author: By the Court : •

text:
    In the Matter of the ATTORNEY-GENERAL, v. THE EMPIRE MUTUAL LIFE INSURANCE COMPANY.

      Insu/ranee Company — reinsurance of its risks — policyholders are not obliged, to accept the reinsurance — they are not bound to pay premiums in the future.

    June 7, 1872, the Empire Mutual Life Insurance Companymade an arrangement with the Continental Life Insurance Company by which the latter was to rein-sure all the policies of the Empire company, and the latter was to go out of business. This arrangement was carried into effect and the Empire company transferred its property to the Continental and went out of business; the Continental reinsuring all of the policyholders of the Empire who desired it so to do. Certain of the policyholders did not accept the reinsurance offered. Thereafter they paid no premiums either to the Empire or to the Continental

      Held, that the act of the Empire company in thus going out of business and transferring its property and business to the Continental excused its policyholders from paying future premiums to it.
    That they were not' bound to accept the reinsurance offered to them.
    That they were entitled to recover from the Empire company or its receiver the damages occasioned by its breach of contract.
    Appeal from an order made at a Special Term, rejecting and disallowing appellants’ claims against the Receiver of the Empire Mutual Life Insurance Company.
    The Empire Mutual Life. Insurance Company was organized under the laws of this State as a life insurance company on the 3d day of April, 1869, and immediately comjnenced the transaction of business. On the 7th of June, 1872, by an agreement in writing, the Empire company reinsured its risks with the Continental Life Insurance Company, and stipulated to withdraw from the business of life insurance, and to do all things necessary and proper, according to law, for the purpose of winding up its business. Most of its policyholders surrendered their policies and accepted new ones instead from the Continental. Some, however, did not, and the Empire, therefore, notwithstanding the agreement, was obliged to keep up an organization and a place for the transaction of such business as it found necessary to do. Its office was removed to the office of the Continental Life Insurance Company, whose employes transacted the Empire’s business.
    Prior to June 7, 1872, the day of the making of the agreement between the Empire and the Continental Insurance Companies for the reinsurance of the Empire’s risks, appellants had insured with the Empire. They paid no premiums after June 7, 1872.
    In December, 1878, proceedings were taken to wind up the affairs of the Empire company and to distribute the $100,000 fund on deposit with the superintendent of the insurance department. Subsequently, and on the 14th day of January, 1879, John P. O’Neill, who had been appointed receiver of the Continental Life Insurance Company, was appointed receiver of the Empire.
    In February, 1881, Mr. O’Neill, receiver of the Empire, petitioned the court for the appointment of a referee to report upon the validity of these claims against the Empire. The referee reported to the court that the claims of appellants were valid and recommended their payment by the receiver. The matter was heard at a Special Term, and an order made rejecting appellants’ claims.

      Raphael J. Moses, Jr., for J ohn G. Simmons and sundry policyholders, appellants.

      William Barnes, for Dr. Edward Young and divers policyholders.

      Leslie W. Russell, attorney-general, for the respondent.
   By the Court : •

The policies in question were in force in June 1872. At that time the defendant made the arrangement with the Continental Insurance Company, by which the latter was to reinsure all the defendant’s policies and the defendant was to go out of business. This arrangement was carried into, effect, and the defendant did go out of business ; the Continental Insurance Company reinsured those of the defendant’s policyholders who desired, such reinsurance. After that time the present claimants made no payments of premiums on their policies and they did not accept the offered reinsurance.

"We think that the act of the defendant in thus going out of business and transferring its property and its business to the Continental Life Insurance Company excused these claimants from the obligation to pay future premiums. They were not bound to accept another company as their insurer. And they could not be bound to continue to pay premiums to a company which had ceased to do business. Practically the defendant had broken the contract, by putting itself in a condition in which it was disabled from carrying out the contract. Therefore the defendant was bound to compensate the claimants for the damages occasioned by this breach of contract. It is not claimed that the rights of these policyholders are barred by the statute of limitations. There is no reason therefore why they should not be paid out of the fund in question, as was reported by the referee.

We think, therefore, that the order of the Special Term should be reversed, and that the report of the referee should be confirmed, with ten dollars costs of appeal, and printing disbursements.

Bockes L, dissenting.

-Present —Learned, P. J., Boardman and Bookes, «LL

Order of special term .reversed, and report of referee confirmed.


source: Caselaw Access Project

author: Learned, P. J.:

license: Public Domain

text:
    In the Matter of the ATTORNEY-GENERAL v. THE CONTINENTAL LIFE INSURANCE COMPANY. Claim of Dollner, Potter & Co.)

      Insolvent corporation — appointment of a receiver — one subsequently recovering a judgment against the company has no lien upon its real estate.

    October 25, 1876, a receiver of tbe Continental Life Insurance Company was appointed in an action brought by one of its stockholders, on the ground of the company’s insolvency, and on November 4, 1876, a final judgment confirming such appointment was made. November 1, 1876, proceedings were commenced by the attorney-general founded upon the fact of the company’s insolvency, and alleging that the first receiver was appointed by consent and for the purpose of concealment. On March 81, 1877, a receiver was appointed i-n the said proceedings by the attorney-general, to whom the-successor of the first receiver who had been appointed in the stockholders’ action, transferred the assets of the company.

      The plaintiff, who had recovered a judgment against the company on February 26, 1877, upon a policy of insurance, claimed to be entitled to a preference over other creditors of the company, upon the ground that the company owned a large amount of real estate on which the judgment was a lien.

      Held, that.the claim was not well founded.
    Appeal from an order made at a Special Term, denying a motion for an order directing the receiver of the Continental Life Insurance Company to pay to the appellant the amount of a judgment recovered against the company.

      Jesse W Furlong, for Dollner and other claimants, appellants.

      John 0. Keeler, deputy attorney-general.

      George IF. Wingate, for the receiver, John P. O’Neill.

      Raphael J. Moses, Jr., for Charles P. Hartwell and other policyholders, respondents.
   Learned, P. J.:

The claimants hold a judgment recovered against the company. February 26, 1877. This they claim should be paid in preference to other creditors on the ground that, at the timé of the recovery, the company owned a large amount of real estate on which the judgment wras a lien.

In an action commenced by Hoyt, a stockholder, on the ground of the insolvency of the company, a receiver was appointed October 25, 1876, pending the action; and a final judgment confirming such appointment, was made November 4,1876. Proceedings were commenced by the attorney-general, November 1,1876, on the ground of insolvency and on the ground that the prior appointment was by consent and for concealment. These proceedings continued until on March 31, 1877, a receiver was appointed, to whom the successor of the receiver first appointed in the Hoyt action transferred the assets. The present claim arose on a policy of insurance.

The title passed to the receiver appointed in the Hoyt action October 25, 1876 (Osgood v. Maguire 61 N. Y., 524), and continued in him until judgment. The receiver is but the officer of the court, in whatever action appointed. The assets have therefore been in the custody of tbe court without interruption down to the present time.

The argument of the claimants is that the appointment in the Hoyt case was utterly void and of no effect. (Attorney-General v. Continental Life Insurance Company, 53 How., 16.) Now we think the claimants fail to notice the distinction between an erroneous and a void judgment.

This court has jurisdiction to appoint receivers of corporations. It may be an erroneous exercise of that power to appoint a receiver of an insurance company at the suit of a stockholder; but we should not hold such an appointment to be void when the company was before the court. Rights of the receivers, under the appointment in the Hoyt suit, have been recognized at Special Term; since the appointment made in the present proceeding.

There is clearly no equity in the claimants’ case; and no reason, unless founded in strict legal right, why they should be paid before other creditors having, similar claims. And we see no legal right which they have against funds which, before their judgment, v ere in the control of the court.

The claimants cite us to a case of one Hartwell against this company, in which a judgment was recovered against the company and ordered to be paid in preference, the judgment having been recovered November 6, 1876. An order for payment appears to have been made at Special Term in Brooklyn, January third. ¥e know nothing of the merits of that case. The petition alleges that the judgment was for moneys fraudulently obtained. That may suggest the reason for its having a preference. Nothing of that kind exists here; and we do not feel bound by that order.

The order should be affirmed, with ten dollars costs and printing disbursements.

Present — Learned, P. J., and Bockes, J.; "Westbrook, J., not acting.

Order affirmed, with ten dollars costs and printing disbursements.


author: By the Court :

text:
    JACOB E. HOGLE, Respondent, v. THE NEW YORK CENTRAL AND HUDSON RIVER RAILROAD COMPANY, Appellant.

      Negligence — duty of a person injured by the negligence of another, to try to diminish the damages.

    This action was brought to recover damages occasioned to the plaintiff’s woods, by a fire alleged to have been caused by the negligence of the defendant. Upon the trial the defendant’s counsel requested the court to charge that, when the plaintiff discovered the ñre, if he neglected to use reasonably practicable means to suppress it, he could not recover for subsequent damages. The court refused, holding that as the plaintiff was not at fault in the origin of the Are, he was not bound to make any effort to suppress it.

      Held, that the court erred in refusing to charge as requested.
    Appeal from a judgment in favor of the plaintiff, entered upon the verdict of a jury, and from an order denying a motion for a new trial, made upon the minutes of the justice before whom the action was tried.
    The action was brought to recover damages for injury to the plaintiff’s woods, occasioned by a fire alleged to have been caused by the negligence of the defendant in the management and construction of its engines.

      S. W. Jackson, for the appellant.

      D. M. Chadsey, for the respondent.
   By the Court :

The court was requested by the defendant to charge that when the paintiff discovered the fire, if he neglected to use reasonably practicable means to suppress it, he could not recover for subsequent damages. The court refused, holding that as the plaintiff was not at fault in the origin of the fire, he was not bound to make any effort to suppress it. We think that this was erroneous. Let us suppose that the plaintiff has seen a little spark of fire beginning to spread among dry leaves; that he could have put it out with a stamp of his foot; but that he knowingly neglected to do this, and thus permitted the fire to extend until it destroyed several acres of his woods. Would it be just that he should make the defendant pay all tbe damages lie had suffered ? Clearly not. It may be that he would not be bound to use every possible effort to suppress the fire. But the language of the request was well chosen. He should do what was reasonably practicable. To say that he need not do what he reasonably could to suppress the fire is not very far from saying that he might do what he could to increase it. The wrong done by the defendant was not intentional. And if it were in the plaintiff’s power, by reasonable efforts, to prevent the increase of the wrong, he should use that power. (Bevier v. D. cmd H. C. Co., 13 Hun, 254; Milton v. Hudson R. Steamboat Co., 37 N. Y., 214)

This is analogous to the rule which requires the innocent party to a broken contract of , hire of services to earn what he can in other ways, and thus dimmish the damages.to be paid by the other party.

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

Present — Learned, P. J., Bockes and Boardman, JJ.

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


text:
    BRIDGET JONES, as Administratrix, etc., of WILLIAM JONES, Deceased, Respondent, v. THE NEW YORK CENTRAL AND HUDSON RIVER RAILROAD COMPANY, Appellant.

      Negligence — when the question should be submitted to the jury.

    On the 5th of February, 1879, about four inches of snow fell. The seventh was a fair day, the temperature being a little above freezing. On the evening of the seventh, the plaintiff’s intestate was directed by the conductor of one of the defendant’s trains to get upon it as a brakeman, at a point east of the Broadway crossing in the city of Albany. No one saw him get on the train and he was never seen alive again. ’ At about the place where the intestate was directed to get on the train the ground was trampled, as if by some one who could not catch his feet; from that point there was a mark northward, between the rails, as if something had been dragged there; along this mark were found the cap, gloves and overshoes of the intestate; a brake stick was found at the crossing and his dead body just north of it; the car wheels were bloody. At the trampled place was found, lying loose and uncovered upon the top of the snow, a broken rung, such as is used in the ladders placed at the sides or ends of freight cars; it was bent or dented; a portion of the break was rusty and seemed to be old, and a portion was bright as though recently broken. This rung was produced at the trial and exhibited to the jury.

      Held, that a verdict of the jury finding the defendant guilty of, and the intestate free from negligence, would not be disturbed.
    Appeal from a judgment in favor of the plaintiff, entered upon the verdict of a jury, and from an order denying a motion for a new trial, made upon the minutes of the justice before whom the action was tried.
    The action was brought to recover damages-occasioned by the death of the plaintiff’s intestate, which was alleged to have been caused by the defendant’s negligence, in furnishing the deceased, a brakeman in its employment, with a defective and unsafe ladder, wherewith to climb to the top of a freight car.

      Samuel Sand, for the appellant.

      E. Goumbryman, for the respondent.
   Learned, P. J.:

The trampled place near the south end of the wooden shed; the mark from that point northward between the rails, as if something had been dragged; the brass button at the trampled place; the cap, gloves and overshoe along this “ drag-mark; ” the brake stick at the crossing; the blood on the wheels, and the dead body of Jones north of the Broadway crossing, were sufficient evidence for the jury to find that Jones fell accidentally or intentionally from the car, and was thus killed. He had been directed by the conductor to get upon the train as a brakeman, and was therefore rightfully upon it. The broken rung was found in the middle of the track upon the trampled platee. There had been about four inches of snow the fifth of February, ending during the night.' The accident occurred the evening of the seventh. The rung was found lying loose on the snow with no snow over it. The weather on the seventh had been fair, and the temperature a little above freezing. It was a reasonable inference that the .rung had fallen not long before it was found. And this inference is consistent with the fact that the rung was wet. The rung was bent, or dented. It had an ■old rusty break, and á small portion which was bright, as from a recent break. It was produced before the jury. It was competent then for them to infer that it had been partly broken by the former injury, which bent it; and that it had recently broken off.

This rung was one of those which were fastened at the end or side of freight cars to form a ladder by which brakemen should ■climb to the top. The fact that it was found just at the trampled place, where the ground looked as if it had been trampled by some one who could not catch his feet, and that this was about the place' where Jones was to get upon the train, with the other facts, some ■of which have been mentioned, justify the. conclusion that his fall was occasioned by the breaking of the rung. The-' accident happened in the evening, and it could not be claimed that the deceased might have carelessly failed to examine the condition of the rungs. That was a precaution not to be expected. No one saw the accident, and there is therefore no direct proof that he was not guilty of contributory negligence. (Reynolds v. N. Y. C. and H. R. R. Co., 58 N. Y., 248.) Neither did any one see the accident in the •case of Hart v. Hudson River Bridge Company (80 N. Y., 622); and all the facts in that case were as consistent with an intentional jumping, or a careless fall from the bridge, as they were with a fall which care would not prevent. In' the language of that case, When the process is to be had at a trial of ascertaining whether one fact had being, from the existence of another fact, it is for the jury to go through with that process.” Plainly, in the present case, the process was to be had of ascertaining whether the fact of the negligence of the deceased had being from the existence of the other facts above mentioned. It was then for the jury to go through with that process. And if we compare this case with that of Hart v. Hudson River Bridge Company, we shall see that there was more evidence in the plaintiff’s favor ,in this than there was in that. An examination of the printed case in Hart v. Hudson River Bridge Company shows that the body of the deceased was found in the river near the abutment; that a splash had been heard in the evening, and a wet place was seen on the abutment, as if the water had been dashed against it. There was no other evidence that the deceased had even been upon the bridge, except that she had intended to cross the river. Those facts were held sufficient evidence on which the jury should have been allowed to find that the death of the deceased was caused by a fall from the bridge; and also that such fall was not occasioned by her negligence, although all these facts were consistent with the theory of suicide. (Reynolds v. N. Y. C. and H. R. R. R. Co., 58 N. Y., 248.)

Now in the present case there are many more facts which reasonably tend to explain how the accident occurred, and to show that it was due to the half-broken rung.

But the defendant insists that, though the deceased fell while using the ladder, there is an absence of proof of the manner in which he was using it. There cannot, however, be such an absence of proof as there was in the case of Hart. ■ And further, we have here the fact that tjie deceased was directed to go upon the train by the person in authority, and that he started for that purpose and was never sefen alive, afterwards. It is a fair inference that he was attempting to perform that duty with which he was charged, and to perform which he went towards the train.

Another point urged by the defendant is, that there was no evidence of negligence on the part of the defendant in not furnishing suitable machinery. To sustain this position the defendant relies, among other cases, upon DeCraffy. New York Central and Hudson River Railrood Company (76 N. Y., 128). An important difference between that case and the present arises from a circumstance, to which full effect can hardly be given on appeal. The broken rung was produced to the jury. Of course a description of it cannot be given, so complete as to produce on this court the effect which its appearance had on the jury. But the evidence shows that the rung was bent or dented. How much we do not know. But it is possible that it was so much bent, and in such a direction, that the blow which bent it caused also the breaking of the rung nearly across — the injury which is spoken of as the rusty breaks. Thus the rung might to the jury have' shown that it had been injured so greatly, at some previous tiprie, as to be dangerous. Ordinary observation would discover the bend; and it may be that this bend appeared so great to the jury that it indicated that the rung had been otherwise injured by the blow, which had been hard enough to bend it. In the De Graff case the court say: Assuming a defect, there is no evidence what it was, or the nature of it, ” etc. This we cannot say here. Something there was in the appearance of the rung, which is referred to in the charge, that indicated the defect and its nature.

It is evidently important to the safety of the brakeman that these rungs should be strong and well secured. . The brakeman is required to climb perpendicularly by their means. A slip or a fall may throw him between the oars; and before he can extricate himself, the cars may start and he may be killed. He has a right, therefore, to have these appliances maintained in good condition, so far as can be done by reasonable care. (Fuller v. Jewett, 80 N. Y., 53.)

And we cannot say that there was nothing in the testimony, taken in connection with the appearance of the broken rung, which would justify the jury in finding that there could not have been reasonable care in this respect on the part of the defendant.

The inferences are not certain and incontrovertible, and may be differently made by different minds, it is for the jury to make them; ” or as otherwise expressed, there were facts in this case which were not so weak as to give no support in some fair and sound minds to such legal probabilities,” viz., that the plaintiff is entitled to a verdict. (Hart v. Hudson River Bridge Co., ut supra.)

Some exceptions are taken to specific charges and refusals to charge. JBut on examining them and the charges delivered by the court, taken as a whole, we think there was no error. The rights of the defendant were fairly presented.

¥e may add that in this class of cases it is easy to lay down general rules .of law. But the point whether the evidence is such as to justify the court in submitting to the jury the question of negligence and contributory negligence can hardly be considered a question of general principles. If juries can form different inferences from the evidence submitted to them, so courts can form different inferences on the point whether the testimony is or is mot any evidence of negligence. Each case differs from every other. And it must be admitted that it is not always easy to reconcile them. Perhaps,-.on the whole, better results would have been obtained in the end if courts had been more willing to trust to’ the good sense of juries, even when the defendants were corporations. The judgment order should be affirmed, with costs.

Present — Learned, P. J., and Bookbs, J.; 'Westbrook, J., not sitting.

Judgment and order affirmed, with costs.


text:
    JOSEPH RODBOURN, Respondent, v. THE UTICA, ITHACA AND ELMIRA RAILWAY COMPANY, Appellant.

      Sequestration of the property of a corporation — the appointment of a receiver can only continue during the existence of a final judgment— Effect of opening u judgment and allowing it to stand as security — Appeal — when a party is not'estopped from tahing it, by accepting a benefit conferred by the order appealed from.

    In an action brought against a corporation to recover a sum of money alleged to be due from it, a judgment was entered against it by default. After an execution issued upon the judgment had been returned unsatisfied, an action was commenced to sequestrate its property, and a temporary receiver ^hereof was appointed therein. Thereafter, upon the defendant’s motion, an order was,made opening the judgment and allowing the defendant to appear and defend, but directing that the judgment and the execution issued thereon should stand as security, and continuing the receivership.
    Upon an appeal by the defendant from so much of the order as continued the receiver:
    • Held, that the acceptance by the defendant of so much of the relief sought for as was granted by the order, did not estop it from appealing from the residue thereof.
    That although the court allowed the judgment and execution to stand as security, the judgment was no longer an adjudication that anything was owing by'the defendant.
    That the court should have vacated the order appointing the receiver.
    Appeal from so much of an order made at a Special Term, as continued a temporary receiver appointed herein.
    On the 4th day of May, 1882, tbe plaintiff commenced an action in’tbe Supreme Court to recover of the defendant money alleged to be due from it for goods sold and labor performed.
    Judgment in this action was taken by default on the 25th day of May, 1882, and entered in the Chemung county clerk’s office.

      After an execution had been issued upon it and returned unsatisfied, the plaintiff commenced this action for the sequestration of the property of the corporation defendant.
    This summons and complaint were issued on the 29th day of May, 1882, and on the twelfth day of June an order wad made appointing George J. Rice and Amos S. Dixon temporary receivers. Subsequently an order was made upon the defendant’s motion opening the judgment' and allowing the defendant to appear and serve an answer, but directing the judgment and the execution issued thereon to stand as security in full force and effect, but to be modified in accordance with any subsequent proceedings in the action, and directing that the order appointing the receiver stand, except in so far as to remove and change the receiver.

      Evarts, iSouthmayd & G'hoate, for the appellant.

      J. McGuire, for the respondent.
   By the Court :

When the judgment in the original action had been opened and the defendant had been allowed to appear and defend, there was no longer a final judgment. Although the court allowed the judgment and the execution issued to stand as security, yet they were only security for such amount as on the trial of the case might be adjudged to be owing to the plaintiff. It was no longer adjudicated that anything was owing to him from the defendant. Hence there Avas, as said above, no final judgment. This is decided in Mott v. Union Eank (38 N. Y., 18).

If a judgment thus opened and allowed to stand as security is not a final judgment which prevents the plaintiff from having the provisional remedy of arrest, then plainly it is not a final judgment upon which the plaintiff may have the supplementary remedy of sequestration.

That remedy must be based on a final judgment, and on the issue and return unsatisfied of an execution. (Code Civ. Pro., § 1784.) It is practically a judgment creditor’s action. (Code Civ. Pro., § 3343, subds. 13,14.) There must be, then, the judicial determination that a debt exists, and the inability to collect that debt by execution. Here there is no longer such determination ; and therefore there can be no debt judicially determined which the plaintiff cannot collect by execution. It cannot be intended that one should maintain proceedings for sequestration against a corporation, when he has only security for an alleged debt, which he may or may not hereafter establish.

The defendant moved at Special Term to set aside the judgment and execution, for leave to defend, and to vacate the appointment of the temporary receivers. The court granted a part of the motion, but refused to vacate the appointment of receivers. There is no reason why the acceptance of so much as was granted should prevent the defendant from appealing from that which was denied. This is not the case of a favor granted upon condition. On the contrary, it is a case where the granting of the right to defend — for it might be more accurately called a right than a favor, under the circumstances — required, on sound principles, that the rest of the motion, viz., the vacating of the appointment of receivers, should also have been granted.

The part of the order appealed from should be reversed, with ten dollars costs and printing disbursements: and the motion to vacate the appointment of receivers granted, with ten dollars costs.

Present — Learned, P. J., Bockes and Boardman, JJ.

So ordered.


author: By the Coukt :

text:
    ROBERT A. CARRINGTON, Appellant, v. JOHN HUTSON, Respondent.

      Witness —penalty for a failure to attend a trial— damages resulting from, his nonattendance must he shown — Oode of Oiril Procedure, see. 858.
    In an action to recover the penalty given by the statute, from a witness who has failed to attend a trial, the plaintiff must show that the witness was material and that damages resulted from his non-attendance.
    There is nothing in section 858 of the Code of Civil Procedure to change this rule.
    Appeal from an order made at a Special Term, denying a motion for a new trial, and dismissing the complaint herein, with costs, and also from the judgment entered in pursuance of the said order.
    The action was brought to recover the statutory penalty for disobeying a duces tecum clause in a subpoena served upon the defendant.
    July 21, 1877, one Ira Carrington recovered a judgment against Henry J. Bitterly and William H. Williams, upon which proceedings supplementary to execution were instituted, and the judgment-debtors required to appear before a referee and answer concerning their property. The defendant in this action was- duly subpoenaed to appear before the referee and produce a bill of sale of the property from Bitterly and Williams to Hutson Brothers, and all letters and writings relating to the bill of sale. Ira Carrington assigned the claim for damages against the defendant to this plaintiff. The complaint alleges that the defendant appeared and testified before the referee, but failed to produce the bill of sale. It appeared by the plaintiff’s opening that the defendant was examined before the referee in regal’d to the transaction described by the bill of sale, and that no adjournmeht was had or applied for by reason of the non-production of the bill of sale, and that a receiver was subsequently appointed in the proceedings. It is-not alleged in the complaint, nor was it claimed in the opening, that the plaintiff’s assignor incurred any expense by reason of the failure to produce the bill of sale, nor is it alleged or claimed in the opening that the production of the bill of sale before the referee would have enabled the plaintiff’s assignor to have established any right, or would have entitled him to any remedy other or'different from the right established and remedy obtained in the proceedings. Upon the complaint and opening the complaint was dismissed upon the defendant’s motion.

      it. A. Carrington, for the appellant.

      Abram C. Crosby, for the respondent.
   By the Coukt :

It was decided in Courtney v. Baker (3 Den., 27,) that in an action for the statutory penalty against a witness who had failed to attend, the plaintiff must show that the witness was material and that damages resulted from his non-attendance. That is, a sound construction of the law. There is no reason why a plaintiff should recover this penalty, unless he was aggrieved; that is, unless the absence of the witness caused some injury. There is nothing in the Code Civil Procedure (§ 853) to change this rule of law.

The judgment should be affirmed, with costs. .

Present — Learned, P. J., Bookes and Westbrook, JJ.

Judgment and order affirmed, with costs.


author: Learned P. J.:

text:
    HUGH CONAUGHTY, Appellant, v. THE SARATOGA COUNTY BANK, Respondent.

      Metra allowance — when it is to be computed upon the value of a corporate franchise — how the value of the franchise is to be determined.

    In this action, brought by a stockholder of the defendant, The Saratoga County Bank, the complaint alleged that the bank and its directors had committed unlawful and improper acts, and prayed for an injunction restraining the defendant from exercising its corporate rights, and from making any payments or transferring any of its property. Upon an application for an extra allowance made by the defendant after a dismissal of the complaint: •

      Held, that the subject-matter involved, upon which the extra allowance should be computed, was the value of the corporate franchise.
    ' That the value of the franchise was, at least, as much as the value of the assets • of the corporation over and above all debts due from it.
    Appeal from an order.made at a Special Term, granting to the. defendant, on the dismissal of the complaint herein, an extra allowance of costs.

      Fobertson do Foster, for the appellant.

      Charles C. Ormsby and Nathaniel C. Moak, for the respondent.
   Learned P. J.:

This action was brought by a stockholder. The complaint alleged untrue reports by,the officers of the defendant, the improper making of dividends and illegal sales of stock by them; and illegal discounts made by the defendant. It asked an injunction against the defendant to restrain the exercise of corporate rights, and to restrain any payments of money or transfers of property.

There was an answer and a trial was had. There is no .doubt that the case was difficult and extraordinary; and that the successful party was entitled to an extra allowance, to be computed upon the value of the subject-matter involved. (Code Civil Pro., § 3253.) The questions are, what is that subject-matter and what is its value ?

The opinion of the learned justice indicates that he considered the value of the total assets of the bank to be the proper basis. And, as the capital was $100,000, and the bank was solvent, he allowed $1,000.

It seems to me that the subject-matter involved was the existence of the franchise, and that the value of the fianchise should be the basis of computation. Of course, the value of the franchise is, at least, as much as the value of the assets after the payment of the debts. Generally, that is all the value of a bank franchise under a free banking system.

I have examined the cases on this question of extra allowance. They are well known, and it is not necessary to cite them. They seem to me to sustain the view above stated, both as to the subject-matter involved and as to its value. It seems to me, then, that it is not the nominal value of the stock, but its actual value which should be the basis upon which an allowance may be made. And a difficulty arises that there seems to be no distinct proof on this point. It is found by the referee that the defendant is not insolvent. But it would not be insolvent, if it could pay its debts; although there was nothing left, after such payment, for the stockholders. Perhaps it was understood by the learned justice that the stock was worth par; and if this were so, then in my judgment the allowance was within the limit of the statute. There was no affidavit in opposition to the motion, showing that the actual value of the stock was less than its nominal value. And no suggestion to that effect is made by the appellant’s brief. It is therefore fair to understand that, when the affidavit of the moving party stated that the capital stock had been reduced to $100,000, it meant to assert that amount to be its real, as well as its nominal value. This, too, may be what is meant by the learned justice when he speaks of the bank as solvent.

I think, therefore, that what may conveniently be called the franchise, that is, the value of the corporation, over and above its debts, was the subject-matter .inAmlved; and that this must be understood to be at least $100,000.

It is urged by the appellant that the case is an unfortunate one for the defeated party, and therefore no allowance should be made. (Losee v. Bullard, 54 How., 319.) This reasoning should be addressed to the legislature. For my own part, I think the provision permitting extra allowance in difficult cases is unwise, and that it often operates unjustly; but it has been established for many years, and courts have only to enforce it. I see nothing in this case which should prevent the- successful party from having this allowance. On the matter of discretion the learned justice was as competent to decide as this tribunal can be.

The order should be affirmed, with ten dollars costs and printing disbursements.

Present — Learned, P. J., and "Westbrook, J.; Bockes, J., not acting.

Order affirmed, with ten dollars costs and printing disbursements.


author: Learned, P. J :

text:
    THE PEOPLE OF THE STATE OF NEW YORK, Respondent, v. THE MECHANICS AND TRADERS’ SAVINGS INSTITUTION. William H. M. Sistare, Claimant, Appellant.

      Savings institutions — creditors a/re entitled to he paid in full in prefewnce to depositors

    The Mechanics and Traders’ Institution was incorporated by chapter 368 of 1852, for the purpose of receiving money on deposit, investing it in governmen securities, etc., and paying to the 'depositors interest, at such arate as that they should receive, as nearly as might be, a ratable proportion of all the profits after deducting the necessary expenses. It had no capital. In 1875, one Sistare commenced an action against it to recover the value of services rendered by him to it in 1872. Thereafter the corporation was dissolved and a receiver appointed, who was substituted in the place of the corporation in the action brought by Sistare. After two trials, a judgment was recovered by Sistare, which was affirmed by the Court of Appeals.

      Held, that he was entitled to have the full amount of the judgment, and not merely his costs and disbursements, paid from the funds in the hands of the receiver in preference to the claims of the depositors.

      Appeal by William H. M. Sistare from so much of an order made at a Special Term, as disallowed his claim to a pi’eference over the depositors of the defendant bank.
    This institution was incorporated by chapter 368, Laws of 1852. Its business, as expressed in section 6, is to receive on deposit such sums of money as may be offered for the purpose of being invested in government securities, etc. The rate of interest is to be so regulated that the depositors shall receive, as nearly as may be, a ratable proportion of all the profits after deducting the necessary expenses. The corporation had no capital.
    Mr. Sistare was a New York broker; and in 1872 the savings institution employed him as such broker to sell certain stock. The result of the transaction was, that on the 5th of April, 1872, the savings institution became liable to him on contract for a large sum. For this Mr. Sistare commenced an action against the savings institution in November, 1875. The action was pending in 1877, when, on the twenty-sixth of December, an order was entered in the matter above entitled, dissolving the corporation and appointing Mr. Best receiver.
    On the 29th of April, 1878, an order was made substituting Mr. Best as receiver in place of the corporation in thq action brought by Mr. Sistare. After that the action was twice tried and twice appealed, and was finally appealed by the receiver to the Court of Appeals. There it was finally decided in favor of Mr. Sistare, about the 14th of April, 1882. Mr. Sistare therefore has a judgment of April 28, 1879, for $6,874.13, and two subsequent judgments for costs.- Upon these appeals Mr. Sistare waived the security, to which he would have been entitled, on the stipulation of the receiver that he would keep on deposit in the United States Trust Company the amount necessary to pay the judgment.
    Mr. Sistare applied to the court that his judgment be paid in preference to the claims of depositors. This motion was granted as to his costs and disbursements but denied as to his claim. And he appeals. '

      Henry S. Bennett. for W. H. M. Sistare, appellant.

      A. J. Vanderpoel, for the receiver.

      John G. Keeler, deputy attorney-general, for the respondent.
   Learned, P. J :

A savings institution is incorporated for the purpose of managing and investing the small savings of persons of moderate means, who cannot well invest for themselves. The only property which it has is that to which the depositors are pro rata entitled. It has no capital. Although each depositor has a claim against the corporation for the amount standing to his name; yet, on the other hand, the aggregate of the property of the corporation belongs to no one else than the depositors. "When the corporation is dissolved and closed,- the depositorsare entitled to all that the institution honestly owns. The question is whether they are entitled to anything more.

The charter of this corporation says (and the law would be so even if this were not expressed), that the depositor shall receive his prorata, after deducting the necessary expenses. Now expenses, unless paid the very moment they are incurred, would create a debt, and such a debt would, by the very terms of the charter, be paid before the depositors received their money.

Again, let us suppose that the savings institution had purchased and received government bonds from Mr. Sistare, but had not paid for them, would it be just that the depositors should share in the assets thus received', and yet should require Mr. Sistare to take a pro rata dividend on his debt ? Certainly not. The management of the institution is really a management of the depositors’ money for their benefit. Unless there be some statute, or some positive decision to the contrary, the depositors should'share only in the assets, after the debts are paid.

~We are cited to section 79, article 3, title 4, chapter 8, part 3, Revised Statutes. (2 R. S., p. 470.) But that is under the head of voluntary dissolution. And the preceding section (§ 69, p. 469) shows that the article refers to stock corporations. Chapter 336 of Laws of 1855, is also cited. But that was repealed by. chapter 371, Laws of 1875. Section 44 of that last chapter was amended by chapter 422, Laws of 1879. That requires the receiver to make distribution of the assets, not specifying the manner.

In Matter of Franklin Bank (1 Paige, 249), to which we are cited, was a case in regard to depositors in a bank of issue and deposit, not a savings bank. And the difference is, that in such a bank the depositors are nothing but creditors. They have no share in the profits and are not to bear the losses. The-stockholders in such a bank are the persons who benefit by the profits, and who therefore, should lose by the losses. It is their property which is to pay the expenses and debts. The contrary is the case in a savings bank. The depositors in such an institution are like the stockholders in a bank of issue and deposit. They share the profits, they bear the losses and they pay the expenses. (Huntington v. Savings Bank, 96 U. S., 388.) We are also cited to the case of People v. Security Life Insurance Company (78 N. Y., 122), to show that policyholders are not partners, but creditors, in a mutual life insurance company. But it is to be noticed that many companies, called mutual, are yet stock companies; and such was the case with the Security company. The head note to the case shows that the decision is qualified by limiting the language on this point to stock companies. It is not, however, necessary to say that these depositors arc partners. It is enough that the savings institution is only, an organization to manage their money for their benefit, and that Mr. Bistare’s claim, is a debt contracted in such management. It should then be chargeable on the fund. To this effect is Stocton v. M. and L. Savings Bank (32 N. J. Eq., 163).

We are of the opinion that the part of the order appealed from should be reversed, with ten dollars costs and printing disbursements, and the motion of Mr. Sistare, to be paid in full his claim, should be granted, with ten dollars costs.

Present — Learned, P. J., and Bocees, J.; Westbrook, J., not acting.

That part of the order appealed from reversed, with ten dollars costs and printing disbursements,, and motion of Sistare granted, with'ten dollars costs.