the executors made any profit out of the estate by the purchase of this interest, and there is no sufficient evidence in the record to support such a finding if it had been made. The plaintiff is not entitled to a strict application of the equitable rule, which she might have invoked if she had moved with some degree of diligence to set aside the agreement and release, and to demand an accounting. An acquiescence for sixteen years requires some explanation. If it was due to. an ignorance of the facts for which the executors were responsible, it should have been shown. The newly discovered facts should also have been proven.

From her long silence, there is a presumption of fair dealing which overrides any presumption of wrongdoing growing out of the trust relation of the parties.

The judgment must be affirmed, with costs.

All concur.


author: Earl, J. Gray, J. (dissenting).

text:
    Edward S. Stokes, Resp’t, v. John W. Mackay et al., App’lts.

      (Court of Appeals,

      Filed December 19, 1893.)

    Principal and agent—When ratification a question for jury.
    Defendant M. was largely interested in telegraph property at a time when plaintiff offered to purchase for him certain lines which would benefit those which he owned. The offer was accepted, and M. during several years advanced large sums to plaintiff, with which'plaintiff purchased said lines in his own name, as it was not considered advisable to let M. appear in the transaction, and managed the same for four years. At the end of that period M. demanded that the securities should be turned over to his agent, claiming them to belong to himself. At a meeting between plaintiff and defendant M.’s agents and attorney, an arrangement was entered into for the transfer of the bonds and securities on payment of $4,100,000, and the cancellation of a note of a firm of which plaintiff was a member, and plaintiff agreed to deliver the bonds to the attorney in escrow, rto be delivered if plaintiff approved or signed the contract. At that time no one was authorized by M. to buy these bonds. The agents telegraphed to M. that the securities and bonds had been deposited to be turned over when the contract was signed, but not stating the consideration, to which he replied: “ All right and satisfactory,” and directed his agent to get the bonds. The securities were then deposited with the attorney, but upon receiving the contract M. refused to sign it, and thereafter claimed, the seentities as matter of right, and not under the contract. Subsequently plaintiff surrendered them without any agreement as to compensation, relying on M.'s generosity for his compensation. In an action upon the contract for the sum therein agreed to be paid, Held, that a direction of a verdict for plaintiff was erroneous; that there was nothing in the telegram from which it could be said as matter of law that M. became a party to the contract; that the meaning to be given to the language used, and the inferences to be drawn from it, the credibility of plaintiff and M., as witnesses, and the question whether M. became bound as a party by ratification, adoption or estoppel, should have been submitted to the jury.
    (Gray, Peckham and Maynard, JJ., dissent.)
    Appeal from judgment of the supreme court, general term, first department, affirming judgment in favor of plaintiff, entered upon verdict directed by the court
    This action was brought to recover the sum of $100,000, less a payment thereon of $25,000, with interest from the 26th day of February, 1889. The plaintiff alleges in his complaint that prior to the 26th day of December, 1888, he owned and possessed certain bonds and stocks of telegraph companies, for convenience called telegraph properties, and that at the-time an agreement was entered into between him and the defendants, whereby they agreed to purchase the telegraph properties and pay therefor the sum of $100,000, upon the assignment and delivery to them by him of such properties; that he thereafter assigned and transferred the properties to them and performed the agreement on his part; that thereafter, on or about the 25th day of February, 1889, they paid him the sum of $25,000 as a partial payment, and that the balance, $75,000, remained due to him, and he prayed judgment for that sum, with interest The defendants answered separately, denying the allegations of the complaint, and making certain other allegations against the plaintiff’s right to recover. The issues thus joined were brought to trial at a circuit court, and, after evidence on both sides had been given, the trial judge refused, upon the application of the defendants, to submit any questions ■of fact to the jury, and directed a verdict in favor of the plaintiff Judgment was entered upon the verdict, and that judgment having been affirmed at the general term the defendants have appealed to this court.

      Joseph Larocque, for app’lts; JEselc Cowen and Joseph H. Choate, for resp’ts.

      Reversing 46 St. Rep., 940.

   Earl, J.

This case has been argued and reargued by very able counsel. We have given it the thorough examination which its importance demands, and we have reached the conclusion that the learned trial judge erred in refusing to submit the questions of fact to the jury.

It appears that for some years prior to December, 1888, the defendant Mackay was quite largely interested in telegraph property, and in or about the year 1884 the plaintiff, in a conversation with him, offered to purchase for him certain other telegraph properties for the purpose of improving and benefiting that which he, Mackay, already owned, the purchases to be made with money furnished by Mackay. Thereafter Mackay advanced for^the purchase of such properties from time to time, during several years after 1884, in all upwards of $1,000,000. There was no agreement in writing between Stokes and Mackay explaining their relations, and in December, 1888, Mackay did not even have vouchers to show how much money he had advanced to Stokes, and ■down to that time he had had no account from Stokes of the manner in which he had disbursed the money with which he had been intrusted by Mackay. Stokes had taken and he held in his own name most of the property thus purchased, although it is quite clear from the evidence that all of them were to have been turned over to Mr. Platt, Mackay’s agent in the city of Hew York. The evidence tends quite strongly to show that Mackay was to have the title to all the properties purchased with his money, but it is a disputed question of fact whether he was to have them as absolute owner or simply as collateral security for the moneys advanced. According to the claim of Stokes, as put forward in his evidence, the only interest he was to have was one-half of the profits of all the properties acquired by and through him after Mackay had been fully reimbursed for all his advances.

Prior to July 28, Í885, Mackay had loaned to 0. H. Read & Co., a firm to which Stokes belonged, and who were the proprietors of the Hoffman House in the city of Hew York, from time to time, in all the sum of $370,352.50, for which on that day he took their note payable on demand. The interest on that note was adjusted in the fall of 1888, and upon a settlement between Stokes and Mackay, the payment of the whole interest to January 1, 1889, was indorsed upon the note, the principal of the note remaining unpaid. In December, 1888, Mackay, through his-agents, from time to time, requested Stokes to turn over to his agent, Mr. Platt, the telegraph properties held by him, and Stokes complied with those requests only to a limited extent. Mackay at that time was in California, where he resided. Prior to about the 24th day of December, 1888, there had never been any negotiation on the part of Mackay for the purchase of the telegraph properties from Stokes. His uniform claim and demand had been that he was entitled to have them turned over to his agent. Shortly prior to the 24th of December, Stokes declined to turn over any more of the telegraph properties unless some agreement was made with him, showing his interest in them, and the share of profits in them to which he was entitled. Finally, on the 24th day of December, he caused an agreement to be drawn up by Col. Ingersoll, his attorney, as follows :

“This agreement made this day of ,1888, between Edward S. Stokes, of the City and State of Hew York, party of the first part, and John W. Mackay, of San Francisco, California, and Hector de Castro, of the City and State of Hew York, parties of the second part, witnesseth :
.“ That whereas, the party of the first part, is the owner of certain bonds and stock of the telegraph company known as The Hnited Lines Telegraph Company, and also of The Michigan Postal Telegraph Company, and certain stock in The Chicago Board of Trade Telegraph Company, and The Pacific Telegraph Company, and The Pacific Mutual Telegraph Company, also of stock in The Lehigh Yalley Telegraph Company, and also the owner of certain contracts made between himself and E. L. Martin for the purchase of additional stock in The Pacific and The Pacific Mutual Telegraph Companies, which contracts and the liability under them, the parties of the second part hereby agree to assume; and
“ Whereas, the party of the first part has unsettled accounts with the parties of the second part for large sums of money borrowed at various times ; and
“ Whereas, the parties of the second part wish to buy, and the party of the first part wishes to sell the said telegraph property and the said securities, including all equities in contracts, as well as all judgments and liens of every kind and description appertaining thereto, and to settle and adjust the indebtedness referred to; and
“ Whereas, the parties of the second part are willing to assume the prosecution and defense of any suits now pending in relation to said property, and to prosecute and defend the same, paying the costs thereof; and
Whereas, the party of the first part has agreed that in the prosecution and defense of such suits he will furnish any and all testimony that he may have, and will at all times furnish the facts in relation thereto ; and
“ Whereas, the party of the first part is indebted for legal services performed in and about said business, and has signed certain bonds and certain contracts to idemnify others, the parties of the second part hereby agree to pay and discharge said indebtedness, as well as to keep the party of the first part harmless by reason of the signing of said bonds and contracts; and
“ Whereas, it is the intention of both parties that the said party of the first part shall be relieved from all the indebtedness and responsibility referred to in this agreement, from and after the date hereof, and that the parties of the second part shall be relieved from all responsibility of every kind and nature by reason of any transaction or transactions before this date.
“ Now, therefore, it is agreed, by and between the parties, as follows:
First. The party of the first part shall furnish all testimony,, and shall make, execute and deliver all papers that may be necessary in the prosecution or defense of any suits not pending, or that may hereafter be brought, without charge.
Second. The said party of the first part hereby agrees to turn over to the parties of the second all the bonds and stock to which he may be entitled, of The United Lines Telegraph Company, and that he will assign all judgments that he may' own, or in which he may be interested, that have been recovered against The United Lines Telegraph Company, or the Bankers and Merchants’ Telegraph Company, or that in any event may 'be a lien upon the property of the United Lines Telegraph Company, and that the same shall be assigned and delivered in due form free of all charge and expense to the parties of the second part.
Third. It is further agreed that the said party of the first part will so assign all of the property before mentioned, and, all of his rights, interests and equities therein, for and in consideration of the cancellation of the indebtedness referred to, and upon the payment of the sum of $100,000, upon the delivery of the bonds and securities referred to in the annexed schedules.
“ It is agreed on the part of the parties of the second part, that the receipt of the said property and interests herein referred to, shall be in full satisfaction of all claims and demands, of whatever kind and nature, against the said Stokes, and also against the firm of C. H. Read & Company, and that the said parties of the second part will save and keep harmless the said parties from any further costs or liability growing out of the transactions connected with the said telegraph business.
“ There is attached hereto a schedule marked A,’ the same being a list of all the properties; also a schedule marked ‘ B,’ the same being a list of suits now pending; also a schedule marked ‘ C,’ the same being a list of the judgments.
“In witness whereof, we have hereunto set our hands and seal, this day of
, 188 .”

On the 24th day of December Stokes had and presented that agreement at a meeting between himself, De Castro, Ingersoll and Platt. De Castro had been in the employ of Mackay, and had been the intermediary between Stokes and Mackay in the negotiations in reference to the telegraph properties, it having been deemed desirable by both of them that Mackay should not be known in Stokes’ transactions in reference to the properties. It was because De Castro had acted as such intermediary that Stokes required that his name should be signed to the contract as one of the parties of the second part. Mackay knew nothing whatever about the terms of the proposed agreement, and nothing contained in the agreement had ever been brought to his attention. The debt which he held against the firm of C. H. Read & Co. had no connection with, or relation to, the telegraph business or the telegraph properties. ¡Neither of the persons who were present at the time this agreement was signed by Stokes and De Castro had any agency whatever in reference thereto for Mackay. There is no evidence whatever that anybody was authorized to enter into such agreement for Mackay, or to negotiate for the purchase of the telegraph properties for him, or that Mackay ever contemplated their purchase. But the evidence tends to show that he always understood and claimed that the properties belonged to him. On the 24th day of December the arrangement was made between Stokes, De Castro and Ingersoll that Stokes should deliver certain telegraph bonds into the hands of Ingersoll, to be held by him as custodian until the agreement was approved or signed by Mackay, when they were to be turned over to Platt as Mackay’s agent; but that if Mackay did not approve of or sign the contract then it was to be null and void, and the bonds were •to be returned to Stokes. At that time Ingersoll gave his receipt for $935,000, par value of the telegraph bonds. This proposed contract was executed in duplicate by Stokes and De Castro. Stokes kept one copy, and it was understood and arranged between Ingersoll and Stokes that the other copy should be sent by Ingersoll to Mackay in California, for his signature. At that interview between De Castro, Ingersoll and Stokes two telegrams were prepared which were to be sent to Mackay, and on that day one was sent by Mr. Platt as follows:

“ I did not succeed in meeting Stokes until late to-day, when made demand for IT. L. T. Co. Eds. Ingersoll was present, and said that, owing to legal complications, he thinks it would be better not to deliver IT. L. T. Co. Eds. to me for the present, and Ingersoll requests me to telegraph you that Stokes has deposited with him to-day 900,000, 30,000, 5.000 1st Mtge. IT. L. T. Co. Eds. 1,000,000, 600,000 stock will be assigned, and all judgments turned over on your order as soon as agreement forwarded to-day is signed by you. He said this course had to be pursued to avoid trouble in the courts, and he says this gives you entire control of the property.
“E. 0. Platt.”

And another one by De Castro as follows:

“ E. S. Stokes turned over to Col. E. G. Ingersoll nine hundred and thirty-five thousand of bonds and other securities. He signed ■also an agreement which is forwarded to you and which leaves him out. Col. E. G. Ingersoll will turn over to E. C. Platt these securities for custody; this is the only way it could be done, and I hope it will be satisfactory. E. S. Stokes swears that he told you about having to use some of the bonds to raise money which he needed absolutely to avoid bankruptcy. Please accept my best wishes for happy Xmas.
“H. De Castro.”

To these telegrams Mackay replied to De Castro as follows:

“ All right and satisfactory. I want you to tell to Ingersoll to do nothing in this case except what he knows to be correct and legal, as I do not want trouble for what has been done in the past, or in the future.”

And then to Platt as follows:

“ Telegram received. All right. You take whatever securities Ingersoll gives you, as Ingersoll understands this matter fully. I do not wish him to do anything but what is legal.”

On the 26th day of December, Ingersoll wrote the following , letter to Mackay, inclosing the contract:

“New York, Dec. 26, 1888.
“John W. Mackay, Esq.:
My Dear Friend—1 regret that there was any feeling on your part about the United States securities. I wanted to carry out your views, so did, Mr. Stokes, but it was impossible to do so. These bonds have been issued for about three years, and Mr. Stokes has sworn again and again that they belonged to him, and I understood and understand the fact so to be. Suits had been commenced to enjoin Mr. Stokes from selling or disposing of these bonds, and these suits were defeated by the fact that he had not disposed of them and did not intend to. This applied to 300 of them. If they had been turned over or sold, the suits would have gone against us.
“ Under these circumstances the bonds could not be turned over in the way suggested by you. They could be sold, and this ■action would be consistent with all the testimony given by Mr. Stokes.
“ Nine hundred and thirty-five of the bonds have been delivered to me and one million six hundred thousand stock.
“ Orders will be given me on Farmers’ Loan and Trust Company for all stock held by that Co. In other words, all the securities will be handed to me.
It seems to me, taking into consideration the complications of the matters between you and Mr. Stokes and the condition of the business, that everything should be settled. There is some danger that it may be claimed that you were a partner and are so still in all this business, including the hotel, and consequently I thought it advisable to include everything, and I think this will meet your approval. ■
“You know that some bonds were used as collateral. Thirty-five thousand dollars was borrowed at the Western National. I gave the note and Mr. Stokes indorsed and deposited the collateral.' At that time the money had to be raised or the effect would have been disastrous. If Stokes had then failed the property would have been attached from every side & the arrangement with the Western Union would have failed. I thought then, and still think, that it was the thing to do. I believe that you have been informed as to the rest.
“ The consideration mentioned will clear everything, take all the bonds up and put the entire property into your hands.
“ In foreclosing the deed of trust I think that De Castro had better take charge of that.
“ I suppose that De Castro has written you on this whole business. I inclose the contract. If it meets your approval please sign & return and I will send you duplicate.
“I am going to Washington to-night to arrange with the Atty. Gen. and the counsel of Western Union & Union Pacific to argue the application for injunction to prevent Union Pacific from carrying out the recent act of Congress in regard to taking messages for all telegraph companies.
“Yours truly,
“B. G. Ing-eksoll.”

This letter was written and mailed the latter part of the day it is dated, and the telegrams to De Castro and Platt had. been previously received on the morning of that day, and their contents were known to Ingersoll, Stokes, De Castro and Platt, who were engaged in these transactions. Notwithstanding the receipt of these telegrams, it is worthy of notice that Ingersoll in his letter stated: “I inclose the contract. If it meets your approval please sign and return and I will send you duplicate,” from which it is quite apparent that Ingersoll, who had been made the custodian of the securities to be turned over, did not understand, at the time he wrote that letter, that Mackay, by his telegrams, had approved the contract. Mackay received the letter inclosing the contract on or about January 3, 1889, and immediately wrote Col. Ingersoll as follows:

“ San Francisco, Jany. 3, 1889.
“ Col. R G-. Ingersoll :
My Dear Col.—Your letter and Article of Agreement dated the 26th received.
“ On looking over the agreement I see no necessity for signing it. Some portions of it are wrong. You say it releases C. H. Bead & Co. from all claims.’ The claim I hold against C. H. Bead & Co. has nothing whatever to do with the Telegraph business. There is no necessity to make any change at present except to place the securities with Mr. Platt for safe keeping, etc. You know exactly what is to be done and I want nothing done except through your instructions.
“Very sincerely,
“ John W. Mackay.”

And on the next day he telegraphed De Castro as follows : “ I have received your letter. That agreement will not suit me. I will sign a proper one when I come east and the thing is cleaned up.”

The facts so far stated are not much in dispute, and if there were nothing else in the record the case would have to turn upon this evidence and the inferences to be drawn therefrom.

It is claimed on the part of the plaintiff that Mackay became bound by the telegrams which he sent to Platt and De Castro, and that as matter of law he must be held to have adopted the contract by those telegrams. It is quite true that without knowing anything that was done by Ingersoll and De Castro in the city of New York he could have used language strong enough in those telegrams to have made himself a party to the contract just as it was written. Fitzmaurice v. Bagley, 6 Ell. & Bl, 868; Lewis v. Read, 13 M. & W., 834; Rogers v. Kneeland, 10 Wend., 218. But did he intend to? We think, that in view of all the circumstances, that the meaning to be given to the language used in those telegrams, and the inferences to be drawn from them, were matters to be submitted to the jury. White v. Hoyt, 73 N. Y., 505 ; First Nat. Bank v. Dana, 79 id., 108; Kenyon v. K. J. & M. M. A. Ass’n, 122 id., 247; 33 St. Rep., 467. It certainly cannot be inferred as matter of law that, without knowing anything about the provisions of the contract, Mackay intended to purchase telegraph properties which he had always claimed as his own, and not only pay $100,000 therefor in cash, but surrender to Stokes a note for upwards of $370,000 against his firm, and in addition thereto release him from any accounting for over $1,000,000, which had from time to time been advanced to him. Mackay had, through, his agents, been claiming these properties and demanding that they should be turned over, and no one in the city of Hew York was authorized to purchase them upon any terms for him. He had no reason to suppose that an agreement had been signed by him, or in his behalf, releasing Stokes from the note which had no connection whatever with the telegraph properties, and when he telegraphed back “ all right and satisfactory,” what did he mean? We think it was for the jury, under all the circumstances, to infer what he meant and how he was understood. It is certainly not an unreasonable inference to suppose, in view of all the facts surrounding the transactions, that he meant it was all right and satisfactory that the bonds had been turned over to Ingersoll, and that the stocks and judgments, the fruits of the money he had advanced to Stokes, would also be turned over. Without giving our views at greater length, and without calling minute attention to all the evidence, we are very clear that there was nothing in the ,twro telegrams sent by Mackay on the 24th of December from which it could be said as matter of law that he became a party to the contract which had previously been signed by Stokes and De Castro. Mackay was not bound to direct Ingersoll to return the securities placed in his hands by Stokes. Ingersoll did not hold them as Mackay’s agent, but as custodian for Stokes. When Mackay refused to approve or sign the contract, Stokes, as between him and Ingersoll, was entitled to receive the securities again. Mackay could continue to demand the telegraph properties from Stokes as he had done before December 24th and even from Ingersoll, without making himself a party to the agreement He claimed the properties as matter of right before December 24th, and he could continue to claim them in the same way without adopting the agreement. Hone of the properties passed from Ingersoll into the hands of Mackay and thus out of the reach of Stokes until they were turned over in March, 1889, under an alleged agreement then made. There certainly was no conclusive evidence that Mackay so dealt with the telegraph or that he so acted or omitted to act in reference to them as to make the ■contract of December 24th binding upon him.

But when we proceed further it is made much plainer that there were questions of fact to be submitted to the jury. There was evidence of subsequent events which illuminate what went before.

There was evidence tending to show that the contents of the letter of Mackay to Ingersoll dated January 3d, and his telegram to De Castro of January 4th were communicated to Stokes; that Stokes knew then that Mackay declined to approve or sign the ■contract; that Mackay never at any time claimed any rights under this contract; that thereafter, down to the 20th of March, 1889, through his agents and in person, he claimed these telegraph properties as matter of right and not under the contract; that ■Stokes at no time in his interviews with Mackay and his agents claimed that Mackay was bound by the contract; that all the-negotiations between Mackay and his agents on one side and Stokes on the other proceeded on the theory that the contract had not been signed or become binding; that nothing was done by Stokes in pursuance of or in reliance upon the contract, or in-performance thereof; that finally, on the 20th day of March, 1889, after some negotiations between Stokes and Mackay and his agents, an arrangement was made by which Stokes agreed to turn over to Mackay all the telegraph properties without any agreement as to compensation, relying entirely upon Mackay’s generosity for his compensation for his supposed interest in the properties, and that in pursuance of that arrangement he did turn over from time to time upon the demand of Mackay’s agents these-properties, never in any of the interviews with them claiming that he was doing it under the contract or that Mackay was in any way bound by the contract until shortly before the commencement of this action in June, 1890. There is also evidence by several witnesses of the defendants plainly contradicting nearly all the material evidence given by Stokes as a witness in his own-behalf,

Under such circumstances it is impossible for us to perceive how it can properly be held that there was no questions of fact for the determination of the jury, and that Mackay, as matter of law, was bound by the contract of December 24th, by the ratification and adoption thereof. We do not mean to intimate any opinion as to the weight of evidence on either side, or as to the merits of the controversy between these parties. The credibility-of both Stokes and Mackay, as witnesses, was matter for the consideration of the jury as well as the force and effect of all the evidence. The ultimate issue to be determined is whether Mackay became bound as a party to the agreement signed by Stokes and De Castro by ratification, adoption or estoppel, and all the evidence bearing upon that issue should be fairly submitted to the jury for their determination.

We have intended only to call attention to some of the main features of the case. Time and space forbid that we should qualify and limit some of -our statements as the evidence may possibly render proper. For the present purposes that is not needed. Stokes seeking to bind Mackay by a contract involving-enormous amounts, and to bind De Castro by a contract in which he has no interest whatever, should make a case by a preponderance of evidence clear and satisfactory.

We have not overlooked the fact that during several years-Stokes rendered valuable and efficient services in purchasing, defending and managing the telegraph properties, and while his compensation for such services is not directly involved in this action, it is an incidental feature of the case not lightly to be ignored.

Our conclusion is, that the judgment should be reversed and-a new trial granted, costs to abide event.

Gray, J. (dissenting).

A majority of my brethren have voted to reverse the judgment upon the verdict for the plaintiff, which the learned trial judge directed, and which the general term below have affirmed, because they think the jury should have been allowed to pass upon the issues. As the case was developed the proof was such as to form a possible issue but upon one question of importance, and that was not material, in view of what had already been established by the evidence. That question, to which much prominence has been given, is whether Stokes agreed in March, 1889, to waive and to abandon any rights which he had acquired under the contract of December, 1888. I think that it is impossible, upon a careful consideration of this evidence, justly, to hold that any such question was open to opposing inferences.

To have sent the case to the jury, would have been, in effect, to authorize them to speculate and surmise with respect to questions, which either were not material, or were, from the nature of the proofs, susceptible of but one answer. The evidence conclusively shows when, in December, 1888, the negotiations for a delivery by Stokes of the telegraph properties resulted in the execution of a contract between him and De Castro, not only that Stokes held the legal title to and had the possession of all of them, and that they were the fruits of the efforts of Stokes through the purchase of the Bankers & Merchants’ Telegraph Company’s property and franchises and in their reorganization and development in the new United Lines Company under his control and presidency; but that he was a co-adventurer or partner with Mackay in the scheme to build them up and, eventually, to consolidate them with Mackay’s Postal Telegraph line, with an interest in these new properties, which his labor of years had created, which was to be reorganized in a participation in the profits or stock of the new corporation to be formed by consolidation. In this attitude of being the legal owner of the properties and entitled by promise, as by his conceded deserts, to some share or interest, Mackay. undertook to obtain from him the bonds and shares of the telegraph companies, through the agency of Platt’ and De Castro, the latter of whom for years had represented him in his various relations with Stokes, and was, with respect to obtaining these securities, particularly instructed and authorized by Mackay.

This contract for a sale of the telegraph properties is drawn up, which is signed by Stokes and by De Castro, and which is forwarded to Mackay for his signature. At the time of its execution Stokes refuses to hand over any securities to De Castro, but is willing that Ingersoll shall hold them, and, meanwhile, and until Mackay can be heard from, turns over $935,000 of bonds in part performance. Mackay is advised in the telegram from De Castro, on December 24th, of the deposit of the bonds, and that an agreement has been forwarded for his signature, which left Stokes out of the telegraph business. He was advised on the same day, in the telegram from Platt, that $1,600,000 of United Lines Company’s stock—a controlling interest—would be assigned if the agreement forwarded was signed. Thus Mackay was informed of a consummation of his agent’s negotiations in an agreement which provided for Ms getting the properties and which left Stokes out of the telegraph business; that a large number of bonds had been deposited with Ingersoll, and that a controlling interest in the stock would be assigned when he approved of the agreement. He might have waited to read the contract, but he promptly telegraphed back to De Castro, “All right and satisfactory; ” and to Platt, “All right," and for him to take whatever securities Ingersoll gave him. De Castro gave Stokes a copy of Mackay’s telegram on December 26th, and, on the strength of Mackay’s distinctly expressed approval, Stokes delivers up the $1,600,000 of stock that day, as Ingersoll’s letter to Mackay, written in the afternoon, shows. Also, on that day, De Castro acknowledges upon the contract of the 24th the receipt of the securities, evidencing ready performance by Stokes, on his part of the contract, in giving over the securities and surrendering his control of the United Lines Company. When Mackay acknowledged the receipt of the contract, so far from expressing himself in repudiation and rejection of it, as it was his honest duty to do, if he did not propose to have anything to do with it, he simply takes exceptions to portions of it. He, in affirmative words, directs a retention of the, securities, obtained through his agent’s transactions, when he writes to Ingersoll: “ There is no necessity to make any change at present, except to place the securities with Platt for safe keeping." At that time, and from the time of the negotiations Ingersoll had ceased to be Stokes’ lawyer. He, himself, says: “ When they fell out, I stepped out." Occupying, therefore, in the commencement ostensibly a neutral position as depositary, the effect of Mackay’s letter of January 3d, was to make Ingersoll his custodian of the securities. It was utterly and clearly inconsistent with a rejection by Maekay of the contract that he should request no change to be made, and that a delivery of the securities should be made by Ingersoll to his financial agent, Platt. Mackay knew, of course, that those securities were in Stokes’ legal ownership and possession, and that something in the nature of a sale or transfer was necessary to get them over into his own possession. Both he and his agent De Castro knew that Stokes had an interest at stake in the telegraph properties. Hence, Mackay was bound to know, when he was informed of an agreement being made and of securities in part deposited with Ingersoll under it, and others to be deposited, if he was heard from in approval, that Stokes’ interests had been acquired on the basis of some consideration moving to him. Any other assumption would be foolish. It was open to Mm to defer expressing himself, but he elected to confirm his trusted agent’s transaction, and thus to obtain at once a delivery of the shares of stock, which carried the control of the United Lines Company, and in that he certainly succeeded. When, upon receipt of the contract, he saw that it effected a sale to him of the telegraph properties that did not surprise him, and very naturally so considering Stokes’ title, and his letter emphatically evidences his intention to hold on to the properties which Stokes had delivered. The sole question for Mackay on January 3d, when he received the contract, was one of its adoption or of its rejection. His duty was plain and honest. The law rigidly held him to the duty of making known at once his answer with the text before him. He did not even hesitate then any more than when he telegraphed, in reply to the telegrams of December 24th, that it was all right and satisfactory, and thus secure possession of the $1,600,000 of stock upon strength of its distinct approval of De Castro’s act. By letters, as by telegrams, he was earnest in his desire to keep hold, through Ingersoll, of what Stokes had delivered, and to have them safely placed in the keeping of his financial agent, Platt.

I do not see how it can seriously be pretended either that from the moment Mackay wrote to Ingersoll on January 3rd, Ingersoll could have understood anything else than that Mackay proposed to hold onto the securities, and that he had not decided to reject the contract. Ingersoll would not have dared, after that letter to him, to give back the securities to Stokes. He was a good enough lawyer to know that thenceforth Mackay considered that he was holding them for him, and that his position was directly affected by the notice in Mackay’s letter. What was the result? On March 20, 1889, when Ingersoll turned over to Platt the securities he had received from Stokes, the receipts given show that between the time when the contract was signed and the $935,000 of bonds were delivered, Stokes, assured by Mackay’s prompt and emphatic telegraphic reply that he was satisfied with De Castro’s transaction, commenced, with the delivery of the 16,000 shares of stock, a faithful performance on his part of the agreement, and subsequently turned over 7,380 more shares .of the United Lines Co.’s stock, besides other bonds and shares. There was on Mackay’s part, with full knowledge of the facts, as complete an adoption of the contract his agent had undertaken to make as the law could ever require. Admitting that it was open to Mackay, when advised of the agreement, to refuse to be bound by it, by his failure to make known his refusal, and by his retention and ultimate acceptance' of the benefits of his agent’s transaction,. he, in legal effect adopted it as his own. To say that there was a question for the jury to decide, arising out of the conflicting testimony of Stokes and Ingersoll, after Mackay came on to Hew York in March, as to whether Stokes aid not agree to abandon the contract and to trust to Mackay’s generosity for his compention, is, as a proposition for consideration, too great a tax upon human credulity ; while as a legal proposition, it is untenable, in view of the acts of the parties. Mackay, by his acts, had become bound to abide by the contract. It was incumbent upon him, in the first place, if he would not be bound by the contract of his agent’s making, to say so in unequivocal terms; and afterwards, if he was going to repudiate his obligations, at any rate, to place Stokes back in his former position by returning all that he had delivered. This he did not do, and, therefore, the law does not allow him now to say, “ I did not come into this contract,” when Stokes, relying upon his acts, had honestly performed his part of ° the agreement. It is a most extraordinary kind of an abandonment of a contract for one party to set up, when sued by the other to perform his obligation under it, having practically received all of the property called for by the contract, and the other party standing denuded through performance.

In view of the knowledge we have from the evidence as to Stokes’ original position and of the concession as to the prepon- " .derance of the evidence in favor of his right to compensation," and in further view of what was done under the contract, I think it is a very technical and a very unwarrantable conclusion to hold that it should have been left to a jury to determine whether or not there was in March an agreement by Stokes to abandon the contract and to rely on Mackay’s generosity for compensation.

I think we should affim this judgment.

Judgment reversed, new trial granted, costs to abide event.

Andrews, Ch. J., Finch and O’Brien, JJ., concur with Earl, J., for reversal; Gray, J., reads for affirmance; Peckham and Maynard, JJ., concur._


author: Per Curiam.

text:
    Mark Lythgoe, Pl’ff, v. Jane Smith, Impl’d, App’lt, Sylvester L. H. Ward, Referee, Resp’t.

      (Court of Appeals,

      Filed December 19, 1893.

    Attorney—Power or.
    Where application is made to the court for authority to a referee to make payment upon a power of attorney, duly authenticated and acknowledged, of a foreign heir, where the identity of the person making it is not disputed nor the facts contradicted, and there are no suspicious circumstances surrounding the application, it is the duty of the court to authorize and direct payment as provided for in the power, and a refusal to make such direction is the denial of a legal right.
    Appeal from order of the supreme court, general term, first department, affirming order directing the referee to pay the share of Jane Smith in the proceeds of the real estate sold to the chamberlain of the city.
    The plaintiff commenced this action for the partition of certain real estate in the city of New York, of which one James Linden died seized. The defendant, Jane Smith, was a devisee of a portion of the real estate of which the testator died seized, and was called Jane Lego in -his will. The plaintiff obtained an order for the service of the summons upon her by publication, as a nonresident of this state, she being a resident of the city of Aukland, in the colony of New Zealand.
    The judgment roll in the action contains- an affidavit, properly authenticated, proving the actual personal service of a copy of the summons and complaint upon Mrs. Smith at Aukland, on the 17th of November, 1891. The attorney for Mrs. Smith, who appeared for her in this action, makes an affidavit in which he says that after the service of the summons and complaint upon her, the defendant, Mrs. Smith, immediately sent the same to him. A hearing or trial of the action was had, and upon the trial the „ plaintiff was sworn, and said he had had a letter from Mrs. Smith "from Aukland about two months before that time; that he had frequently sent letters to her, and that she was his sister, and that he addressed the letters to her as Jane Smith, Aukland, and put a street address upon the letter, but that he had then forgotten it. A portion of the testimony of Jane Smith, taken in another action before the United States consul in Aukland, was read in evidence in the case without objection. The referee herein found that Jane Smith was the half sister of the deceased testator, Linden, and was named in the will as Jane Lego, and is now the wife of Eichard Smith, and resides in Aukland, New Zealand.
    Judgment for a sale of the premises sought to be partitioned was finally entered, and the. real estate was sold under decree of sale, and the share of the defendant, Mrs. Smith, in the net proceeds of the sale was found and determined to be $16,347.49. The referee has paid to the attorney at law for the plaintiff his share of the proceeds of the sale.
    It also appears that there has been considerable litigation concerning the subject of this action, and the attorney for Mrs. Smith received from her and her husband a full power of attorney for them and in their name to, among other things, receive the money belonging to Mrs. Smith or her husband under or by reason of the said will. The attorney says he has acted upon such power of attorney ever since he received it in 1890, and he has been in 'constant and uninterrupted communication with Mrs. Smith through her representative in Aukland, and he says she is over seventy years of age, and in his judgment she is unable to take a long sea voyage.
    This power of attorney was produced, and appears to have been signed, sealed and delivered by Mrs. Smith and her husband in presence of the United States consul at Aukland, and acknowledged before him by both of them, and he certified that he read the paper over to her and that she understood the same, and that they were both personally known to him and known to be the same persons who executed the power. This certificate was signed by the consul and authenticated by the seal of the consulate.
    After the referee had sold the premises and received the money, the person named in such power of attorney, being also the attorney at law for the defendant, Mrs. Smith, in this action, produced the power of attorney before the referee and asked him to pay over the money belonging to Mrs. Smith to him as attorney in fact and as a person duly and properly authorized to receive the same for her. The referee, while not denying any of the facts above set forth, did not admit them. He, therefore, made a certificate stating that he was unwilling to take the responsibility of paying over the money on the faith of this power of attorney and he asked the direction of the court. Upon that certificate an order to show cause was granted requiring the defendant, Mrs. Smith, or her attorney, to show cause why the referee should not be directed to pay Mrs. Smith’s share into court, or to pay it to the chamberlain of the city of New York. Upon the hearing of the motion the facts above stated appeared, and the power of attorney was again produced and, together with the affidavit of Mrs. Smith’s attorney, was filed. The court directed the sum to be deposited with the chamberlain of the city of New York, and that his receipt should be sufficient to discharge the referee. It was further ordered that Mrs. Smith, or her attorney in fact, or any other person making claim thereto, might apply to the court, at the foot of the decree or otherwise, to establish any right or claim which they may have in the fund or in any part of it.
    Mrs. Smith, through her attorney at law, appealed from this order to the general term of the supreme court, where the order was affirmed, and from the order of affirmance an appeal has been taken to this court.

      Isaac N. Miller, for app’lt; Sylvester L. H. Ward, for resp’t.
   Per Curiam.

The power of attorney was duly proved in this proceeding. Code Civ. Pro., §§ 935, 937; 1 Eev. St., 757, § 6, as amended by chap. 80, Laws of 1883. It was ample authority for the payment of the money to the person named therein as attorney in fact. That person produced it and made the demand. The judgment provided for the payment of the money to Mrs. Smith or to any one whom she might legally and properly authorize to act for her.

Upon all the facts of this case, which are uncontradicted and which are above stated, we fail to see anything which would justify a court in refusing to direct a payment to be made on this' power. The court has ordered the money to be deposited with the chamberlain, and such deposit necessarily results in the further expenses of the chamberlain’s fees and fees to counsel for taking proceedings to obtain payment from the chamberlain. This added expense should be avoided if it can reasonably be done We are unable to see what more proof the defendant, Mrs Smith, could produce unless she came over in person.

Upon the uncontradicted facts as they appear there can be no rational doubt that the Mrs. Smith who signs the power of attorney, is the same Mrs. Smith who appears as defendant in this action. It cannot be doubted that she understood the nature and purpose of the power. Its authenticity is fully proven and is not denied. What more could be done to establish the right of the person named in the power to receive the money ? If it be said a later power should be proved, it may properly, as we think, be asked, why ? The present one is a full and' complete authority, and by the proof it is clear it was made with special reference to litigation about this very property and to the fact that moneys belonging to Mrs. Smith might be paid in actions at law, and the attorney was specially authorized to give receipts and acquittances therefor. Since the execution of the power it has been acted upon by the attorney, and he has been in constant communication with Mrs. Smith through her representatives at Aukland, and the plaintiff, but two months before his examination in this case, had himself received a letter from the defendant, his sister, and there is no assertion or suspicion of her death so far as this record shows. Being sufficient when given, and there being no assertion or anything to arouse suspicion of death or that the grantor óf the power has withdrawn or in any manner revoked it, why should another be demanded ? By the time it would reach this country and the money demanded and paid under it, Mrs. Smith might at that moment be dead. Such a possibility of death must of course exist under any circumstances, but all action cannot be suspended by reason of it. The bodily presence of Mrs. Smith to demand and receive her money ought to not to be exacted.

Where a power of attorney is produced to a referee, duly authenticated and acknowledged, it may be prudent to obtain the sanction of the court to recognize and make payment thereon, but when application for such authority is made and the facts appear as in this case, and they are wholly uncontradicted, and there are no suspicious circumstances surrounding the application, we think it is the duty of the court to authorize and direct the payment as provided for in the power, and the refusal to make such direction is the denial of a legal right

We should undoubtedly refuse to interfere with the order of the court below in any case where the material facts were not in substance admitted, or where there was any ground for suspicion regarding the power or the manner of its procurement In this case we think the attorney made out a legal right to receive the money.

The order must, therefore, be reversed and an order entered directing the referee to make the payment to the attorney in fact upon the production of the power of attorney and filing the same with the referee. Ho costs allowed to either party.

All concur.


text:
    Ottillie Sentennis et al., App’lts, v. Edward R. Ladew et al., Resp’s.

      (Court of Appeals,

      Filed December 19, 1893.)

    1. Jurisdiction—Trespass in another state.
    The supreme court is not prohibited by any statute from entertaining jurisdiction of a suit for damages for injuries to real property in another state, and if it acquires jurisdiction of the persons of the parties by personal service of process or voluntary appearance and the defendant makes no objection to the_ authority of the court to hear the cause, and the parties proceed to a trial on the merits, the judgment rendered is neither void nor voidable for want of jurisdiction, but is binding and conclusive on the parties.
    B. Costs—Extra allowance.
    Where the plaintiff in an action at law fails to appear when the case is called for trial, and the case is dismissed because of such default there is a tnal for all the purposes of costs, and, in the absence of proof to the contrary, the amount demanded in the complaint is the sum ‘ ‘ claimed ” and tiie ‘‘value of the subject matter involved,” and may properly be taken as the basis of an extra allowance against the plaintiff.
    Appeal from order of the supreme court, general term, first department, affirming an order denying motion to set aside a judgment for costs and an extra allowance.

      C. Bainbridge Smith, for app’lts; George A. Strong, for resp’ts.

      Affirming 54 St. Rep., 935.

   Maynard, J.

The plaintiffs impleaded the defendants in the supreme court for trespass upon real property in the state of Tennessee, alleging damages to the amount of $50,000, and demanding judgment for that sum. A defense was interposed, and the issues joined were noticed for trial, and when the cause was called for the purpose of making up the day calendar the plaintiffs’ attorney announced that they were ready for trial. When the cause was reached on the day calendar the plaintiffs made default, and an order was entered dismissing their complaint, with costs, and with an extra allowance of $1,000. Judgment was subsequently entered in which it was adjudged that the complaint be dismissed, and that tlje defendants recover of the plaintiffs $1,115,70, costs and disbursements, and have execution therefor. The plaintiffs subsequently moved to set the judgment aside upon the ground that the court had no jurisdiction of the subject-matter of the action, it being for trespass upon real property not situated within the. state, and it could not, therefore, enter a valid judgment. The courts below have denied the motion and the plaintiffs have brought this appeal.

We entertain no doubt that the supreme court had jurisdiction to render the judgment awarded in this action. Under the Constitution it has general jurisdiction in law and equity, and of the class of actions to which this cause belongs. It is not prohibited by any statute from entertaining jurisdiction of a suit for damages for injuries to real property in another state. As was stated by Judge Bari in Cragin v. Lovell, 88 N. Y., 258: “It is a general rule of law that actions for injuries' to real property must be brought in the forum rei sitoe, and this rule of law has been, so far as I can discover, uniformly sanctioned and upheld in this state.’’ But a party may waive a rule of law or a statute, or even a constitutional provision enacted for his benefit or protection, where it is exclusively a matter of private right, and no considerations of public policy or morals are involved, .and having once done so he cannot subsequently invoke its protection. Lee v. Tillotson, 24 Wend., 337; Embury v. Conner, 3 N. Y., 511; Matter. of Cooper, 93 id., 507. If the court acquires, jurisdiction of the persons of the parties by due personal service of process, or by their voluntary appearance and submission to its jurisdiction, and the defendant makes no objection to the authority of the court to hear the cause, and the parties proceed to a trial upon the merits, the judgment rendered would be neither void nor voidable for want of jurisdiction, but would be binding and conclusive upon the parties.

The mile of law which the courts will enforce in this, class of cases, when objection is duly and seasonably made, is waived by the plaintiff when he brings the action; and it is waived by the defendant if he pleads generally and goes to trial without insisting upon its benefits. In all the cases to which counsel refers the question was raised in an appropriate manner by the defendant before trial. Am. Union Tel. Co. v, Middleton, 80 N. Y., 408; Cragin v. Lovell, 88 id., 258; Dodge v. Colby, 108 id., 445; 13 St. Rep., 848. In Tel. Co. v. Middleton it arose on motion to vacate order of arrest; in Cragin v. Lovell and Dodge v. Colby, on demurrer. It would be an intolerable abuse of the process of the court if the plaintiff could be permitted to select his tribunal and summon his adversary before it, and when defeated in the cause be heard to say that the action was not cognizable by the court, and that the judgment which it had rendered was a nullity. It might be different if the court was one whose jurisdiction was expressly limited by statute, or there was some statutory inhibition of jurisdiction in a given case or class of cases. Then consent even might not confer jurisdiction. Such was the case of Oakley v. Aspinwall, 3 N. Y., 547, where the statute prohibited a judge from sitting in a cause if he was related to a party, and it was held that even consent could not confer jurisdiction, because the law was not designed merely for the protection of the parties to the suit, but for the general interests of justice.

In Dudley v. Mayhew, 3 N. Y., 9, the subject-matter was exclusively for the Federal courts under the Federal Constitution and laws to hear, and hence the state courts were prohibited from entertaining jurisdiction. The same principle controlled the decision of Davis v. Packard, 7 Pet., 276, and it was there held that if it had been a personal privilege it would have been waived. If jurisdiction is prohibited and the case is one where consent cannot confer it, it is an unsettled question whether the court, upon dismissing the cause, can render any judgment, even for costs. It does not seem ever to have been the subject of adjudication in this court, and the decisions of the lower courts and of the courts of other states are somewhat conflicting upon this point. As this case does not belong to that class it is unnecessary now to decide the question.

The court having power to award costs and enter judgment could also grant an extra allowance. There was a trial here for all the purposes of costs. This court cannot review the exercise of the discretion of the trial court. It was an action at law and damages to the amount of $50,000 were alleged and demanded. That was the sum “ claimed ” and the value of the subject-matter involved ” in the absence of proof to the contrary, and might properly be taken as the basis of an allowance against the plaintiff. The case is distinguishable from Hanover Fire Ins. Co. v. Germania Fire Ins. Co., 138 N. Y., 252; 52 St. Rep., 334. That was an action in equity. The party against whom the allowance was claimed in his verified pleading denied that the value of the property fight involved was as stated in the pleading of his adversary, and it was held that as against him there was not sufficient proof of value to support an extra allowance. Here the situation is reversed. The allegation of value is made use of against the party asserting it, and averments or statements of fact in pleadings are always admissible in evidence against the pleader.

The order must be affirmed, with costs.

All concur.


author: O’Brien, J.

text:
    Dennis Crown, by Guardian, Rep’t, v. John C. Orr et al., App'lts.

      (Court of Appeals,

      Filed December 19, 1893.)

    1. Master and servant—Negligence—Assumption of risk.
    A servant, although not of full age, when he enters into the relation assumes not only all the risks incident to such employment, but all dangers which are obvious and apparent.
    2. Same.
    It is not negligence to direct a young man nineteen years of age who has seen a machine in operation for three weeks, to place a hood in front of the knives, even without instructions, especially when he asks for none and gives no sign that he is not familiar with the method of doing so.
    3. Same—Act of fellow servant.
    Plaintiff was employed to remove dressed lumber from the planer, and had received instructions as to such work. After three weeks service he was directed by the foreman to place a hood in front of the knives of the machine, and in doing so was injured. Held, that the negligence of the foreman in giving such direction without instructions, if any, was not that of the master, but of a co-servant and that the danger being plain and obvious, the master was not liable for the injury.
    Appeal from judgment of the supreme court, general term,, second- department, affirming judgment in favor of plaintiff.

      John Notman, for app’lts; Isaac S. Catlin, for resp’t.
   O’Brien, J.

—The relation of master and servant existed between the plaintiff and the defendants at the time that the former received the personal injury for which he has recovered damages. The question presented is whether, upon any view of the evidence, the result can be attributed to any fault or neglect on the part of the master. The rules of law in such cases are well settled, but it is not always easy to apply them to the varying facts in each particular case. The master does not insure the servant against, all accidents and mishaps that may befall him in the business. The servant, when he enters into the relation, assumes not only all the risks incident to such employment, but all dangers which are obvious and apparent. The law imposes upon him the duty of self-protection and always assumes that this instinct, so deeply rooted in human nature, will guard him against all risks and dangers incident to the employment or arising in the course of the business of which he has knowledge or the means of knowledge. If he voluntarily enters into or continues in the service without objection or complaint, having knowledge or the means of knowing the dangers involved, he is deemed to assume the risk and to waive any claim for damages against the master in case of personal injury to him. Thompson on Neg., 1008 ; Haskin v. N. Y. C. & H. R. R. R. Co., 65 Barb., 129 ; aff’d, 56 N. Y., 608; Jones v. Roach, 9 J. & S., 248.

This principle applies to the plaintiff, though he was not at the time of full age. Like any other servant he took upon himself the ordinary risks of the service, and all dangers from the use of machinery which were known to him, or obvious to persons of ordinary intelligence. De Graffe v. N. Y. C. & H. R. R. R. Co., 76 N. Y., 125. King v. B. & W. R. R. Co., 9 Cush. 112. He is bound to take notice of the ordinary operation of familiar laws and to govern himself accordingly, and if he fails to do so the risk is his own. He is bound to use his eyes to see that which is open and apparent to any person so using them, and if he neglects to do so he cannot charge the consequences upon the master.

The liability of the master for injuries to the servant received in the service is based upon his personal negligence, and the evidence must establish some personal fault or neglect of duty on his part, or what is equivalent thereto, in order to justify a verdict, and he is entitled to the presumption that he has performed this duty until the contrary is made to appear. Wood on Master & Servant, §§ 345, 346; Cahill v. Hilton, 106 N. Y., 517; 11 St. Rep., 26. If the injury of the servant is attributable to the master’s neglect in omitting to furnish safe and adequate appliances for the work, according to the nature of the business, or competent co-servants, or even if he neglects to give persons unacquainted with the use of machinery proper instructions with respect to its use, he is liable. It remains only to apply these principles to the facts of this case as disclosed by the testimony of the plaintiff himself. On the 10th of December, 1890, the plaintiff, who was then about nineteen years of age, and in the employment of the defendants, lost his hand and part of the arm by coming in contact with the knives of a planing maehine. Ro complaint is made that the machine was in any respect defective or unsuitable for the purpose for which it was used, or that the place where the plaintiff was directed to work was in any respect unsafe. The only omission of duty charged against the master in the complaint, or at least the only fault now urged, is that the plaintiff was ignorant of the use of machinery, and the defendants neglected to give proper instructions to him in this regard, or cause them to be given. When the accident occurred the plaintiff had been at work in the shop about. three weeks. His duty was to stand in front of the machine, and about four or five feet from the end of it, and take off the dressed lumber after it had passed through the planer, and when moved to where he stood by the action of the machine and the use of a small roller and horse attached. He was not required to operate or handle the machine itself, but was cautioned against meddling with its operation. There were four of these machines in the room, under charge of a man who assigned the plaintiff to one of them to take the boards away and load them upon a truck as they were dressed.

The plaintiff testifies that on the day of the accident the man in charge ordered him to place a hood made of tin, and used to direct the shavings and dust from the machines to the floor under the frame, in its place in front of the knives of the planer. This hood had a hook at the top,- and when in use hung in front of the knives and about eight inches from them, upon a small beam under the frame. He says that while attempting to put it in place his hand was caught by the knives; and in this way the injury was sustained. At this point there is-a marked conflict in the evidence. The plaintiff says that he was directed by the man in charge to put the hood in place without giving him any instructions as to the manner of doing it, or1 the danger incident to such an operation. The foreman of the machines in charge admits that he gave him no instructions in this respect, for the simple reason that no such duty was ever required of him, and, in fact, he gave him no order to that "effect on this occasion, but the act was entirely, voluntary on the part of the plaintiff, and without request or direction from any one. The plaintiff says that when his hand came in contact with the knives, the hood dropped from the hand upon the floor,, and that he never succeeded in hanging it. On- the other hand, the -foreman, and in this he is corroborated by several other witnesses who were working in the shop at the time, says that after the injury the hood was found hanging in front of the knives, not upon the beam where it was always placed, but upon another, some four inches nearer to the knives. Assuming- that the, verdict has determined conclusively that the foreman ordered the plaintiff to hang this hood in place, in front of the planer, does this charge the master with personal negligence? The plaintiff had been at work in front of this machine- for three weeks, and during that time had full opportunity to observe the manner of handling this hood and placing it- upon the machine. He had the same opportunity of informing himself with respect to any danger attending such an act as the master had. There was nothing in the operation which he was required to perform that called for any special instructions, and he asked for none. It was not negligence to direct a young man nineteen years of age who had seen the’machine in operation for three weeks, to perform such duty, even without instructions, especially when he asked for none and gave no sign that he was not entirely familiar with the method by which the order could be properly obeyed. This was one of the risks which he' assumed o when he entered the defendants’ service. But if, as the learned counsel for the plaintiff claims, the operation was specially dangerous in the absence of instructions, then the danger was obvious and he was not bound to obey the order, but if he did the risk was his own. The learned trial judge instructed the jury with respect to the law" upon this point in the following language: “Now, there are some dangers, gentlemen, of which a person does not need to be informed. Where there is a knife or a saw, the danger is palpable to any one who is employed to work, that if he gets before that knife or saw, he will be cut or hurt. * * * Against apparent dangers a master need not warn a servant. * * * Now, here this boy unquestionably knew that there were knives in this machine that planed this board and cut grooves or tongues on either side; that was as plain to his understanding as it is to yours, and it was as clear to him when he was put at this employment as it is to us to-day, after this trial. He knew that if his fingers got within the range of ■those knives that the same power that caused those knives to revolve and cut off with great rapidity the coating of these boards and make them smooth, would injure his fingers. Instruction was not necessary to impart that information.”

This it a clear exposition of the law applicable to such questions, but we think its application to the proofs in this case called for a non-suit or the direction of a verdict for the defendants. There is no conflict in the evidence as to the particular duties which the plaintiff was hired to perform. They consisted, as already stated, in removing the dressed boards from the machine as they came through, and occasionally sweeping the floor. It is admitted that proper instructions were given to him to enable him to perform this work with safety, and if it be true, as the plaintiff testifies, that on the occasion in question he was directed to perform another, and specially dangerous service, without sufficient instruction, the fault was not that of the master, but of a co-servant. So that whether we consider the order to hang the hood as an incident of the employment the risks of which the plaintiff assumed, or a direction to do a reckless or dangerous thing without sufficient knowledge or instruction, the dangers of which were plain and obvious, or a request by the foreman to do something that by the employment he was not bound to do, the result is the same. The plaintiff was, no doubt, very seriously injured, and his case was one which appealed to the spmpathy of the jury although the testimony preponderated strongly in favor of the conclusion that the injury was the result of some carelessness or inattention on his own part. But it would be manifestly unjust to subject the master to damages in such a case where, under the most favorable view that can be taken of the evidence in favor of the plaintiff, the injury was the resnlt of an accident which could not have been anticipated or prevented by the exercise of ordinary care, and which occurred without the fault of the master.

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

All concur.

      Reversing 54 St. Rep., 308.