author: Brady, J.:

text:
    In the Matter of the Receivership of the GUARDIAN SAVINGS INSTITUTION, in the City of New York.

      Berpori of referee, on passing accounts of receiver — how reviewed — Bule 89.
    Under the old chancery practice, the report of a referee upon the passage of a receiver’s accounts would only he reviewed upon petition in an independent proceeding. This practice was, however, abrogated by the adoption in 1858 of rule 82, under which, and rule 89 of 1871 and 1874, exceptions to such a report are to be filed within eight days after service of the notice of filing of the report, and the same may be then brought to a hearing at any Special Term thereafter, on notice by any party interested therein.
    Appeal from an order dismissing exceptions filed to the report of a referee, made on passing the accounts of a receiver.

      John T. MeGown, for the appellants.

      Develin c& Miller, for the respondent.
   Brady, J.:

The court at Special Term made an order of reference to pass the accounts of the receiver. Exceptions were duly filed to the report of the referee, but when its confirmation was moved they were rejected as improperly before the court. The appeal is from this result. There can be no doubt that under the former practice in equity no exceptions in any form to -the report of a referee, on passing the accounts of a receiver, could be- presented for review prior to its confirmation, and which took place when it was filed. The principle, however, upon which items were allowed, or the referee had proceeded, were subject to review by petition, which was an independent proceeding. (Brower v. Brower, 2 Edw. Ch., 621, and cases cited; Palmer v. Palmer, 13 How. Pr., 363; Shewell v. Jones, 1 Cond. Eng. Ch. R., 400; S. C., 2 Sim. & Stu., 170; 2 Smith’s Oh. Pr., 388.) This practice was maintained, notwithstanding the Code, until the year 1858, upon the ground that no provision having been made regarding such a proceeding, the rules applicable were those of the courts in effect when the Code was enacted. (Palmer v. Palmer, supra.) This was undoubtedly the correct view of the subject until, as already suggested, the year 1858, when a change took place. The rules adopted on fourth August in that year, to take effect on the first October following, added to rule 22, changing its number to 32, two paragraphs, the last of which is as follows: “ In references other than for the trial of the issues in an action, upon the coining in of the report of the referee, the same shall be filed, and a note of the day of the filing shall be entered by the clerk in the proper book, under the title of the cause or proceeding, and the said report shall become absolute and stand as in all things confirmed, unless exceptions thereto are filed and served within eight days of the service of notice of the filing of the same. If exceptions are filed and served within such time, the same may be brought to a hearing at any Special Term thereafter on the notice of any party interested therein.” In November, 1858, this,rule was construed by the justices of this court in this district, and it was declared that all reports of referees, other than those made upon issues tried, must be filed as prescribed by the rule ; and that where there was an appearance they could not be confirmed until eight days after the service of notice of filing the same, although the parties who appeared might, by consent in writing, waive the delay of eight days, and have the report confirmed at once. And it was also declared that where there was no appearance for the defendant, the report might be presented to the court at once for final order of confirmation, and therefore without waiting the eight days. (Somers v. Milliken [not reported], 10th Nov., 1858, per INGeaham, J.; see Yoorhees’ Code [6th ed.], 1859, p. 616; id. [10th ed.], 1810, p. 707.) This rule remained unchanged until 1870 (December twentieth and twenty-first), when rules were adopted to take effect on the 1st February, 1871. It was then changed in number, becoming thirty-nine instead of remaining thirty-two, and by adding the words “ or for computing the amount due in foreclosure cases the testimony of the witnesses shall be signed by them ” after the words: In references other than for the trial of the issues in an action,” and by requiring that the report of the referee should be filed with the testimony in such other references. The effect of this rule, still continued, was to abrogate the practice which had theretofore existed in relation to reports wbieb did not require confirmation and embraced, therefore, the report of a referee on passing the accounts of a receiver. The rule applies to all cases, save those expressly excepted, in which the report under consideration is not included, and this seems to have been understood or acquiesced in as the existing practice, where notice was served herein, that the report would be presented for confirmation. The learned counsel for the respondent did not suppose that the rule of this court had changed the former practice. His attention may not have been called to the alteration in the rule to which reference has been made, and he has therefore assumed that the rule, as it now exists, was the same in form as in the year 1856, when Palmer v. Palmer (supra) was decided. For these reasons it is quite apparent that the equity practice existing prior to 1858, in relation to reports of referees on passing the accounts of receivers, no longer maintains, and that the court, in declining to hear the exceptions, acted erroneously. It is equally clear that the order, founded upon that incident or ruling, must be reversed. Ordered accordingly, with ten dollars costs and the disbursements of this appeal.

Davis, P. J., and DaNiels, J., concurred.

Order reversed, with ten dollars costs and disbursements.


source: Caselaw Access Project

author: Beady, J.: Davis, P. J.: DaNiels, J.

license: Public Domain

text:
    THOMAS M. TYNG, Plaintiff, v. LEMUEL B. CLARKE, Defendant.

      Judgment in favor of corporation — operates as an estoppel, in action against its trustees because of failure to file annual report.

    This action, was brought to charge the defendant, as a trustee of a corporation, for a debt due therefrom, on the ground that no report had been filed as required by law. Upon the trial the defendant gave in evidence against plaintiff’s objection and exception, a judgment roll in an action by the plaintiff against the corporation to recover the same debt, in which a judgment was rendered for the corporation upon the merits. Held, that the judgment roll was properly received, and that it was conclusive against the plaintiff’s right to recover in this action, (Daniels, J., dissenting.)

      MotioN for a new trial, on exceptions ordered to be beard in the first instance at the General Term, after an order dismissing the complaint herein.
    This action was brought to charge the defendant, as a trustee of the United States Submarine and Torpedo Boat Company, with individual responsibility for a debt of that company, on the ground that said company did not, within twenty days from the 1st day of January, 1870 and 1871, make, file and publish the report required to be so made, filed and published by section 12 of the general manufacturing act of 1848, under which the said company was organized.
    The answer concedes all the facts except the existence of the indebtedness of the company.
    On the trial of the action at Circuit, after the counsel for the plaintiff had opened to the jury, and before he could introduce any evidence to prove his case, the counsel for the defendant offered in evidence, on the part of the defendant, a judgment roll in an action in which this plaintiff sued the said company for the. same debt as is involved in this suit, and in which the complaint was dismissed with costs.
    Counsel for the plaintiff objected to the admission in evidence of the judgment roll on the following grounds:
    First. That it was not an adjudication between the same parties, and therefore incompetent as an estoppel against the plaintiff in the present action.
    Second. That it was not offered at the proper time, it being an affirmative defense set up in the answer; and that the plaintiff was entitled to proceed with his evidence and develop his entire case, before the defendant was at liberty to offer any evidence.
    Third. That it was not such a judgment upon the merits of the issues involved, as would be a bar to another action for the same debt between the same parties.
    Counsel for the defendant then moved upon the judgment roll, thus -admitted, to dismiss the complaint, which motion was granted, and the plaintiff duly excepted.
    The exceptions were ordered to be heard at the General Term in the first instance, and the entry of judgment was in the mean time suspended.

      Thomas M. Tyng, plaintiff, in person.
    The judgment roll was not admissible as evidence in this action, in favor of the defendant Clarke, because it was not an adjudication between the same parties or their privies. {Goddcvrd v. Benson, 15 Abb., 191; Atlcmtio Dock Go. v. The Ma/yor, 53 N. Y., 61; Booth v. Powers, 56 id., 22; Stowell v. Ghamberlavn, 60 id., 272; Kent v. Kent, 62 id., 560, 566; Miller v. White, 50 id., 132.) In all actions at law the party holding the affirmative of the issue has the absolute vested -right to open and close the action. "While it is somewhat within the discretion of the court to control the order of proof, it is not within its discretion to tolerate such an irruption upon the plaintiff’s rights as was here permitted. (Millwrd v. Thorn, 56 N. Y., 402; Lmdsley v. Petroleum Go., 10 Abb. [N.- S.], 107.) The former adjudication was simply a dismissal of the complaint, and therefore would not have been an estoppel in a subsequent suit against the company for the same cause of action. ( Wheeler v. Buckman, 51 N. Y., 391.)

      Fithicm <& Clark, for the defendant.
    The judgment is final and a bar to this suit. (Dexter v. Broat, 16 Barb., 337; Embury v. Gonnor, 3 Comst., 512; Burr v. Bigler, 16 Abb., 177; Bruce v. Howes, 2 Barb., 586, 596, 597.) It is conclusive in this suit on the plaintiff as to all the facts adjudged. (Graig v. Ward, 3 Abb. [N. S.], 235; Doty v. Brown, 4 Comst., 71; Oastle v. Noyes, 14 N. Y., 329, 331; Dema/rest v. Darg, 32 id., 281; Bouchaud v. Dias, 3 Den., 238; O'Brien v. Browning, 49 How., 109 ; Bush v. Knox, 2 Hun, 576.) The cause of action in this suit is different from the .cause of action in the suit against the company, but the determination in that suit is conclusive because the same question was determined there on which this suit depends. (Doty v. Brown, 4 Comst., 75; Goddard v. Benson, 15 Abb., 193.) The matter which the plaintiff now attempts to agitate is res adjudicata. (The People v. Stephens, Gale et al., N. Y. Weekly Digest, July 20,1876, p. 518; Lawrence v. Hunt, 10 Wend., 81; Bates v. Stanton, 1 Duer, 79 ; Green v. Glarke, 12 N. Y., 343; Thomas v. Hubbell, 18 Barb., 9 ; Banjmond v. Howla/nd, 12 Wend., 176; Boynton v. Willard, 10 Pick., 166, 168; Dexter v. Broat, 16 Barb:, 337.)
   Beady, J.:

The plaintiff failed in bis action against the company, and the judgment establishes, until reversed, that he has no claim against it arising out of the transactions litigated. The judgment is therefore conclusive against him. Assuming the liability of the defendant as a trustee, he is responsible only for the debts of the company. The plaintiff sues to recover from the defendant his claim against the company, and the answer is: “You have none; the tribunal to which you appealed 1ms so declared.” If the opposite of this proposition be adopted, then the plaintiff has two chances of success on different actions, for the same claims, and in which the results might be conflicting.

It may well be, as shown by Justice Daniels, that the plaintiff was not bound to commence his action against the company before prosecuting his claim against the defendant; but having done so, he cannot iguore the proceeding. The remedy he sought has been denied by a court having jurisdiction to pass upon the claim presented, and the judgment pronounced is conclusive against him as long as it remained.

The judgment should be affirmed.

Davis, P. J.:

I concur with Beady, J. The plaintiff in this case could not have two remedies; that is to say, he could not recover of the corporation the full amount of his claim, and recover the same of the defendants also. The moment his claim against the corporation should be extinguished by payment or otherwise, his right to prosecute this action would cease. -A mere recovery against the corporation without satisfaction would not have that effect; but if a recovery with satisfaction should be had against the present defendant, would not the latter, by equitable subrogation, be entitled to the demand against the corporation and to participate in its assets; at least after creditors were fully satisfied ? How then, can plaintiff be permitted to recover a claim which has no existence as between himself and the corporation ?

That is this case. The plaintiff can assert no claim against the company, nor transfer any to another. The highest evidence against the defendant that he has no claim upon the company, is tbe record of judgment rendered against bim in bis action against tbe company.

He is bound to establish that at the time of tbe commencement of this action tbe corporation was indebted to bim for tbe sum now demanded. How can be do that in the face of tbe judgment record, which adjudicates finally and conclusively against bim that, there is no such indebtedness ?

It is true the defendant was not a party to tbe record in that action. But he was a, stockholder, and so far as tbe result was to affect his personal liability under tbe statute, he ought to be deemed so far a party in interest, that tbe adjudication in that suit that no debt existed against the company, should be conclusive in his favor, in any subsequent action which might be brought for the same indebtedness. There could, in such a result, be no collusion between the plaintiff and the corporation to the disadvantage of the former. It does not lie in the mouth of the plaintiff to say that the result in the action against the corporation may have been collu-sively obtained; and that fact distinguishes this case from those which hold that a recovery in the suit against the company does not establish the indebtedness against a stockholder subsequently sued.

I think the record was properly admitted in evidence against the plaintiff, and was conclusive; and I concur that the judgment should be affirmed.

DaNiels, J.

(dissenting):

This action was instituted to recover against the defendant, as trustee of the Hnited States Submarine and Torpedo Boat Company, the amount of a debt owing from the company to the plaintiff, which was alleged to have accrued in March, 1866. The company was incorporated under the act providing for the formation of manufacturing and other corporations; and the defendant was prosecuted, as one of the trustees, because no report was made of its capital, the proportion paid in, and the amount of its existing debts, either in January, 1870, or January, 1871, as the law required it should be. (2 R. S. [5th ed.], 661, § 35, amended by chap. 657, Laws of 1871, § 3.) When the trial was brought on, the defendant was permitted to show that the plaintiff had previously prosecuted an action for the same demand against the corporation itself, and that judgment bad been rendered against him and in favor of the corporation, on the merits of the case. The court held that judgment to be a bar to the present suit, and dismissed the plaintiff’s complaint. Whether that was a lawful disposition of the case is the only point now required to be considered and decided by this court.

The statute did not require the prosecution of an action and the recovery of a judgment against the corporation before a suit for this omission could be maintained against its trustees, but it imposed upon them an absolute liability for the debts of the corporation, then existing or afterwards contracted, before the making of such report. The report was required to be made, published and filed in the office of the' clerk of the county in which the business of the company was at the time carried on, and for a default in that respect the trustees were declared liable for these debts. As no suit was first required to be maintained for the recovery of such a debt against the corporation before the trustee could properly be prosecuted for its payment, a judgment against the corporation would have been no evidence against him of its liability. (Miller v. White, 50 N. Y., 137.) The existence of the debt, and the liability of the corporation upon it, would be entirely open to controversy in an action upon it against a trustee, even if a judgment upon it had been first recovered against that body. He would be in no respect bound by such a judgment, for the reason that he was in no legal sense a party to the proceeding. As to him, the judgment would be wholly inoperative. It would be binding only upon the parties to the action, and those standing in privity with them, or allowed by one of them to prosecute or defend the action in his name, or who had, in effect, stipulated to be answerable for the result of the litigation. And the defendant sustained no such relation to the judgment. In Lawrence v. Hunt (10 Wend., 81), it was held that the general rule undoubtedly is, that the verdict or judgment must be between the same parties, or those claiming under them, and that a verdict or judgment is not binding upon a third person who has not had an opportunity to make a defense, or to appeal from the judgment, if erroneous. Neither can a stranger give in evidence the verdict or judgment against a party to the record, because had such stranger been a party to the former trial the evidence and result might have been entirely different.” (Id., 83; Hasbrouck v. Lounsbury, 26 N. Y., 598; Slauson v. Englehart, 34 Barb., 198.)

In Lansing v. Montgomery (2 Johns., 382), one joint trespasser relied upon a judgment in favor of another joint trespasser, as a defense to the action afterwards prosecuted against himself, and it was held to be no bar, for the reason that “ one who is not bound by cannot take advantage of an estoppel.” (Id., 383.) That case was analogous to the present one, for the liability of the corporation and of the trustee, was of a distinct and several nature, as much as that of joint tort-feasors. (Lawrence v. Campbell, 32 N. Y., 455.) Substantially the same rule was acted upon in Castle v. Brown (14 id., 329), where the judgment was only held binding upon the master, because he actually defended the action in which it' was recovered in the name of his servant. It was there declared that, upon the facts shown, the parties are to be regarded as the same; it is by no means true that in order to constitute an estoppel by judgment the parties on the record must be the same. The term has a broader meaning; it includes the real and substantial parties, who, although not upon the record, had a right to control the proceedings and appeal from the judgment.” (Id., 335.) In the present case the defendant could have done neither, in the action prosecuted by the plaintiff against the corporation. Under the term parties, in this connection, the law includes all who are directly interested in the subject-matter, and had a right to make defenses, or to control the proceedings and to appeal from the judgment; this right involves also the right to adduce testimony and to cross-examine the witnesses.” “ Persons not having these rights are regarded as strangers to the cause.” (1 Greenl. on Ev. [7th ed.], 654, § 523.) The term parties includes not merely those who are named as such in the action, but it extends to all who stand in privity with them, and that comprehends all who afterwards derive title to the subject-matter of the litigation, from or under one of the parties to the record (id., § 189), but it will not affect, or include an interest acquired previous to the commencement of the action. (Campbell v. Hall, 16 N. Y., 575.) Within this principle, there w^s no such privity between the defendant and the corporation as would affect him by a judgment against the latter, and, consequently, he cannot, on any such relation, avail himself of its protection. (Lawrence v. Campbell, 32 N. Y., 455.)

In Douglass v. Howland (24 Wend., 35), it was held by CoweN, J., that “the verdict is not only evidence' against the immediate parties, but against all claiming under them; which very nearly expresses the meaning of the word ‘privy,’ when used to signify those persons off the record who may be affected to the same extent as if they were parties. It means any one who takes the subject-matter of litigation after the suit is determined, or, in some cases, while it is pending. He is either a privy in blood— as an heir on whom the estate in litigation descends, a privy in estate, as one who takes by conveyance, or a privy in law, as one who takes a right of dower. In all these cases the reason is obvious, the heir, purchaser, etc., always comes in subject to any act or default of the predecessor, by which the title may have been affected. But, subject to this exception, the law is extremely jealous of the rights of all who are not actual parties, even though they may appear and be made so.” (Id., 53.) And neither Embury v. Conner (3 Comst., 512), nor Bush v. Knox (2 Hun, 576), or either of the other cases relied upon in support of the ruling made at the Circuit, is in conflict with this principle or sustains the defense of the defendants.

As the defendant was not in legal privity with the corporation, he was not, under the principle applicable to that relation, bound by the judgment. He had in no way stipulated, by any conventional arrangement, for his conclusion by such a result, and did not make himself a constructive party to the action; neither did he sustain the relation of a bailor or bailee to it. Consequently, as he could not avail himself of the judgment, if it had been in his favor, because of either of these relations to the litigation resulting in it, the principles applicable to them does not apply to or sanction this defense. (Thomas v. Hubbell, 15 N. Y., 405; Bridgeport Fire Ins. Co. v. Wilson, 34 id., 275; Konitsky v. Meyer, 49 id., 571; Green v. Clarke, 2 Kernan, 343.) As there was no legal principle under which the defendant would have been bound by the judgment if it had been against the corporation, it follows he cannot avail himself of it by way of defense because it was adverse to the plaintiff. For that reason his liability is still an open question, in no way affected or impaired by that adjudication. (Jones v. Barlow, 38 Superior C. R., 142; Deming v. Puleston, 35 id., 309; affirmed, 55 N. Y., 655.)

The verdict should be set aside and a new trial ordered, with costs to abide the event.

Judgment affirmed.


author: Beady, J.:

text:
    JOHN HAYES, Appellant, v. MARCENA M. DICKINSON, Respondent.

      Foreclosure of mortgage — Heaevo&r of rents and profits — Assignee in bankruptcy of mortgagor — right of, to money in hands of receiver.

    The complaint and lis pendens in this action, brought to foreclose a mortgage, were filed September fourth, and one defendant served September sixth. On the eighth the mortgagor filed a petition to be, and on the twenty-third he was declared a bankrupt. On the eleventh the mortgagor was served with a copy of the complaint and notice of motion for appointment of a receiver to collect the rents and profits, pendente lite. On October first a receiver was appointed. The premises having been sold under a decree of foreclosure on the thirteenth of December, and a deficiency having arisen thereon, the plaintiff applied on the twenty-third of March to have the accounts of the receiver passed. TJpon the hearing the court directed the funds in the hands of the receiver, being the amount of the rents collected by him prior to the sale, to be paid over to the assignee in bankruptcy. Held, that this was error; that the assignee took only such interest in the premises as the bankrupt had, and that such interest was subject to the equity existing in favor of the plaintiff to have the receiver appointed.
    Appeal from an order directing tbe rents of mortgaged premises in the hands of a receiver, to be paid to the assignee in bankruptcy of the mortgagor.
    This action was brought to foreclose a mortgage on leasehold property in the city of New York, owned by the defendant Dickinson.
    On the 4th September, 1875, the complaint and Us pendens were filed with the clerk of New York county, and on the 6th September, 1875, one of the defendants was personally served with the summons and a copy of the complaint.

      On the 8th September, 1875, defendant Dickinson filed bis petition in bankruptcy in the District Court of the United States for the southern district of New York, and was thereafter adjudged a bankrupt. An assignee of his assets was duly appointed, and an assignment to such assignee of all the property and estate of the bankrupt was made by the register in bankruptcy in November following.
    On the 11th September, 1875, the defendant Dickinson was personally served with the summons and a copy of the complaint herein, and also with papers and notice of motion for the appointment of a receiver of the said premises and of the rents and profits thereof.
    On 1st October, 1875, an order was entered appointing John W. McGuire such receiver, who immediately filed the necessary bond, duly qualified and entered into possession of said premises, and thereafter collected the rents thereof until the sale under decree in the action.
    On 13th December, 1875, a judgment of this court for foreclosure and sale of said premises was regularly entered, the premises wei’e sold and upon report of the sale a judgment for deficiency was entered against the defendant Dickinson for $5,001.72.
    On 23d March, 1876, on application of the plaintiff on notice, an order was entered appointing a referee to pass the receiver’s accounts. The referee made his report, and thereafter the plaintiff moved, on notice to all parties interested, that said report be confirmed and the balance of rents remaining in the receiver’s hands be paid to the plaintiff, in reduction of his judgment for deficiency. The assignee in bankruptcy appeared on the motion and claimed the money as a part of the assets of the bankrupt. After hearing an order was made confirming such report, but denying the application for payment of the moneys to plaintiff and ordering the payment of the balance, $343.36, to the assignee in bankruptcy.
    From that order (except so much as confirmed the referee’s report) the plaintiff has appealed.

      Geo. E. Horne, for the appellant and plaintiff.

      John O. T. Smidt, for the respondent’s assignee in bankruptcy.
   Beady, J.:

This action was brought to foreclose a mortgage. On the 14th September, 1875, the complaint and Us pendens were filed. On the sixth September one of the defendants was served with the summons and complaint, but Dickinson, the mortgagor, was not served with them until the eleventh September. On the eighth September, and therefore prior to such service, he presented his petition in bankruptcy and on the twenty-third September was adjudged a bankrupt. On the twenty-ninth September an application was made herein for the appointment of a receiver of the rents and profits of the mortgaged premises, on the grounds that upon the sale thereof they would not bring enough to pay the debt due and the existing liens and that the mortgagor was insolvent. The affidavit containing these statements was verified on the ninth September. On the first October an order was entered appointing a receiver. On the 23d March, 1876, an order was duly entered appointing a referee to pass the receiver’s accounts, and on the coming in of his report the plaintiff moved, on proper notice to all the parties, for its confirmation, and that the balance of rents remaining in the receiver’s hands should be paid to him. The assignee in bankruptcy appeared on the motion and claimed such balance as a part of the assets of the bankrupt. The result of the motion was the confirmation of the report, and a direction that the balance should be paid to the assignee and not to the plaintiff. The plaintiff appeals from such direction. "Was the plaintiff entitled to the money ? This is the question presented for our consideration. When the plaintiff commenced this action the necessary elements existed, which authorized the application for a receiver and entitled him to such relief. The mortgaged premises were not sufficient to pay the debts and liens, and the mortgagor was insolvent. An equity consequently intervened, and the proceedings to secure it were inaugurated on the ninth September, when the affidavit mentioned was made, and therefore before the defendant was adjudged a bankrupt. It is settled as a part of our system of remedies that a receiver must be appointed under circumstances such as disclosed, and the jurisdiction of this court over the whole subject was acquired when the action was commenced. (Sea Ins. Co. v. Stebbins, 8 Paige, 567; Rowell v. Ripley, 10 id., 47; Astor v. Turner, 11 id., 436; Clark v. Rinninger, 39 How. Pr., 363; Miller v. Bowles, 2 N. Y. S. C. [T. & C.], 568.) The trustee or assignee in bankruptcy takes the property subject to all legal and equitable claim of others. It is affected by the equities which can be urged against it, not tainted by fraud. (Coole v. Tullis, 18 Wall., 332; Kelly v. Scott, 49 N. Y., 595 and cases cited.) Aside from the equity which springs from the relations of mortgagor and mortgagee, and the design of the parties that the premises should be employed to pay the mortgage debt, there are equities in favor of the plaintiff herein. It was by his diligence that the rents were secured. The receiver appointed to collect and preserve them was appointed at his instance, and not by any act of the assignee, so far as we are advised by the papers, submitted. It is enough, however, that the assignee took whatever interest the bankrupt had in the premises, subject to the existing equities, to render it our duty to reverse the order made at Special Term. Such must be the effect of this appeal, and it is so ordered; but we think no costs should be granted against the assignee, who is in fact the respondent in this proceeding.

Davis, P. J., and Daniels, J., concurred.

Order reversed, without costs.


text:
    DAVID W. BRUCE and others, as Executors, Respondents, v. HENRIETTA P. GRISCOM and others, Appellants.

      Advances by faffter to child — how distinguished from loan.

    Where a father gave to one of his sons $5,000 to enable him to purchase an interest in a patent-right, and to secure the repayment of the same took hack a chattel mortgage upon the patent, executed by the son and the owner of the remaining interest therein', held, that it was a loan by the father to the son, and not an advancement within the meaning of the Revised Statutes.
    Appeal from an order providing for the distribution of the surplus moneys, arising from a sale under the foreclosure of a mortgage.

      Tbe surplus, amounting to about $9,000, arose upon the foreclosure of a mortgage, given by John H. Griscom, deceased. The claimants were his widow, three children, and a grandchild. On the part of the three children, it was claimed that an advance of $5,000 had been made to the father of the grandchild, and that this amount should be added to the surplus before distributing the same; while, on the part of the grandchild, it was claimed that said amount was loaned to its father, and that it could not be taken into account in this proceeding. The $5,000 was given by the father to his son to enable him to purchase an interest in a patent-right, and to secure the payment of the same he took back a chattel mortgage upon the patent, executed by the son and the owner of the remaining interest therein.

      Henry Pa/rsons and A. B. Tajpjpen, for the appellants.

      William A. Boyd, for the respondents. ■
   Beady, J.:

An advance made by an intestate to his child, or its value, must, under our statutes, be reckoned with that part of the surplus of the personal estate which shall remain to be distributed among the children, and in accordance with the provisions relating thereto. (2 R. S., 97, §§ 76, 77, 78; 1 R. S., 754, §§ 23, 24, 25.) Inconsiderable sums of money occasionally given to spend, or to defray expenses in traveling and the like, should be deemed to be given without a view to a portion or settlement in life, and not regarded as advancements. But a considerable sum of money given to a child, to enable him to start in business, should be deemed an advancement, unless proved to have been given “ without a view to a portion or settlement in life,” as contemplated by the statutes. (Supra; Sanford v. Sanford, 61 Barb., 293; McRae v. McRae, 3 Brad., 199; Terry v. Dayton, 31 Barb., 519.) The money received from the intestate by his son was to enable the latter to purchase a patent-right, and evidently for business purposes. The amount was considerable, and the two elements suggested concurring, a proper case in favor of the appellants is made out if the sum obtained from the intestate was in truth an advance, An advance is distinguished from a loan in many of the relations in life. When it intervenes between father and child, it has a very decided legal significance. The definition of an advancement’ is, then, “ a payment or appropriation of money, or a settlement of real estate made by a parent to or for a child, in advance or in anticipation of the distributive share to which such child would be entitled after the death of the parent; money paid in advance (see Burrill’s Law Dictionary); and therefore when money is given, resort must be had to the facts and circumstances attending and making the transaction in order to determine its character. (Hine v. Hine, 39 Barb., 507.) The rule that the intention of the parent, if demonstrable, must prevail, seems to be established, where there is nothing express upon the subject. (Jackson v. Matsdorf, 11 Johns., 91; Proseus v. McIntyre, 5 Barb., 424.) In Hiñe v. Hime (supra) a receipt was given by the son containing the words which money I am to account for without interest,” and it was said the very form of the voucher indicates not a loan, but an advance.” It was also said, “ there was no provision to pay or terms of payment fixed, and no security asked or given.” In this case, however, it appeal’s that the intestate took back from his son a mortgage for the payment of the money given and upon the property acquired by the nse of the money, namely, the interest in the patent purchased, and in which mortgage another person, namely, James J. Wright, united. The transaction having been thus consummated, it bears the impress of a loan, not an advancement. It was not a payment on account of the son’s portion of the estate, real or personal, and there was no evidence given or offered which tended to prove it to be so. The testimony offered and excluded was designed to prove that a loan was made and this was immaterial, inasmuch as it was conceded that a loan had been made. It could not be questioned on the evidence. It was not gainsaid. If a loan secured by a mortgage, even though the mortgage be worthless, can be converted into an advancement such as is contemplated by the statute, then the referee might have been justified in holding otherwise than as he did, but it cannot be. It would be a contradiction in terms to call a loan by a parent to his son an advancement upon the latter’s share of an expectant estate. Such advances in the abstract are not to be returned or paid back to the parent by any understanding between tbe parties. Money thus given is a payment or distribution in anticipation of an event to occur, by which the child will become entitled to a share of property — a partial, and, it may be, a total appropriation of the share by the parent while living to the use of the child. When such an incident occurs, it is not and cannot be a loan. It is true that if the amount given is large, it will be assumed to have been an advance, in the absence of proof to the contrary (cases supra); but in this case there is evidence to the contrary, and it must be regarded as a loan therefore. When the referee determined that it was a loan, he was required, therefore, to deduce that it could not be reckoned as a part of the surplus, and the appellants could not reach it in this proceeding. It was subject, doubtless, to the debts of the son, if any existed, and to be considered and disposed of in another mode provided by law.

We think the order appealed from should be affirmed, but without costs of this appeal.

Davis, P. J., and Daotels, J., concurred.

Order affirmed, without costs.


text:
    MICHAEL KELLY and MARGARET BRADLEY, Respondents, v. FRANCIS E. SCRIPTURE, Appellant.
    Code, § 179 — acceptance of draft by, consignee — failure to pay same out of proceeds of consignment — Arrest—fiduciary capacity.

    Defendant, having in his hands certain malt consigned to him for sale hy the plaintiff, accepted a draft in favor of a third person drawn on him hy the latter on account thereof. Subsequently he sold the malt, hut neglected to pay the draft, which the plaintiff was afterwards compelled to take up. In an action hy the latter to recover the proceeds received upon the sale of the malt, held, that the defendant did not cease to he a factor or agent of the plaintiff upon the acceptance of the draft, and that an order of arrest was properly granted, on the ground that he had received the money in a fiduciary capacity.

      V. and N. National Bank v. Sprague (52 N. T., 605); German Bernik v. Edwards (53 id., 541) distinguished.

      Appeal from an order denying a motion to vacate an order of arrest.

      Frank E. Blackwell, for tbe appellant.

      J. M. Q-uiteau, for the respondents.
   Beady, J.:

The defendant received from the plaintiffs some malt for sale, which had not been disposed of. The latter then wrote him as follows:

“ Phelps, Out. Co., N. Y., December 13, 1875.
“ F. E. Scripture :
“Dear Sie.— We wish you would dispose of the two cars of two-rowed you have in store at the best price you can obtain. Will you permit us to ship you one car of six-rowed in accordance with sample sent you, which you may dispose of for cash or thirty days’ time, and we draw on you for $1,000 on the two cars of two-rowed, and the one of six-rowed ? If this meets with your approval, please telegraph.
“Yours, etc.,
“KELLY & CO.”

The result was that the plaintiffs drew upon the defendant for $1,000, payable to the order of a third person. The draft was not paid at maturity, and the plaintiffs having taken it up, and being ready therefore to. surrender it to the defendant, and the malt having been sold, commenced this action, and obtained an order of arrest. The defendant moved to vacate that order, but the motion was denied. Hence this appeal. The defendant claims .that by the acceptance of the draft the relations between him and the plaintiffs were changed, and that having acquired a special property in the goods by the acceptance, he was no longer factor, agent or person acting in a fiduciary capacity. This view is predicated of the decision in F. and N. National Bank v. Sprague (52 N. Y., 605), and in the German Bank v. Edwards (53 id., 541). It will be found, on examination of these cases, that they were brought upon the acceptance by the holder thereof, and not for the proceeds of the property by the consignors. The defendants were held, therefore, not to stand in such relation to the plaintiffs as would subject them to arrest. The action in each case was upon the acceptance. In this case the action is for the proceeds of the sale, against which the draft drawn and accepted was made. It was in the nature of an advance and in anticipation of funds to meet it, which might reasonably be expected from a sale of the property before it matured. Such an incident in the dealings of the parties would not subvert the relation of factor or agent and principal. It only increased the defendant’s lien on the property. (Duguid v. Edwards, 50 Barb., 288.)

The doctrine thus stated was declared in the case cited, and its correctness has not been questioned. The cases of F. and N. National Bank v. Sprague and the German Bank v. Edwards (supra), would seem, upon a superficial perusal, to be in conflict with this result, but they are distinguishable for the reasons stated.

The order appealed from, for these reasons, must be affirmed, with ten dollars costs and the disbursements of this appeal.

Davis, P. J., and Daniels, J., concurred.

Order affirmed, with ten dollars costs and disbursements.


text:
    CHARLES G. CORNELL and JAMES B. NICHOLSON, Respondents, v. THE MAYOR, Etc., OF THE CITY OF NEW YORK, Appellants.

      Chap. 86, B. L. of 1813 — Commissioners for opening streets in tlw eity of New York — liability of for expenses and disbursements — Liability of personal representatives — joinder of, in action against city.

    Under chapter 87 of 1813, authorizing the appointment of commissioners to open and widen streets in the city of New York, such commissioners are jointly' liable for the expenses and disbursements incurred in such proceeding; and in an action by the commissioners against the city to recover the amount thereof, all the commissioners then living and the personal representatives of those who may be then dead must be made parties.
    Appeal from a judgment entered upon an order overruling, as frivolous, a demurrer interposed by the defendants.

      A. J. Bequier and W. 0. Whitney, for the appellants.

      Henry E. Ernies, 8. G. OlarJce and T. Allison, for the respondents.
   Beady, J.:

This action was brought to recover the fees, charges and expenses of the plaintiffs and one James S. Hennessy, as commissioners of estimate and assessment under an appointment by this court for the widening and straightening of Broadway, from Thirty-fourth to Fifty-ninth street, in this city. The complaint alleges, among other matters set forth, that Hennessy died after the mating of the final report in the proceedings; but it appears that his death did not take place before the fees, expenses and charges had been taxed in" the manner required by law. The defendant demurred upon the ground that there was a defect of parties plaintiff in this, namely, that James S. Hennessy a co-commissioner with the plaintiffs, was omitted as a party.

The statement of the cause of the demurrer is not what was intended. It was evidently the intention of the pleader to assert that the personal representatives of James S. Hennessy were necessary parties. This infelicitous mode of assertion ought not to prejudice the defendants, however, because it could not mislead the learned counsel for the plaintiffs. They thoroughly comprehended what was meant.

The court overruled the demurrer as frivolous, and ordered judgment unless the defendant answered within a time named.

They appeal, and the question to be considered is, the correctness of the order made. The plaintiff's and Hennessy were selected to perform a duty to the public, in a position designated by statute, and deriving all their powers from it. They were to act jointly for a compensation exclusive of necessary disbursements, regulated by statute. The right to compensation depended upon the performance of the duties incumbent upon them. (Smith v. The Mayor, 37 N. Y., 510; McVeany v. The Mayor, 1 Hun S. C. R., 35.) And the claim for such services, exclusive of disbursements, was joint and several. Each commissioner could have prosecuted his claim for his fees; but the disbursements, for which all were liable (Pittman v. The Mayor, 6 N. Y. S. C. [T. & C.], 90; People ex rel. Bagley v. Green, 1 Hun, 1; People ex rel. Purser v. Green, id., 86), could not be tbe proper subject of an. action by any one of them. The joint, not several liability, for these disbursements, including clerk hire, etc., rendered it obligatory upon all, as the joint owners of the- fund provided to pay them, to unite in an action for its recovery. The relation of the commissioners to the defendants, therefore, created a seeming anomaly by which, as to a part of their compensation, they could severally prosecute their demands, and as to another part must unite to coerce payment. This difficulty presents itself in this action with the same force as if but one of them was the plaintiff. The commissioners are jointly liable, as we have seen, for the clerk hire, etc.; and the personal representatives of Hennessy are included in this liability ; and they are interested, therefore, in such part of the claim as may be necessary to discharge the existing obligation. Their liability does not arise upon any principle of copartnership, but from the joint public duties imposed upon them, and which could not be discharged without aid, and the consequent assumption of such responsibility as its procurement might entail.

The plaintiffs do not acquire any right to the whole of such aliquot part of the claim against the defendants, or to that portion of it which was due to Hennessy for his personal services. There was no joint interest in the latter, and none in the former so exclusive as to render Hennessy’s representatives unnecessary parties. They should have joined, or been made defendants, upon a refusal to unite, because the defendants (the Mayor, etc.) should not be subjected to the dangers of a second action for the same cause, or a part of it; and the personal representatives named should not be endangered by a recovery of the sum necessary to pay existing obligations, which would pass into the hands of the plaintiffs free from their control. They should not, in other words, be compelled to substitute the plaintiff’s responsibility for the fund itself.

For these reasons we think the judgment must be reversed with costs, and the demurrer ordered to stand for hearing at the Special Term.

DaNibls, J"., concurred; Davis, P. J., concurred in result.

Judgment reversed, with costs ; demurrer ordered to stand for hearing at Special Term,


author: Beady, J.: DANIELS, J.: Davis, P. J.

text:
    SAMUEL SAMUELS, Respondent, v. THE EVENING MAIL ASSOCIATION, Appellant.
    label— actual malice — Exemplary damages — • liability of a wrpm'ationfw.

    This action was brought to recover damages for a libel concerning the plaintiff published in a newspaper owned and managed by the defendant. It appeared upon the trial that the report was received from an established news agency, that it was published in but one edition of the paper and suppressed in the subsequent ones; that some of the copies of the paper unsold when it was discovered were not destroyed, and one copy was sold; and that on the following day a retraction was published. There was no proof of actual malice on the part of the corporation or any of its officers. Reld, that the evidence would not authorize the jury to find that there was actual malice on the part of the defendant, and that a verdict awarding exemplary damages should be set aside. (Davis, P. J., dissenting.)
    Appeal from a judgment in favor of the plaintiff entered upon the verdict of a jury, and from an order denying a motion for a new trial made upon the minutes of the justice before whom the action was tried.
    This action was brought to recover damages for the publication in a newspaper, owned and published by the defendant, of certain false and defamatory matter concerning the plaintiff.
    The answer set up that the persons employed by the defendant to have charge of editing or publishing its newspaper, were carefully selected and proper and competent persons; that the article was published through mistake, without authority from the defendant, and without the defendant’s permission or knowledge. The answer denied that at the 'time of the publication malice existed on the part of the defendant or any one connected with its newspaper, and denied that the plaintiff has been injured by the publication to any pecuniary extent, in the respects in which damages are claimed.
    On the trial it was shown that the libelous article was furnished to the defendant by an established news association; that the article appeared only in the last edition of the Evening Mail, which was printed aud distributed before knowledge of the libel reached the editor of the newspaper or the treasurer and manager of the corporation; such matter was usually printed in the next days paper, but in this case was suppressed; that some copies which were left over on the premises were not destroyed by the treasurer upon discovery of the libel, and one of them at least was afterward sold.
    A retraction of the libel was published by the defendant the day after it appeared.
    No proof of special damages to the plaintiff on account of the libel was offered.
    The judge refused to charge the jury that the case was not one for exemplary damages, bnt did charge them that if they believed the libel was maliciously published the plaintiff would be entitled to, and they would have the right to award exemplary damages, to which the defendant’s counsel excepted.
    The jury returned a verdict for the plaintiff for the sum of $2,000.
    The case has already been before the General Term, where a new trial was granted on the ground that certain evidence offered by the defendant had been improperly rejected. The case is reported in 13 S. O. E. N. V. (6 Hun), 5.

      Henry H. Anderson and Howard Mansfield, for the appellant.
    Before the defendant can be held liable for actual malice, some corporate act in ordering or authorizing the publication in question' must be shown. (Phila., Wilm. omd Balt. R. R. v. Quigley, 21 How. [U. S.], 213; Maynard v. Ins. Go., 34 Gal., 57; Aclcerson v. Erie R. R., 3 Vroom, 254.) It is not pretended that there were instructions to publish the libel or persist in the publication. That there was no ratification is shown by the retraction of the libel at the first opportunity. (Edwards v. Railway Go., L. B., 5 O. B., 445 ; Allen v. Railway Go., L. B., 6 Q. B., 72; Ackerson v. Erie R. R., 3 Vroom, 253.) The defendant was entitled to have'the jury instructed, that the case was not one for exemplary damages. It should not be held to respond in punitive damages for the unauthorized act of an agent, for which, if done with malice, the agent himself could be punished. (Oleghorn v. JV. Y. G. and H. R. R. R., 56 N. Y., 44; Hogan v. Prov. and W. R. R., 3 B. I., 88; Mil. and Miss. R. R. v. Finney, 10 Wis., 388; Horner v. H. B. and M. R. R., 34 Cal., 594; Yates v. Smith, 40 id., 657; Daily Post Go. v. McArthur, 16 Mich., 447.)

      Robert Sewell, for the respondent.
    Corporations are liable in libel cases for the acts of their agents, and the malice of the agent makes a liability for tbe corporation. If they enter into the business of publishing newspapers, they are liable for the acts of their agents as any natural person would be. (Plvila. R. R. v. Quigley, 21 How. [U. S.], 202; Const, of N. Y., § 8; Huff v. Bennett, 4 Sandf., 120; Ranger v. G. W. R. R. Go., 5 H. L. Cas., 12, 87; Bunn v. Hall, 1 Carter [Ind.], 345; Andres v. Wells, 7 Johns., 260; 2 Kyd on Oorp., 474; Lee v. Sands/ Hill, 40 N. Y., 448; Farmers' Bh. v. Butchers' Bh., 16 N. Y., 133; Whitfield v. S. F. R. R., 1 Ell., B. & E., 115; First Oh. v. Seh. and Troy Oo., 5 Bárb., 80; Aldrieh v. Press Go., 9 Minn., 133; Alex. v. H. Fast R. R. Go., 34 Law J. R. [N. S.], 152; Jefferson R. R. v. Rogers, 28 Ind., 1; Rix v. City of London, 8 How. S. T., 1039; Fdwcwds v. Union Bh., 1 Fla., 136 ; Whitman v. R. R. Go., 2 Har. [Del.], .514; Whitfield v. S. F. Go., 1 Ell., B. & E., 115; Oaldwell v. H. J. Co., 47 N. Y., 283; Regina v. G. N. Go., 9 Q. B., 315.) A corporation is just as liable for the negligence of its agents as it is for their intentional wrong doing. The law implies damage from the publication of a false statement amounting to libel. {Trip/p v. Thomas, 3 B. & C., 427; Townsend on Libel, § 289.)
   Beady, J.:

It has been truly said that slander in writing has, at all times, and with good reason, been punished in a more exemplary manner than slanderous words, for, as it has a greater tendency to pro Yoke men to breaches of the peace, quarrels and murders, it is of much more dangerous consequence • to society. Words which are frequently the effect of a sudden gust of passion may soon be buried in oblivion, but slander which is committed to writing, besides that the author is actuated by more deliberate malice, is, for the most part, so lasting as to be scarcely ever forgiven (6 Bac. Ab., 202; McCurg v. Ross, 5 Binn., 219); and hence the rule that malice is presumed from the falsity of the statement made ; and hence, also, the doctrine pronounced in early cases that, in actions for libel, it is always given in charge to the jury that they are to inflict damages for example sake, and by way of punishing the defendant. (Per Spencer, J., in Tillotson v. Cheetham, 3 Johns., 56.) Chief Justice KeNT, in the same case, said that the actual pecuniary damages in actions for defamation, as well as in other actions for torts, could rarely be computed, and were never the sole rule of assessment. That action was for a libel, and the judge had charged the jury that it was such as, in his opinion, demanded from them exemplary damages; and, further, that he did not accede to the doctrine that the jury ought not to punish the defendant in a civil suit, for the pernicious effect which a publication of that kind was calculated to produce in society. The charge was sustained, and the judgment affirmed. That case was approved in Taylor v. Church (8 N. Y., 452), which was also an action for libel, in all respects, but its doctrine somewhat restricted by the statement of the principle to be that in actions for injuries to the person, committed under the influence of actual malice, or with the intention to injure the plaintiff, the jury, in their discretion, might give damages beyond the actual injury sustained, for the sake of the example —■ damages not only to recompense the sufferer, but to punish the offiender. The earlier rule apparent from the case of Tillotson v. Cheetham (supra), and decisions cited, and which appears to have been sanctioned in Hunt v. Bennett (19 N. Y., 173), seems to have been that punitive damages would be authorized not only where there was actual malice, but where the libel was atrocious in character, or pernicious in its effects, and hence it is said herein that it was restricted by the ease of Taylor v. Church (supra). The right to allow exemplary damages in actions of this character was again affirmed in Caldwell v. New Jersey Steamboat Company (47 N. Y., 282), and it was there declared that corporations were not exempt from the infliction of punitive damages in a proper case. “ In any case where exemplary damages may be recoverable against the servant, they should be allowed against the master, if it appears that he had reasonable notice of the negligent habits of the servant, or if he left the servant without control or supervision of the work.” The ease of Cleghorn v. New York Central and Hudson River Railroad Company (56 N. Y., 48), reasserts this view.

It is not denied in this case that the defendants are liable for the actual injury caused by the publication of the libel, but they insist that punitive damages should not be awarded against them unless there was some expression of the corporate will which could proceed only from the corporation itself, from its board of directors, or other governing board, and not from its agents or officers acting without special directions. If this doctrine be established, it must be subversive of the principle faeit per alium faeit per se.” The public should not be exposed to gross injuries arising from unauthorized publications in a paper, the control of which is given to persons in the employment of the owners or proprietors, and over whom the people have no supervisory or other power. If, however, the immunity is to be enjoyed, it should not be accorded in cases where the agent is left without control or supervision of the work.

This case reveals no supervisory or other control over the managers of the paper as to its contents or distribution. If there was any such element existing, the burden of proving it rested upon the defendants, and not upon the plaintiff. The most liberal rule, therefore, that can be given then in a case like this is, that the evidence shall warrant the submission to the jury of the question of actual malice in the publication of the libel, a subject open to review. (Caldwell v. New Jersey Steamboat Co., supra.) The learned justice charged the jury that if they believed the article was maliciously published, that there was a willful intent on the part of the defendants to injure the character of the plaintiff, he would be entitled to exemplary damages — damages that would serve as an example for such an offense. A careful examination of the case fails to disclose any evidence of such an intent to injure the plaintiff’s reputation. If the character of the publication alone determined the right to exemplary damages, it will not be questioned that they should have been awarded, but such is not now the law. There must be proof of actual malice, that is, an intention to do harm, which could not be inferred alone from a desire to communicate information of striking, thrilling, startling or important events, which is characteristic of journalism, and which seems to provoke a rivalry as to who shall be first in the field with the intelligence. It is a very creditable ambition when it is not abused; and that wrong may be done unintentionally must be apparént from the hasty manner in which news must be gathered for each day’s publication, and the reliance placed upon information springing from apparently reliable sources. The publishers are obliged to take the risk, nevertheless, when the matter relates to character, and must, at least, respond in damages, when in error, to the amount of the injury sustained, and this rule is quite well understood and appreciated. In this case, the news of the event recorded came in the usual way, but was published without the editor’s knowledge. When its publication was discovered by him, he caused it to be omitted from subsequent editions of the paper, and voluntarily made a retraction in the next day’s issue. These facts do not justify the conclusion of actual malice. There is no proof of prejudice against the plaintiff; no proof of any expressed or entertained intention to wound his feelings or hurt his fame, reputation or good name, but, at best, a hasty, inconsiderate and improper publication, false and defamatory in its details, which the editor at once appreciated and sought to remedy. It is true that some copies of the issue containing the article were left after the discovery of the publication by the editor and treasurer, and that they were sold, hut this is not sufficient to overcome the facts mentioned, which seem to destroy the assumed presence of an intention to do wrong, or, in the language of the judge, “ of a willful intent, on the part of the defendants, to injure the character and reputation of the plaintiff.” Applying the rule, therefore, to this case, that actual malice is necessary to warrant exemplary damages, the refusal to charge that the defendants, upon the evidence, were not liable for actual malice was erroneous, and a new trial must be. ordered.

It is not necessary to deprecate in .this opinion the publication of libelous articles in newspapers, especially of influence and power. No right-minded citizen can do otherwise than deplore the invasion of private character, and we cannot but think that journalists are not insensible of this sentiment. The courts will not fail to enforce the obligation resting upon all persons to observe and practice silence, when nothing can he truly and justifiably said to the injury of another, hut the remedy must be applied according to the rules established for the administration of justice in this respect.

New trial ordered, with costs to abide the event.

DANIELS, J.:

The manner in which the libelous article was received and published, its omission from the paper when discovered by the editorial agent of the defendant, and the retraction afterwards published, were sufficient to show that the publication was not the result of actual malice or ill will towards the plaintiff; for that reason, the case was not a proper one for vindictive or exemplary damages. I therefore concur in the conclusion maintained by Mr. Justice Beady.

Davis, P. J.

(dissenting):

The corporation that owned and published “ The Evening Mail,” must be presumed to have clothed its agents with full power to originate, select or “appropriate” and publish whatever matter they should deem best for the general, and especially for the pecuniary interests of that newspaper. In these regards the management of the newspaper was wholly committed to their discretion.

The falsity of the libel was sufficient evidence of malice; and such malice is imputable to the corporation, because the publication was, in law, its own act, performed by its servants in the business it was created to carry on ; and not by any willful departure from such business for the private and individual purposes of the servants.

The libel being false, the malice imputable from the act of publication is a part of the res gestee from which the action arises. Nearly all the principal newspapers of the day are carried on by corporate and not by individual enterprise; and I think the law does not recognize any difference of responsibility between such ownership and that of individuals. Such corporations are capable of legal malice, and it should be imputed to them by the law whenever it would be to individual ownership.

The plaintiff in an action of libel gives evidence of malice whenever he proves the falsity of the libel. It becomes, then, a question for the jury whether the malice is of such a character as to call for exemplary or punitive damages; and that question is not to be taken away from the jury because the defendant gives evidence which tends to show that there was, in fact, no actual malice. When he gives no such evidence it is the duty of the court to say to the jury that, upon proof of the falsity of the libel, the plaintiff is entitled to exemplary damages in their discretion. (Tillotson v. Cheetham, 3 Johns., 56; and see opinion of Kent, Ch. J., in same case; Taylor v. Church, 8 N. Y., 452, where the rule of Tillotson v. Cheetham is approved; Hunt v. Bennett, 19 N. Y., 173.) But where he gives evidence tending to prove the absence of actual malice, then it is the duty of the judge to submit to the jury the question, as one of fact, whether such malice existed in the publication. This is what the learned judge did on the trial of this case; and I think it is a mistake to say that there was no evidence calling for such a charge.

The railroad accident cases, cited by my brother Beady, seem to me to have no bearing upon the question in this case. They hold that a railroad corporation is not chargeable with exemplary, damages in cases of accidental injuries because their agents were guilty of gross negligence, but that facts must be shown which charge the corporation itself with gross negligence — such as knowledge of the ineompetency of the agent from bad habits, or other known causes, rendering him unfit for the employment. (Cleghorn v. N. Y. Central Railroad Co., 56 N. Y., 44; 47 id., 282.) But in libel cases, the falsity of the libel being proof of malice sufficient to uphold exemplary damages, the right to recover them in the discretion of a jury, rests in the very act done in the publication of the false libel; and whoever is chargeable with that act is chargeable with the legal consequence, which is the right of the jury to redress the injury by imposing reasonable damages beyond any injury actually shown. There is no doubt the corporation is chargeable with the act of publication.

In the one class of eases (the railroad injuries), the damages are easily measured by the physical injuries suffered, and they may be made completely compensatory by a jury ; but in the other class, where the injury is to character, it is almost impossible to measure it by fixed standards. The damages must be largely discretionary; and the question how far malice shall affect that discretion must be left to the sound judgment of a j ury. In submitting the question of malice, in this case, to the jury, I think the learned judge did not err; and although the damages in this case seem to me to be larger than the evidence called for, I think there is no legal ground to justify our interference.

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


text:
    LE GRAND M. ANWAY, as Executor, etc., of MARY A. ANWAY, Deceased, Respondent, v. HENRY J. DAVID, Appellant.

      8upplementa/ry proceeding — Code, § 292 — Bmmination of non-resident debtor.

    Under section 292 of the Code a non-resident of this State who had no place of business herein, can only be examined in proceedings supplementary to execution in the county in which the judgment roll was filed.
    Where, however, he has a place of business within this State he may be examined in the county in which such business is carried on, if a transcript of the judgment has been filed therein and an execution issued thereon.
    Appeal from an order denying a motion to vacate an order, requiring the defendant to appear and be examined in proceedings supplementary to execution.

      Alexander Ostrander, for the appellant.

      W. 8. Ioga/n, for the respondent.
   Beady, J.:

Supplementary proceedings were adopted in this case against the defendant by the plaintiff, and the order for the desired examination was granted.upon an affidavit which stated, among other things, that the execution was issued to the sheriff of this county where the defendant then had, and still had, a place of business. It was further stated that the defendant was a resident of the State of New Jersey. The judgment roll was filed in Kings county and a transcript of it in this county. The defendant’s counsel contends that, being anon-resident of this State, no order for his examination could be granted, unless founded upon an execution issued to and returned by the sheriff of Kings county and unless returnable there; and this view is predicated of his interpretation of the language of section 292 of the Code. The question thus presented is one of construction purely. The Code provides that the order supplementary may be granted when an execution is returned unsatisfied, in whole or in part, issued against the property of the judgment debtor or any one of several debtors in the same judgment, to the sheriff of the county where he resides or has a place of business, or if he do not reside in the State to the sheriff of the county where a judgment roll is filed.

The intention of the legislature in enacting this section seems clearly to have been to allow the examination of a judgment debtor in all cases, whether resident or non-resident, to be had in the county in which he has a place of business.

To this conclusion we are led by the fact of which we can take judicial cognizance, namely, many persons residing out of this State have places of business in it.

When at his place of business, it cannot be oppressive to ask the debtor to appear in his business locality and make the statements contemplated by the supplementary proceeding.

The amendment of the section mentioned by adding the words “or his place of business” in 1858, was designed to embrace such cases, and there is reason, justice and equity in the view thus expressed.

It is equally so,'whether founded or not upon judicial cognizance of the presence here of persons for business purposes, and at their places of business, who are non-residents of the State. The creditor should not be subjected to any greater inconvenience than his debtor; and the debtor should not have, by construction merely, any particular choice of the place in which he should reveal what property he possesses. Indeed, the former having the judgment in his favor is entitled to the higher consideration, in all the given remedies to obtain payment of his claim.

When the debtor does not reside in the State and' has no place of business here, then the proceedings must be conducted where the judgment roll is filed. This is the design of the statute and the fair import of its words. The debtor, if then found in this State so that process can be served upon him, cannot be required to appear in any part of its domain, but only where the judgment roll is filed: He is thus protected from transportation from one part of the State to another, or from examination in any part of the State- the creditor may choose to select. The result of this consideration of the statute is, that when the debtor is a resident of another State but has a place of business here, he may be examined in the county, if an execution has been issued and returned here which was based upon a transcript filed here, although the judgment roll was filed in another county.

The statute applies equally to such cases as to those wherein it appears that the debtor, though a resident in some other county in this State, has a place of business here. It is general, and in such cases makes no distinctions. Its provisions relate to judgment debtors generally. The further result is, that the examination of non-residents is confined to the county where the judgment roll is filed, only in the cases where the debtor has no place of business in any county in this State. For these reasons the order should be affirmed, with costs.

Davis, P. J., and Daniels, J., concurred.

Order affirmed, with costs.


text:
    JOSEPH KING, Appellant, v. EDWARD LIVERMORE and JAMES SLATTERY, Respondents.

      Master and servant— Contractor — negligence of— liability of owner for.

    The defendant L. made a contract with the defendant S., by which the latter agreed to remove the earth and rook from a vacant lot of the former, which adjoined upon the west a lot belonging to the plaintiff, upon which was a brick stable. Subsequently the defendant S. sublet the contract to the defendant M., who proceeded so negligently and carelessly in the performance thereof as to injure the Said stable. Such injury was not necessarily caused or produced by the performance of either of said contracts, but was due entirely to the negligence of the defendant M. and his workmen. In an action to recover damages for the injuries so occasioned, held, that the defendant M. alone was liable, and that the complaint was properly dismissed as to the other defendants.
    Appeal by plaintiff from a judgment in favor of defendants, Livermore and Slattery, entered upon the trial of this action by the court at Special Term.
    Judgment was also given in favor of plaintiff against one. McNamara, another of the parties defendant in said action.

      L. 8. Chatfield, for the appellant.
    The plaintiff was entitled to the undisturbed possession of his property, subject to the right of Livermore to enjoy his property in the usual way, and to dig a proper foundation for his building. This was a lawful act; but il in the exercise of this right he injured the property of the plaintiif, he must respond in damages. {Hay v. Oohoes Co., 2 N. Y., 159; Tremain v. Same, id., 163.) Irrespective of the question of negligence, the liability is absolute, it appearing that the work might have been done without damage to plaintiff’s property. If defendant could not do the work without inflicting the injury, he should have abandoned that mode of using his property, or pay the damages resulting therefrom. {Hay v. The Cohoes Co., 2 N. Y., 161; Lasala v. Holbrook, 4 Paige, 113; Lmribert v. Bessy, Sir T. Raym., 421; Tremaim v. Cohoes Co., 2 N. Y., 163; Panton v. Holland, 17 Johns., 92.)

      Rowan c& Helm, for respondent Livermore.
    The defendant Liver-more having entered into a written contract with the defendant Slat-tery, is not liable for the negligence or carelessness of Slattery, or those employed by him to do the work. (O’ Rourke v. Hart, 7 Bosw., 511; Mg Camus v. The Citizens' Cas Co., 40 Barb., 380; RaddiffFx. v. Mayor, etc., 4 N. Y., 195; Seldenv. The Del. and Hud. Canal Co., 29 id., 642; Williams v. Kenney, 14 Barb., 629; Farrandir. Marshall, 19 id., 380.) Where the defendant, in the exercise of ordinary skill and care, in making an excavation for the improvement of his own lot, had dug so near the foundation of the plaintiff’s house as to cause it to crack and settle, it was held he was not liable for the injury, and that it is the duty of the plaintiff to shore or prop up his own ■ building so as to secure it in the mean time. {Panton v. Holland, 17 Johns., 92; Lasala v. Holbrook, 4 Paige, 169, approved; Lotman v. Milks, 21 N. Y., 514.) Where work is done under a contract, and an injury to the individual occurs from the acts or negligence of the servants of the contractor, the owner of the building is not responsible, unless the work itself is a nuisance or the necessary result of the contract itself. {Blalce v. Ferris, 5 N. Y., 48 ; Yanderjoool v. Husson, 28 Barb., 196; MoCamus v. Citizens Gas Co., 40 Barb., 280; Creed v. Hartman, 29 N. Y., 591; Osborn v. Union Ferry Co., 53 Barb., 629.) The evidence shows that the blasting was not a nuisance, but could have been done without injury to the plaintiff. In such cases defendant is not liable. (Marvin v. Brewster Iron Mining Oo., 55 N. Y., opin. by Mr. Justice Folgkeb, 556, 557, 561; Losee v. BucJuman et al., 51 N. Y.; opin. by Eabl, C., 479; Kelly v. Mayor, 11 N. Y., 432; Gardner v. Bermett, Gen. Term Superior Court.)

      W. McDermott, for respondent Slattery.
    The injury having been done by the carelessness of McNamara, and not necessarily resulting from the performance of the contract, and Slattery having no control over the work or its manner of performance while the injuries were sustained, is not liable. {Blake v. Ferris, 5 N. Y., 48; Stevens v. Armstrong, 2 Seld., 435; Pack v. The Mayor, etc., 4 id., 222; Blackwell v. Wiswall, 24 Barb., 355; Kelly v. The Mayor, 1 Kern., 432; Gourdier v. Oormaok, 2 E. D. S., 254; McCafferty v. Th-e Spuyten Duyvil It. It. Go., 61 N. Y., 178.)
   Beady, J.:

The learned justice presiding at Special Term found as follows:

1. That the plaintiff,. for twelve months and more prior to the commencement of this action, was, and still is possessed as owner in fee of the premises known as Nos. 45 and 47 East Forty-first street, in the city of New York; and that said lot is fifty feet in front on East Forty-first street, and about 143 feet in depth on the westerly line.

2. That the defendant Livermore, at the time of the commencement of this action, was, 'and still is the owner of the lot of land adjoining the plaintiff’s premises on the westerly side thereof.

3. That the plaintiff has a two-story and a-half brick stable built on his said land, which covers the entire surface of the said lot.

4. That oh or about the 8th day of February,-1873, the defendant Livermore made a contract in writing with the defendant Slat-tery, whereby the said defendant Slattery agreed to excavate and cart off from his said premises all the. rock and earth to a depth, if wanted, of ten feet, at the price of one dollar and twenty-five cents per' cubic yard for the earth, three dollars per cubic yard for rock.

5. That the said defendant Slattery subsequently, and before the commencement of any work under said contract, made a verbal contract or agreement with the defendant McNamara for the removal of said rod,' and the performance of the work called for by said contract with Livermore.

6. That the said McNamara, commenced the performance of said work called for by the said contract with the defendant Slattery, and did so negligently and carelessly perform the same as to injure and damage the building on plaintiff’s said premises.

Y. That the said injury and damage so caused to plaintiff’s building was not necessarily caused or produced by the performance of either of said contracts so made by the defendant Livermore with the defendant Slattery, or by the said Slattery made with said McNamara, but was caused solely by the carelessness and negligence of the said defendant McNamara and his workmen.

And, as conclusions of law from the foregoing facts, found:

1. That the complaint should be dismissed-as against the defendants Livermore and Slattery, with costs.

2. That plaintiff is entitled to judgment against the defendant McNamara for the damages caused to his said building; and that it be referred to a referee to ascertain and report what damages have been so caused to plaintiff’s said building.

The plaintiff feels aggrieved by these findings as to the defendants Livermore and Slattery, and seeks a new trial If the relation of master and servant exist between either of them and the defendant McNamara, then the conclusions of the learned judge as to such persons were erroneous. The rule is too well settled now to be questioned, that the original employer cannot be held responsible for acts of negligence committed by a subcontractor, or his servants over whom he has no control, unless the work to be done would necessarily produce the injuries complained of, or unless he authorized or permitted a nuisance upon his premises. The doctrine has recently been considered and reiterated. (McCafferty v. S. D. and P. M. R. R. Co., 61 N. Y., 178.)

In this case there was no pretense that the work to be done would necessarily cause the injuries complained of; on the contrary, it appears from the evidence that it could have been done in such a way as to avoid any injury. It is not claimed either that the defendants authorized or permitted a nuisance on the premises. The value of the appeal rests, therefore, upon the relations between the parties, as already suggested. The defendant Livermore had a right to excavate or to remove the rock from his land, and was not engaged, therefore, in an unlawful enterprise. He employed Slat-tery to do the work to be done, and he alone was his servant for the purpose. The party employing has the selection of the party employed (as said by Rolfe, B., in Hobbit v. London, etc., 4 Exch., 255); and it is reasonable that he who has made choice of an unskillful or careless person to execute his orders should be responsible for any injury resulting from the want of skill or want of care of the person employed; but neither the principle of the rule nor the rule itself can apply to a case where the party sought to be charged, does not stand in the character of employer to the party by whose negligent act the injury has been occasioned.” The defendant Livermore was not the employer of McNamara; did not select him, and is not, therefore, responsible for his acts. (Case supra, and cases cited.)

The employer, whatever may be his obligations in reference to the acts of his immediate employe, is not a guarantor of the fitness or capacity or good conduct of the person whom the latter may employ to perform the work to be done as an independent engagement. The same result herein stated affects the right of action against Slattery. He did not stand in the relation of master to McNamara, who was a subcontractor, and not subject to the control of Slattery. No other person than the master can be liable, on the simple ground that the servant is the servant of another, and his acts the acts of another. (Blake v. Ferris, 5 N. Y., 48; Rapson v. Cubitt, 9 M. & W., 710; Kelly v. The Mayor, 11 N. Y., 432.) “ The rule of respondeat superior is simple and easily understood,” said Mullett, J., in Blake v. Ferris (supra), “but it must be confessed that its application in the reported cases has produced some diversity of opinion among learned judges.” This opinion is illustrated by an elaborate dissenting opinion on McCafferty v. S. D. and P. M. R. R. Co. (supra), by Dwight, C., and in which there are many suggestions which seem to destroy the philosophy of the rule which has been discussed, if not its justice. When, however, we have ascertained the relations of the parties, each to the other, there is no difficulty in applying the doctrine of respondeat superior. It is not always easy to declare the relation. It seems to be clear, however, from the cases cited, without calling upon others for elucidation, that a subcontractor is not a servant for the acts of whose employes the contractor is liable. The contractor cannot select the servants or workmen, and has no control over them.. The relation of master and servant does not exist, therefore, between them. Slattery having employed McNamara, and McNamara having employed the workmen to do the work, the latter were the servants of McNamara. Slattery had no control over them, and was under no obligation to them. This absolves him from liability. We apply the rule, having ascertained the relation of the parties — a rule equally applicable to the use and management of real as to personal property. (McCafferty v. S. D. and P. M. R. R. Co., supra.)

The judgment must be affirmed, with costs.

Davis, P. J., and Daniels, J., concurred.

Judgment affirmed, with costs.