text:
    John McNaney, in behalf of himself and all other Judgment Creditors, etc., App’lt, v. Francis G. Hall et al., as Executors, etc., et al., Resp’ts.

      (Supreme Court, General Term, Fourth Department,

      Filed May 4, 1895.)

    1. Fraudulent conveyances — Intent.
    Where the purpose of the insolvent grantor, in making the transfers is an honest one, and it is intended thereby to secure the debts owing to the grantee, and that is his only purpose, he has a right to thus secure him, and the transaction is valid.
    3. Same — Who may sue.
    Where the general assignment is valid, an action to set aside conveyances as fraudulent can be maintained only by the assignee.
    3. Assignment for creditors — Schedules.
    A general assignment is not invalidated by the fact that the assignee, in making tl;e schedules where the assignor fails to make them, omitted some small items of property therefrom.

      4. Appeal — Conflicting evidence.
    The findings of the trial court, on conflicting evidence, will not be disturbed on appeal, unless against the weight of evidence, or the proof so clearly preponderates in favor of a contrary result that it can be said, with reasonable certainty, that the trial court erred in its conclusion.
    5. Former adjudication — Parties.
    A judgment in an action to set aside a general assignment as void as. against creditors is not an estoppel or conclusive evidence in a subsequent action by another creditor, suing in behalf of himself and all creditors similarly situated, to set aside the assignment.
    Appeal from a judgment, dismissing the complaint on the merits.

      Baldwin & Baldwin and Alex. Cumming, for app’lt; Charles J. Bissell, for resp’t Francis G. Hall; Reynolds, Stanchfield & Collin, for resp’ts William S. Carr and other executors, etc., and Samuel C. Taber, as assignee, etc.
   Martin, J.

The pupose of this action was twofold: (1) To set aside a general assignment for the benefit of creditors made by the defendant Francis Gr. Hall to the defendant Taber; and (2) to set aside certain deeds, assignments, bills of sale, and other transfers and conveyances made by the defendant Francis G. Hall to the defendant Samuel S. Hamlin. The ground upon which the plaintiff sought to set aside the general assignment and the other conveyances mentioned was that they were made with an intent to hinder, delay, and defraud the creditors of the defendant Hall.

On August 21, 1884, the plaintiff’s assignor recovered a judgment against the defendant Hall for $1,050.21. An execution was issued thereon, which was returned wholly unsatisfied. Subsequently, and in March, 1889, the judgment, which was the basis of this action, was duly assigned to the plaintiff. For several years prior to July 21, 1884. the defendant Hall was engaged in business as a private banker at the city of Elmira. On that day he suspended payment at his bank, and closed the doors, claiming that he was unable to continue business and meet his obligations. At that time he was the owner of a large amount of valuable real and personal property, and was indebted to a large number of persons in an amount which exceeded the value of such property. After his suspension, the depositors and other creditors of the defendant Hall called upon him for a settlement of their claims. He made a list of his property, and placed an estimate of value opposite each piece, which he showed his creditors as a true list and a correct statement of their value. The list did not specify all his property, and the values were exaggerated. In his negotiations with his creditors, he offered them the property mentioned in the list at the prices designated, in payment of their claims, and to some of them stated that he had no other property, and could pay in no other way, and that if they would not take the property at the prices they would get nothing, and would get nothing if they sued. Between the 21st of July and the 1st of August he compromised with some of his creditors by transferring to them a portion of his property at excessive prices, and thus paid and extinguished about $85,000 of his indebtedness. These transfers were made and received in good faith, without any intent to hinder, delay, or defraud his creditors. ..Among the creditors of the defendant Hall were Samuel'S. Hamlin and Betsy P. Hall. The latter transferred to the former all her claims against the defendant Hall on July 24, 1884. Between the- 21st of July and the 1st of August the defendant Hall transferred to the defendant Hamlin the real estate and property mentioned in the complaint. These transfers were in form absolute, but were made and accepted upon the agreement between the defendants'Hall and Hamlin that the latter should accept them as collateral security for the indebtedness of Hall to him, and that he should be responsible only for what he received out of the property so transferred. The defendant Hall was indebted to Hamlin at that time in a sum exceeding .$60,000. After these transfers were made, and on the 1st of August, 1884, the defendant Hall made a general assignment to the defendant Taber of all his property, not exempt by law, for the benefit of his creditors. The assignment contained no preferences except as to the wages and salaries of his employes. The defendant Taber accepted the trust under such assignment, qualified as such assignee, took possession of the estate, and entered upon the discharge of his duties, and continued to act as such assignee until the commencement of this action. The defendant Hall having omitted to make and file any inventory or schedule of the assigned estate," one was made and filed by the assignee. By inadvertence or mistake on the part of the assignee, and without fraud or fraudulent intent, the inventory or schedules were defective in omitting therefrom the property transferred by the defendant Hall to Hamlin and others as collateral security. The foregoing, briefly stated, are the facts found by the referee. He also found the general assignment for the benefit of creditors and the transfers and conveyances made to the defendant Hamlin were made and accepted in good faith, and without, any intention to hinder, delay, or defraud the creditors of-the defendant Hall, and held that the defendants were entitled to a -judgment dismissing the plaintiff’s complaint with costs, and directed judgment accordingly.

The important issues in this case were whether the general assignment made by Hall, and the transfers and conveyances made to Hamlin as collateral security for the debts held by him against Hall, were made with an intent to hinder, delay, or defraud his creditors. We deem it unnecessary to state in detail all the various acts, circumstances, and transactions which are relied upon by the appellant as evidence that the assignment and transfers in question were made with a fraudulent intent. The evidence disclosed a variety of circumstances and many transactions from which, if unexplained, an inference of fraud might perhaps have been drawn. The defendants have, however, introduced evidence which has explained the circumstances and transactions thus relied upon in a manner which, if believed, would show that the purpose of the transfers in question was an honest one, and that they were made in good faith. While the evidence shows that Hall transferred to Hamlin a large amount of real and personal property, yet it also discloses that he was largely indebted to Hamlin. These transfers were as security only, so that, if the ju’operty transferred exceeded in value the amount of Hamlin’s debt, the creditors of Hall would have the benefit of any surplus there might be. It was at least natural that Hall should have secured his indebtedness to Hamlin, who was a relative, and had been his friend from his youth up, and advanced to him these large sums of money. If his purpose in making these transfers was an honest one, and it was intended thereby to secure the debts owing Hamlin, and that was its only purpose, he had a right to thus secure him, and the transaction was valid. Citizens’ Bank v. Williams, 128 N. Y. 77; 40 St. Rep. 979 ; Williams v. Whedon, 109 N. Y. 333, 337; 15 St. Rep. 265; Paper Co. v. O'Dougherty, 36 Hun, 79; affirmed, 99 N. Y. 673 ; Knapp v. McGowen, 96 N. Y. 75, 86; Dorr v. Beck, 76 Hun, 540; 58 St. Rep. 261; Sumner v. Skinner, 80 Hun, 201; 61 St. Rep. 797; Murphy v. Briggs, 89 N. Y. 446, 452. The fact that Hall agreed to take charge of the property and to manage it for Hamlin was perhaps a circumstance to be considered by the referee in determining the question of fraudulent intent. But when it is remembered that Hamlin was an old man, who was infirm, unable to assume the -care and labor incident to looking after this large property, and that Hall had previously acted for him in the transaction of his business, it seems but natural that it should have been agreed between them that Hal! should look after it for him. With this explanation the potency of that circumstance as an evidence of fraudulent intent is very much diminished, if not substantially overcome.

Again, it is contended that the amount of the property transferred was large. This is true, but the debts it was given to secure were also large. The property transferred was not so greatly in excess of the debts to be secured as to constitute a circumstance of much weight bearing upon the question of fraud. Indeed, the referee has found that the value of the property transferred was in fact less than the amount of the debts owing by Hall to Hamlin. Moreover, if the general assignment was valid, this action, under the allegations of the complaint, could not be maintained by the plaintiff to set aside the transfers and conveyances made to Hamlin. Under such circumstances, the action could only be maintained by the assignee, as the right to assail those conveyance on the ground of fraud was vested in him alone. Spring v. Short, 90 N. Y. 538; Crouse v. Frothingham, 97 id. 105, 113; Loos v. Wilkinson, 110 id. 195, 209; 18 St. Rep. 110; Prentiss v. Bowden, 145 N. Y. 342; 64 St. Rep. 811.

When we consider the question of the validity of the general assignment, we find that the evidence renders it quite clear that at the time of his suspension the defendant Hall did not intend to make a general assignment for the benefit of his creditors, but believed that he could adj ust his debts by distributing among his creditors all the property owned by him at excessive prices, and that he could borrow sufficient money to pay the remainder after his property had been so distributed. This course.was industriously and effectively pursued by him until his creditors, by attachments, issued and threatened, rendered an assignment practically necessary.

But it is said that when the inventory was filed the property transferred to Hamlin as collateral security, and property transferred to some of his other creditors as collateral, and some other small items of property, were omitted from the schedule, and hence the referee should have found that the general assignment was made with an intent to hinder, delay, and defraud his creditors. The evidence discloses that the schedules were made by the assignee, and not by the assignor. It is true, however, that he was consulted in regard to making them. We do not think the act of the assignee in making the schedules in any way reflects-upon the act of the defendant Hall in making the assignment. Denton v. Merrill, 43 Hun, 224, 232; 5 St Rep. 887. The question here was as to the intent of the defendant Hall at the time the assignment was made. If his purpose was honest, the instrument was valid. Hardmann v. Bowen, 39 N. Y. 200. But the-subsequent acts of the assignor were admissible to reflect upon the original intent. Shultz v. Hoagland, 85 N. Y. 464. The most, therefore, that can be said in this case, is that the omission of the-assignor to correct the schedules made by the assignee, by inserting therein the property omitted, was a circumstance to be taken into consideration by the referee in determining the intent with which the assignment was made. If, as the referee found, the omission was not an intentional one, but was the result of forgetfulness or oversight on the part of the assignor, or if he supposed it unnecessary, then light weight was to be given to such omission,, especially as all the facts°relating to that property were known to the public, and had been testified to by Hall when examined under the assignment act, so that the actual situation must have been known to his creditors. As was said by Finch, J., in theShultz Case:

“ It would be hard to find any schedules absolutely perfect, or any debtor who could inventory every item of his property with strict accuracy. Room must be allowed for honest mistake, and,, possibly, even for careless and thoughtless error.”

See, also, Peyser v. Myers, 185 N. Y. 599; 48 St. Rep. 825;. and Ellis H. Roberts & Co. v. Buckley, 145 N. Y. 215; 64 St. Rep. 600.

It is also said that the transfers of property to pay a portion of his creditors, and of other portions of his property to secure other of his creditors, including the defendant Hamlin, his wife, his brother, the Chemung Canal Bank, and Charles J. Langdon, were evidences that the assignment was made with an intent to defraud his creditors. Each of these transfers was a circumstance to be considered by the referee in determining this question of intent, and yet, when it is found that in each of those cases the defendant. Hall was in fact indebted to the creditors secured, and that the property transferred as collateral for such debt was not greatly disproportionate to the debt sought to be secured, the referee might well-have been led to the conclusion that those circumstances were entitled to but little weight in determining the question of the intent with which such general assignment was made.

The appellant" also contends that the exhibition by Hall of an incorrect list of his assets, his representations concerning it, and his threats to creditors, were evidence of an intent to defraud his creditors by the assignment which was subsequently made. It may be assumed, we think, that 'this was a circumstance which the learned referee was authorized to consider in determining that question, but it was neither controlling nor conclusive evidence of fraud.

Upon all the evidence in the case, the referee has found that the general assignment made by the defendant Hall and the transfers by him to the defendant Hamlin were made in good faith, for a valuable consideration, and without any intent to hinder, delay, or defraud the creditors of the defendant Hall. A patient and careful examination of the great volume of evidence contained in the appeal books in this case has led us to the conclusion that these findings of the referee are sustained by the evidence. The evidence in the case was conflicting, and it is quite possible that different inferences might have been drawn, and different conclusions reached, from the testimony of the witnesses and thetransactionsand circumstances developed by the evidence. This was clearly a case where the questions at issue were of fact for the referee, and the findings were not so plainly against the weight of evidence, nor did the proof so clearly preponderate in favor of a contrary result, that it can be said with reasonable certainty that the referee erred in his conclusion. Where a review of the facts by an appellate tribunal is proper, it is under no obligation to arbitrarily adopt the conclusions of the trial court; yet great consideration will be accorded to its opinions, especially where there is evidence on both sides, and the mind of the court has been called upon to weigh conflicting statements and inferences, and to decide upon the credibility of opposing witnesses. In reviewing the determination of a trial court in such a case, the appellate court is not warranted in reversing upon the sole ground that in its opinion the trial court should have reached a different conclusion. To justify such a course, it should appear that the findings of the trial court were against the weight of evidence, or the proof so clearly preponderated in favor of a contrary result that it can be said with reasonable certainty that the trial court erred in its conclusion. Westerlo v. De Witt. 36 N. Y. 340; Crane v. Baudouine, 55 id. 256 ; Sherwood v. Hauser, 94 id. 626; Baird v. Mayor, etc., of City of New York, 96 id. 567 ; Lowery v. Erskine, 113 id. 52; 21 St. Rep. 917; Devin v. Bank, 125 N. Y. 756; 35 St. Rep. 922 ; Barnard v. Gantz, 140 N. Y. 249; 54 St. Rep. 931. We are of the opinion that, under the doctrine of the authorities cited, the findings of the referee should be upheld.

The appellant, however, contends that a former judgment, in an action in which John R. Purtell and another were plaintiffs, and Francis Gr. Hall and Samuel Gr. 'haber were defendants, was a bar or conclusive evidence against the defendants Hall and Taber. That action was brought by the plaintiffs therein against the defendants for the sole purpose of setting aside the general assignment of Hall to the defendant Taber. The judgment adjudged the assignment to be fraudulent and void, and set it aside only as against the plaintiffs in that action. That action was by the plaintiffs therein alone, and not in behalf of other creditors. The plaintiff in this action was not a party to that action, nor a privy of the plaintiff therein, and hence was in no way bound by the judgment. Indeed, he was not a creditor of Hall until March, 1889, when he purchased the judgment upon which he bases his right to maintain this action. We think the judgment in that action was not an estoppel or conclusive evidence against either of the defendants in this action, and the referee properly so held. Shipman v. Rollins, 98 N. Y. 311, 330; Moore v. City of Albany, id. 396,409 ; Masten v. Olcott, 101 id. 152, 160 ; Quinby v. Carhart, 133 id. 579; 44 St. Rep. 666.

While an examination of the requests to find proffered by the plaintiff and those proffered by the defendants shows that in some instances the learned referee has made findings upon such requests that are perhaps somewhat inconsistent, still we find nothing in those findings which materially affects the questions at issue in the case, and therefore they furnish no reason to disturb the judgment. We have examined the various rulings to which our attention has been called by the appellant, but have discovered no error in them that would justify a reversal. Nor do we deem it necessary to discuss them further than to say that each of the rulings has been carefully examined and considered by us. We áre of the opinion that the findings of the referee in this case are fully sustained by the evidence, that no exceptions were taken which would justify a reversal, and that the judgment herein should be affirmed. Judgment affirmed, with costs.

All concur.


source: Caselaw Access Project

author: Lewis, J.

license: Public Domain

text:
    The People, Resp’t, v. Joshua S. Helmer, App’lt.

      (Supreme Court, General Term, Fifth Department,

      Filed April 12, 1895.)

    1. Corporations — Exhibiting false books.
    On the trial of an indictment of the president of a bank under section 592 of the Penal Code, evidence that he was in the bank when the examiner called and knew the object of the visit, is sufficient, though he did not personally show the books, to establish the fact that he exhibited the books.
    2. Same — Knowledge of falsity.
    In such case, it must be shown that he knew that the books, exhibited to the examiner, were false and forged, in order to his conviction.
    Appeal from a judgment of conviction, and from an order denying a motion for a new trial, made on the minutes.

      K M. Ashley and Tracy O. Becker, for app’lt; P. F. King, Disk Atty., for resp’t.
   Lewis, J.

It was charged in the indictment: That on the 21st day of September, in the year 1893, the defendant was, and had been for several years prior thereto, the president and a director of the Merchants’ Bank of the City of Lockport, a state bank doing business in said city. That there was kept by said bank, among others, the following books, to wit: A teller’s tickler or cash book, which purported to show the correct amount and kinds of cash on hand in said bank at the close of business on the 20th day of September, 1893; a register of drafts which purported to show the date, number, amount, and the party in whose favor each draft drawn by said bank upon its New York correspondent up to the day mentioned; and also a discount book, in which was purported to be entered the kind of paper, the date, name of the maker and indorser, the amount, and the time and place of payment of all the commercial paper discounted by the bank, and the aggregate amount of discounts up to the close of the day mentioned. That the books aforesaid, with others, each contained false and forged entries, and that the defendant, on the 21st day of September, 1893, feloniously and knowingly did present, expose and exhibit said false books to a Mr. Clark, who was duly authorized to examine the affairs of the bank, and who was at the bank on that day for that purpose. He was charged in other counts with having aided, assisted and advised other officials in the bank in presenting false books. The only books which it will be necessary to consider in disposing of this appeal are the cash and discount books and the draft register. There was evidence tending to show that there were false entries in each one of these books, by which they failed to show the true condition of the bank at the close of business on the 20th day of September, 1893. The evidence, we think, fairly established that the defendant exhibited the books mentioned to the examiner. It was not shown that he personally called the examiner's attention to the books, nor handed them to him, but they were there upon the tables of the bank, accessible to the examiner, and the defendant was in and about the bank, and knew the purpose of Mr. Clark’s visit. It was incumbent upon the people to show that the defendant knew that these books contained false and fraudulent entries, and that defendant presented or exposed them to the examiner with intent to deceive him.

It was made to appear by entries in the cash book that the bank had on hand, at the close of business on the 20th of September, the sum of $18,705.55, when in fact the actual amount was only $11,705.55. The difference was represented by two checks drawn by the cashier, Mr. Arnold, as county treasurer of the county of Niagara, upon other banks in Niagara county, — one for $4,000. and the other for $3,000. These two checks had been placed in the bank by Mr. Arnold, to cover moneys which he had drawn from the Merchants’ Bank for his own use. The defendant knew that the checks had been so deposited, and, while Mr. Clark was engaged in counting the cash actually in the bank, the defendant left the bank, and borrowed $7,000 in currency, which he caused to be placed in the vault of the bank, to be delivered to Mr. Clark, to be counted as cash actually in the bank; and after it had been so counted, and on the same day, the defendant returned the identical money to the persons from whom he had borrowed it. There was at the time a sufficient amount of county money on deposit in the banks upon which these checks were drawn to pay them, and they would have been paid at any time had they been presented. They were banks which had been duly designated as depositories of the county funds. There was at this time the well-known stringency in the money market, and Mr. Arnold had been requested by the officers of said banks to favor them, and not draw out the county deposits more than was absolutely necessary. There was nothing in the use made of these checks tending to show an intention on the part of either the defendant or Mr. Arnold to defraud the bank. The defendant had the general supervision over the affairs of the bank, and attended to its correspondence. He had nothing to do with keeping the books or making entries therein. While he unquestionably had the right to examine the bank books, it was not shown to be a part of his duties, and obviously it would have been impracticable for him to have done so to any extent, and performed his duties as president.

We assume, in deciding the case, that it was a question for the jury whether the defendant knowingly, feloniously and wrongfully exhibited the cash book containing false entries as to the amount of cash in the bank to Mr. Clark, with intent to deceive him. It cannot be said that his guilt in that respect was established beyond a reasonable doubt. To justify a conviction upon circumstantial evidence, not only must the facts proved be consistent with and point to the defendant’s guilt beyond a reasonable doubt, but they must be inconsistent with his innocence. People v. Stokes, 2 N. Y. Cr. R. 382. After a careful examination, we have failed to find any evidence tending to show that the defendant had any knowledge or cause for suspicion that there were ever any false entries made either in the discount book or the draft register. The office of the discount book was to show what commercial paper had been discounted by the bank. When Mr. Clark, the examiner, called for the discount book, Mr. Arnold informed him that there was a large number of promissory notes which had been discounted by the bank which had not been entered in the discount book; and, at the suggestion of Mr. Clark, the cashier proceeded to write them up. Arnold had been misappropriating the funds of the bank to a large amount, and, to cover up his defalcation, had forged a number of promissory notes, amounting to about $35,000. He entered in the discount book this forged paper, together with about $50,000 of genuine notes, which had been discounted, and had not, therefore, been entered in the discount book. After entering the genuine and forged paper, Arnold delivered the notes and the book to Mr. Clark. Defendant was not present at the time. The defendant was ignorant of Arnold's defalcation, and knew nothing about this forged paper. When Clark came to examine the forged paper, he suspected its genuineness, and, called the defendant’s attention to the matter. There was an absence of any evidence that the defendant saw the discount book while Arnold was engaged in entering the notes, or knew at any time what entries he had made therein, until Clark called to his attention his suspicions about the paper. Arnold was not then in the bank. When he returned, the defendant interviewed him, and soon learned by confession of Arnold that he had been guilty of forging the paper. Mr. Arnold was called as a witness by the people, and testified that he was guilty of forging the paper, but that the defendant knew nothing of it. Mr. Clark asked defendant’s permission to take the suspected paper away from the bank, promising to return it in four or five days. To this defendant objected, saying that he had no right to consent to it without being authorized so to do by the directors of the bank. Mr. Clark suggested that ho at once call a meeting of the directors, and the defendant informed him that he knew that there was not a quorum of the directors at that time in the city. After the defendant’s attention was called to the forged paper, the discount book, so far as appears from the evidence, was not examined or referred to by the examiner.

Our attention is called by the learned counsel for the people to the refusal of the -defendant to permit Mr. Clark to take the suspected paper away from the bank, as evidence tending to show that he was aware of its being forged. We fail to see in his refusal the slightest evidence of guilt on his part. There was at that time simply a suspicion that the paper was forged, for this occurred before the confession of Arnold. If it was forged, the defendant did not know who committed the forgery. The paper had been presented by a man who had been up to that time a, trusted officer of the bank. Arnold had been connected with the bank for many years, in different capacities, for a longer time than the defendant, and had up to that time enjoyed the unquestioned confidence, not only of the officers of the bank, but of the community. He was serving his third term as treasurer of the county of Niagara. The defendant was suddenly confronted with the fact that the cashier had presented this suspected paper as genuine. It was most natural and entirely proper for him "to reply to Mr. Clark as he did. He naturally wanted to see the cashier, and ascertain what he had to say about the paper while it was in the bank. When he learned from Arnold that he had been guilty of forging the paper, and was a defaulter, the defendant at once called in another director, and they succeeded in inducing Mr. Arnold to transfer real estate and securities to an amount which nearly or quite indemnified the bank against loss. This is also urged by the district attorney as evidence tending to show guilt on the part of the defendant. We do not so consider it. It was, we think, entirely proper for the defendant to seek to indemnify the bank, as he was shown to have done.

There was evidence tending to show that Mr. Arnold had filled out three several drafts, at different times theretofore, upon a New York bank, which was the correspondent of the Merchants’ Bank, and presented them to the defendant for his signature, and defendant signed them. Two of these drafts were for $1,200 each, and the third one was for the sum of $2,000. The cashier, in entering them in the draft register, instead of stating the true amounts, entered one for the sum of $200, another for $23.50, and the third for $15.76. By making these false entries, it appeared by the draft register that the Merchants’ Bank had on deposit with its New York correspondent a larger amount of money than it actually had, to wit, the difference between the sums actually mentioned in the drafts and .the entries made in the draft register, and these were the errors appearing in the draft register. The defendant had nothing to do with making these entries, and there was an absence of any evidence tending to show that he ever had any knowledge or any grounds of suspicion that there were false entries in the draft register.

At the close of the charge to the jury, the defendant’s counsel requested the court to charge the jury that there was no proof sufficient to warrant a conviction that the defendant knew of any false, forged, or altered entry in the discount book when it was presented or exhibited to Clark. The court replied: “ I decline to change my charge in regard to the discount book." It appears by reference' to the charge that the court had not given the instruction requested to the jury, but, on the .contrary, had submitted to them the question whether the defendant knew of these false, forged, and counterfeit notes, and that they had been entered upon the discount book. There was not, as before stated, any evidence that the defendant did know of the forged notes or of the entries upon the books, but the facts and circumstances as related by the witness negatived any such claim. Counsel for the defendant submitted a like request as to the draft register. The court replied that that was a question for the jury, and that he would not change the charge in that regard. The jury had not been charged as requested, but the court had submitted to them the question as to whether there were false entries in that book to the knowledge of the defendant, and whether he was connected in any manner with the presentation of the book to Mr. Clark. Defendant’s counsel requested the court to charge the jury that there was no proof sufficient to warrant a conviction that the defendant presented or exhibited the draft register to Clark. The court declined to change his charge in that respect. Neither the request nor the substance of it had been charged. The only evidence upon the subject of the draft register being submitted to Mr. Clark came from Clark himself. He testified that he did not examine it at any time, and did not call for the draft register,, and that the entries in the register did' not enter into any part of Ins examination. We are of the opinion that the substantial rights of the defendant were prejudiced by the failure of the court to comply with the requests specified. The facts developed by the evidence as to the forging of the notes, and their entry into the discount book,, and the false entries in the draft register, presented questions of much greater moral turpitude than the facts as to the entries in the cash book. If the defendant exhibited or caused to be exhibited to Mr. Clark the discount book with knowledge of the entry therein of these forged notes, his guilt was established beyond any reasonable doubt, and the same may be said of the draft register. The people having failed to connect the defendant in any way with these false entries, or with the presentation of these books with knowledge, he was entitled to have that branch of the case taken from the jury. “ A misdirection upon one point is sufficient, although the jury may have properly found their verdict, upon another point, as to which there was no misdirection.”’ 3 Whart. Or. Law (7th ed.), § 3248.

Because of the errors mentioned, the judgment and order-appealed from should be reversed, and a new trial granted.

All concur.


author: Martin, J.

text:
    Delos W. Matteson, Resp’t, v. Benjamin Gillett et al., App’lts.

      (Supreme Court, General Term, Fourth Department,

      Filed May 4, 1895.)

    Pbincifal and agent — Pbooe.
    Nothing in the correspondence between the defendants and the alleged agent was held to indicate any intent upon the part of the defendants to authorize the latter, as their agent, to employ the plaintiff, or any one else, for them, or to authorize him in any way to bind them by any contract, that he made with the plaintiff.
    Appeal from a judgment, rendered on the decision of the court., in favor of the plaintiff.

      R. R. Jelliff, for app’lts; Burr Mattice, for resp’t.
   Martin, J.

The trial court found that on or about April 3r 1893, the plaintiff and defendants entered into a contract whereby the defendants agreed to employ the plaintiff from May 1, 1893,. to November 1, 1893, and to pay him for his services the price of fifty dollars per month, and to furnish him his board and do his. washing during that time; and for a breach of that contract by the defendants the court awarded the plaintiff damages to the amount of $271.38. The defendants contend that the evidence, was wholly insufficient to justify such finding and judgment. It is not pretended that any such contract was ever made by the parties themselves. The only ground upon which it is claimed that this judgment can be sustained is that the defendants authorized one Oscar. Hopkins to employ the plaintiff for them, and that he-was employed for them by him as their agent. If Hopkins had1 any such authority, it was conferred upon him by the correspondence which passed between the defendants and Hopkins, as the-case discloses that the defendants did not see Hopkins until after the time when the contract with the plaintiff was alleged to have been made. Therefore, if Hopkins possessed any such authority, we must seek for it in these letters.

qu March 31, 1893, the defendants wrote Hopkins:

“If you can come and run the factory for us this season', write us what you want a month, commencing April 25th, — six months. We board you, and do your washing. And if you can’t come/ what can you get a man for? * * * If you find a man for us, have him write to us what he wants per month for six months.”

At most, this letter asked Hopkins to write the defendants what he would want a month for six months, if he could come and rum the factory for them, and, if he could not, the inquiry was made as to what he could get a man for. , The defendants, however, added that, if he found a man for them, he should have him, the man, write them what he wanted for six months. In this letter we find nothing to authorize Hopkins to employ the plaintiff. Clearly the letter was one of simple inquiry. It is true the defendants inquired what he could get a man for; but they at the same time negatived the idea that Hopkins was to have authority to employ .a man for them by stating that, if he found one, he should have the man write them what he would want a month, clearly intending thereby to provide for further negotiations between the man found and themselves. In reply to that letter, and on April 10th, Hopkins wrote to the defendants:

“I will come out and run the factory for you, or furnish aman, with board and washing, for fifty dollars, or without board sixty-five dollars, per month. I am paying my hands sixty-five dollars per month, with board, for the season. *• * * If you want us to come write when you want us, as I can’t be there only part of the time, but will furnish an experienced hand that will give good satisfaction when I hain’t there. You meet us at the cars, if con- ■ venient.”

In this letter there is no suggestion that Hopkins had or even thought he had been given authority to employ any one for the •defendants, but its clear purport is that he, Hopkins, would himself engage to do the work for the defendants for the price named, with the understanding that when he could not be there himself he would furnish a satisfactory substitute. In answer to this letter, and on April 14th, the defendants wrote:

“We will give you fifty dollars per month and board and washing. Will not want only one of you, — yourself or your man.”

This portion of the letter clearly indicates that the defendants were still negotiating with Hopkins to run their factory, personally or by some person in his employ. But the defendants then add, as qualifying what they had already written:

“You stated in your letter that you couldn’t be here only part ■of the time. If you or your experienced hand comes, and the man we have spoken of in our letter gets so that he can run the factory alone, will it matter to you whether you stay here and work for us all the season or not? If so, let us know, and we will make ■different arrangements.”

This part of the letter' was clearly intended to so far qualify the preceding statement as to include the provision that, unless the plaintiff was willing to modify the propositions which had been previously made by and between them, to the extent of his consenting not to insist upon staying through the season if the defendants’ man got so that he could run the factory alone, the negoitations were to end, and the defendants were to make different arrangements. It is obvious that Hopkins must have so understood the letter. It could have no other meaning. In this letter of April 18th he writes:

“I received your letter, and will send an experienced hand for the season, for I have got to hire him for the season, or not at all to go out there, or work for me at home, if I come to work for you, so I will come with him and stay a week, and help get started, free of charge, if you will board me and fetch me back to the cars; and we will be there April 28th ready to commence. Please let us hear from you by return mail, for the time is short.”

This letter, like those preceding it, plainly indicates that Hopkins intended either to go there and run the factory himself, or -employ some one to run it for him when he was not there, and also shows that he was not disposed to accept the qualification contained in the defendants’ last letter, for the reason that he had to hire his man for the season, or not at all. Ho other correspondence was had between Hopkins and the defendants, except that on April 24th the defendants wrote Hopkins to the effect that they would not want him or want him to furnish them a man, as they had one.

Surely there is nothing in this correspondence which indicates any intent upon the part of the defendants to authorize Hopkins, as their agent, to employ the plaintiff, or any one else, for them, or to authorize him in any way to bind them by any contract that he made with the plaintiff. We are of the opinion' that Hopkins had no authority to bind the defendants by the contract he made with the plaintiff, and consequently there was no contract between the plaintiff and the defendants, and the court erred in so finding and awarding a judgment to the plaintiff. Judgment reversed on the law and facts, and a new trial ordered, with costs to abide the -event.

All concur.


text:
    George Bushey, Resp’t, v. William Santiff, App’lt.

      (Supreme Court, General Term, Fourth Department,

      Filed May 4, 1895.)

    1. Basements — Prescription.
    Where the user for the time requisite to create an easement or right of way over the land of another by prescription or user, has been open, notorious, visible, uninterrupted, undisturbed and under claim of right adverse to the owner, the latter is charged with notice thereof, and his acquiescence is implied.
    3. Same — Defined line of travel.
    A prescriptive right of way over another’s land generally, without any defined line of travel, cannot be acquired by either the public or an individual. ■
    S. Same — Defense.
    Where a party seeks to defend his trespass by setting up a prescriptive right, he is bound to show such right to the extent of user claimed, or his defense fails.
    Appeal from a judgment, entered on a verdict in favor of plaintiff, and from an order denying a motion for a new trial, made on the minutes.
    Merrell, Reyel & Merrell, for app’lt; C. S. Mereness, for resp’t.
   Martin, J.

This action was for trespass in tearing down and breaking fences upon, and driving over, certain premises occupied "by the plaintiff, and to which he had the right of possession. The defense was that the defendant had a right to the use of an" easement or right of way across the farm or premises occupied by the-plaintiff, and that the alleged trespass consisted in using it, and in removing obstructions placed therein by the plaintiff. The only-question litigated upon the trial was whether the defendant and. those under whom he claimed had a right of way across the plaintiff’s premises. There was no claim or pretense that any such right of way existed unless it had been acquired by prescription or an uninterrupted user for twenty years.

To create an easement or right of way over the land of another by prescription or user, the user must be open, notorious, visible, uninterrupted, undisputed, under claim of right adverse to the owner, acquiesced in by him, and must have thus existed for a period of at least twenty years. Where, however, the user, for the-requisite time, has been open, notorious, visible, uninterrupted,, undisturbed, and under claim of right adverse to such owner, he-is charged with notice, and his acquiescence is implied. Parker v. Foote, 19 Wend. 309 ; Nicholls v. Wentworth, 100 N. Y. 455 ; Ward v. Warren, 82 id. 265 ; Hammond v. Zehner, 21, id. 118 ; Colburn v. Marsh, 68 Hun, 269 ; 52 St. Rep. 378. A prescriptive-right of way over another’s land generally, without any defined line of travel, cannot be acquired either by the public or by an individual, and where a way is claimed by prescription, that there has been a certain and well-defined line of travel should be shown. Holmes v. Seely, 19 Wend. 507, 511; Elliot Roads & S. 137 ; Railroad Co. v. Parker, 41 N. J. Esq. 489 ; Bryan v. City of East St. Louis, 12 Ill. App. 390 ; Owens v. Crossett, 105 Ill. 355. The court submitted to the jury the question whether there had been such a user of the claimed right of way, and the jury found that there had not. A careful examination of the evidence renders it quite obvious, we think, that the question whether the defendant and those under whom he claimed had acquired, by user or prescription, a right of way across the premises in question, was for the jury. The evidence tended to show that, within eight years of the time of the trial, persons occupying the premises had locked up the gate across the claimed right of way next to the highway, and, when torn down, that it was nailed up again on one or two occasions. It also disclosed that at the point where the claimed right of -way reached the highway it was changed a distance of more than eleven rods during the time in which the defendant claims a, right of way was acquired by prescription, and that such change-was less than twenty years before the trial. As the defendant sought to defend his trespass by setting up a prescriptive right, he was bound to show such right to the extent of user claimed, or his defense failed. American Bank-Note Co. v. New York El. R. Co., 129 N. Y. 253; 41 St. Rep. 531.

As no other questions are raised by the appellant, it follows, we think, that the judgment should be affirmed. Judgment and order affirmed, with costs.

All concur.


text:
    Loretta McConnell, App’lt, v. George F. Barber et al. Resp’ts.

      (Supreme Court, General Term, Fourth Department,

      Filed May 4, 1895.)

    1. Appeal — Conflicting evidence.
    The decision of the trial court, on conflicting evidence, will not be disturbed on appeal, unless it is against the weight of evidence, or the proof so clearly preponderates in favor of a contrary result that it can be said with reasonable certainty that the trial court erred in its conclusions.
    3. Fraudulent conveyance — Consideration barred.
    In an action to set aside a conveyance as fraudulent, the fact that the consideration for the deed was an indebtedness barred by the statute of limitations, which had been standing for many years without the payment of any interest thereon, is a circumstance to be considered by the trial court, but is not controlling, in determining the question of good faith.
    3. Same — Compound interest.
    That compound interest forms part of tlie consideration, does not render the deed void as to creditors, in the absence of any agreement for its payment.
    Appeal from a judgment dismissing the complaint.

      B. T. Wright, for app’lt; E. D. Crosley and T. E. Courtney, for resp’ts.
   Martin, J.

This was an action in the nature of a creditors’ bill. Its purpose was to set aside a deed given by George F. Barber to the defendant Marcellie I. Barber. The defendants were husband and wife. The special term found that the deed was made in good faith, without any intent to hinder, delay, or defraud the creditors of George F. Barber, the judgment debtor; that it was based upon a good and sufficient consideration; held that the conveyance in question was valid; and directed a judgment accordingly with costs. The appellant contends that the findings of the trial court were against the weight of evidence, and should not be upheld. A thorough and careful examination of the evidence discloses that the question of the intent with which the conveyance under consideration was made was one of fact to be determined by the trial court. While there were circumstances which, unexplained, might have justified the court in inferring that the transfer was fraudulent, yet, if the court gave credit to the evidence of the defendants and their witnesses, it was sufficient, we think, to justify the decision of the trial court. Where a review of the facts by an appellate tribunal is proper, it is under no obligations to arbitrarily adopt the conclusions of the trial court. Yet great consideration will be accorded to its opinions, especially where 'there is evidence on both sides, and the mind of the court has been called upon to weigh conflicting statements and inferences, and to decide upon the credibility of opposing witnesses. In reviewing the determination of a trial court in such a case, the appellate court is not warranted in reversing upon the sole ground that in its opinion the trial court should have reached a different conclusion. To justify such a course, it should appear that the findings of the trial court were against the weight of evidence, or the proof so clearly preponderated in favor of a contrary result that it can be said with reasonable certainty that the trial court erred in its conclusion. Westerlo v. De Witt, 36 N. Y. 340; Crane v. Baudousine, 55 id. 256; Sherwood v. Hauser, 94 id. 626; Baird v. Mayor, etc., of City of New York, 96 N. Y. 567; Lowery v. Erskine, 113 id. 52; 21 St. Rep. 917; Devlin v. Bank, 125 N. Y. 756; 35 St. Rep. 922; Barnard v. Gantz, 140 N. Y. 249; 55 St. Rep. 541. Applying the doctrine of these authorities to this case, we think the findings of the special term should not be disturbed.

The fact that the indebtedness to the wife of the judgment debtor, which was the consideration for this transfer, was barred by the statute of limitations, and had been standing twenty-seven or twenty-eight years without the payment of any interest thereon, was a circumstance to be considered by the trial court in deterrning the question of good faith; but it was not controlling, as the statute of limitations might' be waived and the transfer be valid as to creditors. Bump, Fraud. Oonv. 220.

The appellant also insists that, as the consideration for this transfer consisted to a great extent of compound interest, in was invalid. In Stewart v. Petree, 55 N. Y. 621, 623, Allen, J„ said:

“ But a prospective agreement, after the interest has accrued, to pay interest thereon, is valid, and money paid for compound interest cannot be recovered back. So, too, a security for interest upon interest, given after it has accumulated, and in the absence of any prior undertaking to pay it, is valid, and supported by a good consideration.”

At its last term, in a case in which no opinion was written, this court held that a note, payable in future, given for compound interest, was valid, and could be enforced. Following the doctrine of these authorities leads to the conclusion that, if the transaction between the defendants was free from actual fraud or fraudulent intent, the consideration was sufficient to uphold the conveyance in question. Although it must be admitted that if the consideration for this transfer was fictitious, and consequently fraudulent, and such fraud was participated in by both"parties, it would be void, yet, as in this case the court has, upon sufficient evidence, found that the consideration was not fictitious, or the transfer fraudulent, that principal has no application.

We are of the opinion that the evidence was sufficient to sustain the findings of the trial court, and the judgment should be affirmed.

Judgment affirmed, with costs.

All concur.


author: Merwin, J.

text:
    Violet A. McLaughry, by Guardian, etc., Resp’t, v. William C. Porter et al., App’lts.

      (Supreme Court, General Term, Fourth Department,

      Filed May, 1895.)

    1. Process — Abuse of — Question for jury.
    Where, in an action to recover damages for personal injuries suffered! in the execution of a warrant of dispossession, evidence that the defendant, at whose instance the warrant was issued, was there on the premises in consultation with the officer and assistants, and took an active part in the removal, that his orders were to put the plaintiff into the road and that he furnished to the officer the money rvith which the latter paid his assistants, is sufficient to render the question as to his participation in the matter one for the jury.
    3. Same — Charge.
    Where the evidence tends to show that the assistants were in good faith summoned to aid in, and were all necessary for the proper removal of a large amount of personal property, which the parties sought to be removed had on the premises, a charge, as matter of law, that the officer had no right to take the assistants which he did, unless he apprehended resistance, and that, if he took them there for any other purpose, they were all trespassers, is erroneous.
    Appeal from a judgment entered on a verdict in favor of plaintiff, and from an order denying a new trial, made on a case and exceptions.

      Edward O' Connor and F. R. Gilbert, for app’lts; Walter ScottT for resp’t.
   Merwin, J.

The exceptions only are before us upon this appeal. The action is brought to recover damages for personal injuries sustained, as the plaintiff claims, by her wrongful removal from the house occupied by her parents, upon the execution by the defendant Porter, a deputy sheriff, and his assistants, of a warrant of dispossession, issued by a justice of the peace, upon the petition of the. defendant McDonald, after a foreclosure by advertisement of a mortgage made by the father of plaintiff, David H. McLaughry, who was then the owner of the premises. The plaintiff claims that she was at the time of her removal sick, and, in substance, that the officer and those who assisted him were guilty of an abuse of the process, in that they used unnecessary and unreasonable force in her removal, and that the assistants or posse which the officer had there were not summoned in good faith or for any legitimate purpose, but for the purpose of intimidation and violence. It is not alleged in the complaint that defendant McDonald was personally engaged in the removal, but it is alleged that the wrongful acts of the other defendants were done by and through his aid, advice, procurement, and instigation. It appears that after the removal, and before the commencement of this action, the final order of the justice of the peace under which the defendants acted was on appeal to the county court reversed. The court, however, charged that the officer and those who acted under him were protected, unless there was an abuse of the process.

At the close of the evidence, the counsel for the defendant McDonald moved that as to him the complaint be dismissed, on the ground that sufficient facts had not been proven to establish a cause of action-against him. This motion was denied, and exception taken. The plaintiff claimed that there was sufficient evidence to make it a question for the jury to say whether or not McDonald aided and abetted the other defendant in their improper conduct. There is evidence tending to show that McDonald was there on the premises, and near the house, and in consultation with the officer, and with the two physicians that were there at his (McDonald’s) request, and took an active part in the removal; that the attorney who represented him. before the justice in obtaining the warrant was present, and took an active part in the matter; that his (McDonald’s) orders were to put the plaintiff into thd road; that he afterwards furnished to the officer the money with which he paid his assistants and the physicians. We are inclined to the opinion that the question as to McDonald’s participation in the matter was for the jury, and that the motion to dismiss as to him was properly denied.

The counsel for the defendant McDonald asked the court to ■charge that:

“ If the jury find that the only connection defendant McDonald had with the eviction of this plaintiff was the presenting of the petition and commencing of the summary proceedings before the magistrate, he is not liable in this action.”

This was properly refused, for the reason that, on the undisputed evidence, McDonald was in fact connected with the eviction beyond what was stated in the request.

In the charge of the court there occurs the following:

“ If he (the officer), went there with a posse selected by himself, not for the purpose of overcoming any resistance which he apprehended, or which was present, or which was determined to be present, then, gentleman, he was there without lawful authority with his assistants, and he and his assistants, every one of them, became trespassers from the beginning, and cannot be protected in the proceedings which were enacted and which followed.”

Exception was duly taken. The charge, in effect, was that the officer had no right to take there the assistants which he did, unless he apprehended resistance, and that, if he took them there for ■any other purpose, they were all trespassers. It was error to ■charge this as matter of law, inasmuch as the defendants claimed, •and gave evidence tending to show, that the assistants were in .■good faith summoned to aid in, and were all’ necessary for, the proper removal of a large amount of personal property, such as lumber and hay, which the McLaughrys had on the premises. This aspect of the case the defendants were entitled to have the jury consider, and the court had no right to withdraw it from their consideration. It may be claimed that, taking the charge as a whole, the error was cured. In this view we have examined the charge, and are of the opinion that the error was not cured, al-1 though the attention of the court was expressly called to it by the •exception taken at the close. The jury were liable to have been misled, and we cannot say that they were not. The evidence was very conflicting, and the case was a peculiar one. We think that the exception was a good one, and that it inures to the benefit of McDonald, as well as to the other appellants. Under the allegations of the complaint, McDonald is only liable on the basis that the officer and his assistants improperly did their duty, and committed a wrong on the plaintiff. It follows that, by reason of the error suggested, a new trial must be granted.

Judgment and order reversed, on the exceptions, and a new trial ■ordered ; costs to abide the event. All concur.


author: Per Curiam.

text:
    In the Matter of the Application of Lemon Thomson et al. Julia L. De Camp, App’lt.

      (Supreme Court, General Term., Fourth Department,

      Filed May 4, 1895.)

    1. Condemnation proceedings — Eights in river.
    Section 4, chapter 207 of 1851, as amended by chapter 712 of 1894, does not authorize the condemnation of a right in a stream and of a strip of land along the banks thereof.
    2. Same — Scope.
    Such law authorizes the procedure for the condemnation of property only when the person instituting it has authority, under some independent statute, to acquire the title to real property for public use.
    3. Appeal — Appealable order.
    An order denying a motion to dismiss a petition in condemnation proceedings, and appointing a referee to hear and determine the issues, is appealable.
    Appeal from an order denying a motion to dismiss the petition, and appointing a referee to hear and determine the issues ■raised by the petition and answer.

      C. D. & Seth C. Adams, for app’lt; Charles E. Snyder, for resp'ts.
   Per Curiam.

This proceeding was instituted under the provisions of the condemnation law (Code Civ. Proc. chap. 23, tit. 1) to condemn and acquire a right, privilege and easement to float logs, pulp wood and timber over the defendant’s lands, down and through the Moose river and its branches, as they flow across township 7 and the north half of township 1, John Brown’s tract, town of Wilmurt, X. Y., together with the right, privilege and easement to make all necessary improvements by way of removing ■any obstructions that may exist in said river and its branches, such as removing snags, blasting stones, boulders, etc., and also to condemn for such use a strip of land along upon the shores of said river, its branches and tributaries, for a distance of ten feet back from high-water mark upon each side thereof. The plaintiffs have purchased and are the owners of the trees, timber and logs upon a large tract of land lying above the premises of the defendant De Camp, upon and near the Moose river and its tributaries, which they desire to float down these streams to their mills and to market, and by this proceeding seek to condemn an easement over the lands of the defendant, together with ten feet of land on each side of said streams, to enable them to accomplish that purpose.

Upon the presentation to the court at special term of the petition herein, the defendant De Camp specially appeared, and interposed preliminary objections to the petition, and moved to dismiss the same upon the grounds:

(1) “ The court has no jurisdiction of the subject-matter to condemn the stream and real estate described in the petition for a highway, public or private. The Moose river acts referred to in said petition and annexed thereto are invalid. (2) That the petitioners are not authorized to institute this under the condemnation law, and the court has acquired no jurisdiction over defendant De Camp. * (3) That the petition does not show on its face that the petitioners are entitled to the judgment sought or prayed for.”

The motion was then reserved, without prejudice, until after the filing of an answer by defendant De Camp, which was then filed, and made a part of the papers on said motion. The court thereupon denied the defendant’s motion, overruled her preliminary objections, and, in pursuance of section 3367 of the condemnation law, ordered that the issues raised by the petition and answer be referred to a referee to hear and determine.

The questions presented by this ruling are whether the plaintiffs had any authority to institute this proceeding, and whether, upon the facts alleged in the petition, they were authorized to condemn the defendant's lands. That the plaintiffs had no authority to condemn them for the purposes stated in the petition is manifest, unless such authority has been conferred upon them by some act of the legislature. A statutory authority is requisite to justify the taking of private property for public use under the power of eminent domain, and those claiming the right must be able to point to a statute conferring it; and in construing statutes which are claimed to authorize the exercise of the power of eminent domain, a strict, rather than a liberal, construction is the rule. In re Poughkeepsie Bridge Co., 108 N. Y. 483 ; 13 St. Rep. 770. In discussing the question in that case, Andrews, J., so clearly and fully states the doctrine applicable to this question that a quotation from his opinion cannot well be omitted. He says:

“The power of eminent domain, which resides in.the state as an attribute of sovereignty, is nevertheless dormant until called into existence by an act of the legislature. Until a statute authorizes an exercise of the power, it is latent and potential merely, and not active or efficient; and the state can neither exercise the prerogative nor can it delegate its exercise, except through the medium of legislation. Therefore it is that wherever an attempt is made, either by the officers of the state or by a corporation organized for a public purpose, to take private property under the power of eminent domain, the officers or body claiming the right must be able to point to a statute conferring it. In the absence of statutory authority, private property cannot be invaded by this power, however strong may be the reasons for the appropriation. In construing statutes which are claimed to authorize the exercise of the power of eminent domain, a strict, rather than a liberal, construction is the rule. Such statutes assume to call into active operation a power which, however essential to the existence of the government, is in derogation of the ordinary lights of private ownership and of the control which an owner usually has of his property.”

Under the rule stated, the question presented is whether the legislature has, by any statnte, authorized the plaintiff’s to condemn the defendant’s property for the purposes mentioned in the petition herein. The only pretended authority for these proceedings is contained in chapter 207 of the Laws of 1851, which was an act entitled “ An act declaring Moose river, together with the north and south branches thereof, in the state of Mew York, a public highway, and regulating the passage of logs and timber down the same,” and an act to amend the same, passed May 16, 1894, by which section 4 of that act was amended. Section 1 of the original act declares Moose river to be a public highway for the purpose of floating logs and timber. Section 2 describes the manner in which booms shall be constructed. Section 3 provides the penalty for obstructing the channels of the river, except as provided in the preceding section. Section 4, as amended in 1894, which is the section relied upon by the plaintiffs, provides :

“Persons desirous of floating logs or timber down the said stream may construct a chute or apron in connection with any dam across said stream, and may reconstruct any booms already constructed, or hereafter to be constructed in, over and across said stream, in such manner as to allow logs and timber to pass by the same, doing no unnecessary damage to the owner or occupants of said boom, and paying to such occupants or owner all damages that he or they may sustain by reason of the floating of logs and timber, or the alteration of dams or booms, said damages to be ascertained by three commissioners to be appointed by the supreme court, as provided for in the condemnation law, on the application of either party, and notice of ten days to the other party, unless the parties can agree; nor shall this act be construed to impair or abridge any private or individual rights in the construction of bridges, dams or booms across said river, except so far as is necessary for the improvement of said river and floating logs and timber down the same.”

While this section purports to give persons desirous of floating logs or timber down the stream the right to construct a chute or apron in connection with any dam across it, and to reconstruct any booms already constructed or to be constructed over said stream in such manner as to allow logs and timber to pass the same, doing no unnecessary damage to the owner or occupants of said boom, it provides for compensation only to the owner or occupants of such booms, and for paying to such occupants or owner all damages he or they may sustain by reason of the floating of logs and timber on the alteration of dams or booms in the manner prescribed in that section. We find nothing in this act which makes provision for the payment of damages to the owners of land over which this river runs for any improvement of the river for highway purposes by removing obstructions by blasting stones, rocks and boulders, and removing snags, or for acquiring any of the owner’s land therefor. Indeed, the only damages that seem to be provided for are such as the owners or occupants of booms along the river may have sustained by reason of the floating of logs and timbeq or the alteration of dams or booms. This falls far short of providing for damages for the taking of the defendant’s property for the purpose of improving Moose river and its tributaries, or authorizing the condemnation of such property for that purpose. We find nothing in the statute, when construed in accordance with the doctrine already stated, which would authorize this proceeding for the condemnation of the defendant’s property.

There is nothing in the condemnation law that would authorize it, as the purpose of that statute is simply to regulate the procedure for the condemnation of property, and authorizes such .procedure only when 'the person instituting it has authority under some independent statute to acquire the title to real property for public use. Code Civ. Proc. § 3359.

While the constitutionality of the statute of 1851, as amended, in 1894, may be doubted, still we deem it unnecessary to determine that question. If the statute is constitutional, the rights given by it can be exercised and enjoyed independent of any action by the court .to condemn the defendant’s property, or any part thereof; and, so far as those acts are justified by that statute, they may be performed by the plaintiffs without liability to the defendant, except as in the act provided. So, too, if it be admitted that the Moose river and its tributaries are public highways by common law, the plaintiffs have the right to properly use them as such ; and, so far as that right extends, no condemnation is necessary. But here the plaintiffs seek to condemn the defendant’s property, not only in the stream or alleged highway, but for ten feet upon each side. We are utterly unable to find any statute or authority justifying this proceeding, and are of the opinion that the court below erred in denying the defendant’s motion to dismiss it.

We think this order was appealable, If, upon the case presented by the petitioners, the court was not authorized to appoint a .referee, and acquired no jurisdiction, the defendant’s motion should have been granted ; and this court, upon appeal, has the power to inquire and decide whether the court had authority to act upon the application. In re City of Buffalo, 64 N. Y. 547. It follows that the order appealed from should be reversed, and the proceeding dismissed.

Order reversed, with $10 costs and disbursements, and proceeding dismissed, with costs.


text:
    Providence Steam and Gas Pipe Company, App’lt, v. Lansing W. Connell, Resp’t.

      (Supreme Court, General Term, Fourth Department,

      Filed May 4, 1895.)

    1. Corporations — Foreign—Right to sub.
    A foreign corporation, doing business in this state at the time of the enactment of chap. 587 of 1892, is authorized to continue doing business without a certificate until December 31, 1892, and after that day it.may sue on contracts previously made though it had not obtained the certificate.
    2. Same — Stockholder—Liability.
    A stockholder is liable’for a corporate debt while the corporation is in default in filing the annual report, though filed before the debt became ■ due.
    Appeal from a judgment dismissing the complaint.

      H. E. Miller, for app’lt; Charles H. Peck, for resp’t.
   Merwin, J.

This action is brought by a creditor of a stock corporation to enforce the liability of a director for failure to file an annual report, as required by section 30 of the stock corporation law (chapter 564 of the laws of 1890, as amended by chapter 688 of 1892). The rnain questions here are (1) whether the plaintiff itself, being a foreign corporation, has capacity to sue; and (2) whether the debt of the plaintiff is within the provision of the statute making the directors liable “for all the debts of the corporation then existing, and for all contracted before such report shall be made.”

The plaintiff, at the time of the transactions in question, was a foreign manufacturing stock corporation, organized several years before, under the laws of the state of Ehode Island. It was doing business within this state, and has not at any .time filed in the office of the secretary of state the proofs required by section 16 of the general corporation law (chapter 563 of 1890, as amended by chapter 687 of 1892), and procured the certificate required by section 15 of that act. The Syracuse Bamboo Furniture Company is a manufacturing stock corporation incorporated on the 19th August, 1891, under the provisions of the business corporation law (chapter 567 of 1890), and the defendant is, and has been since its incorporation, one of its directors. Its business was carried on first at Syracuse, and afterwards at Baldwiusville, in this state. On the 12th April, 1892, the plaintiff and the furniture company entered into a contract in writing by which the plaintiff agreed to supply to the factory of the furniture company, at Baldwinsville, a system of automatic fire extinguishers, for the price of $950, which the company agreed to pay. The plaintiff completed the contract on its part on or about July 14, 1892. On December 9, 1892, the "furniture company, for the price stated in the contract, gave to the plaintiff three notes, dated that day, for $300 each, and payable, respectively, in one, two, and three months from date, with interest, and the balance of the price was paid in cash. The first of these notes was paid at maturity, upon the second there was paid $103.20, and the balance of that and the third note has not been paid. On the.17th June, 1893, the plaintiff recovered a judgment against the furniture company for the balance due on the notes. It was found by the special term that the notes were made and accepted in full payment and settlement of the plaintiff’s claim, and that it was so agreed between the parties. The furniture company did not in January, 1892, file any annual report, as required by section 30 of the stock corporation law ; and it filed none until January 31, 1893, at which date it filed its report in the office of the clerk of Onondaga county, and on the 1st February a duplicate was filed in the office of the secretary of state. This report was verified by J. 0. Kenyon, who deposed that he was the vice-president and treasurer of the company.

Section 15 of the general corporation law is as follows :

“ Sec. 15. Certificate of Authority of a Foreign Corporation. No foreign stock corporation other than a monied corporation, shall do business in this state without having first procured from the secretary of state a certificate that it has complied with all the requirements of law to authorize it to do business in this state, and that the business of the corporation to be carried on in this state is such as may be lawfully carried on by a corporation incorporated under the laws of this state for such or similar business, or, if more than one kind of business, by two or more corporations so incorporated for such kinds of business respectively. The secretary of state shall deliver such certificate to every such corporation so complying with the requirements of law. No such corporation now doing business in this state shall do business herein after December 81, 1892, without having procured such certificate from the secretary of state, but any lawful contract previously made by the corporation may be performed and enforced within the state subsequent to such date. No foreign stock corporation doing business in this state without such certificate shall maintain any action in this state upon any contract made by it in this state until it shall have procured such certificate. ”

Section 16 states what proof shall be filed with the secretary of state before he shall grant the certificate.

These two sections were not in the law of 1890. The act of 1892 (chapter 687) was passed May 18, 1892, and took effect twenty days after its passage, except as therein otherwise provided. So that when the contract was made between the plaintiff and the furniture company, the capacity of the plaintiff to sue was the same as that of a domestic corporation. Code Civ. Proc. § 1779 ; Demurest v. Flack, 128 N. Y. 205 ; 40 St. Rep. 883. It was doing business in the state when the act of 1892 took effect, and it is expressly provided, in section 15, that:

“No such corporation now doing business in this state shall do business herein after December 31,1892, without having procured such certificate from the secretary of state, but any lawful contract previously made by the corporation may be performed and enforced within the state subsequent to such date.”

This, in effect, provided that a corporation in the situation of the plaintiff had a right to go on with its business in the ordinary way, without a certificate, up to and including December 31, 1892, and after that date perform and enforce any lawful contracts previously made, but that if, after that date, it desired to do business beyond the performance and enforcement of previous contracts, it must have a certificate. The last clause of the section was not intended to change these provisions, but was applicable to cases where corporations were doing business in defiance of the law, and it provided that contracts made by them when so acting could not be enforced until the certificate was procured. See White, Corp. Law, 21. This action of the plaintiff is not, strictly speaking, upon any contract made by it. Stokes v. Stickney. 96 N. Y. 323; Carr v. Rischer, 119 id. 117; 28 St. Rep. 260, but assuming it is, in substance, an action to enforce its contract with the furniture company, the inhibition in the last clause of the section does not, we think, apply. The plaintiff had a right to carry on its business when the contract and notes were made, and it was not the design of the statute to interfere with the ordinary remedies in such a case. We think, therefore, the plaintiff had capacity to sue.

The defendant further claims that he is not liable because the notes that represent the balance of the debt due to plaintiff were not either of them due until after the annual report was filed, on January 31, 1893. The plaintiff says the debt was contracted before, and that was enough. The position of the defendant is based on the idea that the debt for the contract price of the articles supplied by plaintiff, which had been due for some time before the giving of the notes, was satisfied by the notes, so that a liability against defendant cannot be predicated on the original debt. It is not entirely clear that the evidence authorizes a finding that the notes were received in satisfaction of the prior debt. Carroll v. Sweet. 128 N. Y. 21; 37 St. Rep. 868, but assume that they were. Then we have the ease of a debt contracted on December 9, 1892, but not due until after January, 1893. Is the defendant relieved of liability because the debt was not due during the existence of the default in filing the report? Jones v. Barlow, 62 N. Y. 202, is cited on both sides. That was an action to enforce the liability of a trustee under the general manufacturing act (chapter 40, § 12, Laws 1848), by reason of failure to file an annual report in January, 1871. A report was filed in January, 1872. See Jones v. Barlow, 38 N. Y. Supr. Ct. 143. The plaintiff in 1871 sold goods to the corporation, for which in December, 1871, the corporation gave its notes, on time. On 6th June, 1872, these notes were taken up, and ten new ones given, severally maturing, the first one month from date, and the others, successively, at intervals of one month. The action was commenced February 7, 1873, and at that time three of the notes were not due. The court below sustained a recovery for the full amount of all the notes, but the court of appeals held that the recovery must be limited to the amount due when the suit was commenced. It was not decided that a debt must become or be due during the existence' of the default in filing the report, in order to be recoverable. On the contrary, Judge Allen, at page 206, says:

“It would not be contended by any one that, for merchandise sold the corporation upon an agreed credit, while the trustees are in default for not making the statutory report, an action would lie against the trustees at once, and before the expiration of the term of credit. The law does not vary the contract of the parties, or absolve either from its performance, or an observance of its terms. In such cases there would be a liability, but it would be dormant, and not constitute a cause of action until the debt shall become due.”

The case of Arms Co. v. Barlow, 68 N. Y. 34, does not help the defendant. That was the case of an executory contract for the delivery of a certain quantity of locks; and it was not shown that, during the existence of the default in filing the report, there had been any such performance as created an obligation to pay either presently or in the future. It seems to have been conceded that if there had been a performance an indebtedness would have existed, within the statute, although the corporation had a term of credit for the price. In Vernon v. Palmer, 48 N. Y. Supr. Ct. 231, it is said that the true doctrine is that a debt is contracted when, in consideration of value" received by the corporation, a payment is to be made, no matter whether at once, or at a future period. See, also, Carr v. Rischer, 50 Hun, 148 ; 19 St. Rep. 718. We are of the opinion that the debt to plaintiff is within the statute. It was contracted during the existence of the default, and the fact that the notes of December, 1892, were not due when the report of 1893 was filed does not relieve the defendant. The debt was contracted, and so within the statute, though not due. All the notes became due long before the present action was commenced. An extension of time by the corporation would not discharge the defendant, though it would postpone the remedy. Jones v. Barlow, supra. The obtaining of a judgment by the plaintiff against the corporation did not affect the defendant’s liability, as the debt was not paid. Deming v. Puleston, 35 N. Y. Supr. Ct. 309, 314; affirmed in 55 N. Y. 655. These considerations lead to the conclusion that the complaint was improperly dismissed.

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

All concur.


text:
    In the Matter of the Application for the Voluntary Dissolution of the Eureka Mower Company.

      (Supreme Court, General Term, Fourth Department,

      Filed May 4, 1895.)

    Fixtures — Contract.
    Where a contract for the sale of real estate includes “ such machinery and office furniture as is mentioned in the schedule hereunto attached,!’ and the schedule enumerated various articles of machinery which were attached to the premises in such manner that they could be detached, similar articles not enumerated in the schedule, are personal property and do not pass with the realty.
    Appeal from an order, adjudging that certain property is personal property.

      Riley, Robinson & Love, for app’lt; Cookingham & Sherman, for resp’t.
   Merwin, J.

In February, 1893, the respondent, Simmons, was appointed receiver of the Eureka Mower Company, a domestic corporation organized for the purpose of manufacturing and selling mowing machines and other agricultural tool's. At this time the company was in possession of about seven acres of land, on which were located brick buildings built by the company i.n which to conduct its business; and it had there manufactured mowing machines, and also spring tooth harrows and cultivators. The receiver, after his appointment, continued, to some extent, to carry on the business, for the purpose of closing up the affairs of the company. On the 6th of September, 1893, by authority of the court, the receiver entered into a written contract with Edwin H. Risley; leasing to him for one yéar the real estate and certain machinery, and giving him the right to purchase. the same on certain terms, provided he gave notice in writing on or before July 1, 1894, of his desire and determination to do so. This option of purchase was in due time accepted by the Standard Harrow Company, the assignee of Risley, and for whose benefit, apparently, Mr. Risley acted in the transaction. In carrying out this contract, a controversy arose as to whether certain articles on the premises were real estate, and so passed under the contract, or whether they were personal property, and not included in the contract of sale. Thereupon the parties agreed upon a statement of the facts, and .the receiver, upon notice, applied to the court for instructions and fora determination of the questions involved; each party stipulating to abide by the decision of the court, without prejudice to the right of appeal. After hearing both parties’, the order appealed from was made. In the contract of September 6, 1893, the property leased is described as follows :

“The manufacturing plant known as the 1 Eureka Mower Company’s Property,’ consisting of about seven (7) acres of land, on which are erected an office building, foundry, machine shops, storehouse, lumber sheds, scales, and other appliances for conducting a manufacturing business, including only such machinery and office furniture as is mentioned in a schedule hereunto attached, marked 1 A,’ with all the appurtenances, rights, privileges, and benefits, railroad tracks, water rights, and other privileges incident to said real estate.”

In giving the option of purchase, the property is described as “the property embraced in the lease.” In Schedule A, annexed to the contract, there was: First, under the head of “ Office Furniture,” a list of such articles ; then, under the head of “ Machinery, etc., in Wood Shop,” a number of articles were specified, including “ one grindstone, with iron frame," several circular saws and tables, a planer, a lathe, a section fan and its air pipes, work benches and iron vises on them, and “ all countershafts and bolts used for driving all the foregoing machinery; ” then, under the head of “Machinery and Tools in Blacksmith Shop,” several articles were named, among others “ one Merrill & Bros, drop hammer,” a spring hammer, all countershafts and bolts used for driving them, “ one fan blower, with its countershaft, belting, and air-pipes ; ” and lastly, under the head of “ machinery, piping, shafting,” etc., there was entered “all piping, line shafting and line belting, boilers, engines, heaters, steam pumps, all tools and appliances in the engine and boiler rooms.” On the same day that this contract was made, the receiver took bach from Risley a lease for a year of “all that part of the Eureka Mower Company plant, in Utica, described as follows: The north one-half of the machine shop, and the rooms known as the milling, grinding, and chipping rooms, on the north front of said plant," the foundry, sand house, and pattern house, the cupola house, core room, and the iron and coke sheds, the easterly lumber shed,” — and a certain portion of the office and furniture therein. On the 2d January, 1894, the receiver gave to Hart & Crouse a lease from January 1, to September 1, 1894, of “ all that of the Eureka Mower Com-pony plant, in Utica, New York, which is described as follows 2 The entire foundry, the sand house, pattern house, core room, cupola house, coal and coke houses, the milling and grinding rooms, and all the machinery therein,” — excepting certain things not important here. Prior' to June 23, 1894, Eislev assigned to the Standard Harrow Company the contract and option of September 6, 1893, and that company also acquired of Hart & Crouse their lease for the months of July and August, 1894, and entered into possession thereunder. The articles in controversy are a cupola, a blower, seven tumbling barrels, two grindstones, a power press, a drop hammer, two pattern maker’s work benches {one having an iron vise, and the other a wooden vise), and a quantity of hose and couplings. It is not claimed that any of these articles are mentioned in Schedule A, attached to the contract of September 6, 1893. That contract, by its terms, included “ only such machinery as was mentioned in the schedule. So that if the articles in question are to be deemed machinery, within the contemplation of the. parties, they did not pass. The appellant claims they were so attached or used that they formed part of the realty, and were not affected by the provision in the contract as to machinery.

Ordinarily, in determining whether a certain article is a fixture and a part of the realty, the purpose of the annexation and the intent with which it was made are the most important considerations. McRea v. Bank, 66 N. Y. 489. The intent is sometimes presumed, Tifft v. Horton, 53 N. Y. 382; Ewell, Fixt. 43, or it may be inferred from circumstances, McRea v. Bank, supra ; Voorhees v. McGinnis, 48 N. Y. 178. So that in the present case, although the intent with which the annexations were made is not specifically stated in the facts agreed upon, still the object and purpose of the annexation appear, and the surrounding circumstances ; and these facts are to be considered in ascertaining the intent of the annexation, so far as it may be material. When, however, there is an agreement on the subject between the parties, then the.intent of the parties is to be given effect, and the question becomes one of interpretation and.construction, determinable bv the general rules applicable to such cases. Ewell, Fixt. 307. In such cases the conduct of the parties is material, and if the language of the contract is indefinite or ambigious the practical interpretation of it by both parties is a consideration of importance. Woolsey v. Funke, 121 N. Y. 92 ; 30 St. Rep. 768. It is conceded that the most, if not all, of the articles in controversy were placed in the buildings by the Eureka Company for its use in its manufacturing business. It is also quite apparent that many articles so placed were by all parties, without question, considered personal property. Of the articles in question, the cupola, the blower, and the tumbling .barrels were used in connection with the foundry. The cupola was in the foundry building, and was used for melting iron to be used in making castings. It rested on a concrete foundation let into the ground, and extended upward through the floor and through the roof, and was covered with iron. It consisted-of an iron shell about fifty-six inches in diameter, lined in the inside with fire brick, and was supported in its vertical position by iron stops bolted to the floor and to the roof. The structure seems to have been called the “ Cupola House " in the sublease to the receiver. The blower in question was used in connection with the cupola, and was necessary to its operation. Ft was located on the second floor of the building, to which it was firmly attached by bolts, and it was connected with the interior of the cupola by a metallic pipe. Motion was imparted to the blower through a system of slialis, pulleys, and belts, which connected with the main line of shafting in the building. The countershafting was supported by hangers bolted to timbers connected with the frame work or works of the building. The Standard Harrow Company, upon taking possession under the lease assigned to it by Hart & Crouse, severed the blower from all connection with the cupola building, and at the termination of the lease the blower, together with its countershaft, pulleys, hangers, and halts, lay on the floor in the foundry building. Tumbling barrels are used in all iron-casting foundries to free the castings from sand and other roughness of surface. The barrel is mounted on shafts supported in bearings made of cast iron, which, in turn, are supported on a concrete foundation; the bearings being held in position by bolts, the heads of which are built into the concrete foundation, and the bolts pass through the base of the bearings, and are held in position by nuts. On one end of the bearings is a large cast-iron pulley, from which a belt runs to a countershaft, and this, by belt, is connected with the main line of shafting. One of the barrels in question was in the same room with the cupola, and the others were in a tumbling barrel room, and were to some extent, separated by wooden partitions. They were all supported in a similar way,'and were driven by belts running to countershafting and that, in turn, receiving power through belts from the main line. The two grindstones were located in the room adjoining than containing the tumbling barrels. The grindstone beds or walls were built of brick and mortar, and let into the ground, on the top of the walls there were bolted two timbers, one on each wall, and on these timbers the hangers for supporting the grindstone shafts were bolted. On the end of each grindstone shaft was a large cast-iron pulley connected by belt with the countershafts, and that, by belt, connected with the main line. On the 16th January, 1894, the receiver sold at public sale a large amount of property located in the said buildings, including the said grindstones, with the belts, pulleys, countershafts, and hangers therefor; and Eisley and the manager of the harrow company were present, and saw the same sold, and made no objection thereto, or any claim on the property. The power press and the drop hammer were in the machine shop. The press rested upon a large flat stone placed on a concrete foundation about four feet square, let into the ground a sufficient depth to support and steady the press in its work, the press being held in position by its own weight. The drop hammer was placed on a block of wood set in a vertical position, and let into the ground a number of feet. The base of the hammer was bolted to the block by bolts so to be held firmly in position. Both the press and the hammer were connected by pulleys and belts with the countershafting, and were operated by power derived in that way. They were located in that part of the building occupied by Risley and the harrow company, and on the 4th October, 1893, the har: row company rented them of the receiver for several months. The work benches and vises were for the use of pattern makers, and were in no way fastened to the buildings. During the term of the lease they were removed by the harrow company from the room1 they were in at the time of the lease to another. The hose was, at the date of the lease, distributed in different rooms, and was fitted to be attached to hydrants in the yard of the mower company, for use in case of fire, apd for any other purpose which it was suited for. It was provided for the -safety of the plant, and the couplings were arranged to connect -with the couplings on the hydrants. Neither the hose nor the couplings were special, but such as were in general use.

It is evident that all the articles in controversy, except cupola, that were attached to the buildings or grounds, could be removed without injury, so that each of such articles may be said to be, in itself, a complete machine, or a complete article of machinery, capable of being used in other places of like character. It is to be observed that in the schedule of machinery attached to the contract there are specified a fan blower and belting and a drop hammer. The failure to specify the similar articles in controversy would indicate an intention they should not be included. All line shafting and line belting are specified, but only the countershafts and belts then used fqr driving the machinery therein specified. The inference would be that the countershafting and belting, in connection with articles not specified, were not intended tobe included, as all the countershafting was attached to the buildings in substantially the same form. The conduct of the parties in regard to the sale of the grindstones and the renting of the power press and drop hammer, although the latter were at the time in possession of Risley and the harrow company, is suggestive of an understanding at the time that they were not covered by the original contract. The purpose of the lease in the contract of September 6,1893, was to enable1 the lessee or the harrow company to manufacture harrows. For that purpose they had no use for the articles specially connected with the foundry, and so it may be said that for that reason they were not mentioned in the schedule of machinery, or intended to be included in the contract of purchase. The tumbling barrels were such as were used in similar foundries, and if the countershafts used in connection with them were not intended to.be covered by the contract, as they were not therein specified, it may also be said that the barrels were not intended to .be covered. They were certainly no more a part of the realty than the line shafting, and the specification of the latter gives point to the failure to specify the other. If there be many things of the same class or kind, the expression of one or more of them in a conveyance implies the exclusion of all not expressed, although the law would have implied all if none had been enumerated. 2 Pars. Cont. (8th ed.) 516; Hare v. Horton, 5 Barn. & Adol. 715. The foregoing considerations lead to the conclusion that the cupola should be deemed to be a part oí the realty, but that all other articles in controversy should be deemed machinery, within contemplation of the parties, and, not being specified in the schedule attached to the contract, were not intended to be covered by its provisions. The order appealed from should therefore be modified by declaring that cupola is a part of the realty. In other respects the order should be affirmed.

Order modified, stated in the opinion, and as modified affirmed, without costs of appeal to either party.

All concur.