text:
    Louis Bauer, App’lt, v. Thomas C. Platt et al., Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed October 13, 1893.)

    1. Corporations—Directors—Equity.
    An action in equity to enforce the liability of directors of a corporation under a provision of the charter making them liable for all debts incurred to a specified amount may be maintained by a creditor of the corporation in behalf of himself and all other creditors who choose to come in and join him.
    2. Same—Parties.
    In such an action the corporation is not a necessary party, as it has no rights to be'ascertained before the rights of the parties to the suit can he determined.
    3. Same.
    The directors have no interest in having the corporation made a party where it is shown that executions against it have been returned unsatisfied, and hence, that it is insolvent.
    4. Same—Pleading.
    In such an action the fact that the other creditors are not made parties plaintiff or defendant is not ground for demurrer.
    Appeal from interlocutory judgment sustaining demurrer to the complaint.

      James Dunne, for app’lt; Tracy, Boardman & Platt, for resp’ts.
   Parker, J.

The complaint alleges the organization as a domestic corporation of the American Loan & Trust Company ; pleads the charter, which provides “ that every director shall be personally liable for debts incurred by the corporation dnring his administration to an amount not exceeding $5,000; ” avers that defendants, and none others, were the duly qualified directors for the year 1890; the contracting of the debt by the company to plaintiff during that year; the demand for, and the refusal of payment; the commencement,,of actions against the company on such indebtedness; the recovery of five judgments thereon; the issuing of executions against the company, and the return thereof wholly unsatisfied ; pleads anew the five certificates which evidence the indebtedness of the company; contains appropriate allegations of presentment and demand and nonpayment; asserts that other creditors are about to commence actions similar to this; that the actual indebtedness contracted by the company during the year 1890, for which defendants are liable, cannot be ascertained without an investigation of the accounts between the company and its directors and the creditors of the company similarly situated as the plaintiff in this suit, where all such directors are made parties, and where such other creditors similarly situated can come in and have their interests protected. The complaint concludes with a prayer for relief, in his own behalf, and in behalf of all other creditors similarly situated, who shall come in and join him, appropriate to the facts alleged, and asking, among other things, whether said defendants, as directors, are liable- to pay said debts, or any part thereof; if so, what directors are liable, for what amounts, in what proportions; that the liability of said directors as ascertained and determined be enforced, and that each of the defendants be restrained from paying to any creditor of the American Loan & Trust Company any sum of money whatever as a liability under § 11 of the charter of the company until the determination of the suit

One of the grounds of demurrer sustained by the trial court is that the complaint does not state facts sufficient to constitute a cause of action against this defendant. The point specially relied on to support such ground of demurrer is that a suit in equity will not lie; that by the eleventh section of the charter an action, of debt is given to any individual creditor against one who was a director at the time his debt accrued. That such a creditor has a remedy at common law, but can obtain no redress in equity. The provision of the charter is as follows: Every director shall be personally liable for debts incurred by the corporation during his administration to an amount not exceeding $5,000.” The charter does not, nor does any other statute, provide a special remedy for the enforcement of the right which it gives the creditors of the corporation against its directors. The-purpose of the provision was not only to insure vigilance on the part of the directors, but to further assure to the creditors of the company payment of their claims. It has for its object the protection of all creditors, not a portion of them. That result might not be effectuated if each creditor should be compelled to resort to an action at law. The liability of each director does not exceed $5,000. If, then, each director should suffer judgment to go against him by default, the creditors first suing might recover their entire claims, while others, less prompt, would not receive anything. If the directors should find that the amount of their statutory liability would not equal the deficiency of the company to its creditor’s, some or all of them might arrange for a preference of creditors by answering or demurring i n some cases, while suffering default in others. By such methods, which even the vigilant prosecutor could not overcome, some creditors might be paid in full, while others would receive little or nothing. As the statute was intended for the benefit of .all creditors, and all of them, as well as some of them, must be presumed to have trusted in part to the protection assured them by its provisions, it is no more than just that each creditor should share ratably in the fund which an enforcement of the liability of the directors will produce. A favored class of suits in courts of equity are those where, by bringing in all the parties interested in the particular subject-matter, complete justice to all may be had in one suit; thus preventing excessive litigation. Moalc Yan San tv. PI. (3d ed.) 168. Where there are a number of parties, and a multiplicity of actual or threatened suits, a resort to a court of equity will sometimes be justified when the subject is not at all of an equitable character, and there is no other element of equity jurisdiction. Board of Supervisors v. Deyoe, 77 N. Y., 219.

How, the complaint charges, in substance, that other parties are about to commence actions against these defendants for the purpose of recovering the amounts of their respective claims as creditors of the American Loan & Trust Company. The allegation is sufficient to inform the court that a multiplicity of suits is threatened, and may be prevented if an action in equity broad enough to secure the rights of all the parties be prosecuted. It is apparent that much useless and probably expensive litigation will result if equity do not take jurisdiction and determine and enforce the rights and* interests of all the parties. Here are twenty directors, each of them liable in the sum of $5,000. This plaintiff’s claim is over $10,000, so, in order to recover at law, it would be necessary for him to bring three separate actions; but a dozen. other creditors perhaps might sue the same directors, with the result that some portion of them would suffer defeat, because the first judgment obtained would exhaust the amount of the directors’ liability. In Weeks v. Love, 50 N. Y., 568, the question was presented whether a creditor of a manufacturing corporation organized under the act of 1848 (Laws 1848, cli. 40) could maintain an action against one of the stockholders to enforce the liability imposed upon a stockholder by the act, when there are other creditors similarly situated. It was held, following B’k of Po'keepsie v. Ibbotson, 24 Wend., 473; Garrison v. Howe, 17 N.Y., 458, that a single creditor of the corporation could maintain an action at law against on,e of several stockholders to recover a debt owing, but the court said ‘‘the personal liability of stockholders under the acts may be enforced in an equitable action against all the stockholders,” and quoted with approval an intimation in Garrison v. Howe, supra, “ that a stockholder who had been sued by a creditor, and in case of a recovery against him' subjected to a greater liability for the debts of the' corporation than his share as between himself and the other stockholders, might commence an equitable action against all the creditors and stockholders for an account and for contribution, with a view to distribute the burden of the debt among the stockholders according to the amount of stock held by them respectively.”

The discussion in Pfohl v. Simpson, 74 N. Y., 137, is directly •applicable and controlling here. That action was authorized by a statutory provisión making stockholders liable for the debts of the corporation in an amount equal to their respective stock holdings. It was conceded that an action would lie by a creditor of a corporation against a stockholder, and the question was whether a suit in equity could be maintained, and the court (probably in answer to a suggestion made in that case, similar to one made here, that the liability created by the statute was special, and not analogous with the cases in which courts of equity have taken jurisdiction) said:

“ It matters not whether the right of action to so many arises from general principles of law or from particular provisions of constitution or of statute. If the right exists, and is likely to be so used as to produce the mischief, the jurisdiction of equity .arises and attaches.”

The opinion of Judge Folger in that case also answers another point which is made here, that the liability of defendants is a several, and not a joint, liability:

“ The provision in the charter of the corporation that the stockholders shall be severally liable does not have such reach as that it precludes the attachment and exercise of this jurisdiction of equity. That provision fills the full scope of the legislative intention when a stockholder is held liable by any jurisdiction, in any form of action, whether sued alone or brought into court with some or many others in like category, for as much as, and no more than, the facts of his own relation to the corporation and its creditors and co-stockholders demand. He may not in any action be made liable (under provisions like those of this charter) for more than an amount equal to the sum of the stock owned by him individually, in addition to his liability to pay in full the stock subscribed for or brought by him. Though he be sued with others, and at the suit of many, or in a suit for the benefit of many, if he is not cast in judgment for more than the amount above indicated, his several liability is preserved.”

It is clear, therefore, that no harm can result to the directors from bringing them all into court on the equity side, for they cannot in any event be decreed to pay more individually than the liability named in the charter, and assumed by them when they became directors. Indeed, it would seem that such a suit is peculiarly adapted for the protection of directors in such cases from the possibility of vexatious litigation. If the amount due creditors equals or exceeds the aggregate of the statutory liability of the directors, the judgment decreeing that each make payment of the sum for which lie is liable will relieve him from the annoyance and expense of further litigation. On the other hand, if it should prove to be less, the judgment will provide for a ratable payment, and, in addition to the other litigation, which would otherwise be threatened, possibly an action for contribution may be avoided. If it should later appear that the rights of all the parties in interest can only be protected by bringing in other parties than those now before the court, it will order them brought in, and thus, in the end, the object which the statute liad in view in attaching a liability to the directors, to wit, security oí the creditors, will be-effectuated as nearly as possible by the accumulation of a fund from the directors, and its proportionate distribution among the creditors of the corporation entitled thereto, and at a minimum of expense, because accomplished through one suit.

•Having reached the conclusion that a suit in equity will lie,, we come to the consideration of the other grounds of dem urrer. The first-is, that there is a defect of parties defendant, in that the American Loan & Trust Company was not made a defendant in this action. It may be assumed that the corporation is a proper-party to the suit, but demurrer will not lie unless it is a necessary party. In McMahon v. Allen, 12 How. Pr., 39, the phrase, a. complete determination of the controversy,” was held to mean when there are persons, not parties, whose rights must be ascertained and settled before the rights of the parties to the suit can be determined. This definition was cited with approval in Chapman v. Forbes, 123 N. Y., 532-538; 34-St. Rep., 351. In Anderton v. Wolf, 41 Hun, 572; 4 St. Rep., 101, it was held “ that, in order to sustain a demurrer for a defect of parties, it must appear that the party demurring has an interest in having the omitted parties joined, or that he is prejudiced by the nonjoinder.” Now, applying these rules, we find, first, that the corporation has no-rights to be ascertained and settled before the rights of the parties to the suit can be determined. The liability of the directors is not created for the benefit of the corporation, but rather for that of its creditors. It is not an asset of the corporation, and cannot be enforced by it, nor by a receiver of its assets, appointed in an action for a dissolution of the corporation. The liability is to the creditors, and they alone can compel its payment. Cook, Stock & S., § 216; Farnsworth v. Wood, 91 N. Y., 308 ; Billings v. Robinson, 94 id., 415. These decisions, it is true, were in cases arising under the manufacturing act, but they are. equally applicable here.

It is said that the demurrant has an interest in having the corporation made a defendant for the purpose of showing how much its-assets can pay on the claim of plaintiff and others similarly situated who may come in and prosecute the suit, and thus equitably adjust the amount which he is called upon to pay; but that point is not well made, unless it appears upon the face of the complaint that the corporation had assets which can be applied in payment of its creditors; and it does not so appear, while the allegation touching the issuing of executions, and their return wholly unsatisfied, sufficiently establishes the insolvency of the corporation.. It was held in Mickles v. Rochester City B'k, 11 Paige, 118—127, that if the corporate property is exhausted, and the bill is filed for the-mere purpose of enforcing the liability of stockholders, the corporation need not be made a party. It may well be that, after the-pleadings are all in, it will appear to be ii necessity to make the-corporation a party; then the court, in the exercise of its equitable v jurisdiction, and in pursuance of the authority conferred by the-Code of Civil Procedure, will bring in the corporation, and such. other parties, if any there be, which it may deem needful in order to secure a final and equitable adj ustment of the matters in controversy.

A further ground of demurrer is that there is a defect of parties plaintiff, in that the other creditors for whose benefit the suit is brought are not joined either as parties plaintiff or parties defend- • ant. The Code provides that “ when the question is one of a common or joint interest of many parties, * * * one or more may sue or defend for the benefit of all.” Section 448. It sufficiently appears from the complaint, we think, that the question is one of common interest to many persons. If other creditors fail to come in in due course; plaintiff will be entitled to a judgment for the enforcement of such rights as he may have. The interlocutory judgment sustaining the demurrer should be reversed, with costs, and the demurrer overruled, with leave to answer within twenty days on the payment of twenty dollars costs.

O'Brien, J., concurs; Follett, J., not voting.


source: Caselaw Access Project

author: Follett, J.

license: Public Domain

text:
    Ellen Callahan, Resp’t, v. Michael O’Brien, App’lt, and John Graddy et al., Resp’ts.

      (Supreme, Court, General Term, First Department,

      Filed October 13, 1893.)

    1. Aliens—Inheritance.
    The great nephew of a deceased citizen, who is also a citizen, but whose1 mother and grandmother were aliens, is within the provision of § 22 of 4; E. S. (8th ed.) 2466, and entitled to inherit.
    2. Same—Lands acquired by purchase.
    As to land which had been acquired by purchase heirs who are citizens do not take to the exclusion of those who are aliens; § 4 of ch. 115, Laws 1845, as amended by Laws 1875, ch. 38, being comprehensive enough to-include citizens and aliens.
    3. Same—Land acquired by descent.
    The statute, however, does not apply to lands which were acquired by descent, and the alien heirs take no interest therein.
    Appeal from interlocutory judgment in an action of partition-entered on a decision of special term.
    June 8, 1869, Catherine Callahan, a citizen of the United States- and a resident of the State of New York, acquired by purchase and grant the absolute fee of No. 18 Perry street. The deed teller is duly recorded in the office of the register of the city and county of New York, in Book No. 1119 of Deeds, at page 159. November 15, 1869, William Callaban, a citizen of the United States, and a resident of the state of New York, acquired by purchase and grant the absolute fee of No. 58 Greenwich avenue. The deed to him is duly recorded in said register’s office in Book No. 1123 of Deeds, at page 330. At the date of this deed said William Callahan and Catherine Callaban were husband and wife. February 27, 1873, William Callahan died intestate, and seised in fee of said lot, leaving him surviving William T. Callahan, his son and only heir, who was a citizen of the United States, and a resident of the state of New York, and Catherine Callahan, his widow. March 26, 1888, said William T. Callahan died intestate;. ■seized in fee of No. 58 Greenwich avenue, and leaving Catherine Callahan, his mother, his sole heir, who then became seised in fee of said lot. March 1,1890, said Catherine Callahan died intestate, and seized in fee of said two pieces of real estate. She left her surviving no ancestors nor descendants, but left the following collateral relatives: Ellen Callahan, a sister; John Graddy,
    a nephew, the only surviving child and heir of John Graddy, a deceased brother of Catherine; Anne Murphy and Margaret Jame-son, nieces, the only surviving children of Anne Morrissey, a deceased sister of Catherine Callahan; John Jackson, the only surviving child and heir of Ellen Jackson, a deceased daughter of said Anne Morrissey, he being a grandnephew of the intestate, and a grandson of Anne Morrissey ; Michael O’Brien, Mary Leahy, Margaret Neville, Catherine Burns, Ellen O’Brien, and John O’Brien, nephews and nieces, the only surviving children and heirs of Margaret O’Brien, a deceased sister of Catherine Callahan. The plaintiff, Michael O’Brien, and John Jackson are resident citizens of the United States, but all of the other litigants and their husbands and wives are citizens of the United Kingdom of Great Britain and Ireland, residing in Ireland, of which kingdom their parents and grandparents were citizens and residents. The special term held that the following persons were entitled to inherit the two pieces of realty as heirs at law of Catherine Callahan, deceased, in the following proportions; Ellen Callahan, six twenty-fourths ; "John Graddy, six twenty-fourths; Anne Murphy, Margaret Jame-son and John Jackson, two twenty-fourths each ; Michael O’Brien, Marv Leahy, Margaret Neville, Catherine Burns, Ellen O’Brien and John O’Brien, one twenty-fourth each.

      Abram Kling, for app’lt; William P. S. Melvin, for resp’t, Callahan ; Murphy, Lloyd & Boyd (Robert M. Boyd, Jr., of counsel), for resp’ts, Murphy and Jameson.
   Follett, J.

One of the questions presented by the record being whether the rights of the litigants are the same in both-pieces of land, it will be most convenient to consider to whom each parcel descended, so we will first determine the rights of the parties in No. 18 Perry street, which the intestate acquired by purchase and grant. Section 4 of chapter 115 of the Laws of 1845, as amended by chapter 38 of the Laws of 1875, provides :

Sec. 4. If any alien resident of this state, or any naturalized or native citizen of the United States, who has purchased and taken, or hereafter shall purchase and take a conveyance of real estate within this state, has died, or shall hereafter die, leaving persons who, according to the statutes of this state, would answer the description of heirs of such deceased person, or of devisees under his last will and being of bis blood, such persons so an-' swering the description of heirs, or of such devisees of such -deceased person, whether they are citizens or aliens, are hereby declared and made capable of taking and holding, and may take and hold, as heirs of such devisees of such deceased person, as if they were citizens of the United States, the lands and real estate owned and held- by such deceased alien or citizen at the time of his decease. But if any of the persons so answering the description of heirs, or of such devisees as aforesaid of such deceased person, are males of full age, they shall not hold the real estate hereby made descendible or devisable to them as against the state unless they are citizens of the United States, or in case they are aliens, unless they make and file in the office of the secretary of state the deposition or affirmation mentioned in the first section of this act.”

The counsel for the plaintiff insists that John Jackson did not inherit, because his deceased mother and deceased grandmother were nonresident aliens, and, being compelled to trace his right through two such ancestors, is not within § 22 of chap. 2 of part 2 of the Revised Statutes, which provides :

“ Sec. 22. ¡No person capable of inheriting under the provisions of this chapter shall be precluded from such inheritance by reason of the alienism of any ancestor of such person.”

The contention of the counsel was decided adversely to'him by the court of appeals in McCarthy v. Marsh, 5 N. Y., 263. Jackson is entitled to inherit.

The eleven persons who the special term held inherited this parcel “ answered the description of heirs of such deceased person" (Catherine Callahan) “according to the statutes of this state," and all of them took the land by inheritance, unless the contention of the counsel for the appellant that the eight nonresident aliens did not take jointly with the three citizens, but that the citizens took to the exclusion of the aliens. The statute quoted makes no such distinction. It does not provide that in ■case an intestate dies leaving no persons answering the description of heirs who are citizens, in that case aliens answering such description may take; nor does it provide that in case an intestate dies leaving persons answering the description of "heirs, some of whom are citizens and others aliens, that only the former can take, but the language of the section is comprehensive enough to include citizens and aliens, which is, we think, what the legislature intended to do. Luhrs v. Eimer, 80 N. Y., 171, is not to the contrary. That case arose over the land of a naturalized citizen who died intestate in 1866, before the amendment of chapter 115 ■of the Laws of 1845. The question involved was whether aliens so related to the decedent, a naturalized citizen, as to answer the description of heirs, inherited by force of chapter 115 of the Laws ■of 1845, and it was held that they did not. It was said in that •case: “ The fourth section declares that if any 1 alien resident,' who has taken or shall take a conveyance of lands, has died or shall die, leaving persons who, according to the statutes of this state, answer the description of heirs, such persons, whether citizens or aliens, shall be capable of taking and holding as heirs of the 1 deceased alien,’ etc."

This remark tends to support the construction we have given the section. The result is that No. 18 Perry street descended to the litigants in the following proportions : The plaintiff and John ■Grraddy took six twenty-fourths each, the children of Margaret O'Brien took one twenty-fourth each, the children and grandson-of Anne Morrissey took two twenty-fourths each.

This brings us to the consideration, to whom did No. 58 Greenwich avenue descend ? As before stated, Catherine Callahan, the intestate, acquired this parcel by descent from her son. Does land acquired by descent by “ any alien resident of this state, or any naturalized or native citizen of the United States," descend to aliens by force of the section hereinbefore quoted ? The language? of the statute seems to us so explicit as not to admit of serious1 question. It is:

“If any alien resident of this state, or any naturalized or native-citizen of the United States, who lias purchased and taken, or hereafter shall purchase and take, a conveyance of real estate? within this state,” etc.

The.idea that the statute embraces only lands acquired by purchase is emphasized by the use of the words, “purchase and take-a conveyance of real estate,” which seems to exclude from the-operation of the section lands acquired by descent The word “purchase” has a well settled meaning at common law and in the-jurisprudence of this state. Words and terms having a precise- and well settled meaning in the jurisprudence of the country are to-be given that meaning when used in its statutes, unless it is plain that they were used in a different sense. Cruger v. Hudson R. R. R. Co., 12 N. Y., 190, 198; Wynehamer v. People, 13 id., 378, 427 McCool v. Smith, 1 Black, 459; Stephenson v. Higginson, 3 H. L. Cas., 638. We cannot regard the use of these words, “purchase- and take a conveyance of real estate ” as accidental nor as used in a different sense than theretofore given them in the real property law of this state. The same words are found in chapter 115, Laws-1845, and in chapter 261, Laws 1874. We are asked to give controlling force to the words, “ the lands and real estate owned and held by such deceased alien or citizen at the time of his decease,”’ and hold that they embrace all lands, however acquired. The decedent having acquired one piece of land by purchase and conveyance and another by descent, it is urged that both fall within the section, and both descend to aliens. Such a construction seems-to us unnatural, and to warp the section from its true meaning. It would be as reasonable to hold that in case a person had acquired parcels of land by -purchase and others by descent, and had died seized only of those acquired by the latter mode, that they would descend to his alien relatives answering to the description of heirs because the intestate had once had lands acquired by purchase. IIow the acquisition of one parcel by purchase can affect the right of aliens to succeed to another acquired by descent we arc unable to sec. The reasoning in Stamm v. Bostwiclc, 122 N. Y., 48; 33 St. Rep., 293, is an answer to tins argument. Whether non-resident aliens take by force of the statute under-consideration lands acquired by descent was discussed in Branagh v. Smith, 46 Fed. Rep., 517, and the conclusion was reached that the statute applied only to lands acquired by purchase, and was-not applicable to lands acquired by descent. We think that the non-resident aliens took no interest in the land acquired by the-intestate by descent, and that the avails arising from the sale of that parcel mast be distributed among the heirs who are citizens -of the United States. This leads to a modification of the judgment so far as it affects the piece of laud under consideration. 'The judgment so far as it relates to No. 18 Perry street should be .■affirmed, but, in so far as it relates No. 58 Greenwich avenue, it should be modified, by providing that one-third of the avails be -distributed to the plaintiff, one-third to John Jackson, and one-third to Michael O’Brien, and that the judgment as so modified .-should be affirmed, without costs in this court to any party.

Yah Brunt, P. J., and O’Brien, J., concur.


text:
    Engelbert Hardt et al., Resp’ts, v. Terese Schwab et al., Impl’d, App’lts.

      (Supreme Court, General Term, First Department,

      Filed October 13, 1893.)

    1. Assignment fob creditors—Fraudulent judgments.
    After confessing four judgments, upon which executions were immediately issued and levied, and on the same day, a firm executed an assignment for creditors. The firm property was bid in hy the creditors on the execution sale, hut not removed, and was taken possession of hy a new firm, composed of the brothers of the debtor, who placed the debtor in charge as manager. Held, that the facts supported a finding that the assignment was fraudulent and the judgments, execution and sale intended to defraud creditors of the firm.
    2. Same.
    A creditor having a just claim against a failing debtor must not use it for the purpose of placing the property beyond the reach of other creditors, and for the benefit of the failing debtor; if he does, he is liable to refund any sum that he has acquired by such attempt.
    Appeal by defendants, Terese Schwab and Joseph Lilienthal, from fin interlocutory judgment adjudging an assignment for creditors made by defendant, Emanuel Schwab, and certain judgments confessed by him to be void, and from final judgment determining the liabilities of the appellants.

      J.H. V. Arnold, for app’lt Schwab; Hays & Greenbaum, for App’lt Lilianthal; Blumenstiel & Hirsch, for resp’ts.
   Follett, J.

For some years prior to November 25, 1887, Emanuel Schwab and Jacob Schwab were partners in the city of New York, under the firm name of Schwab & Son. Before the ■date last mentioned Jacob Schwab died, leaving Emanuel Schwab the surviving partner of that firm. On the 25th day of November, 1887, Emanuel Schwab confessed four judgments—one in favor of Levi J. Gazan, for $2,021.47, which was entered and docketed at 11 o’clock A. M.; one in favor of Joseph Lilienthal, for $5,053.97, which was entered and docketed at 11 o’clock and 1 minute A. M.; one in favor of Terese Schwab, for $4,857.97, which was entered and docketed at 11 o’clock and 2 minutes A. M.; one in favor of Meyor Guggenheim, for $751.89, which was entered .and docketed at 11 o’clock and 3 minutes A. M." Executions were immediately issued upon said judgments, and, prior to the filing of the general assignment hereinafter mentioned, were levied upon All of the leviable assets of Emanuel Schwab. On the same day Emanuel Schwab, as surviving partner and individually, executed a general assignment to Herman Frohman for the alleged benefit of creditors, which was recorded in the office of the clerk of the city and county of Hew York at 11:80 A. M., immediately after the sheriff had taken possession of the assignor’s property under the aforesaid executions. On the 6th of December, 1887, the property was levied on by the sheriff, and was sold ubder said executions for $13,748.68. Of the property so sold—

Joseph Lilienthal purchased to the amount of....... $4,147 09

J. Frank “ “ “ “....... 6,358 87

J. Gazan “ “ “ “....... 764 72

J. Dreyfus “ “ “ “........ 622 87

Leopold Wallach was the attorney for the plaintiffs in these actions, and also for the assignor in the making of the assignment, and matters connected therewith. Hone of the property purchased by the above mentioned persons was removed from the premises where it was sold, being the place of business which Schwab & Son had occupied prior to the date of the assignment, but was left thereat, and taken possession of by a new firm, known as Schwab Bros., composed of two brothers of the assignor and judgment debtor. This firm employed the assignor and judgment debtor as general manager of the business of the new firm at a salary of $50' per week, and thereafter the business of Schwab Bros, was continued on the same premises occupied by the former firm of Schwab & Son, with the property purchased at the sale, no money being invested in the business by the new firm. The foregoing facts are not disputed, and from these and many other incriminating facts and circumstances the court found that the assignment was fraudulent and void, and that the judgments were recovered', the executions issued, and a sale made, with intent to delay, cheat and defraud the creditors of Emanuel Schwab. The appellants do not assert that any error was committed in the admission or exclusion of evidence on the trial, but insist, as their sole ground for a reversal, that the decision is contrary to the weight of evidence. This contention cannot be sustained. The evidence that these parties entered into a conspiracy to transfer the title to these goods to third parties to put them beyond the reach of creditors, and for the benefit of Emanuel Schwab, is overwhelming, and it. is quite useless to enter into a discussion of it. We think that the' judgment is not only supported by the weight of evidence, but that a decision in favor of these appellants would have been set aside as against the weight of evidence. A companion case, Abegg v. Schwab, 31 St. Rep., 139, has been before the court. That, was an action to set aside the assignment as fraudulent. In that, case, as in this, the defendants sought to reverse the judgment upon the ground that it was not sustained by the evidence. In discussing the question, the court said :

“ The debtor simply occupied the property under the weak device of a partnership between a couple of his clerks, who,. as we have seen, were his brothers, and agreed, nominally through these brothers, to pay the judgment creditors as he realized from the goods. There was a pretense that the judgment creditors bid at the sheriff’s sale to protect their judgments. But that was a very shallow pretense, for there was ample property to cover their judgments, and, besides, the biddings had no relation to the judgments. In fact, this pretense was worked out in a singularly inartistic and slovenly fashion,” reflecting but little credit upon the directing mind.”

This language is as applicable to this case as to the one then under consideration.

It is urged that it is established, beyond doubt, that the debts for which these judgments were recovered were just ones, due and owing from the judgment debtor to the judgment creditors. This may be true; but a creditor having a just claim against a failing debtor must not use it for the purpose of placing the property beyond the reach of other creditors, and for the benefit of the failing debtor. If he does, he is liable to refund any sum that he has acquired by such attempt, and, if it results in a loss of his claim, it is not too severe a punishment for the offense. The judgment should be affirmed, with costs.

O’Brien and Parker, JJ., concur.


author: Per Curiam.

text:
    The People ex rel. Louis L. Lorillard, Resp’t, v. Edward P. Barker et al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed October 13, 1893.)

    Taxes—Costs.
    Costs will not be awarded against the assessors personally on setting aside an assessment unless they have acted with gross negligence, in bad faith or with malice.
    Appeal from order of special term setting aside assessment for personal taxation for the year 1892, and awarding costs against the respondent personally.

      William H. Clark, corp. counsel, (James M. Ward, of counsel), for app’lts; Platt & Bowers (J. M. Bowers and Latham G. Reed, of counsel), for resp’t.
   Per Curiam.

There being no evidence that the appellants acted with gross negligence, in bad faith, or with malice, the court below should not have awarded costs. Order appealed from modified by. reversing that part of the same which awards costs, ■and, as modified, affirmed, without costs.

Van Brunt, P. J., and Parker, X, concur.


author:
Beach, J.
      Per Curiam

text:
    The People ex rel. The Thurber-Whyland Co., App’lt, v. Edward P. Barker et al., Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed October 13, 1893.)

    Taxes—Corporations—Debts.
    Relator, a foreign corporation doing business here, was assessed for taxation at §500,000. It appeared that the amount invested in business in this state was §750,000; that its debts amounted to §1,200,000, and that the moneys due to it amounted to $1,400,000. Held, that the assessment was not excessive; that if its debts were to be deducted from the sums invested in the business, the outstanding credits must also be considered.

      Appeal from, order dismissing writ of certiorari.

    Eelator, a New Jersey corporation having its principal office in ..Jersey City, and transacting business in the city of New York, where it also maintained an office, was assessed for taxation for the year 1892 in the sum of $500,000, being the capital of the relator invested in business in New York state. The original assessment for the said year was $3,000,000, which was reduced, upon due application by the relator, while the books of annual record were open for correction. The grievance of the relator is set forth in its petition as follows: “Petitioner has claimed .and protested to said commissioners that on the second Monday •of January, 1892, the petitioner had no personal property subject to taxation, for the reason that the whole amount of its capital invested in, and the whole sum invested in any manner in, its business in the city of New York, was only $750,000, and the whole amount of its debts was $1,218,904, and that by reason of its said debts, which it was entitled to deduct from the whole .sum, as aforesaid, invested in its business, it was not liable to the tax sought to be imposed upon it.” It further appears from the petition that the whole amount of relator’s capital stock issued was $2,500,000, of which $100,000 was for cash, and the rest for “ property consisting of merchandise, trade-marks, good will, etc.,” and that the “ balance of its capital was employed outside the city of New York, principally in the form of accounts receivable, amounting to about $1,400,000.” It does not appear that any portion of the $1,400,000 of accounts receivable was invested •outside of the state of New York.
    The following is the opinion at special term :

      L. C. Waehner, for app’lt; William H. Clark, corp. counsel (G. S. Coleman and James M. Ward, of counsel), for resp’ts.
   Beach, J.

The principle regulating the taxation of relator is ■furnished by Laws 1855, chapter 37. The statute provides for assessment and taxation “ on all sums invested in any manner in said business the same as if they were residents of this state.” A resident is entitled to the deduction of just debts owing by him. 1 Eev. St., 390, § 9. The relator is, therefore, entitled to a deduction of its just debts. Nothwithstanding this conclusion, I think the action of the respondent is right. They are not bound to accept any one fact stated by relator as indispensable. The •pertinent one referred to is that the sums invested in its business in this state amounted to $750,000. It also appears from the return that the relator conducts its business in the city of New York, and at time of assessment was possessed, in addition, of bills receivable, or moneys owing to it, in amount to about $1,400,000. A resident of the state is taxable upon all “ debts and obligations for the payment of money due or owing ” to him ; the. same principle granting relator a deduction for its debts under this sum as •credits liable to taxation. The respondents rightfully so considered, so far as appears, and their conclusion is, therefore, deemed correct. The bills receivable of relator are, in law, “invested in its business ” carried on in this state. The writ is dismissed.

Per Curiam

It does not seem to be necessary to decide the question as to whether, when an assessment is levied under § 1 of chapter 37 of the Laws of 1855, which provides for the levying of assessments on all sums invested in any manner in business by -all persons and associations doing business in the state of Hew York, the general indebtedness of such person or association should be considered, because, if debts are to be deducted from the sums invested in any manner in said business, then, certainly, outstanding credits must be considered, for, in order to determine what debts are chargeable to capital, the moneys to be received .and properly applicable to the payment of debts in the ordinary course of business must be taken into account. Adopting this rule, it follows that the assessment is correct

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

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


text:
    The Mercantile Safe Deposit Co., App’lt, v. Charles L. Dimon, Adm’r, et al., Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed, October 13, 1893.)

    Thteivplbader—Safe deposit companies.
    Where the property deposited with a safety deposit company is claimed by the personal representative of the depositor, who cannot produce the key of the box, but explains its loss, and also by one who produces the key and claims under an alleged gift causa mortis, the company may maintain an action of interpleader and be protected from other litigations respecting the property. »
    Appeal from an order which dissolved a temporary injunction restraining the defendants from commencing or prosecuting any action or proceeding in any court against the plaintiff for the recovery of the moneys and property mentioned and described in the complaint.
    Plaintiff is a safe-deposit company, and defendants are rival claimants to the possession of certain property heretofore deposited in one of plaintiff’s safe-deposit boxes, and now in plaintiff’s custody. The safe-deposit box in question was originally hired, and the property in dispute deposited therein, by one Stephen C. Dimon, now deceased. Defendant Charles L. Dimon claims the right of possession by virtue of letters of administration issued to him on the estate of the decedent. Defendant Keery bases her claim upon an alleged gift causa mortis to her from decedent of the contents of the box, evidenced by the delivery to her of the keys of the box, which are in her possession. Defendant Keery also claims that some of the property contained in the box never belonged to the defendant, but has always belonged to her. The transactions had between the parties which led up to this suit were, briefly, as follows: On or about May 8, 1893, defendant Dimon presented to plaintiff proof of his appointment as administrator of the estate of Stephen C. Dimon, deceased, and .asked to be put in possession of the contents of decedent’s safe-deposit box. He did not produce the keys to the box, but gave an explanation of their loss, and plaintiff, having no notice of the adverse claim, began to break open the box, with a view of putting him in possession. At this point defendant Keery appeared with the keys of the box, and asserted her claim to the property by virtue of a gift causa mortis. She notified plaintiff, both orally and in writing, that the property formed no part of the decedent’s estate, and warned plaintiff not to deliver it to the administrator. Plaintiff thereupon refused to give possession to-either claimant, but, as the lock of the box had already been broken, the property was removed to another box for safekeeping. This was done without inspection of the property. Subsequently, at the request of the administrator, he was permitted to inspect-the property in the presence of officers of the company, and a list was made of the articles found. Ho other inspection of the property has been made or permitted by plaintiff.

      Alexander & Green (Charles B. Alexander and Charles W. Pierson, of counsel), for app’lt; Wm. R. Wilder, for resp’ts.
   Per Curiam.

It satisfactorily appears to us that the Mercantile Safe-Deposit Company cannot, with safety to itself, deliver the property, the subject-matter of this action, to either of the claimants. Therefore, it has a right to maintain this action of inter-pleader, and be protected from other claims and litigations in-respect to this property. The order appealed from should be reversed, and the motion for continuing the injunction granted, with ten dollars costs and disbursements of this appeal, and ten dollars costs of the motion in the court below, to abide the final event of the action.

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


author: Osborne, J.

text:
    William Grigg, App’lt, v. Peter H. McNulty, Impl’d, Resp’t.

      (City Court of Brooklyn, General Term,

      Filed October 23, 1893.)

    1. Attokneys—Lien—Condemnation pboceedings.
    A claim by an attorney for compensation for services in condemnation proceedings under an agreement by which he was to have a share of the-award, which was to be “ a lien on the property,” is not such an inherent part of the condemnation proceedings that a conveyance of the land pursuant to a judgment for specific performance of a contract of sale “subject to the judgment of condemnation" is also subject to said claim.
    S. Same—Geantee oe client.
    The attorney is not aided by § 66 of the Code as against the grantee of his client, where said grantee receives no part of the award.
    Appeal from judgment in favor of defendant McHulty, dismissing the complaint as to him.

      William Grigg, app’lt in person; Gaynor, Grout & De Fere, for resp’t
   Osborne, J.

On and prior to October 24, 1891, defendant Urban was the owner of certain premises on Fulton street, running through to Liberty street, in this city. On that day a judgment of condemnation was entered on the application of the trustees of the New York & Brooklyn bridge, in proceedings to acquire a part of said premises, and commissioners were appointed to ascertain the compensation to be made. On December 18, 1891, defendant Urban made an agreement in writing with plaintiff, by which he retained the plaintiff as his attorney in the proceedings for compensation, and agreed to pay him for his services a sum equal to one-half of the amount received for damages in excess of $20,000, “ said one-half to be a lien on the property.” While these proceedings were pending, defendant Urban contracted with the respondent McNulty, by agreement dated February 12, 1892, to sell and convey to him the whole of said premises, and in an. action brought in this court by McNulty for that purpose specific performance of this contract was adjudged by judgment entered. August 2, 1892, and Urban was directed to convey, subject, however, to said judgment of condemnation. 50 St. Rep., 565. On March 19, 1892, the commissioners appointed to make compensation by their report awarded to defendant Urban the sum of $26-000 for the land taken, out of which $25,000 was to be paid to satisfy a mortgage then on said property, and the balance of $1,000 was to be paid to two tenants. This report was confirmed on April 4, 1892. Plaintiff now brings this action on his said agreement with Urban, alleging the judgment for specific performance above referred to, directing,among other things,that the defendant McNulty should take said premises subject to said condemnation proceedings, and that the claim of the plaintiff is part and parcel thereof, and he prays for judgment against Urban for $3,000 and interest, “ and that said sum be declared a lien upon the premises herein described, paramount to the claims of the defendants herein.” Notice of Us pendens was filed herein August 30, 1892. Defendant Urban was served on October 28,1892, and defendant McNulty on December 28, 1892. On the trial, plaintiff had judgment against the defendant Urban, and the complaint against McNulty was dismissed. From the judgment in favor of McNulty dismissing the complaint as against him, the plaintiff brings this appeal.

We cannot agree with the contention of the learned counsel for the appellant that his claim for compensation was such an inherent part of the condemnation proceedings that, when Urban was directed to convey to McNulty “subject to the judgment of condemnation,” such conveyance was also subject to the claim of plaintiff for his professional services, nor is there anything in the judgment for specific performance that, in our opinion, can fairly bear such a construction. Plaintiff’s agreement with Urban was never recorded, nor is there any claim that the respondent ever had any notice of such an agreement, so that the provision in the agreement that plaintiff’s one-half should “ be a lien on the property ” cannot bind the respondent.

The appellant further contends that under § 66 of the Code of Civil Procedure he had a lien on the real property for his claim, and that such alleged lien followed the property, and that whoever took title thweto took it subject to his alleged lien. We do not think that the section in question helps the plaintiff in this controversy. It might be suggested that the section applies only to “ actions,” and not to a special proceeding, such as this is; but that, perhaps, might be deemed too narrow a construction of the section. Conceding that under this section the plaintiff had a lien, and that attached to the “ judgment in his client’s favor, and the proceeds thereof, in whosesoever hands they may come,” it appears from the evidence that no portion of the “ proceeds ” or recovery came into the hands of the respondent; all of the award was paid to mortgagees and tenants of the premises, and there was nothing accruing from the judgment and award that came to respondent’s hands to which any lien could attach. That damages awarded for land taken for public use stand in lieu of the land is well settled, but this is not a proceeding to reach the award.

The learned counsel for .the appellant likewise claims that in equity he should be protected; that when Urban contracted to sell to McNulty, such contract was subject to any prior equities existing against the property; that McNulty resorted to equity to enforce specific performance, instead of seeking his legal remedy for damages; and he contends that whatever equitable rights McNulty had were subordinate to liis (plaintiff’s) prior and superior equities. It seems to us that a complete answer to this contention is found in the tenth finding of fact of the learned trial judge. He finds that there was no evidence showing that the defendant Urban is insolvent. For aught that appears to the contrary, the judgment which plaintiff now has against Urban is good and collectible. Till that fact appears, till it is shown that plaintiff is remediless at law, lie cannot be heard in equity. For the reasons stated we think that the judgment appealed from should be affirmed, with costs.

Van Wyck,, J., concurs.


text:
    John Evans, Resp’t, v. The Henry Vogt & Bros. Manufacturing Co., App’lt.

      (City Court of Brooklyn, General Term,

      Filed October 23, 1893.)

    1. Master and servant—Negligence—Unfinished building.
    The setting a servant at work in an unfinished building where there is danger of injury from the accidental or negligent dropping of objects from above by workmen not under the master’s control, is not negligence on the part of the master, where such risk is patent and the servant of sufficient age to appreciate it.
    3. Same—Unsafe approaches.
    Where the place where the work is to he performed is safe, but it can only be reached by means of a ladder through a hatchway, the master is not liable for an injury sustained while passing up the ladder on the ground of a violation of his duty to furnish a safe place to work.
    Appeal from judgment in favor of plaintiff.

      Charles C. Nadal, for app’lt; Dailey, Bell & Crane, for resp’t.
   Osborne, J.

Plaintiff brought this action to recover damages for the loss of services of his son, Edward E. Evans, resulting from injuries alleged to have been caused by the negligence of defendant, in whose employ said son was at the time. Plaintiff complained that the alleged negligence consisted in placing his son in a position of danger, in not providing him with a safe place to work, and in failing to warn him of danger. Plaintiff had a verdict, and defendant appeals from the judgment entered thereon, and from the order denying motion for a new trial.

Plaintiff’s son was the only witness on behalf of the plaintiff as to the happening of the injuries which he received. It ajjpeared from his evidence that he was fifteen years of age, and that he had been in the employ of the defendant for about three months prior to the date of the accident. Defendant’s business was the manufacture of iron tanks, and plaintiff’s son was employed to heat rivets, and also to run on errands. At the time of the accident defendant was engaged in putting together an iron tank some fifty or sixty feet long and twelve or fourteen feet wide and about four feet high, on the second floor of a building which was in process of erection on Washington street, Hew York, for the Hew York Steam Qompany, to be used for refrigerating purposes. Carpenters and masons were at work on the building at the time, and the roof had not yet been put on. There were no stairways in the building, and the only means of getting from one floor to another was through a sort of hatchway between two and three feet square, by means of iron rungs built into the wall, thus forming a ladder. Plaintiff’s son had been working in this building about three weeks prior to the accident On the day of the accident his forge would not work, and he says that the foreman in charge told him to go up on the fourth floor, where the flooring was then being: laid, and get an oil can. This he did, using the iron ladder lathe opening for the purpose. He says that when he got up there he saw men laying bricks, carpenters were cutting wood and drilling.holes in boards or blocks “andthey were sweeping out, too.”' He brought the oil can down to the place where he was at work. The foreman used it to oil the forge, and then told him to go back with it again. While on his way up the ladder, and when between the third and fourth floors, “he felt something hit him on the head” which rendered him unconscious, and he fell, and received the injuries complained of. He further testified that on a previous occasion he had seen bricks and pieces of wood and pieces of boards and logs of wood falling through this hatchway. That about two weeks prior to the accident his foreman had told him not to be fooling around the hatch; that he might get hit with something—“ might get hurted; ” and that on another occasion he saw William Yogt go up the hatchway, and that he said “ that it was a d-d dangerous place; as d-d a place as he ever got up.” At the close.of the plaintiff’s case defendant’s counsel moved to dismiss the complaint, which motion was denied, and an exception thereto was taken. After a very careful examination, we have come to the conclusion that the learned trial judge erred in denying the motion to dismiss the complaint We fail to see wherein the defendant was negligent. The fact that plaintiff’s son was set to work in an unfinished building was certainly not a negligent act on defendant’s part. That there was a chance that some of the other .workmen on the building, not under defendant’s control, might accidentally, or even carelessly, drop some object from the upper floors, was an incident almost inseparable from the erection of a large building, and was, we think, one of the risks incident to the employment of this lad at the building. It was also a patent risk, one of w'hich plaintiff’s son was well aware, for he testified, as before stated, that he had been fully warned of the dangers lurking around this hatchway, and the chance of his getting hurt there, and he was of sufficient age and intelligence to appreciate the risk. Nor do we think that the defendant violated its duty to plaintiff’s son in not furnishing him a safe place to work.

In fact, the tank was the place where he was set to work, and there is no claim that that was unsafe. We do not think that the passing up and down the ladder can be construed or designated as his place to work, but rather as a route or means of transit by which he was to get to his place of work. Suppose that, as plaintiff’s son was entering this building on his way to his work on the tank, some mason at work above had let a brick fall, which struck and injured this lad, surely that would not have constituted negligence on defendant’s part; and yet, if plaintiff’s contention is sound, defendant would be liable. There is an entire lack of evidence as to how the substance which struck plaintiff’s son came to fall, or who was responsible for, its falling. Certainly there is no proof that it was due to the negligence of the defendant or any of its servants, and, in the absence of such proof, there was nothing on which to base a verdict in favor of the plaintiff. Wall v. Jones, 45 St. Rep., 687. The case of Ford v. Lyons, 41 Hun, 512 ; 4 St. Rep., 59, cited by the learned counsel for the respondent, is not in point. In that case plaintiff’s intestate was set to work in the cellar, in a place where broken pieces of brick fell from the upper portion of the building, where defendant had full control of the erection, and complaint had been made as to the insufficient protection of the covering of the men at work in the cellar. There it was clearly a case where the actual place of work was unsafe. For the reasons stated we think that the exception to the denial of the motion to dismiss the complaint was well taken. Having come to this conclusion, it is unnecessary for us to discuss any of the other exceptions in the case.

Judgment reversed, and a new trial ordered, with costs to abide the event.

Clement, Oh. J., concurs.


author: Clement, Ch. J.

text:
    Louis Hoffman, Resp’t, v. James Ruddiman et al., App’lts.

      (City Court of Brooklyn, General Term,

      Filed October 23, 1893.)

    1. Negligence—Damages—Pleading.
    In an action to recover damages for negligent injury to a horse, the expense of hiring another horse to do its work is special damage which cannot he recovered unless specifically set forth in the complaint.

      3. Same.
    An allegation in the complaint that plaintiff was put to trouble and expense in consequence of the injury refers only to such trouble and expense as naturally followed from the injury.
    Appeal from, judgment in favor of plaintiff, and from order denying motion for a new trial.

      Tredwell & Catlin, for app’lts; Hirsh & Rasquin, for resp’t.
   Clement, Ch. J.

This action was brought to recover damages ■for injury to a horse, which resulted from negligence of the defendants. The allegation as to damages in the complaint, after .amendment on the trial, was as follows:

“ That by reason of the damages to said horse, caused as aforesaid, and the trouble and expense incurred in consequence thereof, the plaintiff has been injured, in all, to his damage two hundred dollars.”

On the trial plaintiff gave the following answers to his counsel:

“ Question. Did you have another horse, during the time this horse was ill, to do your work? Answer. Yes, sir. Q. How much did you pay for the use of the other horse? (Objected to as irrelevant, immaterial and incompetent, and not within the issue. Such damages should have been specifically set forth in the complaint. Objection overruled. .Defendants except”)

We are of opinion that the foregoing exception was well taken, on the authority of Gumb v. Twenty-third St. Railway Co., 114 N. Y., 411, 414; 23 St. Rep., 748. The damages sought to be proven were special, and should have been specifically set forth in the complaint. The “trouble and expense” mentioned in the •complaint referred to only such trouble and expense as naturally followed from the injury. The allegation as to loss was general, and did not cover any claim for special damages. Judgment and order denying new trial reversed, and new trial granted, with costs to appellants to abide the event.

Van Wyck, J., concurs.


author: Van Wyck, J.

text:
    Francis Bruno, Resp’t, v. The Brooklyn City Railroad Co., App’lt.

      (City Court of Brooklyn, General Term,

      Filed October 23, 1893.)

    1. Railboad—Negligence—Riding on step op open cab.
    To ride upon the step of an open street car, when the car is crowded, is not negligence as matter of law, but the question is one for the jury.
    3. Same—Chabge.
    An error, if it he such, in refusing a request to charge that it was the duty of the plaintiff, on getting upon the car, to use reasonable care to put himself into as safe a place as he could procure, is cured by a charge that if there was room on the front platform it was his duty to take his position there, where it appeared that all the seats were occupied and the rear platform crowded.
    Appeal from judgment in favor of plaintiff, entered upon ver-dict, and from order denying motion for a new trial.

      Morris & Whitehouse, for app’lt; J. Edward Swanstrom, for resp’t.
   Van Wyck, J.

This action was brought to recover damages alleged to have been inflicted upon the plaintiff through the negligence of defendant, and without any on his part. The jury rendered a verdict in plaintiff’s favor for <$1,500, and from the judgment entered thereupon, and the order denying a motion for a new trial, this appeal is taken. The testimony shows that, plaintiff took passage on an open car of defendant, running easterly through Flushing avenue, all the seats of which were occupied, and. the rear platform of which was crowded, though there may have been standing room on the front platform. He stood facing the body of the car, upon the side step, running along the entire length of the car; and while he was in this position the conductor collected his fare, after which, when this car reached Washington avenue crossing, another car of defendant, proceeding along Washington avenue in a northerly direction, was approaching Flushing avenue. The driver of the latter car, instead of stopping, kept right on, and drove his horses against the plaintiff, knocking him off the car, whereby plaintiff received the injuries complained of. The contention that plaintiff, in standing upon the step, was guilty of contributory negligence, as matter of law, cannot be sustained. The question was properly submitted to the jury to decide as a matter of fact. If it was error for the court to refuse to charge the request of defendant “ that it was the duty of the plaintiff, on getting upon defendant’s car, to use reasonable care to put himself into as safe a place as he could procure,” the error was cured by the charge of the court that, if there was room on the front platform, it was the duty of the plaintiff to have taken his position thereupon, for the evidence shows that all the seats were-occupied, and the rear platform was crowded. After reading and carefully considering the testimony relating to plaintiff’s injuries, we do not think the verdict of the jury for $1,500 should be disturbed as excessive. For these reasons we think the judgment and order must be affirmed, with costs.

Osborne, J., concurs._


author: Freedman, J.

text:
    George W. White, App’lt, v. Robert Stafford et al., Resp’ts.

      (New York Superior Court, General Term,

      Filed October 24, 1893.)

    Injunction—Pendente lite—Appeal.
    A contested motion for an injunction pendente lite is addressed largely to the discretion of the judge or court, and where there is a doubt as to-plaintiff’s right thereto, an order denying such motion will not be disturbed.
    Appeal from order denying motion to continue an injunction ^GTldGlltG lti&.

      E. B. & C. P. Cowles, for app’lt; Hobbs & Gifford, for resp’ts.
   Freedman, J.

A contested motion for injunctive relief during the pendency of the action is addressed largely to the discretion of the judge or court, upon all the facts as presented by the moving papers and opposing affidavits. Upon the motion in this case-the learned judge below, upon a consideration of all that was submitted and claimed by the respective parties, was justified in withholding the relief prajrnd for, because the case was fairly brought within the rule that in case of doubt the plaintiff should be left to establish his right to injunctive relief, if he has any, by a regular trial of the issues. The appeal, therefore, fails tx> present a case for the disturbance of the exercise of the discretion by the judge below. The order should be affirmed, with ten dollars costs and disbursements.

GrlLDERSLEEVE, J., concurs.


text:
    William P. Roome et al., App’lts, v. Frederick C. Jennings et al., Resp’ts.

      (New York Superior Court, General Term,

      Filed October 24, 1893.)

    Pleading—Amendment.
    Upon affirmance of a judgment on plaintiff’s appeal, the appellate court stated in the opinion that “if the plaintiffs can show a different state of facts and desire to do so, their remedy is by motion for leave to amend their complaint.” Held, that this meant, provided plaintiffs should acqwiesce in the law as laid down, and move for the vacation of the judgment on terms and for leave to amend, and that such leave would not be granted where no motion to disturb the judgment is made, but an appeal is taken to the court of appeals.
    Appeal from order denying motion for leave to amend the complaint.

      F. A. Thomson, for app’lts; Putney & Bishop, for resp’ts.
   Freedman, J.

It appears that the issue of law raised by defendants’ demurrer to the complaint resulted in a judgment for six cents damages to the plaintiffs, and awarding the costs of the action to the defendants. From this judgment the plaintiffs appealed to the general term of this court, where the judgment was affirmed, with costs. In the opinion then delivered the court said, 3 Misc: Rep., 413; 52 St. Rep., 507: “If the plaintiffs can show a different state of facts, and desire to do so, their remedy is by motion for leave to amend their complaint.” This meant: Provided the plaintiffs should acquiesce in the law as laid down, and move for the vacation of the judgment upon terms, and for leave to amend. But the plaintiffs did not do this. They simply moved for leave to amend the complaint, without asking to have the judgment disturbed; and from the judgment they appealed, as has been, conceded on the argument before us, to the court of appeals, where they intend to ask for the reversal of the judgment on the ground of error. Under these circumstances, the motion for leave to amend was properly denied. The order should be affirmed, with ten dollars costs and disbursements.

GrlLDERSLEEVE, J., CODCUl'S.


text:
    Sarah Cohen, Resp’t, v. John J. Gorman, Sheriff, Def't.

      (New York Superior Court, General Term,

      Filed October 24, 1893.)

    Sheriffs—Default—Indemnitors.
    Where a judgment by default in an action against a sheriff was not em?tered until eight months after tile commencement of the action, and has been paid and satisfied, the default will not be opened on application of the indemnitors where there is no proof of collusion, or disclosure of the nature of the proposed defense.
    Appeal from order denying motion of the sureties on an indemnity bond given to defendant as sheriff to vacate a judgment recovered against him by default, and substitute them as defendants.

      Goldsmith & Doherty, for app’lts; W. E. Stillings, for resp’t.
   Freedman, J.

This is an appeal from an order denying a motion made by Callman, Rouse and Samuel Barnett, sureties on an indemnity bond given to the defendant as sheriff, to set aside a judgment taken against defendant by default, and to substitute the appellants as defendants, and to permit them to come in and defend. The action was commenced in October, 1891, and resulted in a judgment against the defendant iii June, 1892. The judgment was paid by the defendant and satisfied by the plaintiff of record before the appellants gave notice of motion to bp substituted. In view of these facts, and there being no proof of collusion, and no disclosure of the nature of the proposed defense, the motion was properly denied. Jakobi v. Gorman, 50 St. Rep., 202, is clearly distinguishable.

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

Gtldersleeve, J., concurs.


text:
    Jane Crossley, Resp’t, v. Henry B. Adams, App’lt.

      (New York Superior Court, General Term,

      Filed October 27, 1893.)

    Appeal—Case.
    In a case where there has been a reference to inquire and report a formal case and exceptions showing the proceedings before the referee is wholly unnecessary for the protection of the appellant’s rights.
    Appeal from order setting aside a proposed case.

      Smith & Perkins, for app’lt; Townsend, Dyett & Einstein, for resp’t.
   Per Curiam.

The record upon which this appeal has been submitted is so imperfect that we would not be justified to determine upon it that the learned judge below erred. The pleadings, the interlocutory judgment, the report of the referee, the exceptions filed thereto, the order of confirmation, the final judgment, the notice of appeal, the case and exceptions proposed to be served, have all been omitted; not even the nature of the action has been sufficiently disclosed. In the absence of the interlocutory judgment, it does not appear what powers were conferred by it upon the referee. Upon the affidavit made by one of the attorneys for the plaintiff, upon which the order appealed from was made, and which was and is unopposed by any counteraffidavit, the conclusion may be reached that the reference was one to in-, quire and report, see Austin v. Ahearne, 61 N. Y., 6; that it was' treated as such; that a formal case and exceptions showing the proceedings before the referee are, under all the circumstances, wholly unnecessary for the protection of the rights left to the appellant ; and that the appellant was bound to proceed exclusively under rule 80 of the general rules. The early history of that rule (being rule 32 of 1858 and rule 39 of 1871) may be found in the report of the case of The Receivership of the Guardian Savings Inst., 9 Hun, 267. If there are facts which might lead to a different conclusion, the appellant should have shown them. ' For the reasons stated the order must be affirmed, with ten dollars costs .and disbursements.

Freedman and Gtldersleeve, JJ., concur.


author: Lewis, J.

text:
    William Kiernan, Individually and as Executor, et al., App’lts, v. The Agricultural Insurance Company of Water-town, New York, Resp’t.

      (Supreme Court, General Term, Fifth Department,

      Filed October 20, 1893.)

    1. Insurance (fire)—Avoidance by mortgage—Indorsement on policy.
    Where, after probate of a will, the legatee and devisee procured insurance on the property, the fact that the insurer’s agent, for the protection of testator’s mortgagee, thereafter indorsed on the policy that the “property is held by and insured in the name of” such legatee and devisee as executor of the will, does not alter his interest in the property so as to prevent a subsequent mortgage by him from avoiding the policy under the usual provision against incumbrances.
    '3. Same—Divisibility.
    Where a policy of insurance on a building and its contents in separate amounts contains a provision that the entire policy should be void if incumbered by legal process, a judgment filed so as to become alien on the house only avoids the policy as to contents as well.
    Appeal from a judgment entered in Cattaraugus county in favor of the defendant, and against the plaintiff, upon a decision of the court at special term dismissing the complaint.

      E. D. Northrup, for app’lt; A. H. Sawyer, for resp’t.
   Lewis, J.

The action was brought for a reformation of a policy of insurance issued by the defendant to the plaintiff, and upon the policy as reformed to recover judgment for $2,300 for loss of a dwelling house and furniture therein by fire.

The policy was for $2,000 on a dwelling house, $300 on household furniture and other personal property therein, $600 on barn Ho. 1, $500 on produce therein, $100 on barn Ho. 2, $200 on farming utensils, $200 on horses and $200 on cattle. The form of the policy was the one provided for by chapter 488 of the Laws ■of 1886, and is known as the standard fire insurance policy of the -.state of Hew York. There was in the main body of the policy a provision as follows: “If the subject of insurance be personal property, and be or become incumbered by a chattel mortgage, or if any change * * • * take place in the interest * * * •of the subject of insurance * * * whether by legal process or judgment,” the entire policy shall be void.

The policy also contained a provision as follows: “ This policy is made and accepted subject to the foregoing stipulations and conditions, together with such other provisions, agreements or conditions as may be indorsed hereon or added hereto; and no-officer, agent or other representative of this company shall have the power to waive any provision or condition of this policy except such as by the terms of this policy may be the subject of agreement indorsed hereon or added hereto, and as to such provisions and conditions no officer, agent or representative shall have such power or be deemed or held to have waived such provisions' or conditions unless such waiver, if any, shall be in writing upon or attached hereto; nor shall any privilege or permission affecting' the insurance under this policy exist or he claimed by the insured unless so written or attached.”

Other provisions were added to the policy in the form of a rider attached thereto by mucilage. There was contained in the rider a description of the property insured, separately valued, and among other provisions the following: “If the property, real or personal,. covered by this policy be or become incumbered by a mortgage, trust deed, judgment or otherwise, this entire policy shall be void, unless otherwise provided by agreement indorsed hereon or added hereto.”

The property insured was situated in the town of Ellicottville, Cattaraugus county, and belonged during his lifetime to James Kiernan, who was the husband of the plaintiff Esther, and father of William Kiernan. James Kiernan died on the 10th day of September, 1890, leaving a last will and testament, by the terms of which the insured property was devised and bequeathed to the plaintiff William Kiernan, subject to some conditions not material to mention. The will was duly admitted to probate on the 16th day of" the same month, and the plaintiff William went into possession of the property, and thereafter made application for and obtained the policy of insurance in question, and on the 15th day of December, 1891, the dwelling house and contents were destroyed by fire.

The plaintiff in his complaint asked for a reformation of the policy by striking therefrom the clauses as to encumbrances upon, the insured property, alleging that they were not a part of the' contract between the parties for the reason that defendant’s local-agent, at the time the policy was issued, represented to the insured" that the provisions therein as to encumbrances were not to be-considered as a part of the contract of insurance and were of no-effect, and that the plaintiff accepted the policy and paid the premium relying upon such representations. There was upon the farm upon which the dwelling-house was situated at the time of the insurance a mortgage running to Thomas W. Litchfield to-secure $2,800. The mortgage provided that the loss, if any, on the buildings, was payable to Thomas W. Litchfield, mortgagee, and insured, as interests may appear. The policy was delivered to the plaintiffs on the 17th day of August, 1891, and on the 8th day of October thereafter, at the request of the mortgagee Litchfield, and with the consent of the plaintiff William Kiernan, who was the acting executor of his father's will, the defendant’s local agent wrote across the face of the rider attached to the policy as follows: “October 8, ’91. It is hereby understood that this property is held by and insured in the name of William Kiernan, executor of James Kiernan estate, and mother.” Signed by the agent. There was at the time of the delivery of the policy a chattel mortgage of $600, given by the plaintiff William Kiernan to H. M. Harmon, upon the cows, horses and hay insured in the policy.

The trial judge held that the agent had notice of this mortgage •at the time of issuing the policy.

After the delivery of the policy a chattel mortgage securing the same debt secured by the mortgage to Mrs. Harmon before mentioned, and interest, amounting to $685, was given to Mrs. Harmon, and thereafter, and on the 7th day of October, 1891, the plaintiff William Kiernan executed and delivered to Elihu S. Stewart, as president, etc., a chattel mortgage on the cows, horses, hay and farming utensils insured by the policy; and on the 80th day of November, 1891, he gave another chattel mortgage upon other personal property upon the farm included in the policy of insurance, for the sum of eighty-nine dollars; and on the 8th day of October, 1891, a judgment was recovered against the plaintiff and others for the sum of $670.46, and was docketed on that day in the Cattaraugus county clerk’s office and became a lien upon the dwelling house.

It is the contention of the plaintiff that these chattel mortgages do not invalidate the policy, for the reason that after the indorsement of October 8th only the property of the estate of James Kiernan, deceased, and that of his widow was insured. The indorsement upon the rider mentioned, we have seen, was made at the request of the mortgagee Litchfield, he entertaining the opinion that it was necessary in order to protect his mortgage. We do not see that the indorsement had any effect in changing the interests of the parties insured in the property. By the will of the father it was vested in the plaintiff William Kiernan, subject to his mother’s dower interest, and the indorsement mentioned did not in any way change the rights or interests of the parties therein.

The plaintiffs farther contend that their claim is divisible; that mortgaging the cows, horses and farming utensils did not invalidate the insurance upon the house and furniture, as they were separately valued in the policy. This argument, so far as the dwelling house is concerned, leaves out of view the recovery of the judgment against the parties insured. The policy provided that encumbering the property by judgment should make it void; and, as we have seen, after the issuing of the policy plaintiffs permitted the docketing of the judgment mentioned, which became a lien upon the premises upon which the insured house was located. The recovery of this judgment must be held to prevent a recovery for the loss of the dwelling house; but the judgment cannot be said to have encumbered the household furniture before levy thereon, and as none of the chattel mortgages covered the ■household furniture, the question is presented whether under this •policy the plaintiffs are entitled to recover for the loss of the household furniture. As we have seen, the policy provides that, “ If the property, real or personal, be encumbered by mortgage/ etc., “the entire.policy shall be void.’’

In Merrill v. Agricultural Ins. Co., 73 N. Y., 452, the property insured was itemized and separately valued. The policy contained a condition that if the property insured should, be or become encumbered by mortgage or otherwise it should void the policy, A portion of the property insured was encumbered by a mortgage,, and the court held that the claim was divisible and that plaintiff could recover the value of the property insured that was not mortgaged. But it will be observed that in that case the policy did not provide that the entire policy should be void, in case the insured property should be mortgaged. The form of the policy-in question was prepared after the decision of the Merrill case, and we think that the use of the word entire in this policy may be held to distinguish this from that case.

In Smith v. Same Defendant, 118 N. Y.,518; 29 St. Rep., 810,. the policy provided that “If the property, either real or personal, or any part thereof, shall be encumbered by mortgage, judgment, or otherwise, the policy shall be void.” It was held that the claim was not divisible, and that the mortgaging of any portion of the property invalidated the whole policy. In the latter case, how» ever, it will be seen that the words, “ or any part thereof,” were contained in the policy, which it may be claimed distinguishes it from the policy in question.

The word “entire" has no significance in the contract unless it be held that mortgaging a part of the insured property makes it wholly void, for if the entire property insured be mortgaged, of course the policy is wholly void, and in such case the use of the word “ entire ” would have no significance. It has no-meaning in the contract unless it be construed as making the policy void in toto in case a part only of the property insured be mortgaged. Experience has taught insurance companies that what is known as the moral hazard is an exceedingly important factor in their business. It is a well known fact that during periods of financial and business depression losses by fire of insured property largely increase in number. The right is reserved in this policy to the company to arbitrarily cancel the policy at any time. Had the company been advised that Mr. Kiernan was placing mortgage after mortgage upon his property insured ; that he had suffered a judgment to be recovered against him, it would undoubtedly have availed itself qf the right reserved to cancel the policy;, its officials would have concluded that there was a moral hazard which they did not wish'to be subjected to.

It was this moral hazard defendant was guarding against when it provided in the contract that if the parties insured should encumber the property insured by judgment, mortgage or otherwise (thereby evidencing that they were embarrassed pecuniarily), the company would not any longer carry the risk; that the entire policy should be void. The real estate was encumbered, as we have seen, by a mortgage of $2,300 at the time the policy was issued; a judgment was thereafter docketed which was an additional lien thereon, and all of the personal property insured liable: to levy and sale under execution was mortgaged; the only property not mortgaged was the household furniture, which was exempt from levy and sale under execution. The furniture was in the insured house, and was likely to bum with the house. We think that under the circumstances it must be held that the policy was wholly void. The court in Stevens v. Queen Ins. Co., 81 Wis., 335, takes a like view of the question; a number of authorities to the same effect can be found in Clement’s Digest of Fire Insurance Cases, page 92. One of the cases in this digest is Holloway v. Dwelling House Ins. Co., 21 Ins. L. J., 379, decided by the St. Louis court of appeals, the substance of the case is stated as follows : “Although building and contents may be separately valued, if policy provides that this entire policy shall be void in event of violation of certain conditions, and such violation affects the realty or building only, the loss is not severable, and the entire policy is void.” The word “entire” is italicized by the author. In Knowles v. American Ins. Co., 21 N. Y. Supp., 50; 49 St. Rep. 7, the general term, third department, and the Hew York common picas, in American Artistic Gold Stamping Co. v. Glens Falls Ins. Co., 20 N. Y. Supp., 646; 48 St, Rep., 653, have taken a different view of this question. These cases fail to meet our approval. We think they fail to give full effect and meaning to the word “ entire ” in the policy.

The plaintiff failed to make a case for reforming the policy.

The judgment appealed from should be affirmed, with costs,

Haight and Bradley, JJ., concur.


text:
    Daniel P. Smith, Resp’t, v. The Buffalo, Rochester & Pittsburgh Railroad Co., App’lt.

      (Supreme Court, General Term, Fifth Department,

      Filed October 20, 1893.)

    1. Master and servant—Railroad—Negligence.
    It is negligence for a railroad coinpany to substitute in the night time for a switch engine in its yard an ordinary freight engine having none of the usual appliances on switch engines designed to protect switchmen on failure to make couplings.
    2. Same.
    In such a case, although the switchman might have known of the substitution of engines and that the freight engine was not provided with safety appliances, yet being inexperienced and never having tried to make a coupling with the freight engine, he was not guilty of contributory negligence in attempting to make the coupling in obedience to his superi- or’s orders, he having a right to assume that the company had provided safeguards for his safety.
    Appeal from a judgment in favor of the plaintiff entered upon a verdict, and from an order denying a motion for a new trial made upon the minutes of the court.

      Henry G. Danforth, for app’lt; E. F. Babcock, for resp’t.
   Lewis, J.

This action was commenced for the recovery of damages for personal injuries sustained by the plaintiff while employed by the defendant as a switchman in defendant’s yards at Bradford, Pa.

The plaintiff had been at work for the defendant in the capacity of switchman for nine days prior to the accident. He had prior thereto been employed by railroads in various capacities, but never before as a switchman. The defendant had in its yards two switching engines for doing that work. They were provided with applicances for the protection of switchmen when engaged in •coupling cars. In front of these switch engines, and running .across the front thereof, was a foot-board about twelve inches wide, upon which the switchman could stand when making couplings. They were also provided with a projection in front -called a mouth organ or draw-head; the front/end was large and had three openings to receive a link. The draw"-head acted in a measure to prevent the engine and the car when being coupled •coming near enough to each other to injure the switchman. On the night of the accident the plaintiff went on duty at 6:30 P. M., .and commenced switching with a regular switch engine, but early in the night, without his knowledge, the switch engine was sent to "the shop for repairs, and a regular road freight engine was substituted for use in the yard. It was a heavy eight driving-wheel engine, and was not provided with any appliances for the protection of the switchman while making couplings. It had the usual pilot or cow-catcher which extended out about five feet in front and coming to a point. The coupling appliance consisted of an iron draw-head, commonly known as a bull nose, which extended from the face of the pilot beam a distance of two and a half feet. The face of the bull nose was twelve inches long and ten and one-eighth inches broad. The opening in the head of the bull nose was five inches square; this was to receive a link. There was a step or foot-rest on the pilot fifteen inches long, projecting five inches from the outside of the slats composing the pilot The end of this step was thirteen inches from the end of the pilot.

The plaintiff was directed by the yard conductor or headswitchman to couple the engine to a passenger car; it was dark at the time. The passenger car w'as provided with what is known .as a Miller coupling, but it had neither bumpers, safety blocks nor dead-woods. These Miller draw-heads extend out from the platform of the car about a foot, with a face width of about eight inches, with an appliance to receive a link. Attached to it is a strong spring which- gives a play to the draw-head to the left of about three and one-half inches. Near the front end of it is a clutch or jaw, and when two of these draw-heads come together, -owing to this play they pass each other until the clutches are opposite, and then close by springs automatically. In attempting to effect the coupling on the occasion of the accident the plaintiff stepped with his left foot upon the ledge or step described and balancing his body upon that foot, the other foot having nothing ■to rest upon, with his lantern upon his arm he took .the links attached tó the draw-head of the engine in his left hand and with a pin in his right hand attempted to insert the link into the Miller -coupling and secure it thereto by dropping the iron pin into the link. He failed to insert the link and the two draw-heads came together, passed each other and the draw-head of the passenger car caught plaintiff’s left leg between it and some part of the pilot and crushed it, injuring it so that it necessitated amputation. The accident occurred before daylight in the morning.

The plaintiff attempted to make the coupling in the ordinary manner, but obviously with the appliances furnished him it was a hazardous and dangerous thing to do. There was an entire absence of any safeguards to protect the plaintiff’s person in ease of a failure to effect the coupling. Standing, as he was required to do, upon one foot with the lantern upon his arm, with both hands engaged, it is not surprising that he failed to secure the link in the passenger car. It was, we think, inexcusable negligence on the part of the defendant to use such an unguarded and unprotected engine for such a purpose, especially in the night time. In view of the terrible consequence likely to result to the plaintiff if the slightest mishap should occur, it was the defendant’s duty to provide him with every reasonable and well-known safeguard to ¡prevent injury to his person. This it failed to do, and the jury very properly found the defendant was guilty of negligence causing the injury to the plaintiff.

The evidence tended to show that there was in common use, and ¡had been for many years upon engines and cars, bumpers and other appliances for the protection of men when engaged in ■coupling cars.

It was the first time the plaintiff had attempted, to effect a ■coupling with this engine. He was directed by his foreman to do the work. He had no time or opportunity to investigate the engine and car to ascertain if there were appliances for his protection. The exigencies of the business required prompt action on his part, and it became a question for the jury to determine from the evidence whether the plaintiff was guilty of negligence contributing to his injuries. While the plaintiff may have known in a general Way that the engine was not provided with dead-woods, he had a right to assume that the defendant would not require him to use an appliance without some safeguard for his protection.

The defendant has no cause to complain of the charge to the jury. The law of the case, taking the entire charge together, was carefully and correctly stated.

We find no reason for disturbing the judgment.

The judgment and order appealed from should be affirmed.

Dwight, P. J., and Haight, J., concur.