text:
    Robert Herbst, Resp't, v. Lionel Hagenaers, App'lt.

      (Court of Appeals,

      Filed February 28, 1893.)

    Arbitration—Award must be final and definite.
    Where the question submitted to arbitrators is the interest of copartners, and they name an amount to which a partner is entitled, but also provide that he is entitled to another sum not named or fixed, but to be ascertained from the books of the firm, the award is not final and definite as required by the Code, and is void.
    Appeal from judgment of the supreme court, general term, first department, reversing order denying motion to set aside award and vacating the award.

      W. A. Poste, for app’lt;

      Wm. K Cohen, for resp’t.

       Affirming 43 St. Rep., 54.

   O’Brien, J.

This appeal brings here for review an order of the general term vacating an order made by arbitrators in favor of the appellant, and reversing an order of tire special term which confirmed the award. It appears that the parties entered into a partnership agreement on April 16, 1888, which was to terminate June 30, 1893. The business of the firm was that of foreign commission merchants. The appellant’s share or interest in the business was fixed by the partnership agreement at a salary of $2,000 per year, from the date of the agreement to June 30, 1890, and for each succeeding year the same sum, with an increase of $500 over each preceding year. The respondent was to receive a compensation of $6,000 per year. The profit or loss resulting from the business was to be divided as follows: The appellant was to receive two and one-half per cent for the first year, and for the.remaining years of the term five per cent per annum until he should contribute to the capital of the firm, and then an additional two per cent for each $10,000 contributed up to a sum equal to the capital invested by the respondent. In the month of April, 1891, on account of differences and disagreements between the partners, the partnership was practically dissolved, and on that day they entered into an agreement to submit their respective rights and interests to arbitration under the provisions of § 2366 of the Code. The precise question which they submitted to the decision of the arbitrators was, what their respective interests in said copartnership of Herbst Brothers are, and also what compensation, if any, either party is entitled to, in consequence of the dissolution of the partnership.”

The firm name mentioned in the submission was the same one under which the business was formerly conducted, and which was assumed by the partners in the agreement above mentioned. On the 29th of April, 1891, the arbitrators made and delivered an award in which it was decided that the respondent should pay all the liabilities of the firm and give appellant a formal release, that he was entitled to collect the •debts and receive the assets of the firm and continue the business and receive all the books and papers of the firm. Then the award provides that the respondent pay to the appellant $6,336, “ which does not include the amount due Mr. Lionel Hagenaers on the books of the firm on April 18, 1891, and which latter amount is also to be settled as above referred to.” In another and preceding part of the paper it was provided that the amount which may be due appellant under date of April 18, 1891, “ irrespective of the amount of this award hereinbelow stated, is to be paid to him in excess of the amount of the award. This said amount in excess of the award, and also including the amount of the award, both of which amounts are to be paid to Mr. Lionel Hagenaers in cash within ten days from this date."

About ten days after the delivery of this award the arbitrators reconvened and made what is called in the case a supplemental award, in which the amount due to the appellant upon the books of the firm was stated, and this paper was before the court in the subsequent proceedings to confirm, and it was practically incorporated with the first award and made the basis of the judgment. It is unnecessary to make further reference to any action of the arbitrators subsequent to the delivery of the first paper, because by that act they became functus officio and without any power to alter or modify the award, or do any other act under the submission. Flannery v. Sahagian, 134 N. Y., 85; 45 St. Rep., 598.

The motion to vacate and to confirm the award was made at the same time, with the result already mentioned.

When any of the reasons specified in § 2374 of the Code are made to appear to the court upon the motion to confirm or vacate, the court must vacate the award. In this case all the grounds for vacating enumerated in the section were alleged against the award. The court below properly overruled all of them except the grounds specified in the fourth subdivision of the section. The general term has held that the abitrators have so far failed to execute their powers that their award is neither final nor definite. The motion of the respondent to vacate and that of the appellant to confirm applied to both awards, as they are called, and both were confirmed. The judgment is based upon both, and the last one was clearly void. Flannery v. Sahagian, supra; Doke v. James, 4 N. Y., 568; Fallon v. Kelehar, 16 Hun, 266.

The order of the special term could not have been sustained in any view that can be taken of the case. The only question is, whether the first award should have been permitted to stand. The object of the parties in submitting the controversy to the decision of arbitrators was to have determined the question as to how much money the appellant should be paid. Certainly nothing less than a definite and final declaration of the rights of each party as against the other was intended. The award in question does not answer these requirements. It left matters properly embraced in the submission open for future contention, and hence it was not final, as something was still left to be done in order to accomplish the result which the parties had in view. It was not definite, for, whereas, the question submitted was clearly capable of determination by directing the payment of a fixed sum of money, the award does not do that. True, it names an amount to which the appellant is entitled, but it also provides that he is entitled, in addition, to another sum not named or fixed, but to be ascertained from the books of the firm. The judgment to be entered on this award cannot possibly, without some other proceeding, be any more definite than the award itself, and thus would not definitely or finally determine the rights and interests of the parties. The award contemplated some further action by some one in order to ascertain what further sum, if any, was due to appellant upon the firm books. These books and all the firm papers were awarded to the respondent, and unless he volunteered to produce them, and with the appellant ascertain and adjust the balance, it is difficult to see how further legal proceedings could be avoided. The arbitrators probably supposed that the parties would do so. But in view of the nature of the controversy and the failure of the parties to agree in the first instance, it is not easy to see how they could be expected to do any better after the award was made. If it was but a mere matter of computation from books or documents equally accessible to both parties or in the possession of the court, it is possible that the award might be held sufficient. But for aught we know the books might be made, under the principles of the award, to show a balance against the appellant, which might operate to diminish the fixed sum awarded, in which view of the case it can scarcely be said that any definite sum of money is given to the appellant by the award. The learned counsel for the appellant insists that the award is good for the sum of money stated therein, rejecting the other matters. It has been held that where part of an award which is void is not so connected with the rest as to the affect the justice of the case, the award is void only pro tanto. Jackson v. Ambler, 14 Johns., 96; Cox v. Jagger, 2 Cow., 638; Martin v. Williams, 13 Johns, 264.

This principle has been most frequently applied to a case where arbitrators after fully, finally and definitely passing upon all matters embraced in the submission, also include in the award some matter not submitted. Doke v. James, supra.

In this case all matters embraced in the award were duly submitted to the arbitrators. There was jurisdiction, and the only, difficulty is that the powers conferred were imperfectly executed. We cannot say under the circumstances of this case that the several provisions of the award are not so related to or dependent upon each other that they can be separated and the indefinite provision rejected. Moreover, this award leaves undetermined a part of the controversy submitted,' and if the respondent would be obliged to answer to that again in some other forum the purpose of the submission would be defeated, so far as he is concerned, by holding him to what is definite and leaving open what is not.

Both parties were entitled under the submission to a mutual, definite and final award. It cannot be shown that they have got it without the aid of the artificial reasoning and refined distinctions involved in the maxim, that whatever can be made certain is to be deemed certain, and then the most that can be said is that the award contains principles, which when applied to the case, a definite result may be produced. This argument, however, assumes the necessity of some further proceeding, and hence involves the admission that the award in its present form is not final. • When an award does not appear upon its face to be defifinite and final, and does not in itself contain the data or means of working out a definite and final determination of the whole controversy submitted, the powers conferred upon the arbitrators have not been fully executed, and the provisions of the present Code are imperative that it must be set aside. Waite v. Barry, 12 Wend., 377; Jones v. Welwood, 71 N. Y., 208; Dodds v. Hakes, 114 id., 260; 23 St. Rep., 192; Code, § 2374, subd. 4.

' The award in this case does not, we think, satisfy the requirements of the law, and was, therefore, properly vacated.

The order appealed from should be affirmed, with costs.

All concur.


source: Caselaw Access Project

author: Peckham, J.

license: Public Domain

text:
    Robert J. Dean et al., Resp'ts, v. Marshall S. Driggs, App'lt.

      (Court of Appeals,

      Filed February 28, 1893.)

    1. Warehousemen—Effect of receipt.
    All that a warehouseman can be fairly charged with asserting, by the mere acknowledgment of the receipt of merchandise, is that the box or barrel in which it is packed bears the same outward appearance as does the box or barrel in which merchandise of the character described is usually carried, and that there is nothing unusual, or out of the ordinary way of business, in the marks, appearance, signs, labels, or character of the barrel or box from that in which goods of the character described are usually transported, and that the articles have been represented to him, and that he believes them to be as described.
    2. Same—Estoppel.
    The warehouseman is estopped in regard to any error or misstatement in the bill or receipt only when it amounts to a representation as to a fact-which was, or in the ordinary course of business ought to have been, within his knowledge, and which, therefore, a third person acting reasonably would have a right to rely and act upon.
    3. Same—Factors’ act of 1858.
    Chap. 326 of the Laws of 1858, which prohibits a warehouseman from issuing a receipt for any goods, unless such goods shall have been actually received into the store, or upon the premises of such warehouseman at the time of issuing the receipt, does not reach the case of a warehouseman who gives a receipt for 1,500 barrels of Portland Cement which he honestly believed to be such, but which afterwards turned out to be an inferior quality, or in fact not Portland cement at all.
    Appeal from judgment of the supreme court, general term, first department, affirming judgment in favor of plaintiff.

      The plaintiffs are brokers in the city of New York, and the defendant a warehouseman in that city. The defendant on the 28th of March, 1885, issued to one Max Yon Angern two warehouse receipts similar in all respects except as to the name of the vessel in which the merchandise was imported and the quantity which was delivered. One of the receipts reads as follows:
    “M. S. Driggs & Co.’s Warehouse,

    “New York, March 28, 1885.

      “ Received from Max Yon Angern, ex Grimaldo, in store 278-80 South street, to be held by us on storage, and to be delivered to his order on return of this receipt and payment of storage and charges, fifteen hundred barrels Portland cement
    Storage per month 4.
    Labor.
    “ M. S. Driggs & Co."
    The second receipt named the vessel Ruth as bringing the merchandise, and stated it to be 963 bbls. of cement (Portland). There had been actually delivered to the warehouseman the number of barrels of what was on each barrel described as Portland cement, as stated in the warehouse receipts.
    Yon Angern having obtained the receipts, went with them to the plaintiffs and there executed a note for $3,500, and indorsed the warehouse receipts, and authorized the plaintiffs to deliver the note and the guaranty of payment indorsed thereon by plaintiffs at his request, together with the collateral securities (the warehouse receipts) to the Chemical National Bank of New York, and to receive the proceeds of the discount of such note. -The plaintiffs did so and received the moneys from the bank arising upon such discount and delivered them to Yon Angern. The note was not paid by Yon Angern when due and upon his default the plaintiffs paid the same to the bank because of their guaranty of payment, and took back the note and the warehouse receipts.
    At the time when the plaintiffs indorsed the note at Yon Angern’s request they testified that they relied in doing so upon the statement contained in the warehouse receipts, that defendant had received the stated number of barrels of Portland cement.
    After the note had been paid by the plaintiffs they inquired as to the whereabouts of Yon Angern, but were unable to find him, and, in fact, he had absconded. The plaintiffs then went to the warehouse of defendant and there opened and examined a number of the barrels, and the result of the examination was the discovery that the contents of the barrels were not Portland cement. The material which had been packed in the barrels was a hardened substance like clay or mortar, coarse in its grain and different from any cement and practically worthless, while Portland cement was worth from $2.25 to $2.50 per barrel.
    The plaintiffs then commenced this action against defendant, and set up the above facts, and. that they relied upon the defendant’s statement in the warehouse receipts that he had on storage Portland cement, as therein stated. The complaint seems to have been founded also upon some allegations of negligence in the care of the barrels on the part of the defendant, so that by his fault the .article was rendered worthless; but that allegation was not proved, •and the case rests upon the other facts alleged. The plaintiffs claimed to have been bona fide purchasers of the warehouse receipts for value, and that the defendant was bound to make good the truth of the statement therein contained that he had Portland cement on deposit, and they claimed damage to the amount of the Yon Angern note ($3,500) which they had paid, with interest from the time of such payment.
    The defendant denied all carelessness, and set up that he had received on storage from the importer the goods covered by the warehouse receipts referred to, and they had remained and then were on storage with him.
    The question whether the article deposited was or was not Portland cement was litigated at the trial, and the case was submitted to the jury upon the charge of the judge that if the contents of the barrels were Portland cement of any description, however inferior in quality, the plaintiffs could not recover. Upon that issue the verdict was with the plaintiffs. The court also charged the jury that the plaintiffs had the right to demand, in this case, that the article should be Portland cement, and, if it were not, then they were entitled to recover from the defendant the principal of the Yon Angern note, with interest.
    The defendant asked the court to charge that to entitle the plaintiffs to recover on the receipts the jury must find the defendant knew the article was not Portland cement, and wilfully issued the receipts knowing that fact; also, that a warehouseman incurs no liability to the holders of a receipt issued by him whenever the goods are described according to their outward appearance, marks and description, except for their safe custody and return, unless he has knowledge or reason to believe that such description is untrue, and that a warehouseman is simply. a custodian of the goods deposited with him on storage, and his liability does not extend beyond the proper care of the goods, and return of the same, on demand, on payment of storage, unless he wilfully misrepresents the character or condition of the goods. The requests were denied. Proper exceptions were taken to the charge as made, and to the refusals to charge as requested.
    The jury found a verdict for the plaintiffs, for the full amount claimed, and judgment having been entered, .an appeal was taken to the general term of the first department, and from an affirmance by that court an appeal by the defendant has been taken, and the case brought before this court for review.

      John Berry, for app’lt;

      L. B. Warren, for resp’ts.

       Reversing 44 St. Rep., 402.

   Peckham, J.

The question in this case is as to the meaning of the receipt issued by the defendant. Does it mean that the warehouseman acknowledges and asserts the fact that the merchandise delivered to him and consisting of twenty-five hundred, barrels does in truth contain the genuine article, Portland cement, or does it mean that the warehouseman 1ms received that number of barrels bearing the usual appearance of barrels in which Portland cement is packed, and with the usual marks and signs thereon, and represented to him to be Portland cement, and which, he in good faith supposes to be that article ?

The defendant, at the time he received this merchandise, was a warehouseman, and in connection with his business he had a bonded warehouse under license from the United States government, and in it he received on storage imported, dutiable merchandise which could not be delivered until the duty was paid. The goods in question came to the defendant from the vessels named in the two receipts, which vessels came from Marseilles, France, from which place Portland cement is imported. The barrels carne on trucks licensed to transport bonded merchandise, and when they came in the duty had not been paid. They were stored in the bonded warehouse under the joint custody of the defendant and a government officer. The duty was subsequently paid. The defendant testified that the warehouseman had no authority to open goods stored in a bonded warehouse without permission of the government.

These barrels the defendant testified were in character, appearance and style the same as those in which Portland cement was imported. The brand on the barrel heads was “ Wil, Weight & Go., Portland Cement, Trade Mark.” There was also a label on each barrel to the same effect, and also some other signs and letters, all of them consistent with the idea that the barrels contained genuine Portland cement, and, in brief, the whole external appearance of the barrel was that of one in which Portland cement was usually imported. Upon these facts, the court charged as above stated.

We think the language of the receipts is merely descriptive of the barrels which defendant received.

It is meant to describe their outside appearance and that they were, in truth, marked and represented to be Portland cement. It cannot be that the language properly construed could mean that the warehouseman warranted such contents. If that were the meaning to be attributed to such a statement, the warehouseman could be safe only after he had examined critically and cautiously the contents of each box or barrel which he received. To do so would consume a great deal of time, and frequently necessitate the employment of experts who dealt in or were judges of the particular article claimed to be delivered, and they would have to make such an examination of the article as its nature demanded before an opinion could be arrived at.

Any one at all familiar with the business of a warehouseman knows that he could not transact business if he were first to exam-inc the contents of each package, barrel or box of merchandise which was delivered to him, and. so packed as to cover and conceal the real nature of the goods delivered. The warehouseman cannot be supposed to know the contents of barrels or boxes so delivered to him. All he can be fairly charged with asserting by the mere acknowledgment of the receipt of merchandise thus described is that the box or barrel in which it is packed bears the same outward appearance as does the box or barrel in which merchandise of the character described is usually carried, and that there is nothing unusual or out of the ordinary way of business in the marks, appearance, signs, labels or character of the barrel or box from that in which goods of the character described are usually transported, and that the articles have been represented to him, and that he believes them to be as described.

It has been urged that a warehouseman may easily protect himself from any liability by signing a receipt which in so manjr words acknowledges the receipt of barrels or boxes said to contain certain described merchandise, but the contents of which are unknown by the warehouseman, and which, therefore, he does not warrant. This is true, but it does not answer the objection to a warranty which arises out of the transaction itself. In its very nature it seems to me plain that no warranty as to contents can reasonably be implied under these circumstances from the use of such language as these receipts contain. Representations in a bill of lading or warehouse receipt which should be held to be warranties should be confined usually to those which the carrier or warehouseman may ordinarily be assumed to have knowledge of, or which he or his agents ought to known As was said by Mr. Justice Hoar in Sears v. Wingate, 3 Allen, 103, at 107, when speaking of a bill of lading, the master is estopped to deny the truth of the statements to which he has given credit by his signature, so far as those statements relate to matters which are or ought to be within his knowledge.

It is known and understood that the business of a warehouseman is not that of an inspector of property delivered to him, nolis he an insurer of the contents of packages. It is no part of the duty of the defendant, as a warehouseman, to have property inspected or its quality warranted, and no proceedings are supposed to take place to enable a warehouseman to become acquainted with the contents of packages, for the very reason that in his business it is unimportant what such contents are. The general object of giving in the receipt a description of the property is for purposes of identification only, so that the identical property delivered to the warehouseman may be delivered back by him upon the return of the warehouse receipt, and for such purpose it is sufficient to describe the property as it, by its external appearance, seems to be. Such a description is not calculated to mislead anyone in regard to the actual contents of the package. When the warehouseman described in this case the outward appearance and marks and the numbers on the barrels, he. did warrant the correctness of his' description so far as to say that the numbers stated were in reality delivered, and that they were marked as stated, and also that there was nothing unusual in the appearance of the barrels or in the direction, marks or labels upon the merchandise which would reasonably lead to any suspicion that the contents were not what they were represented to be.

A warehouse receipt does not differ in this respect from a bill of lading. In the one case the warehouseman agrees to keep, and in the other case the carrier agrees to transport the goods which he receives, but the acknowledgment of delivery either to the warehouseman or to the carrier is essentially the same, and the same rules govern in the interpretation of the receipt. In Hastings v. Pepper, 11 Pick., 41, Shaw, Ch. J., said that the acknowledging to have received the goods in question in good order and well.conditioned would be prima facie evidence that as to all circumstances which were open to inspection and visible the goods were in good order, but the carrier could show that a loss did in fact proceed from a cause existing at the time of the execution of the bill of lading, if it were not then open and apparent, and if he showed that fact it would be a defense. This statement is approved in Nelson v. Woodruff, 1 Black., U. S., 156 at 160.

In Warden v. Greer, 6 Watts, 424, Huston, J., in delivering the opinion of the Pennsylvania supreme court, held that generally a bill of lading could not be contradicted, but that if a captain were innocently to receive a barrel of corn instead of a barrel of coffee, or a barrel of cider instead of Madeira wine, or a package of cotton linen instead of flaxen linen; it would seem that his bill of lading would not and ought not to exclude him from proving this, as the captain does not open or otherwise examine the casks.

We think the rule is clearly expressed in Hale v. Milwaukee Dock Co., 23 Wis., 276; S. C., on second appeal, 29 Wis., 482. It is there stated, 29 Wis., at 489, that the warehouseman or carrier, in regard to packages which are so covered as to conceal their contents, receipts them upon the representation of the bailor and upon the external appearance corresponding therewith as to contents. He is not supposed to have any actual knowledge of their contents and the language of the receipt is not to be so understood. It is a warranty that the barrels are so represented and so appear to him to the extent of his knowledge or means of information on the subject, and as they are represented and appear to him, so he represents or describes them in his receipt.

In the Wisconsin case here alluded to, the warehouseman receipted for fifty-four barrels of mess pork. The supreme court held the defendant at liberty to show its readiness to redeliver the identical property delivered to it and that the barrels when the defendant took them, and unknown to it, really contained nothing but salt. o A verdict for the plaintiff, who was a bona fide holder for value, was, therefore, set aside and a new trial granted.

It was stated upon the argument here, that a different doctrine prevails in this state, and counsel cited as authority for such claim Jones on Pledges, § 252. The learned author does so remark and the cases of Meyer v. Peck, 28 N. Y., 590; Armour v. Railroad Co., 65 id., 111, and Miller v. Hannibal & St. Jo. R. R., 24 Hun, 607, are cited as authority for such alleged differences.

In Meyer v. Peck, the question did not really arise. The facts showed the draft was paid by the defendant because drawn upon him by his own agent and without the least reference to the bill of lading. Chief Judge Denio referred to the principle as well understood, that a bona fide indorsee for value of a bill of lading could claim the benefit of an estoppel in his favor as against the carrier, and he said that such indorsee could rely upon the quantity of the merchandise acknowledged in the bill and might compel the carrier to account for the same, whether it was placed on board or not. But it is clear enough that a carrier thus situated ought to be estopped from showing that a less quantity was received, because it was his own carelessness in certifying to a fact which was or, at any rate, ought to have been within his own or his agent’s knowledge. When one has advanced money upon the faith of a statement thus within the knowledge of the person making it, I think all would agree that the latter cannot be heard to dispute it. A carrier or a warehouseman is not, however, supposed to know the contents of merchandise so packed as to conceal such contents, and, therefore, his ignorance cannot be said to be carelessness. In Armour v. R. R., supra, the same principle was announced. The defendant acknowledged, in its bill of lading, the receipt of a quantity of lard which, in fact, it had not received. Drafts were attached to the bill and were paid on the faith of the defendant’s acknowledgment in the bill of the receipt of the lard. It was held that the defendant was bound by the acts of its agents who signed the bill of lading and that it was estopped from denying the receipt of the lard.

It would seem as if this decision were right upon the .plainest principles of justice. A written declaration was made that acknowledged the receipt of property which, in fact, had. not been delivered, and which defendant's agent knew had not been delivered, but trusted that it would be. It was a statement of that nature which either was or necessarily ought to have been within the personal knowledge of the defendant’s agents, and, as to such a statement, another person had the right to believe it and act as if it were true.

The case of Miller v. Hannibal & St. Jo R. R. Co., supra, was reversed in this court in 90 N. Y., 430.

The point under discussion in that case, and the only one to. which the attention of this court on appeal was directed, was whether the written and printed part of the bill of lading should be read together, so that the printed part, which acknowledged the receipt of the merchandise “ in apparent good order, contents unknown,” should be construed in connection with the written part, which acknowledged the receipt of “30 bbls. eggs.’,’ It was held the whole should be construed together, and that the bill simply admitted the receipt of 30 bbls. described as containing eggs, but the actual contents of which were unknown. The judge, in the course of his opinion, said that if the description of the article were a representation that the barrels contained eggs, plaintiffs would have the right to recover, citing the case of Myers v. Peck, supra. It was held that it was not. Although there was in the bill of lading the added expression, “ contents unknown,” yet there was no decision that in the absence of such expression the description would have amounted to a representation. That question was not before the court, was not in fact discussed directly, and was not decided. For the reasons already suggested, it would seem improper to so regard the description of merchandise which, when received, is so covered and packed as to securely conceal the actual contents from the carrier or warehouseman.

In First National Bank of Chicago v. Dean, 50 St. Rep., 194, there was a direct written representation on the receipts that the-brandy was stored in a “ free warehouse ” of defendant’s, which expression means that the revenue tax or import duties have been paid on all goods there deposited. This was a representation of a fact which was within the knowledge of the defendant, and we-held that he could not be permitted to show that the representation was untrue as against a bona fide holder for value of the certificates, who had purchased in reliance upon the representation that the brandy was “ free.” The real point in dispute there was,, whether the plaintiff occupied the position of such a holder.

From this review of the authorities upon which it was claimed that the courts of Hew York had taken an exceptional stand, I think it quite plain that in truth no exceptional doctrine obtains here. I think that we, in common with the courts of other states, hold the carrier of warehouseman estopped in regard to any error or misstatement in the bill or receipt only when it amounts to a representation as to a fact which was, or in the ordinary course of business ought to have been, within his knowledge, and which, therefore, such a third person- acting reasonably would have a right to rely and act upon. The court below, however, has sustained the right of the plaintiffs to recover in this case chiefly upon the provisions of the factor’s act of 1858, as amended by that of 1866. Ohap. 326 of the Laws of 1858 ; chap. 440, Laws 1866. The first section of the amended act prohibits a warehouseman, among others, from issuing a receipt for any goods unless such goods shall have been actually received into the store or upon the premises of such warehouseman at the time of issuing the receipt.

The court held that if the goods were not Portland cement then the receipts issued by the defendant were untruthful and a violation of the above cited first section of the act.

We think the act was not intended to and does not reach this case. It was not passed in order to transform a warehouseman from a mere depositary to that of an insurer of the kind and quality of goods deposited with him. It was not intended to alter the law in regard to the character of such a representation as is contained in these receipts or to make it anything other than a description of property as above stated. We are quite clear the act does not cover such a case as this if we assume the defendant was honestly mistaken when he described the goods actually received by him as Portland cement. The court withdrew from the jury the question of the knowledge of the defendant as to the character of the merchandise received by him as entirely immaterial, and hence we must assume his ignorance in discussing his liability.

The English statute to amend the law relating to bills of lading, passed in 1855 (18 & 19 Yic., chap. Ill), recited that “ it frequently happens that the goods in respect of which bills of lading purport to be signed have not been laden on board, and it is proper that such bills of lading in the hands of a Iona fide bolder for value should not be questioned by the master or other person signing the same on the ground of the goods not having been laden as aforesaid.” It was then enacted that bills of lading in the hands of a consignee or indorsee for value, representing goods to have been shipped on board a vessel, should be conclusive evidence of such shipment as against the master, notwithstanding the goods or some part had not been so shipped, unless the indorsee had notice, etc.

This statute evidently referred to a case where there had been no delivery of any goods, or only a part delivery of the amount receipted for, and we think the section of the act of the legislature of this state, above cited, refers to the same kind of omission. Signing a receipt for goods actually delivered, but known by the signer to be something other than that described in the receipt, would be a fraud and amount to a false representation for which the signer would be liable in any event.

But this issue was not submitted to the jury.

It is urged that such a receipt is made negotiable. We do not see that its negotiability is of the least importance in the decision •of this question. That there is a certain kind of negotiability attached to this kind of a receipt and to a bill of lading is not disputed. Dows v. Perrin, 16 N. Y., 325; Dows v. Greene, 24 id., 638; Lickbarrow v. Mason, 1 Smith’s L. C. (8th Am. ed.), 1159, and notes; § 6, Factor’s Acts, above cited.

It is not the same thing as the negotiability of a promissory ' ■note or bill of exchange. It could not be in the nature of things, but by the indorsement and delivery of such a receipt or bill of lading the indorsee for value and without notice is entitled to hold the property represented thereby under the circumstances stated in the above mentioned acts.

In this case the plaintiffs are entitled to be treated as the owners of the property which was deposited with defendant, and they are entitled to its re-delivery to them upon payment of the charges, just the same as the original owner would have been but for the transfer. When, however, the plaintiffs demand, not the identical property which was deposited with the defendant, but such property as would have been deposited had the description in the receipt been correct, the right to demand such a delivery must be based not upon the mere transfer of the receipt, but upon the principle of estoppel; such a principle as precludes a party who has made a representation upon which another has acted from denying the truth of that representation. Obviously the first inquiry must be whether such a representation has been made, and when it turns out that it has not, the estoppel falls to the ground. We have seen that the character of the representations made by defendant was nothing more than that he had in fact received 2,500 barrels of what purported to be and was described to him as and what he believed was Portland cement, packed as such cement was usually packed and bearing the outward indicia of such article. There is in such case no room for the application of that principle which decrees that when one of two equally innocent persons must suffer from the fraud of a third, that one .should suffer who has enabled the third person to commit the fraud.

Upon the proper construction given to the language of the receipt the representation contained therein was true. If, however, the plaintiffs chose to regard a mere description of the outward appearance of property packed in barrels as a representation and warranty by defendant that the contents were actually as described in the receipt and to advance money upon the faith of such alleged representations, the fault lies wholly with the plaintiffs, who placed a degree of faith in the correctness of the description which was totally unwarranted from the nature of the transaction and for which the defendant ought not to be held responsible.

Our conclusion is that the trial judge erred in his charge to the jury above quoted, and in his refusals to charge as above requested, and for such errors the judgment must be reversed and a new. trial ordered, with costs to abide the event.

All concur.


author: O’Brien, J.

text:
    In the Matter of The City of Rochester to Acquire Lands for Park Purposes.

      (Court of Appeals,

      Filed February 28, 1893.)

    1. Condemnation proceedings—Laws 1888, chap. 193—Notice.
    In proceedings to take the property of an owner for park purposes under chap. 193, Laws 1888, the notice required by the statute was not given, but the preamble and resolutions passed by the common council, which recited that a map of the lands proposed to be taken and a copy thereof had been duly made, certified and filed, as required by law, and which set forth the intention of the city to apply for the appointment of commissioners to take the pieces of land described, were published in full in the newspaper chosen by said resolution. Held, that the publication of the resolutions of the common council in full answered every requirement of the statute.
    Same—Constitutional law.
    The twenty-ninth section of the act provides that all other lands acquired by the city under its provisions may be sold at public auction whenever the board of park commissioners shall determine that the same, or any parcel thereof, is unnecessary to be longer used for the purpose of the commission. Held, that this is not unconstitutional.
    Appeal from judgment of the supreme court, general term, fifth department, affirming orders appointing three commissioners to ascertain and report the just compensation to be paid for lands of appellant.

      John Desmond, for app’lt;

      Edward Harris, for resp’t.

         Affirming 48 St. Rep., 358.

   O’Brien, J.

The city of Rochester is empowered by chapter-193 of the Laws of 1888, to acquire lands, by condemnation proceedings, for use as a public park. The supreme court made an order appointing commissioners to condemn the lands, an'd subsequently another order confirming their report. The appellant, a property owner interested in some of the - lands so taken, appealed to the general term from both orders, which were there-affirmed, and he now appeals to this court. The principal contention of the appellant at the general term was that the compensation awarded to him for his lands taken was inadequate; and, upon this question the court, with power to examine all the evidence, held against him, and, we think, properly. No erroneous, principle of estimating the damages was adopted, nor was any ruling made, or testimony admitted, that was prejudicial to him. In this court there are but two questions presented that are necessary to be noticed.

First. That the notice required by the statute was not given. The city authorities caused to be published in the manner and for the period of time required by the statute, a preamble and resolutions passed by the common council, in which it is recited that a map of the lands proposed to be taken, and copy thereof, had been duly made, certified and filed, as required by law ; that a resolution of the common council, declaring the intention of the city to-f¿ake the pieces of land described therein, had been duly passed, and notice of such intention given, as required by the statute that the city hereby declares that it has determined to take and appropriate the several lots, parcels and plots of land therein particularly described, and which have been selected by the park commissioners as desirable for a public park. That notice of such determination be published in a newspaper of the city, which was. named and designated for that purpose, and that the city would apply to the supreme court, at a time and place named, for the appointment of commissioners to ascertain and report the-just compensation to be paid to the owners or persons interested in the lands described. The resolution in full was duly published.

It is urged by the appellant that this was not a notice, as it was. not entitled in the court where the proceedings were to be instituted, or directed to the person or persons to be affected, or signed by the party giving it, or his agent or attorney. The fifth section of the act requires notice of the determination to be published the form of the notice is not prescribed. Its object was to inform the property owners and the public that it had been determined to take lands described, and that an application for the appointment of commissioners would be made at a time and place where-all parties interested could be heard. The publication of the resolutions of- the common council in full answered every requirement of the statute, as they contained all the facts necessary to-give the required information, and this was a sufficient notice.

Second. The 29th section of the act provides that all other-lands acquired by the city under its provisions may be sold at. public auction whenever the board of park commissioners shall determine that the same, or any parcel thereof, is unnecessary to he longer used for the purpose of the commission. It is claimed that this provision is in conflict with the provisions of the constitution respecting the taking of private property for public use, as it in fact authorizes the city to take it for a purpose not public. We think the objection is without merit or substance. Of course the city could not take private property for the purpose of selling it or dealing in it; but having once acquired it for a park, and it becoming, in the course of time, unnecessary or useless for that purpose, by the growth of the city or other changes in the situation, a sale in the manner prescribed by the statute would be within the legitimate functions of the city as a municipal corporation, and power to that end, conferred by the legislature at any time, or in the act authorizing the taking, cannot invalidate the delegated right to exercise the power of eminent domain.

The order should be affirmed, with costs.

All concur.


author: Andrews, J.

text:
    Emanuel S. Sutro et al., Resp'ts, v. The Metropolitan Elevated Railway Co. et al., App'lts.

      (Court of Appeals,

      Filed February 28, 1893.)

    1. Railboads—Elevated—Damages.
    In estimating damages to property by reason of the construction of an elevated railway, the trial judge refused to find that the easements taken or impaired had, as to the abutting owner, only a nominal value, independent of their relation to the land. Held, error.
    2. Same.
    A very clear case should be presented on the part of the owner of improved property to justify an award of fee damages when an award of past damages is denied. The court ought not to assume that the present condition is not to continue, or to award fee damages on the speculation that by future changes in the operation of the road, or the location of its stations, the benefits which it now receives will be withdrawn.
    Appeal from judgment of the New York superior court, general term, affirming j udgment in favor of plaintiffs, entered upon decision of judge at special term.

      Brainard Tolies, for app’lts;

      M W. Tyler, for resp’ts.

       Reversing 42 St. Rep., 958.

   Andrews, J.

It has been decided by the cases of Newman, 118 N. Y., 618; 30 St. Rep., 36, and Bohm, 129 N. Y., 576; 42 St. Rep., 247, that in' estimating damages to property by reason of the construction and operation of the elevated railway, all benefits general or special to the 'rental or fee value of the property, resulting from the existence of the railway, are to be considered, and that only such damages which are over and above all such benefits are recoverable. This doctrine stands upon the most manifest equity. The easements of light, air and access taken or impaired by the railroad structure are, as we have said, of no value to the property owner separated from the land, and the damages of the land owner are consequential merely.

The injury from the impairment of these easements and the inconveniences and annoyances incident to the operation of the road may be, and in the case of business property especially are quite likely to be, offset in whole or in part by the increased facility of access afforded by the elevated system, thereby mitigating or preventing actual loss. In such cases it would be in the highest degree inequitable to- estimate and award damages irrespective of benefits.

In the present case the usual action is brought by the owner of the property on Second avenue and Seventy-second and Seventy-third streets, to recover past damages for diminution of rentals in consequence of the railway in Second avenue, and for damages for the permanent impairment in value of the property caused thereby. The singular result was reached that there has been no injury in the past, and judgment for past damages was denied, and yet the owner was awarded $5,000 damages to the fee value, based on the supposed future damages which would result from the maintenance and operation of the defendants’ road “ over and above all benefits peculiar to said premises.” This result, moreover, was reached although it appeared that the aggregate rental value of the premises had increased, and that the fee value had largely increased since the railroad was constructed. Special circumstances may in some cases affect the ratio of rental to the fee value of property. In this case circumstances were shown which may possibly have contributed to maintain the rentals of the apartments above the normal value, but the steady increase in the rental value of the stores is undisputed, largely increasing the aggregate receipts from the property since 1882.

It is quite plain, we think, that the trial court in arriving at the damages to the fee value of the property did not apply the proper rule. The judge refused to find that the easements taken or impaired had, as to the abutting owner, only a nominal value, independent of their relation to the land, a principle sanctioned by our decisions. He also refused to find that the traffic on Second avenue, where the premises are located, was largely increased by the presence of the railroad, and that the road produced a special benefit to the property for business purposes. Both of these facts were, we think, established without contradiction, either directly or from facts which the court would have been warranted in inferring, and ought to have inferred, in the absence of evidence to the contrary, And in awarding damages the court apparently only regarded benefits “peculiar to said premises,” thereby inferentially excluding general benefits to the property which it may have shared in common with other property.

There is, it must be admitted, some indbfiniteness in the manner of raising the exceptions relied upon. But we are not disposed to be very critical in construing them against the’defendants under the circumstances of the case. A very clear case should be presented, we think, on the part of the owner of improved property, to justify an award of fee damages when an award of past damages is denied. The court ought not, we think, to assume that the present condition is not to continue, or to award fee damages on the speculation that by future changes in the operation of the road or the location of its stations the benefits which it now receives will be withdrawn. The judgment in the case seems to have been drawn with special care to confine the award of fee damage for the easements taken to damages for the maintenance of the defendants’ railway “as at present maintained.”

But in any view we think the plaintiffs upon this record failed to establish any claim for substantial fee damage.

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

All concur, Gray, J., in result.


author: Earl, J.

text:
    Jacob Bookman, Resp't, v. The New York Elevated Railroad Co. et al., App'lts.

      (Court of Appeals,

      Filed February 28, 1893.)

    1. Railboad—Elevated—Damage to easements.
    The easements, if any, appurtenant to the several lots of land taken or interfered with by the erection of an elevated railway, aside from any consequential damages to said premises from the taking of the same, have, in themselves, only a nominal value.
    2. Same—Judicial notice.
    The courts may take judicial knowledge that the nature and operation of the elevated railroads increase the traffic in the wide avenues largely devoted to business purposes and thus generally promote and increase the business there.
    3. Same—Evidence of value.
    Plaintiff testified that the lot which he purchased in 1881, after the elevated railroad was built, for $22,500, was then worth $25,00,), and that he could now obtain $30,000 for it; that he wanted to keep the property for his family, and on that account did not wish to sell it, and that but for that reason he would sell it for $30,000. He was then asked, “ Suppose you could have your right of action against the railroad company without any impairment of it and still sell the property, what would you still be willing to sell it at?” and under objection was allowed to answer: “If I could keep my right of action against the elevated road I would take $25,000 for it.” Held, error; that what plaintiff would be willing to sell his lot for under such circumstances was not proper evidence of its value.
    Appeal from judgment of the New York superior court, general term, affirming judgment rendered by the court after a trial at the special term.

      Brainard Tolies, for app’ltsi?.

      E. W. Tyler, for resp’t

       Reversing 42 St. Rep., 958.

   Earl, J.

The plaintiff was, at and before the commencement of this action, the owner of lots No. 261, 1028, 1240, 1242, 1244, 1246, 1248 and 1255, in Third avenue, in the city of New York. The defendants’ elevated railroad was constructed and is maintained and operated through that avenue. The plaintiff com-1 menced this action against them and prayed for the relief usual in this class of actions.

The court, upon the trial, found the rental damages to the lots to be $17,500, and the fee damages $22,000. Most of these lots were situated in the neighborhood of Seventy-seventh street, several miles from the business center of the city.

We have carefully read the evidence, and are satisfied that in the' estimate,of damages injustice was done to the defendants, and the proper .rules of law were not applied in awarding the judgment

The court refused, upon the request of the defendants’ counsel, to find the following facts: “ That the easements, if any, appurtenant to the several lots of land, and taken or interfered with by the defendants’ railway, aside from any consequential damages to said premises from' the taking of the same, have, in themselves, only a nominal value.”

That request should have been found, and the refusal to find the facts shows that the court misapprehended the principles of law laid down in the cases of Newman v. Elevated Railroad Co., 118 N. Y., 618; 30 St. Rep., 36, and Bohm v. The Same, 129 N. Y., 576; 42 St. Rep., 247. According to those principles the defendants were bound to pay the value of any property they actually took without any allowance against such value for benefits; and the allowance for benefits could be made only in reduction of consequential damages. Hence it was important for the defendants to have a finding that substantially all the damages were consequential, so as to give room for the allowance of benefits.

The court also refused to find the following facts, as requested : 41 That the only property rights of the plaintiff in said Third avenue, taken, appropriated or interfered with by defendants, are casements of light and of air and of access in and over said street, in front of and appurtenant to the lots of land described in the complaint herein.”

That was a proper request, and why it was refused is not perceived.

The court also refused to respond to the following requests: That “ the presence of defendants’ railway and of their stations at Twenty-third and Fifty-ninth streets brings a large number of persons daily into the Third avenue m the immediate neighborhood of the portions of the premises in suit, Mos. 261 and 1028 Third avenue, and increased the traffic in and upon said avenue at these points, in the neighborhood of said premises respectively.” “ The effect of the proximity of the defendants’ stations above mentioned to the said parcels of the premises in suit is advantageous to the business portion of the said premises and produces a special benefit to the same for business uses.” We think these facts could, with propriety, have been found upon the evidence in the -case. But the nature and operation of the elevated railroads are so notorious that the courts may assume to be acquainted with them; and from the numerous cases which have come before them they may take judicial knowledge that they increase the, traffic in the wide avenues largely devoted to business purposes, .and thus generally promote and increase the business there.

The court found the rental damages to lot Mo. 1255 to be $2,500, and the fee damages $3,000. That lot is situate on the avenue above Seventy-seventh street, and the plaintiff purchased it in 1881, after the elevated railroad was built, for $22,500. He testified at the trial that he was sure the lot was then worth $25,000, and. that he could now obtain $30,000 for it. He testified that he wanted to keep the property for his family, and on that account did not wish to sell it, and that but for that reason he would sell it for $30,000 ; he might sell it for $28,000. He was then asked by his counsel this question: “ Suppose you could have your right of action against the Elevated Bailroad Company without any impairment of it and still sell that property, what would you still be willing to sell it at ? ” Counsel for the defendants objected to the question as incompetent and improper, and the court overruled the objection.

The plaintiff then answered: “If I could keep my right of action against the elevated road I would take $25,000 for it” It is impossible to perceive upon what principle this question and the ruling thereon could be justified. It was not justified by the previous course of the plaintiff’s cross-examination, and it enabled him to state in this way what he considered his cause of action worth. The very highest price he had previously put upon the lot was $30,000, and thus it appears that the highest price he put upon his cause of action was $5,000, and yet the court awarded him $5,500. This was certainly a very novel way to test the value of this lot The court could, with equal propriety, have permitted the plaintiff directly to estimate the value of his lawsuit. What the plaintiff would be willing to sell his lot for under such circumstances was not proper evidence of its value, and we think there was error in receiving it

Justice requires that there should be a new trial of this action so that the principles of law laid down in the cases above cited may be properly applied.

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

All concur, GrRAY, J., in result


author: Andrews, Ch. J.

text:
    Eliza M. Sloane, Resp't, v. The New York Elevated Railroad Company et al., App'lts.

      (Court of Appeals,

      Filed February 28, 1893.)

    Appeal from judgment of the supreme court, general term, first department, affirming judgment in favor of plaintiff.

      Arthur 0. Townsend, for app’lts;

      Charles A. B. Pratt, Jr., for resp’t

       Reversing 44 St. Rep., 583.

   Andrews, Ch. J.

We think this judgment should be reversed on the principle of the opinions in Sutro and another v. The Manhattan Railway Company and another, and Bookman v. Same, decided at this term, and a new trial ordered, with costs to abide event.

All concur.


text:
    Robert Wyllie et al., App'lts, v. James Palmer, Jr., et al., Resp'ts.

      (Court of Appeals,

      Filed February 28, 1893.)

    Master and servant—Negligence.
    The citizens of Auhurn by written order purchased a quantity of fireworks of defendants, who, as requested by the former, sent a man with them to “take charge of the display,” and also a boy. The committee took charge of the display, the man and boy acting under its directions, and while the man was engaged in setting and discharging the large pieces at one end of the inclosure, the chairman ordered a member of the committee and the hoy to discharge the rockets at the other end, and in so doing the boy so handled one of the rockets that it was discharged horizontally and injured plaintiff, a bystander. JAM,that the contract made was for the sale and delivery of personal property; that the boy was at the time the servant of the committee, not of the defendants, and the latter were not liable.
    (Finch, J., dissents.)
    Appeal from judgment of the supreme court, general term, fifth department, affirming judgment dismissing plaintiffs’ complaint upon the merits, entered upon a nonsuit directed at the circuit

      jJames B. Cox, for app’lts;

      Nathaniel Foote, for resp’ts.

       Affirming 43 St. Rep., 92.

   O’Brien, J.

The plaintiffs in this case having been nonsuited at the trial, the general inquiry upon this appeal is whether they were entitled to have the case submitted to the jury.

The plaintiffs are husband and wife, and they sought to recover damages for an injury to the wife by the discharge of a rocket, while she was witnessing a display of fireworks at a Fourth of July celebration in Auburn, July 4, 1888. It is claimed that the defendants stood in such legal relations to the transaction as to become liable for the injury. They are partners in the business of manufacturing and selling fireworks at Rochester and they furnished the rocket that injured the plaintiff. The theory upon which the plaintiffs claim to recover is that the defendants contracted with a committee to give an exhibition or display of fireworks, and in carrying out this contract the defendants, or their servants, so negligently handled or managed the fireworks, that the rocket was discharged horizontally into a crowd of people and struck Mrs. Wyllie, inflicting the injury complained of. The complaint is framed upon this theory alone and it is proper to say that the learned counsel for the plaintiffs, in his brief and in his oral argument in this court, boldly rests his whole case upon that principle. Neither by pleading, proof or argument has he suggested or claimed that there was any other ground for a recovery. The defendants deny that they ever made such a contract or that they ever gave, controlled or directed any such exhibition. The controversy is thus reduced to the inquiry as to what the defendants’ legal relations were, upon the proofs given at the trial, to the transaction which was the cause of the injury.

This is to be ascertained- from the testimony of the plaintiffs, for the defendants gave none, and there is no conflict or doubt with respect to the facts. Some time prior to May 1, 1888, a public meeting was held at Auburn, which was attended by the mayor and principal citizens, who resolved to have a celebration on July 4th, and a committee was then and there appointed to have general charge of it, consisting of thirty persons. Out of this general committee various sub-committees were formed, and among them a committee of five on fire works, of which George H. Battams was the chairman. He opened a correspondence with the defendants which must determine the legal nature of the transaction. His first letter is dated May 1, in which he wrote to the defendants “ Please send me your catalogue of your goods. I wish you would mark out a display for the Fourth of July that will cost $500.” The natural and obvious construction of this language is that the chairman of the committee asked defendants for a catalogue of their goods upon which should be indicated such articles as would be sold for $500. This letter does not appear to have been answered, and on May 18th, the chairman wrote again asking for the “ catalogue of your goods, with a display you can give for $500, also a display for $400.” Four days afterwards the defendants wrote to the chairman, in which they stated that: “We inclose programme of exhibition which we have made up specially for you, and have taken pains to give you a very fine display * * * to cost $500 net. * * * If you do not wish to expend this amount, let us know, and we can reduce it to any amount desired by taking out some pieces. We make no charge for boxing or cartage, but expect you to return us the empty boxes and frames. We inclose printed sheet giving full instructions for firing the display.” It seems quite clear that this was nothing more than a proposition on the part of the defendants to sell and deliver certain goods specified, on what is called a pro-gramme, for $500. Nothing more was done till the 12th of June, when the following letters were exchanged and which constitute the contract:

“ Auburn, June 12, 1888.

Mr. J. Palmer's Sons:

“ Dear Sirs.—At last we have arrived at a conclusion in regard to the exhibition. I have been trying to get the whole thing, $500, but failed. At last we have decided to have a $400 display. Will you please inform me what you will give in that, including the steam engine and Mr. Wheeler’s picture. We have had four others to buck against; three from New York and one from Syracuse. Mr. Scott had one from New York. There is considerable kicking, but we are there. Please give us a fine display. We would like to have a man to take charge of the display. Please inform me how many posts jmu will need. I have the model of post, the one we used last summer. Of course, the $500 is a fine display, and I think you can give a fine $400 out of that.

“ Hoping to hear from you soon, I rem. yours truly.

“ Geo. H. Battams.”

To which the defendants replied as follows:

Rochester, N. Y., June 14, 1888.

Geo H. Battams, Esq., Auburn, N. Y. :

“ Dear Sir.—Your favor of the 12 inst. at hand, with pro-gramme. We understand that we have your positive order for display to cost four hundred dollars net, including expense of man, and we inclose you programme, representing the goods we will send. We have included the steam fire engine and bust of Mr. Wheeler. You should have sixteen posts made like the model you have, one for each piece. The net price of the bust of Mr. Wheeler, with name and arch, is $50, and will be large and got up fine as possible. This will give you the finest display that can be had for the money. We will put our very best work in it, and know you will be pleased. It is a pity you did not accept our other programme and raise the whole $500, and if there is any possibility of your raising the other $100, we would advise you to do so, and we will ship the goods.

“ Yours, etc., James Palmer’s Sons.”

‘ The defendants, as a result of this correspondence, shipped the goods by rail to the chairman, and the latter took them from the station at Auburn and paid the freight thereon. On the third of July, defendants’ man came to Auburn, called upon the chairman at his place of business, and was by him taken to a hotel, and the expenses were paid by the committee. There came with him a boy about seventeen years old to assist in raising and, handling the large pieces. The committee took charge of the display, fixed the time and place, which was an inclosed space about 200 feet from east to west in one of the principal streets of the city. It was arranged that the large set pieces were to be discharged at the west end of the space and the rockets and small pieces from the east end. All the arrangements were made by the committee, and the man and boy sent by the defendants acted under its directions. While the man was engaged setting and discharging the large pieces at the west end of the. space, which was inclosed with ropes, the chairman of the committee on fireworks ordered another member of the committee and the boy to discharge the rockets at the other end, and this order they proceeded to carry out, and in doing so the boy so handled one of the rockets that it was discharged horizontally and injured the plaintiff, who was one of the bystanders. The contract of the defendants with the committee was in writing. The parties had no personal interview. It was either a contract for the sale and delivery of the goods, or a contract for services and materials. The language was not ambiguous or equivocal, and hence it was not competent to ask the jury to determine its construction, meaning or legal effect. Arctic Fire Ins. Co. v. Austin, 69 N. Y., 470; Kenyon v. K. T. & M. M. A. Ass'n, 122 id., 247; 33 St. Rep., 467.

7Indeed, the learned counsel for the plaintiffs does not claim this. His position is that the contract is, as matter of law, one obligating the defendants to give a display or exhibition.

Upon every test that can be applied to this contract it seems to me that it is one for the sale and delivery of personal .property. If the defendants failed to perform it the damages against them would have to be measured upon the principles applicable to a breach of contract for the sale and delivery of goods. The city or the persons in charge might be able to show very large damages for breach of a contract to give an exhibition or display, but it would seem to me preposterous to measure the loss upon such a theory. The defendants parted with the title to the property upon delivery to the carrier at Rochester. While in the depot at Auburn a levy by virtue of an execution against the defendants would not bind them, and if, while there, they had been destroyed, the loss would not fall upon the defendants. The chairman of the committee purchased the goods from the defendants, and it is as manufacturers and vendors of the fireworks only that the defendants are connected with the injury. The committee, not the defendants, gave the display. It was for that purpose they were appointed. They procured the funds, selected the place, fixed the time and directed and controlled everything that was done from the beginning to the end. It would be a gross perversion of the language and intention of the parties, and of all the facts, to hold that the defendants were occupying the streets of Auburn on the evening in question, controlling and directing a display of fireworks for the amusement of the citizens, while the committee had ceased to direct and had become mere spectators. The fact that two persons who were in the general employ of the defendants aided and assisted in discharging the fireworks does not change the situation or the relations of the defendants to the transaction. They were not, as to this transaction, engaged in the defendants’ business, nor under their control or direction, but were in the business of the committee, controlled and directed by them. The plaintiffs’ counsel, as already observed, rests the case upon the proposition that the defendants were independent contractors for the performance of certain work or services for the committee. His argument contains no suggestion that the defendants are liable if the contract was one for the sale of goods. The action was not brought and the complaint was not framed upon that theory, and, as I think the plaintiffs’ construction of the contract is not the correct one, the discussion might very well end here. But it may not be amiss to ascertain whether the defendants can be made liable upon any possible view that may be taken of the transaction. A manufacturer and dealer in dangerous articles intended for use, such as explosives of this character, may become liable to the purchaser, at least, and possibly to third persons, in some cases, for damages resulting from defective materials or from want of proper care and skill in the manufacture, but it has never been h'eld that he could be made liable for an injury resulting from the negligent or improper use of the article by the purchaser or by third persons. Loop v. Litchfield, 42 N. Y., 351; Losee v. Clute, 51 id., 494; 7 Am. & Eng. Encyclopaedia of Law, 517-524.

It is not necessary, however, in this case to pursue the inquiry or to attempt to define the liability of a manufacturer and dealer in fire works in all cases, because no claim is made in behalf of the plaintiffs that the defendants did not in this respect perform all the obligations imposed upon them by the contract, and every duty that may have .been due to the public.

It may be said that a part of the contract was that defendants should send a man to assist in handling and exploding the pieces sold. The defendants performed all its obligations in that respect. They did send a man who was perfectly competent for the work, and it is not shown that he was guilty of any fault or neglect whatever. Even if the injury was the result of some fault on his part, it would not follow that the defendants were liable for it. Their duty was performed when they selected and sent to the committee a man who was competent for the work and possessed the necessary experience and skill, and it is not claimed that they were delinquent in this respect. When he arrived at Auburn and the committee took charge of him and assumed to direct and control him, as they were entitled to do under the contract, he became their servant, and as the defendants were not insurers against every possible mistake that he might make, they were not then responsible for his acts, even if it was shown that he was in fault, which clearly it is not. But the defendants did more than they agreed to. They sent a boy with the man as a helper. It was intended that he should assist the man in handling and setting off the larger pieces, not that he should discharge rockets or perform any other duty. He was perfectly competent in every respect to perform the work for which the defendants employed him. But a member of the committee, under the direction of the chairman, ordered this boy to assist him in discharging the rockets, and he obeyed the order. This is the only fault of which he was guilty, for it may be assumed that he was not possessed of the necessary experience and skill to handle and discharge fireworks. That was not the work that the defendants employed him to do and not the work-that they intended he should do on this occasion. But are the defendants liable because he did not refuse to obey this order ? Are they liable because the older, more experienced and competent man permitted him to obey it? There is no evidence in the case that the latter even heard the order or knew it was given or had any other knowledge that the boy was being put by the committee at such work, but even if he had, 'what power or right did he have to disregard or resist the directions of the committe, who had the real charge of the whole affair? Certainly the defendants are not liable unless the boy, at the time he discharged the rocket, was the defendant’s servant engaged in their business. The learned counsel for the plaintiffs claims that he was, but this claim rests entirely upon the erroneous assumption that the defendants were independent contractors to give an exhibition and that there was no sale by them of the goods. This is obviously the only ground upon which the relation of master and servant between the defendants and the boy at the time of the accident can rest. If the display was that of the committee, as I think it was, then both the man and the boy, though in the general employment of the defendants, were nevertheless the servants of the committee and for the time being under its direction and control. Suppose the platform or staging built by the committee contained a rotten plank or board that gave away while the man and boy were upon it, and injured them, who would be responsible for this negligence ? Them can be no doubt, I think, that such liability would fall upon the members of the committee and persons in general charge and not upon the defendants. Butler v. Townsend, 126 N. Y., 105; 36 St. Rep., 508; Olive v. Whitney Marble Co., 103 N. Y., 292; 3 St. Rep., 66; Blake v. Ferris, 5 N. Y., 48.

The doctrine of respondeat superior applies only when the relation of master and servant is shown to exist between the wrongdoer and the person sought to be charged for the result of some neglect or wrong, at the time and in respect to the very transaction out of which the injury arose. Thorpe v. N. Y. C. & H. R. R. R. Co., 76 N. Y., 406; Dwinelle v. N. Y. C. & H. R. R. R. Co., 120 id., 117; 30 St. Rep., 578; Penn. Co. v. Roy, 102 U. S., 451; Wood v. Cobb, 13 Allen, 58; Kimball v. Cushman, 103 Mass., 194; Ward v. New England Fibre Co., 154 id., 419.

The fact that the party, to whose wrongful or negligent act an injury may be traced, was at the time in the general employment and pay of another person, does not necessarily make the latter the master, and responsible for his acts. The master is the person in whose business he is engaged at the time, and who has the right to control and direct his conduct. The rule on this subject is well stated by a learned author on the law of negligence as follows: “He is to be deemed the master who has the supreme choice, control and direction of the servant, and whose will the servant represents, not merely in the ultimate result of his work, but in all its details. The payment of an employee by the day, or the control and supervision of the work by the employer, though important considerations, are not in themselves decisive of the fact that the two are master and servant. * * * Servants who are employed and paid by one person may, nevertheless, be ad hoc the servants of another in a particular transaction, and that, too, where their general employer is interested in the work. They may, without consulting their master, but in good faith, assist a person independently employed to do something which shall benefit their master, but with which neither he nor they have any right to interfere, and in which they act entirely under the control of such other person. In none of these cases is the nominal master responsible to strangers for their acts or omissions.’’ Shear. & Redf. on Reg., 4th ed., p. 269.

Assuming that the contract between the committee and the defendants was for the sale of fireworks, the boy, who it is said negligently discharged the rocket that injured the plaintiff, was not at the time the servant of the defendants. There was no question upon the evidence to submit to the jury, and hence no error in granting the nonsuit.

The judgment should be affirmed.

Judgment affirmed, with costs.

All concur, Gray and Maynard, JJ., in result, except Finch, J., dissenting.


author: Maynard, J.

text:
    The Fifth Ave. Bank of New York, Resp't, v. The Forty-Second Street & Grand Street Ferry Railroad Co., App'lt.

      (Court of Appeals,

      Filed February 28, 1893.)

    1. Corporations—Representations by officer.
    A corporation is bound by representations of one who is secretary, treasurer and transfer agent, with power to transfer stock, made in answer to inquiries as to the genuineness of particular stock, although such stock afterwards proves to be spurious, the president’s name thereto having been forged by the secretary himself.
    3. Same.
    When certificates of stock contain, apparently, all the essentials of genuineness, a bona fide holder thereof has a claim to recognition as a stockholder, if such stock can legally be issued, or to indemnity if this cannot be done. The fact of forgery does not extinguish his right when it has been perpetrated by, or at the instance of,- an officer placed in authority by the corporation and entrusted with the custody of its stock-books, and held out by the company as the source of information upon this subject.
    Appeal from judgment of the supreme court, general term, first department, affirming order denying motion for new trial and directing judgment for plaintiff.

      Freling H. Smith, for app’lt;

      Edward 0. James, for resp’t.

       Affirming 44 St. Rep., 379.

   Maynard, J.

In September, 1885, the plaintiff, a domestic banking corporation, loaned one Hofele $15,000 upon his individual note payable in three months, and secured hy the pledge of an instrument which, upon its face, purported to be a certificate for 160 shares of stock of the defendant, a domestic railroad corporation having its office and principal place of business in the same city with the plaintiff. It was subsequently discovered that this certificate was spurious, and that the signature thereto of the defendant’s president had been forged by one Eben S. Allen, its secretary, who was also its treasurer and transfer agent, and who had, in these capacities, signed and countersigned the certificate and delivered it to Hofele, who was his partner in business, for the purpose of raising money upon it, to be used in the firm undertaking.

We are required upon this appeal to determine how far the defendant company is liable for the loss sustained by the plaintiff in consequence of this fraudulent and criminal act of one of its principal officers.

The good faith of the plaintiff in the transaction by means of which he became possessed of the forged certificate, seems to be satisfactorily established. Hofele was a stranger to the officers of the bank, and they had no knowledge of his business relations with Allen, or that the latter was, in any way, interested in the proposed loan. Before acting upon Hofele’s application for a discount, the plaintiff’s president sent its confidential clerk to the office of the defendant with the certificate, who, pursuant to' instructions, showed it to the person in charge of the office, who-was then unknown to the clerk, but who proved to be Allen, its secretary and treasurer, and who was asked if it was genuine and all right, and if Hofele was a stockholder of the company, to which an affirmative reply was given, and a description of Hofele, from which the bank might identify him as the person who had presented the certificate and sought the loan upon the strength of it. The clerk reported the result of the interview to the plaintiff’s officers, who thereupon discounted Hofele’s note for the sum named payable in three months, and accepted the certificate as collateral security in the usual form for its payment and for all other present or future demands of the bank against him. The note was renewed from time to time and increased in amount, and some smaller notes given until his indebtedness amounted to $35,000 and upwards. Meanwhile the plaintiff had taken as additional security a like certificate for fifty shares to which the signature of the defendant’s president had also been forged, and which was first received as security for a loan of $5,000. This loan was afterwards consolidated with the other loans, and became a part of the total indebtedness for which both certificates were held as security. Hpon the pledge of the fifty share certificate, the plaintiff made no inquiries of the defendant, or of any of its officers with reference to its genuineness.

In July, 1889, Hofele ordered the plaintiff to sell the two certificates and signed the usual blank transfer or power of attorney for that purpose upon the back of them. When they were first hypothecated he had executed a separate power of attorney authorizing plaintiff to sell and transfer them in case of default in the payment of the loans. The certificates were sold by plaintiff’s brokers, and the net sum of $43,890 received and placed to Hofele’s credit, and his indebtedness charged to his account, leaving an apparent balance due him of $8,479.

When the certificates were presented by the purchasers at the office of defendant for transfer, it was refused upon the ground that they were forged and spurious, and the treasurer and transfer agent wrote across their face in red ink the words “ no good,” and added their official signatures to the statement. The plaintiff then refunded to the purchasers the amount paid upon the sale of the certificates, and took an assignment from them of all rights of action which they had against the defendant, and upon the refusal of the defendant to recognize the certificates as valid evidences of title to its shares of stock, this action was brought, in which the plaintiff has recovered for its loss on account of the invalidity of the 160 share certificate, and the defendant alone has-appealed.

With respect to this certificate, we fail to discover any omission on the part of the plaintiff which would impeach its character as a bona fide holder. It made inquiry at the office of the defendant, where its books and records were kept, and of the officer in charge, whose duty it was to furnish correct information upon the subject, and it had no reason to suspect that the assurances it received were misleading or false, or that the officers of the defendant had entered into a conspiracy with Hofele to defraud the public.

It resorted to the only source of verification of the truth of Hofele’s statements which was readily accessible; and it exercised all the care and vigilance which a prudent man would be expected to exhibit in the ordinary course of the business in which it was engaged. There was no circumstance proven which required a display of greater diligence. Nor were the rights of the plaintiff affected by the sale of the certificates and their redeliv'ery to the plaintiff upon a refund of the proceeds of the sale to the purchasers. Though nominally sold on the account of Hofele, the plaintiff was the real party in interest in the transaction. There was an implied guaranty of the genuineness of the certificates which the vendor might be required to makegood, and as the plaintiff had received the fruits of the transaction, the consideration of which had failed, it could not lawfully withhold them from the purchasers when restoration was demanded. The purchasers were also bona fide holders of the certificates, and the plaintiff, by their assignment, acquired the right to the enforcement of whatever remedies they might have in that capacity against the defendant, although it was then aware of their fraudulent issue. While certificates of stock in railroad and other business corporations do not possess the qualities of commercial paper in the full sense of the term, yet as evidences of title, when the transfer indorsed thereon is signed in blank by the shareholder, they become, in effect, so far as the public is concerned, as if they had been issued to bearer. They are then readily transferable by delivery, and have an element of negotiability which renders them an important factor in the financial and commercial transactions of the country. They may be and are frequently listed upon the stock exchanges, and their sales represent a large proportion of the daily business of these bodies.

The plaintiff must, therefore, be accorded whatever advantage belongs to a holder in good faith of a chose in action of this character, and we have only to consider how far the defendant is responsible for the acts and representations of its officers, by means of which Hofele was enabled to obtain the plaintiff’s money upon the faith of paper apparently valid, but in fact worthless.

The defendant was incorporated under the general railroad law, originally, with a capital of $600,000, afterwards increased to $750,000, all of which had been issued, excepting twenty shares, before 1870. Its books relating to the issue and transfer of stock consisted of a certificate book, a transfer book and a stock ledger, which were all kept by the secretary, and were in his immediate custody; but in his official capacity and work he was subject to the supervision of the president, and all the officers were under the general control and management of a board of directors.

It is apparent from the evidence that the secretary was, ex officio, the transfer agent of the company. At least from 1868 to the present time the secretary had acted as such agent, and there is no provision in the by-laws for the separate appointment of a transfer agent, and the only reference to such an officer is in a single paragraph in § 15, where it is provided that “all certificates shall be issued and signed by the president and treasurer, •and countersigned by the transfer agent, under such other regulations as the board of directors or finance committee may from time to time prescribe.” Whether the secretary was by virtue of his office transfer agent is not material, but the fact remains that ■so far as the evidence discloses anything upon the subject, he always discharged the duties of that office, and in the performance of the work was fitly characterized as the transfer agent of the •company. When stock was issued, either in payment of an original subscription, or upon its transfer from one person to another, the engraved certificate was taken from the certificate book and filled up by the secretary, presented to the president and treasurer, who signed it, and it was then countersigned by the secretary as transfer agent, and sealed by him with the seal of the corporation, ■and delivered to the stockholder or transferee named in it. The secretary at the same time inserted the proper data in the stub re-' maining in the certificate book, and made the necessary entries in the transfer book and the stock ledger. The certificate received by plaintiff from Hofele had been taken from the certificate book. It appeared upon its face to be perfect and regular in every respect. It had the name of the president and treasurer signed to it, was countersigned by the transfer agent, and bore the impress -of the corporate seal. It recited that Hofele was the owner of 160 shares of $100 each of the capital stock of the company, contained the usual provisions in regard to the mode of transfer, and -declared that no certificate should bind the company unless signed by the president and countersigned by its treasurer and transfer agent. The in testimonium clause asserted that the defendant had ■caused that particular certificate to be signed by its president and •countersigned by its treasurer and transfer agent, and sealed with its corporate seal, February 6, 1885.

It is very clear that under the regulations adopted by the defendant, and pursuing the mode of procedure which it had prescribed, the final act in the issue of a certificate of stock was performed by its secretary and transfer agent, and that when he -countersigned it and affixed the corporate seal and delivered it with the intent that it might be negotiated, it must he regarded, so long as it remained outstanding, as a continuing affirmation by the defendant that it had been lawfully issued, and that all the ■conditions precedent upon which the right to issue it depended had been duly observed. Such is the effect necessarily implied in the act of countersigning. This word has a well defined meaning, both in the law and in the lexicon. To countersign an instrument is to sign what has already been signed by a superior, to authenticate by an additional signature, and usually has reference to the signature of a subordinate in addition to that of his superior by way of authentication of the execution of the writing to which it is affixed, and it depotes the complete execution of the paper. Worcester’s Die. When, therefore, the defendant’s secretary and transfer agent countersigned and sealed this • certificate and put it in circulation, he declared in the most formal manner that it had been properly executed by the defendant, and that every essential requirement of law, and of the by-laws, had been performed to make it the binding act of the company. The defendant’s by-laws elsewhere illustrate the application of the term when used with reference to the signatures of its officers. In § 10 it is provided that all moneys received by the treasurer should be deposited in bank to the joint credit of the president and treasurer, to be drawn out only by the check of the treasurer, countersigned by the president. If the president should forge the name of the treasurer to a check and countersign it and put it in circulation and use the proceeds for his individual benefit, we apprehend it would not be doubted that this would be regarded as a certificate of the due execution of the check, so far as to render the company responsible to any person who innocently and in good faith became the holder of it.

This result follows from the application of the fundamental rules •which determine the obligations of a principal for the acts of his agent They are embraced in the comprehensive statement of Story in his work on Agency (9th ed. § 452), that the principal is to be “ held liable to third persons in a civil suit for the frauds, deceits, concealments, misrepresentations, torts, negligences and other malfeasances or misfeasances and omissions of duty of his. agent in the course of his employment, although the principal did not authorize, or justify, or participate in, or, indeed, know of such misconduct, or even if he forbade the acts or disapproved of them. In all such cases the rule applies respondeat superior, and is founded upon public policy and convenience, for in no other way could there be any safety to third persons in their dealings, either directly with the principal, or indirectly with him through the instrumentality of agents. In every such case the principal holds out his agent as competent and fit to be trusted, and thereby, in effect, he warrants his fidelity and good conduct in all matters-within the scopq of the agency.” It is true that the secretary and transfer agent had no authority to issue a certificate of stock except upon the surrender and cancellation of a previously existing valid certificate, and the signature of the president and treasurer first obtained to the certificate to be issued; but these were facts necessarily and peculiarly within the knowledge of the secretary, and the issue of the certificate in due form was a representation by the secretary and transfer agent that these conditions had been complied with, and that the facts existed upon which his right to act depended. It was a certificate apparently made in the course of his employment as the agent of the company and within the scope of the general authority conferred upon him, and the defendant is under an implied obligation to make indemnity to the plaintiff for the loss sustained by the negligent or wrongful exercise by its officers of the general powers conferred upon them. Griswold v. Haven, 25 N. Y., 599; N. Y. & N. H. R. R. Co. v. Schuyler, 34 id., 30; Titus v. G. W. Turnpike Co., 61 id., 237; Bank of Batavia v. N. Y., L. E. & W. R. R. Co., 106 id., 199; 8 St. Rep., 209. The learned counsel for the defendant seeks to distinguish this case from the authorities cited because the signature of the president to the certificate was not gen uine; but we cannot see how the forgery of the name of the president can relieve the defendant from liability for the fraudulent acts of its secretary, treasurer and transfer agent. They were officers to whom it had entrusted the authority to make the final declaration as to the validity of the shares of stock it might issue, and where their acts, in the apparent exercise of this power, are accompanied with all the indicia of genuineness, it is •essential to the public welfare that the principal should be responsible to all persons who receive the certificates in good faith and for a valuable consideration and in the ordinary course of business, whether the indicia are true or not. Beach on Pr. Cor., vol. 2, p. 790; North River Bank v. Aymar, 3 Hill, 262; Jarvis v. Manhattan Beach Co., 53 Hun, 362; 25 St. Rep., 1; Tome v. Parkersburg Branch R. R. Co., 39 Md., 36; Baltimore, etc., R. Co. v. Wilkens, 44 id., 28; Western M. R. Co. v. Franklin Bk., 60 id., 36; Com. v. Bk., 137 Mass., 431; Holden v. Phelps, 141 id., 456; Manhattan Beach Co. v. Harned, 27 Fed. Rep., 486; Shaw v. Port Phillip & Co., L. R., 13 Q. B. Div., 103.

The rule is, we think, correctly stated in Beach on Private Corporations, vol. 2, § 488, p. 791: “When certificates of stock contain, apparently, all the'essentials of genuineness abona fide holder thereof has a claim to recognition as a stockholder, if such stock can legally be issued, or to indemnity if this cannot be done. The fact of forgery does not extinguish his right when it has been perpetrated by or at the instance of an officer placed in authority by the corporation and entrusted with the custody of its stock-books, and held out by the company as the source of information upon this subject.”

Having reached the conclusion that the defendant is liable for the representations of its officers appearing upon the face of its certificate over their official signature and under the seal of the corporation, we do not deem it necessary to consider the effect of the oral representations made at the office of the company to the plaintiff's clerk, except so far as they bear upon the question of the good faith of the plaintiff in the acquisition of the certificate.

The judgment and order must be affirmed, with costs.

All concur.