text:
    Anson E. York and Wallace W. Starkweather, Resp’ts, v. William W. Conde and John C. Streeter, App’lts.

      (Supreme Court, General Term, Fourth Department,

      Filed July 7, 1891

    Equitable assignment—Priority.
    W. & G., who had a building contract with the government, assigned a portion of the money to become due to plaintiffs in payment for material furnished. Prior thereto the defendants had endorsed notes for W. & G. to enable them to procure funds to prosecute their work, under an agreement by which it was agreed that they should have the avails of such contract when it was closed up with which to pay such notes, and that the check when-received should be turned over to them. Held, that this constituted an equitable assignment of the fund, and that defendants were entitled to the moneys.
    This was an appeal from a judgment entered in Jefferson county, December 9,1890, for $2,661.77, damages and costs. A verdict was directed by the court in favor of the plaintiff, t In September, 1889, the firm of Witherby & Gaffney, who were contractors and builders, entered into a contract with the government of the United States to construct certain buildings known as officers’ quarters at Madison Barracks, Sacketts Harbor, H. Y.
    Subsequently, the plaintiffs, at the request of Witherby & Gaffney, sold and delivered to them on credit large quantities of lumber and building material, which was used in the construction of such buildings, and was of the value of more than $3,000. Witherby & Gaffney, being thus indebted to the plaintiffs, before the completion of their contract, and on March 27,1890, executed to them an assignment of $3,000 of the money which should thereafter become due and owing them from the government, to be applied in part payment of their indebtedness.
    The moneys due Witherby & Gaffney were afterwards paid to-the defendants, with notice of' the plaintiffs’ assignment.
    The defense interposed was that prior to the assignment to the plaintiffs by Witherby & Gaffney, the defendants had become accommodation endorsers for Witherby & Gaffney to the extent of upwards of $4,000; that the defendant Conde was a surety to the government on the contractors’ bond, and that these endorsements were essential to enable the contractors to carry on their work, and the proceeds thereof went into the buildingsj that, before such endorsements were made, Witherby & Gaffney promised the defendants that they would devote the moneys realized from the government on the contract to the payment of the notes thus endorsed, and would transfer and assign the evidences, of the Government’s indebtedness to the endorsers to be devoted to that purpose; that thereafter, in pursuance of that purpose, and on April, 18, 1890, Witherby & Gaffney, who at that time were getting a further endorsement of $500, assigned the same moneys in writing to the defendants; that afterwards, and on May 15r 1890, the government having delivered to Witherby & Gaffney a draft for the moneys due on the contract, less $110 penalties for non-performance as to time, they transferred the same to the defendants, who discharged the endorsed notes therewith.
    On the trial the defendants also insisted that the assignment by Witherby & Gaffney to the plaintiffs, as well as the assignment to-themselves, was void under § 3477 of the United States Revised Statutes.
    The defendant Streeter testified that, at the time of the first endorsement, Mr. Gaffney said, “that under no circumstances would anything step in or interfere with the payment of these notes; that we should have the avails at the closing up, the payment from the government; that when it was transferred or delivered to him, it would be transferred to us to wipe out these notes; and that he regarded it as a sacred matter; it would be the first liability that would be canceled. There were several talks of that character from September on, as the endorsements were made, and these talks were had before March 27, 1890. Mr. Gaffney endorsed the check or draft and turned it over to Mr. Conde in my presence. Conde and I.endorsed this paper jointly by arrangement between us three. He had to have help, or he could not complete the job.”
    Mr. Conde testified: “ Mr. Gaffney repeatedly told me that if it should become necessary, he would assign the contract with the government at any time I desired it; that he would assign over all right and title that he had in the property. I replied that I didn’t want the contract. The understanding between us was, that at the final settlement, that out of the final moneys which he-got, there was enough percentage kept back, and that when that was paid these notes would be retired. He promised to turn over the check or draft after he got it to me. That was at the time the endorsements, or some of them, were made. It was stated that it was to be turned over for the retiring of these notes endorsed by me and Mr. Streeter. Those notes were made before March 17,1890. There were several talks like that before March 17, 1890, and Mr. Gaffney did so turn over the draft to me when he received it on financial settlement from the government.”
    The trial judge held that § 8477 of the U. S. R S. did not apply to the assignment in question; that the plaintiffs’ assignment was therefore not void, but gave them an equitable lien on the moneys in question; that such equitable lien could be enforced in an action at law; that what took place between the defendants and Gaffney at the time they commenced to endorse their paper did not operate to create a lien upon the fund, or any right to have the fund applied to the payment of the notes endorsed by the defendants; that their right to have the fund applied to the payment of such notes was first created at the time of the first transfer in writing to the defendants.
    The defendants duly excepted to the direction of a verdict by the court, and also duly excepted to each of the propositions stated by the court in arriving at the conclusion to direct a verdict.

      Brown & Adams, for app’lt Conde; Watson M. Rogers, for app’lt Streeter; Henry Purcell, for resp’ts.
   Martin, J.

—The controversy between the parties to this action was as to the priority of their respective rights to the fund in question.

The plaintiffs’ claimed title was founded on an assignment to them made by Witherby & Gaffney, March 27, 1890. The defendants’ rights were based upon an oral agreement with Witherby & Gaffney, made long before the plaintiffs’ assignment, which the defendants contend amounted to an equitable assignment to them of the fund in question.

If the defendants’ contention is sustained by the proof, or if the evidence was sufficient to present a question of fact for the jury upon that question, the judgment must be reversed, and no other question need be considered.

The defendants’ testimony was to the effect that in or about the month of September, 1889, the firm of Witherby & Gaffney applied to the defendants to endorse the notes of that firm to enaMi it to procure the money necessary to prosecute the work under its contract with the United States government; that the defendants agreed to, and did, endorse such notes; that in consideration of such agreement and endorsement by the defendants, said firm expressly agreed that the defendants should have the avails of such contract when it was closed up, with which to pay the notes which should be endorsed by them, and that when the check or draft for the work should be received by said firm, it should be delivered to the defendants to be applied by them in paying such notes.

IE this agreement was made as testified to, we think, as it was-founded upon a valuable consideration, it amounted to an equitable assignment of the fund in question, and that the defendants-were entitled to receive and use it for the payment of the notes endorsed by them. That such an agreement amounts to an equitable assignment seems to be well settled in this state. Williams v. Ingersoll, 89 N. Y., 508; Fairbanks v. Sargent, 104 id., 108; 5 N. Y. State Rep., 531; S. C., 117 N. Y., 320; 27 N. Y. State Rep., 411. That the defendants subsequently took a written assignment does not affect such rights. The assignment was not invalid because it was oral. Risley v. Phenix Bk. of City of N. Y., 83 N. Y., 318; Coates v. First Nat. Bk. of Fmporia, 91 id., 20.

We think the court erred in holding, as a matter of -law, that the defendants acquired no right to the fund in question under their agreement and directing a verdict for the plaintiffs, and that, the defendants’ exception thereto was well taken.

Judgments reversed on the exceptions and a new trial ordered,, with costs to abide the event.

Hardin, P. J. and Merwin, J., concur.


source: Caselaw Access Project

author: Hardin, P. J.

license: Public Domain

text:
    George F. Ellison, Resp’t, v. John W. Jones, App’lt.

      (Supreme Court, General Term, Fourth, Department,

      Filed July 7, 1891.)

    1. Master and servant—Compensation—Right to recover.
    In .an action "brought by an employe to recover, the value of services' rendered, the defense was that he had wrongfully left defendant’s service. Plaintiff testified that he was to have the privilege of terminating his service at his option, which was denied by the defendant. Held, that the question whether there were any facts justifying the plaintiff in leaving defendant’s service was properly submitted to the jury.
    3. Same—Instructions to jury.
    Defendant requested the court to charge “thatif the jury find that the plaintiff was to have $28 per month for six months, he cannot recover anything in this action.” Held, that the refusal so to charge was not error.
    3. Same—Evidence.
    Evidence of the value of the services of plaintiff and his wife, and also that the plaintiff was able to do a full man’s work, was properly received.
    Appeal from a judgment of the county court of Cortland county, entered upon a verdict of a jury taken in that court. The verdict was $64.54. When it was delivered the plaintiff’s attorneys stipulated that the sum of $4.54 be deducted from the verdict. The deduction was made. Thereupon defendant’s counsel stated: “We desire to make a formal motion in behalf of defendant for a new trial upon the minutes. The Court: Denied. Exception taken by defendant’s counsel.” The case also states: “A motion was here made by W. C. Crombie, of counsel for defendant, for a new trial on the minutes, which motion was denied.” The case contains no other statement in respect to the-motion.
    Judgment was entered in the county court, December 17, 1889^ for §60 damages and §82.48 costs; total, §142.48. January 6, 1890, the defendant appealed from the judgment “and from the order entered in this action at the tn&L denying a new trial on the minutes.” The action was commenced in a justices court on the 11th day .of June, 1889. The complaint contained the following language : “ The plaintiff complain of defendant; alleges that the defendant is indebted to the plaintiff for work, labor and services of said plaintiff and his wife, and goods, wares and merchandise, provisions and personal property of the value and fully worth sixty dollars. That the said services was of the value and well worth that sum and was performed by plaintiff and his wife, Minnie Ellison, for defendant under and in pursuance of an oral contract, and was of the value and worth the sum charged, and the goods, wares and merchandise, provisions, etc., was well worth the sum charged, and defendant promised and agreed to pay therefor.” It also alleged that the wife, Minnie Ellison, had assigned her interest in the claim to plaintiff before the commencement of the action. The answer of the defendant contained a denial and alleged payment, and that the services were “performed by plaintiff and his assignor under a special contract, which said contract the said plaintiff and his assignor have failed to keep and perform and refuse to keep and perform, and have left defendant’s employ without the consent of this defendant and without the fault of the defendant and to the defendant’s damage in the amount of fifty dollars. * * * ” It also alleged that the services were “ performed under a special and entire contract, and plaintiff has, and plaintiff’s assignor has failed to keep and perform their- said contract with defendant and cannot maintain this action.”

      W. C. Crombie, for app’lt; J. & T. E. Courtney, for resp’t.
   Hardin, P. J.

—According to the well settled practice of this court, the appellant is not entitled to review the order refusing a new trial on the minutes, as neither the motion nor the order specifies any grounds upon which the motion is made. Hinman v. Stillwell, 34 Hun, 178. The appeal from the order must, therefore, be dismissed.

(2) Upon the evidence it is clear that the plaintiff and his wife entered into the service of the defendant in April, 1889, and continued until the 6th of June of that year, at the instance and request of the defendant Plaintiff’s complaint alleges the value of the services performed, and to support that allegation the plaintiff gave evidence tending to show that the defendant requested the services and promised to pay therefor at the rate of twenty-eight dollars per month. The answer of the defendant alleges that the defendant and the plaintiff have entered into a contract for a definite period, and that because the plaintiff had not performed the services for the period mentioned in the contract, he was not entitled to recover. In response to evidence tending to support the allegations of the defendant, plaintiff gave evidence tending to show that there was a condition in the contract, or understanding between the parties, that the plaintiff might quit the service of the defendant at his option. Defendant gave evidence tending to establish that there was no such condition in the contract. These questions of fact (there being conflicting evidence) we think were proper for the jury to determine. In the body of the charge the court instructed the jury, viz.: “If the plaintiff did make the contract testified to by him, and he had a reasonable ground to disagree, then he had the right to cease his employment and terminate his contract.” And the court instructed the jury, viz.: “If the terms of the contract were that he had the right to quit if they disagreed, ordinarily there must be something upon which you can predicate that disagreement; it must not be purely fictitious. If, however, the contract was that he might terminate the contract at pleasure, then he need not. The plaintiff has testified that the contract was that he might terminate it if they could not agree. I think that is his language. And he says the reason they could not agree was for certain things that the defendant didn’t furnish in the house, finding fault with him and about certain things. Now, was there any fact, or were there any facts justifying the plaintiff upon that issue alone in saying that they could not agree. I submit these questions, all of them, to the jury.’- The defendant’s counsel took an exception as follows : “To that last part I except.” We think the exception is unavailing. We think the evidence warranted the court in submitting the questions mentioned in the instruction to the jury. The plaintiff gave some evidence tending to show that the arrangement entered into w.ith the defendant was to the effect that he was to have the privilege of quitting at his option, and that the defendant was to have the privilege of discharging him at his option. The plaintiff also gave some evidence tending to show “ facts and circumstances that would justify him ” in aArailing of the option mentioned. Upon the evidence it was for the jury to determine whether the facts and circumstances were such as to warrant the plaintiff in leaving the employment of the defendant; if there was an agreement for a definite period of time it was for the jury to say whether there was an actual, genuine cause, “ not feigned, real and not merely pretended.” Smith v. Buffalo Street R. R. Co., 35 Hun, 204.

The defendant’s counsel requested the court to charge, “We also ask the court to charge, that if the jury find that the plaintiff was to have $28 per month for six months, he cannot recover anything in this action.” The court declined to so charge, and the defendant took an exception. We think the refusal was not error. The request leaves out of view any condition in the contract between the parties as to the right to quit by force of the reservation in the terms of the contract; and it also leaves out of view the right of the plaintiff to quit if he had justifiable cause by reason of the improper conduct of the defendant towards him.

In Gates v. Davenport, 29 Barb., 160, it was held: “ Where one contracts to serve another, for a specific time, he may leave his employer before the expiration of the time agreed upon, if sufficient cause exists to justify such leaving; and he will be permitted to recover for the time he actually served, and in some cases beyond that. Where there is a provision in the contract that the employe may leave in case of a disagreement, the fact of a bona fid§ disagreement is all that is necessary to entitle either party to put an end to the contract.”

Our attention is invited to Monell v. Burns, 4 Denio, 121, where it was held that “ it was part of the agreement fhat if either party became dissatisfied he might abandon the contract; ” and in that case there was “ not the least room to doubt that the contract bound the plaintiff to labor seven months, unless he had a right to quit if dissatisfied; ” and it was said in the course of the opinion that “if it had been material to ascertain whether the contract authorized either party to bring it to a close, if dissatisfied, that must also have been left to the jury.” We are therefore of the opinion that it was proper in this case for the trial judge to refuse the charge requested, and to submit the questions of fact to the jury.

(3) We think there was no error in instructing the jury that plaintiff might recover “what those services were reasonably worth,” if the jury found the other questions of fact favorable to the plaintiff. Gates v. Davenport, supra; Ludlow v. Dole, 1 Hun, 715; S. C., affirmed 62 N. Y., 617; Goetz v. Van Au, 12 Civ. Pro. Rep., 104, and cases cited in note.

(4) Nor do we think it was error to receive evidence of the value of the services of the plaintiff and his wife. The valuation put upon the services by the witnesses did not exceed the sum which the testimony tended to show was assented to by the parties, to wit: twenty-eight dollars per month.

In Koon v. Greenman, 7 Wend., 123, it was said that “ so far as the work was done under the special contract, the prices specified in it are, as a general rule, to be taken as the best evidence of the value of the work; ” but there is nothing in the case that indicates that it is the exclusive evidence that should be received bearing upon the question of the value of the services.

We think Ladue v. Seymour, 24 Wend., 62, does not aid the appellant. In that case it was held that “ when the special contract has been rescinded or abandoned by the parties, or when an end has been put to it by the wrongful act of the party for whom the services were rendered, the other party may, in general, resort to the indebitatus assumpsit counts, and in that form recover for his labor and materials. In such cases, there is no subsisting special contract between the parties. There was one, but it is at an end.”

(5.) Appellant insists error was committed by the court in allowing the plaintiff, as a witness, to state that he was able to “do a full man’s work during the time ” he labored for the plaintiff, and that he did during that time every day “ do a full man’s work.” The ruling made by the court was that the witness might state whether he did a full man’s work every day. To that ruling an exception was taken and the witness stated that he did. We think the question called for a fact that was pertinent and proper upon the issues to be considered by the jury. Besides, the evidence of that fact seems to be borne out by the testimony of the defendant himself, who, in the course of his cross-examination, stated “the plaintiff was a fair workman on my place.”

(6.) We think no error was committed upon the trial in respect to the articles which the plaintiff had taken to the defendant’s. At folio 91 the defendant conceded that no question should* be made as to “the fact that they took those articles” to defendant; and subsequently attention was called to the fact that such concession had been made; again, as the appellant is not in a situation to review the amount of damages recovered, we see no occasion to disturb the verdict on that ground. We think the appeal from the order should be dismissed and the verdict allowed to stand.

Appeal from the order dismissed.

Judgment affirmed, with costs.

Martin and Merwin, JJ., concur.


author: Mayham, J. Learned, P. J.

text:
    The Hudson River Telephone Co., App’lt, v. The Watervliet Turnpike & Railroad Co., Resp’t.

      (Supreme Court, General Term, Third Department,

      Filed September 9, 1891.)

    Street railroads—Telephone companies—Injunction.
    In an action to restrain the defendant from using electricity as a motive power in such manner as to injure plaintiff's telephone service it was found that both parties were lawfully conducting their respective businesses under the sanction of acts of the legislature and permission of the city; that of plaintiff having been carried on for six years before the introduction of electricity upon defendant’s line; that currents of e’ectricity pass from defendant’s line into the ground and through the same upon private property of the plaintiff and its subscribers, to the injury of its business; that such effects could be avoided by a change of the system of either party; that a change by plaintiff would greatly exceed in cost a change by defendant. Held, that the defendant was not protected by its grant from the state or city from the consequences of allowing its currents to flow upon the private property of plaintiff and the fixtures on the premises of its patrons to the injury of its business, and. that an injunction was the proper remedy.
    Appeal from a judgment entered upon a report of a referee, dismissing the complaint of the plaintiff. The action was brought to restrain the defendant from using electricity for the propulsion of its cars in such a manner as to interfere with and injure the efficiency of the plaintiff’s telephone service in the city of Albany. On the trial the referee dismissed the plaintiff’s complaint, and on such nonsuit judgment was entered in favor of the defendant, from which the plaintiff appeals to this court

      D. Cady Herrick, for app’lt; Marcus T. Hun, for resp’t.
   Mayham, J.

—In the examination of the questions involved in this appeal, it is perhaps necessary and proper for this court to inquire whether they have not been substantially settled by the court of appeals when the parties were before it on an appeal from the order of the general term of this department upon the question of the continuance of a temporary injunction granted in this action.

If the court of appeals has authoritatively disposed of the plaintiff’s right to recover in this action adversely to that right, as is insisted by the learned counsel for the respondent, then it becomes the plain duty of this court to affirm this judgment If, on the other hand, the merits of this controversy remain undetermined, then it becomes equally the plain duty of this court to examine and decide the same as presented on this appeal. The complaint, among other things, alleged that the plaintiff was a corporation and incorporated in 1888 under and in pursuance of chap. 265 of the Laws of 1848, and the several acts amendatory thereof, and that ever since 1883 the plaintiff as such corporation has been, and still is, engaged in carrying on telephone business in the city of Albany, and furnishing telephonic communication between people at a distance both in such city and in other cities and towns at long distance, for which the plaintiff charged and received compensation. The process by which this telephone business was carried on by the use of electricity was described in the complaint with great minuteness.

The complaint also alleged that the defendant was a corporation duly incorporated under the laws of Hew York as a turnpike company, under and by virtue of chap. 141 of the Laws of 1828, and thereafter and pursuant to, and by virtue of chap. 233 of the Laws of 1862, and the consent and permission of the common council of the city of Albany granted in pursuance of such last mentioned act, constructed a railroad track upon and through Broadway in said city, from the northerly bound of such city to South Ferry in the same, and thereafter operated such railroad by horse power until about the month of September, 1889. Section 4 of chap. 233 of the Laws of 1862 authorized the propulsion of cars on defendant’s railroad “ by the power of horses, animals, or any mechanical or other power, or the combination of them, which the said company might choose to employ, except the force of steam.”

On the 17th of June, 1889, the common council of Albany granted to the defendant the right to propel its cars through the city of Albany on its tracks in Broadway by electricity, and to erect poles and string wires in the streets for that purpose, with certain restrictions and limitations on the exercise of that right contained in the ordinance.

The defendant under the latter grant adapted its tracks to the use of electric cars, and strung its wires and constructed its dynamo power and other fixtures and appliances for the purpose., and adapted to the propulsion of its cars upon a system known as the single trolley system, and was about to, or did, commence the operation of its cars in Broadway in such city by electricity upon that system when the plaintiff commenced this action, and alleged in his complaint and proved by affidavits that the operations of the defendant’s railroad in that manner and upon that system would injure and seriously impair the usefulness and efficiency of its telephonic service, and prayed for an injunction restraining the defendant from operating' such road upon that system.

A temporary injunction was obtained and continued by an order of the special term during the pendency of this action, from which order an appeal was taken to the general term, where the same was continued, unless the defendant filed security for any damage which the plaintiff might sustain by reason of the acts of defendant pending the action, in which case the injunction should be discharged. From this order the defendant appealed to the court of appeals, where the appeal was dismissed on the ground that the granting of an injunction pendente lite was a discretionary order, not reviewable by the court of appeals; but in discussing the question and arriving at that conclusion the learned judge who delivered the opinion of the court uses language which, if employed in pronouncing upon this case when properly before that court for determination, would seem to be decisive of the case,.

But the learned judge concludes his opinion in a manner which shows that he did not intend- to express an opinion upon the merits, and the whole subject seemed to be relegated to the trial court to be disposed of, by it and the appellate courts, in the usual and orderly method of trials and appeals, and to that end he concludes his opinion as follows:

“ But we think we ought not to dispose of the case upon its merits in this proceeding. The questions are new and difficult and courts elsewhere have differed upon them. The trial of the case upon the merits is now proceeding, wherein the facts will be judicially ascertained, and in case an appeal shall be taken upon the final judgment rendered, to this court, we shall then be better able than now to determine the ultimate rights of the parties. The present appeal should, therefore, be dismissed.”

It is quite apparent from the above quoted remarks of the learned judge that the whole subject in controversy was remitted to the trial court for its determination as an original question, and having been disposed of by it, as such it comes to this court on appeal, to be reviewed as any other case coming before this court in which there has been no authoritative determination by the court of appeals. The referee finds the organization and incorporation of the plaintiff and defendant substantially as alleged in the complaint; that the plaintiff was incorporated in the month of April, 1883, under and in pursuance of the provisions of chap. 265 of the Laws of 1848, and the several acts amendatory thereof, and supplementary thereto, and ever since 1883 as such corporation it has been, and still is, engaged in carrying on- the telephone business in the city of Albany, which business consists of furnishing means of communication between people at a distance from each other by the transmission of sound, or the human voice; and that in the transaction of such business the use of a current of electricity of an extremely minute character is required; and that the instruments necessarily used in utilizing such current are delicate and sensitive in a high degree.

The referee also finds that persons desiring to communicate with each other are placed in communication through a central office, or exchange, and that the plaintiff’s central office is located in a building on the west side of Broadway, in the city of Albany. The report also shows that the telephone service of the plaintiff is furnished to persons hiring the same for a fixed period at a stipulated price, who are called subscribers: and also to public stations where such use or communication is paid for by any person desiring to use the same, on payment thereof, and that all public and private stations are connected to the central office, or exchange, by a separate wire, which is also connected with a magnetic bell, or annunciator, at the exchange and also at the station, or house or office of the subscribers; and that the plaintiff has connecting lines with stations located in the city of Troy, the village of West Troy and various other cities and villages at long distance from the plaintiff’s central office, and connected therewith by wire and wires as before described. The referee also finds that the plaintiff has expended many thousand dollars, and now has many thousand dollars invested in its plant and equipments in the city of Albany, and a large number of poles erected on Broadway and elsewhere in Albany, and on its various lines in and outside of such city, and has procured license and permits of the owners of buildings to erect poles upon and string wires over and upon their premises, and that plaintiff has subscribers in all parts of the city of Albany who have heretofore been able to communicate by means of plaintiff’s telephone with West Troy and various other cities and villages.

The referee also finds that the defendant is a corporation duly organized and incorporated under and by virtue of chapter 141 of the Laws of 1828, and chapter 233 of the Laws of 1862, and that by the Laws of 1862 the defendant was authorized to maintain one or more railroad tracks through Broadway and North Ferry streets, in the city of Albany, with the consent of and under such restrictions as might be imposed by the common council of the city; and shortly thereafter constructed railroad tracks on the road-bed of its turnpike from West Troy through Broadway in Albany to South Ferry street in said city, and operated such railroad by the use of horse power for the propulsion of its cars.

On the 17th of June, 1889, the defendant obtained permission from the city of Albany to erect iron posts of such form and height as might be approved by the board of contract and apportionment of the city, on both sides of Broadway, between the south line of South Ferry street and the north line of the city, * * * and to string and place wires thereon in such manner that power might be communicated by means of electric motors to be placed on the cars of the defendant, and operate its cars through Broadway and North Ferry street by means of electric motors upon the single trolley system. The referee also found that under the provisions of chapter 233 of the Laws of 1862, the defendant was authorized to use the power of electricity to operate its railroad; and that prior to the commencement of this action the defendant had fitted its road for operation by electricity and had prepared cars for running on said road adapted to use by electricity, but before it had erected a post or strung a wire it was through its president notified by the plaintiff that if it at-temped to operate its road by means oí electricity' upon the system proposed, it would seriously interfere with, if not destroy the telephone business and service of the plaintiff.

The referee also found that the electricity used by the defendant in the propulsion of its cars is collected or generated by machinery propelled by steam in what is termed ' the power house, and that in operating the railroad by electricity the defendant will cause large quantities and powerful currents of electricity to be generated at the power house, which will pass from the dynamos in the power house upon, and through said trolley wires to points where the trolley wheels come in contact therewith, thence to pass down said trolley, through the conductors to the motors, through the motors to the conductors connected with the running gear of the car, and thence to the rails of defendant’s road, and thence in part through the rails and copper wire connections back to the place of generation, but that a portion of such electricity and electrical currents will escape or pass from the rails, copper wire and copper connection into the earth, and pass out through the earth, and electrical conductors found therein, such as gas and water pipes, to a considerable distance from the track of defendants’s railroad and thus come upon the wires of the plaintiff’s system, the ends of which are inserted in the earth, or connected with gas or water pipes, and from them into and upon the telephonic apparatus of the plaintiff.

That whenever the trolley wires of the defendant’s road run for any considerable distance parallel or substantially parallel with the wires of the plaintiff’s system and at short distance therefrom, as in the case of said street called Broadway, a current of electricity by what is termed induction will be excited or induced upon the parallel lines of the plaintiff’s wires by "the currents of electricity passing upon such parallel wires of the defendant, and the current of electricity so excited or induced upon the plaintiff’s wires will pass into and upon the system and apparatus of the plaintiff. That the stations of the telephone company and subscribers are located upon private property and that the telephone service is not disturbed by the “ conduction ” or “leakage ” of the railway currents, except when said currents flow upon the private property of either the telephone company or of the subscribers.

That by reason of the currents of electricity so escaping from the defendant’s tracks and of the currents of electricity so excited and induced upon the plaintiff’s parallel wires by coming into or upon the wires and telephonic system and apparatus of the . plaintiff many of the annunciators of the plaintiff’s exchange will be caused to drop, to the great interruption and detriment of the i plaintiff’s business ; and loud noises will be produced in a large portion of plaintiff’s telephones, by reason whereof the beneficial use of the same will be frequently rendered difficult and unsatisfactory, and many times impossible, to the great detriment of the plaintiff and its business, and such detriment will be continuous, and that therefore the plaintiff will have no adequate remedy at law. That by the adoption and use of either what is called, commonly, the double trolley system, or what is commonly called the storage battery system, as the same are described in the evidence given upon the trial herein, the defendant can obviate all the damage and injury complained of herein by the plaintiff and hereinbefore described.

The adoption and use of either of said systems by the defendant would necessitate the expenditure of large sums of money for construction, maintenance and operation in excess of those required therefor by the single trolley system heretofore adopted .and used by the defendant and hereinbefore described. That the operation of the defendant’s road upon the double trolley system would be much more liable to accidents and interruptions than upon the single trolley system.

That the plaintiff by mating each of its circuits a metallic ■one, as described in the evidence given upon the trial herein, can obviate all the damage and injury complained of by it herein ■and hereinbefore described. That it would cost the plaintiff much more to make each' of its circuits a complete metallic one as aforesaid than it would cost the defendant to change its system from a single trolley to a double trolley one. That it would cost the plaintiff much more to maintain such complete metallic circuit than it would cost to maintain its circuits as now constructed. That the plaintiff can, by adopting and using what is called and known as the McClure device, or system, and described in the evidence given at the trial herein, upon, a portion of its line, obviate to a considerable extent the effect upon its telephone of the currents coming in and upon its wires as above set forth, but that such effects would to a certain damaging extent continue after the adoption and use of such device or system, and that the adoption thereof would cost the plaintiff several thousand dollars.

The referee also found that the current of electricity used by "the plaintiff is so slight that it can in nowise affect the defendant, :and that the single trolley system is the only system of electric railway propulsion that in any degree affects the'telephone service, and that the storage battery system and double trolley system are now in practical operation in various parts of this country and Europe, and that both of the last mentioned systems are operated upon and over roads with heavier grades than those upon the defendant’s road; and that there are no curves, turnouts or crossovers upon the defendant’s road to prevent the use of either the storage or double trolley system, and that the operation of the defendant’s railroad either by the double trolley or storage battery system would prevent any interference on its part with either the plant, equipment or service of the plaintiff. The referee also found that the plaintiff had between 1,400 and 1,500 subscribers, and twenty-seven out of town lines, constituting the Albany exchange ; and that the central office or exchange of the plaintiff being situate immediately upon the line of defendant’s road, will be communicated to all the lines of the plaintiff, and that the plaintiff had erected its poles and strung its wires through the ■streets of the city of Albany and was using electricity, and the earth as a return current therefor, for a number of years before the defendant attempted to make any use of electricity as a propelling force for its cars; that the first electric railway was built in 1879, and that they have only been in use commercially in this county for the last five or six years.

The referee also found that the only way plaintiff can prevent being interfered with and injured is by making a metallic circuit on all of its lines, and that the plaintiff's present switch board cannot be used for a metallic circuit exchange, and that a new switch board will cost about $20,000, and that to change the plaintiff’s exchange from a ground.circuit exchange to a metallic circuit exchange will cost the sum of $120,000, and that the highest estimate of expense in exchanging the defendant’s system from a single to a double trolley system is the sum of $39,520.

The referee found as matter of law that the plaintiff had the right to erect its poles and string its wires through the streets of the’city of Albany and conduct the telephone business by means thereof. The referee also found and decided that upon the pleadings and proof the plaintiff has failed to establish a cause of action against the defendant and that the defendant is entitled to judgment against the plaintiff, dismissing the complaint upon the merits and for costs.

The counsel for the plaintiff excepted to this conclusion of the referee, and also to numerous other conclusions of law, as well as to numerous findings and refusals to find by the referee. The facts found by the referee differ widely from those before the special and general term of this court and the court of appeals when this case was before the courts on appeal from the order continuing the injunction pendente lite. In considering the questions raised on this appeal, I think we must start with the assumption that both the plaintiff and defendant held valid charters and grants from the State, and the municipal authorities of the city of Albany, to conduct their respective business in that city. The plaintiff under the grants and concessions to it had the right to establish its exchange, set its poles and string its wires in the streets and over and upon private property when it had acquired that right of the individual owners either by grant or license; and thus to carry on the business of telephoning, and that the defendant in like manner had the right by legislative grant and municipal ordinance to lay its tracks in the streets of' the city and propel its cars over the same by any power authorized in the act of 1862, and thus to operate its railroad.

Starting with this assumption, we must next inquire whether either of these parties may so conduct its own business as to injure or impair the business of the other. . And if so, to what extent such injury may be lawfully carried. In examining this question, we must endeavor to ascertain what rights the respective parties acquired in the street under their grants, and whether in any event the defendant can without liability permit currents of electricity, induced by it in the operation of its railroad, to escape upon the private property of the plaintiff, to the damage of the same. The grants to both of these corporations of their respective charters, for the proper and necessary carrying on of their respective business, are for public purposes, and either may in a proper case condemn private property, chap. 471, Laws of 1853, § 2 ; People ex rel. Postal Telegraph Co. v. Hudson River Telephone Co., 19 Abb. N. C., 466, and each were authorized by law and city ordinance to conduct their business in Broadway in the city ■ of Albany.

While it is true that at the time the defendant, by the act of 1862, acquired the right to lay down rails and operate a railroad in Broadway, electricity was unknown as a motive power for railroads, yet this court has held that the authority given by that act embraced electricity. Hudson River Telephone Co. v. Watervliet Turnpike & R. R. Co., 29 N. Y. State Rep., 696. I think that within this case it is no longer an open question for the determination of this court as to the right of either of these parties to the exclusive occupancy of the street by its electric currents, as this court in that case expressly held that “ The grant to each company is to employ upon the same street the invisible energies of nature, and since it is in vain to define the fields that confine them, we are perforce constrained to seek methods which will neutralize or reduce to the minimum the injurious effect of their contact, or interference with each other.” While, therefore, the above must be the law of this case as to the street, in which both parties have, under the grants, equal immunity, it by no means follows that either party may permit its current, used properly for its own business, to stray upon, the private property of the other, to its damage. As we have seen, the referee has expressly found: “ That the stations of the telephone company and subscribers are located on private property, and that the telephone service is not disturbed by the 1 conduction ’ or ‘leakage’ of the railroad current, except when such current flows upon the private property of either the telephone company or that of the subscribers.” If, therefore, we assume that the legislative grant gave the defendant the authority to use as a motive power for the propulsion of its cars upon the tracks which it was permitted to lay down in Broadway an energy or power which would pervade the entire street, can it be held that as an incident of that grant the defendant could adopt a power which could not be confined to the street, but would spread out upon the private property of abutting owners, to their damage ? In answer to this question we are re-„ ferred by the learned counsel for the defendant to the rule that grants of franchises to be exercised for the public convenience must be liberally construed for the promotion of their beneficial purpose, and we are referred to 1 Morawetz.on Private Corporations, where it is laid down as a rule that “ There can be no doubt that railroad companies may adopt all improvements in their business which a liberal management and an inventive genius can provide.” Again: “Doubtless it is to be held that every grant of power is intended to be efficacious and beneficial, and to accomplish its declared object, and that it carries with it such incidental powers as are requisite to its exercise.” Matter of City of Buffalo, 68 N. Y., 172.

“ Within the limits of substantial adherence to purpose the empowering clause of incorporating instruments should be construed largely and liberally so as not to defeat the purpose by too narrow restrictions of the means.” Mayor of Norwich v. Norfolk Railway, 4 Ellis & Bl., 433. While these rules above referred to and quoted are doubtless sound and should govern in a proper case, we fail to see their application to this question. It cannot we think be claimed that the application of these principles will authorize such a construction to be placed upon a legislative grant as to authorize one corporation to invade the private property of another and destroy or appropriate it without condemnation and compensation. The sound and just elementary rule still prevails, that a party must so use his own property as not to injure his neighbor. It is true that exceptions to this rule may exist in certain cases, when the act done is in the lawful and reasonable use of one’s own property, and when the damages to another are so remote as not to be readily traceable as the consequence of the act complained of. 103 N. Y., 18; 3 N. Y. State Rep., 56.

This rule is not changed by any right or authority conferred upon the defendant by the act of 1862 or the authority conferred on it by the municipality to use electricity as a motive power. The authority thus conferred must be deemed limited within the rules of law by which the rights of owners of abutting property are protected in the use and enjoyment of their property.

The consent of the state or the municipality to the doing of an act in a public street does not vary the rights and liabilities of the parties in respect to the cause of action when it is based on the wrongful or negligent manner in which the act was done and not upon its unlawfulness. Village of Port Jervis v. First National Bank, 96 N. Y., 556 ; Mairs et al. v. Manhattan Real Estate Association,89 id., 503.. “Consent by a municipal corporation to a person to do a lawful act merely permits it to be done in a careful, prudent and lawful manner, and when performed in any other manner and injury to a third person ensues, the author of the injury is liable therefor.” “ Upon receiving a license from the body authorized to grant it * * * the licensee impliedly agrees to perform the act in such a manner as to save the public from danger, and the municipality from liability.” Village of Port Jervis v. First National Bank, 96 N. Y., supra, and cases there cited.

The authority conferred by the legislature in this case was to propel their cars by “ the power of horses, animals or any mechanical or other power or combination of them- which, the said company may choose to employ, excepting the force of steam.” The language of the act of the legislature conferring this grant of franchise is similar to that under consideration by the court of appeals in Cogswell v. The N. Y., N. Haven & Hartford R. R. Co., 108 N. Y., 10; 3 N. Y. State Rep., 56. Under the authority conferred by the legislature to operate a railroad, the defendant erected its engine house and located its coal yard in close proximity to the plaintiff’s dwelling, so that the smoke, gas and dust seriously affected the comfort and health of the occupants of the house. In an action for damages by the owner of the house against the railroad company the defense was the legislative grant of authority and that the defendant had not abused or exceeded the authority given. The trial court found : “ That whatever

damage has resulted to the plaintiff or her property by reason of the defendant’s use and occupancy of its engine house and coal bins is damnum absque injuria.

The court of appeals reversed the judgment of the trial court in this case, and in the discussion of the power of the legislature recognized that in some instances the legislature may subject private property rights to inconvenience or loss for the promotion of the public good, but in laying down that rule the court uses this qualifying language. “But the statutory sanction which will justify an injury to private property must be express, or must be given by clear and unquestionable implication from the powers expressly conferred, so that it can fairly be said that the legislature contemplated the doing of the very act which occasioned the injury.? This is but an application of the reasonable rule that statutes in derogation of private rights or which may result in imposing burdens upon private property must be strictly construed. For it cannot be presumed from a general grant of authority that the legislature intended to authorize acts to the injury of third persons where no compensation is provided, except upon conditions of obtaining consent. This construction of statutory powers applies with peculiar force to grants of corporate powers to private corporations which are set up as a justification of corporate acts to the detriment of private property.” Cogswell v. N. Y., N. H. & H. R. R. Co., supra. It will hardly be contended that the legislature, in making the grant to the defendant in 1862, contemplated the use of motive power by the defendant in running their railroad which would not only pervade the whole of Broadway but would extend beyond the limits of that thoroughfare and drive out of use on private property, industries lawfully and properly established there, without the consent of the owner, but simply by the exercise of superior and irresistible force. Unless the legislature did contemplate such a result and provide for it in the act, the defendant under the legislative grant acquired no right thus to injure and destroy the plaintiff’s property or impair its use, especially on its own premises. This would seem to be the clear and inevitable result of the court of appeals in the case last cited. It will be observed in this case that the language in the legislative and municipal grant of authority to the defendant relates only to the power to be used by it, and specifies no particular mode of its application.

If the single trolley system was the only method of applying electricity as a motive power to cars, then the authority to use electricity might be said to contain an authority for the use of that system, notwithstanding its injurious effect upon others, provided the legislature has the constitutional power to grant a right to a corporation to invade private rights or destroy the property of other corporations or individuals. But as the case discloses that the single trolley system is not the only method of applying electricity as a motive power for the propulsion of railroad cars, we are not called upon to examine that constitutional question. The referee having found that all injury to the plaintiff’s business and property can be obviated by the adoption of the double trolley system or storage battery system, it follows that enjoining the use of the single trolley system would not deprive the defendant of the use of electricity as its motive power, but leave it in the beneficial enjoyment of the grant by the legislature and of the ordinance of the common council, neither of which confine the grant of the use of electricity to the single trolley system. The defendant having it in its power to avail itself of the use of electricity, conferred by the statute and ordinance, in a manner in which the .rights of the plaintiff would not be affected injuriously, cannot be permitted to justify an injury to the plaintiff under such statute and ordinance.

In the case of Hill v. Managers of Metropolitan Asylum District, L. R., 4 Q. B. Div., 433, the act of Parliament authorized the erection of an asylum for infirm and insane paupers in the metropolitan asylum district in London, to be designated by the poor law board, and authorized the purchase and leasing and fitting up a building for that purpose.

. The act referred to small-pox patients as among the class of persons to be provided for. Under this act the managers erected a hospital in close proximity to the plaintiff’s house, which the jury declared a nuisance; no precise definite site was fixed by the act of Parliament, except a general designation of the metropolitan asylum district in London. The commissioners might have selected a site which would not have injured the plaintiff. The defendant sought to justify under the act But it was held that the statutory sanction, sufficient to justify the commission of a nuisance, must be express; that the particular land, or site for the hospital, must have been defined in the act; that it must appear by the act, while defining certain general limits, that: it could not be complied with at all without creating the nuisance. Lord Watson used this language: “If the order of the legislature can be implemented without-nuisance, they cannot, in my opinion, plead the protection of the statute; and on the other hand, it is insufficient for their protection, that what is contemplated by the statute cannot be done without nuisance, unless they are also able to show that the legislature has directed it to be done. •

“Where the terms of the statute are not imperative, but submissive, when it is left to the discretion of persons empowered to determine whether the general powers committed to them shall be put in execution or not, I think the fair inference is, that the legislature intended that discretion to be exercised in strict conformity with private rights, and did not intend to confer license to commit nuisance in any place which might be selected for that purpose.”

The reasoning and conclusion of the court of queen’s bench in the above case was adopted and fully acquiesced in by the court of appeals in the case of Cogswell v. N. Y., N. H. & H. R. R. Co. 103 N. Y., supra. The rule therefore seems settled and of uni versal application, that when a grant is given by the legislature to conduct a business, in the conduct of which two or more ways exist, and by one of which the rights of others will be injuriously affected, and by the adoption of the other methods other parties will not be injured, a court of equity will interfere and enjoin the use of the mode by which the rights of others will be injuriously affected.

We are cited to numerous cases by the learned counsel for the defendant, where it is held that injuries remote and consequential must be submitted to by the citizen in the march of public improvements, and that the injury in such cases is damnum, absque injuria ; such as building docks in navigable rivers, cutting down on the line of abutting premises in excavating for public streets, and the like; but I have found no case like this, where the injury is direct and not remote, and where the act has not been ordered by the legislature, where the court has refused relief or redress to the party injured." It is also urged by the learned counsel for the defendant that, as the electrical system to be used by the defendant in the propulsion of its cars has not been defined by the legislature, it must be left to the determination of the defendant as to what method or system it will adopt, and that the power of selection is not the subject of review. The doctrine when applied to public bodies and municipalities is sound and supported by authority. But I think with private corporations and.individuals a different rule obtains, and while they may adopt such devices as they please, so long as their selection does not affect the rights of others, they are bound so to use their own as not to injure others.

An individual may use for his own purposes a powerful, ferocious and dangerous animal, but he must do so at his peril, and if others are injured by such animal known by the owner to be dangerous, no one would question the liability of the owner.

But it is also said that the defendant had selected the best known method and therefore- cannot be interfered with in its use. It is true that the referee has found that the system of the defendant, in the use of electricity as a motive power, is the most efficient and economical system in use. It is equally true that the plaintiff's system of telephoning is shown to be the usual and approved method, and it is not claimed that its use in any way injures the business of the defendant. Assuming as we must that each company, within their chartered privilege, is in the pursuit of laudable and useful business, no reason is perceived why they should not each be accorded the protection guaranteed by law to other business and pursuits, and in like manner be subject to the duties and obligations imposed by law. Wood, in his Law of Nuisances, defines such rights and obligations as follows: “Every person who, for his own benefit, profit or advantage, brings upon his premises, and collects and keeps there, anything which, if it escapes, will do damage to another (subject to some exceptions for industrial interest) is liable for all consequences of his acts, and is bound at his peril to confine and keep it upon his own premises.” Wood Law of Nuisance, 115, § 111.

. We see no reason why this principle is not applicable to the parties in this action. As we have seen from the report of the referee, no injury occurs to the plaintiff until the electricity generated or produced by the defendant invades the plaintiff’s premises, in violation of the above principle. But it is doubtless the duty of the court, in the exercise of its equitable power, to protect as far as practical within legal rules both these great modern improvements, and as intimated by this court and the court of appeals, when this case was before it on a motion, if practical, save both of them to the public use, upon just and equitable principles and at the least possible expense and burden to the parties. On that motion it was assumed that the telephone could change its system from a ground circuit to a metallic circuit at less expense than the defendant could change from a single to a double trolley system. The trial of the action and the report of the referee now demonstrates that the expense of changing to a metallic circuit by the plaintiff would be over §120,000, while that of changing from the single to the double trolley system would be but about $33,000. . Thus it appears that in the light of economical expenditure of money the defendant can obviate the difficulty complained of at much less expense than the same can be done by a change of plaintiff’s system.

Again it is worthy of consideration that the plaintiff established its plant and prosecuted its business for some years before the use of electricity was known as a motive power for railroads ; and while this court has held that the right of the defendant to use electricity was given by the act of 1862, it could npt have been anticipated by the plaintiff at the time it established its plant and commenced its business that it could be interfered with by any power which the defendant by that act could employ as a motive'power. But if we assume, as we must, that the.act of 1862 and the act under which' the plaintiff was incorporated gave to these parties equal equity, still the employment of the plaintiff’s capital in the establishment of its business long before either the plaintiff or defendant knew of the defendant’s right to use electricity would seem to give the plaintiff a superior equity. In Pomeroy’s Equity Jurisprudence, § 114, the rule is laid down as between parties having only equitable interests if their equities are in all respects exactly equal, priority of time will give the better equity. Having reached a conclusion that the defendant is not protected by its grant from the state or the city against the consequences of allowing its currents to flow upon the private property of the plaintiff, and that of its fixtures upon the premises and property of its patrons, to the injury of the plaintiff and its business, and that the injury complained of is not damnum absque injuria, the remaining question is, is this a proper case for equitable relief by way of injunction ; or has the plaintiff a complete and adequate remedy at law? The referee finds and the evidence clearly establishes-that the injury complained of is continuous and permanent; that by reason of the currents of electricity so escaping from the defendant’s tracks, etc., and of the currents of electricity so excited or induced upon the plaintiff’s parallel wires by the parallel wires of the defendant coming into or upon the wires of the telephone system and apparatus of the plaintiff, many of the annunciators of the plaintiff’s exchange will be caused to drop, to the great interruption and detriment of the plaintiff’s business, and loud noises will be produced in a large proportion of the plaintiff’s telephones, by reason whereof the beneficial'use of the same will be frequently rendered difficult and unsatisfactory and many times impossible to the great detriment of the plaintiff and its business, and that such detriment will be continuous, and that therefore the plaintiff will have no adequate remedy at law. It would seem to follow that the only available remedy open to the plaintiff to prevent a continuance of the injury to its property is an appeal to the equitable power of the court to restrain the defendant from a continuation of the injury, and that an injunction is the proper remedy.

We think, therefore, that the conclusions of law of the learned referee are not in harmony with the facts found, and that the dismissal of the complaint was error, for which the judgment should be reversed.

Judgment reversed, referee discharged, and a new trial granted, costs to abide event

Learned, P. J.

—I concur with the foregoing opinion. It seems to me that this case has been practically decided by the court of • appeals.

It was held by that court in McHenry v. Jewett, 90 N. Y., 58, that if in any case the complaint showed no cause of action, then on an appeal to that court from an order affirming an injunction order pendente lite a question of law arose; that that court ought to decide that question and ought to reverse the order. The same rule is laid down in Williams v. W. U. Tel. Co., 93 N. Y., 640, and again in the present case in 121 N. Y., 397; 31 N. Y. State Rep., 524. When in the present case the appeal from the order affirming the injunction was decided, two of the- judges were of the opinion that the complaint showed no cause of action, and, therefore, must have been in favor of reversing the order appealed from. But the other judges of the court held otherwise, and dismitsed the appeal, holding that the complaint did state facts show- - ■ ing a cause of action, and, therefore, that the question of granting an injunction pendente lite was one of discretion in this court The allegations of facts were clearly stated in the complaint, and there could be no uncertainty as to the positions taken by the parties. The questions argued in this court, and necessarily in the court of appeals, were largely as to the right of the plaintiff to enjoy its alleged franchise and business without the interference which was alleged to arise from the franchise and business of the defendant in the manner stated. Unless the plaintiff had such rights on the facts alleged in the -complaint, then of course it could not maintain the action, and the court of appeals would have reversed the order which affirmed the injunction pendente lite.

It is true that the opinion of the court speaks of “ grave doubts ” whether on the facts stated in the complaint any cause of action existed. This language is probably used in compliment to the two judges who disagreed with the majority opinion. Undoubtedly, too, the defendant had “grave doubts ” on this point, and for a settlement of these doubts appealed to that court. But there could be no longer any doubt on the subject when that court decided to dismiss the appeal. For its decisions make the law in this state. And, therefore, it cannot say that it dismissed the appeal because it' did not know whether the complaint stated a cause of action or not. It was the right of the defendant to have á reversal as matter of law if no cause of action was set forth in the complaint. And when that court dismissed that appeal, it decided that the complaint stated a good cause of action.

Something is said in the opinion as to the trial being then in progress and as to the facts which thus might be judicially ascertained ; and, of course, if the trial should not have established the facts alleged in the complaint, then that decision .of the court of appeals would be inapplicable. But we are not to suppose that that decision was merely a temporary expedient, or that the court would cause parties the labor and expense of trying a cause in which the complaint alleged no good cause of action, when the question was directly before the court whether or not the complaint did contain such good cause of action.

It ,did not need a trial of the issues to determine whether on the facts stated in the complaint a cause of action existed. If on these facts a cause of action did not exist, the court would have reversed the order. If it did, the court would have dismissed the appeal, as was, in fact, done. ' To suppose that the court did not know whether a cause of action existed or not on the facts stated, would be disrespectful. We cannot believe that when this case shall finally come before that court, it will hold any differently from its decision above cited, viz. : that the complaint states a good cause of action.

The referee's report sustains the allegations of the complaint and establishes facts more favorable to the plaintiff than those which were proved on the hearing upon the motion for an injunction, as is shown in the preceding opinion by my brother, May-ham. His conclusion, therefore, necessarily follows from the decision of the court of appeals above referred to.

Landon, J., concurs.


author: Mayham, J.

text:
    The Hudson River Telephone Co., Resp’t, v. The Watervliet Turnpike & Railroad Co., App’lt.

      (Supreme Court, General Term, Third Department,

      Filed September 9, 1891.)

    Costs—Extba allowance—Injunction.
    In an action to restrain the use of electricity upon a portion of defendant’s route where the complaint simply demands an injunction, and the answer sets up no claim for affirmative relief, there is no basis for an extra allowance of costs on the dismissal of the complaint. The only question which could he litigated under such pleadings is the right of the plaintiff to an injunction, and neither the value of defendant’s franchise, of its right to use electricity nor that of its tracks and cars, is involved.

      Appeal from an order denying defendant’s motion for an additional allowance on the dismissal of the plaintiff’s complaint

      Marcus T. Hun, for app’lt; Herrick & Delehanty (D. Cady Herrick, of counsel), for resp’t.
   Mayham, J.

—This application was made under § 3253 of the Code of Civil Procedure. The action was to restrain the defendant from operating that portion of its railroad passing along Broadway in the city of Albany by electricity, as a motive power, upon what is known as the single trolley system, on the ground that the use of such system by the defendant at that point obstructed or impaired the use of the plaintiff’s telephone system which had its central office, batteries, key board, ana other apparatus lawfully located on that street and in operation there, prior to the time the defendant commenced to propel its cars through that street by the use of electricity. On the trial of this action the referee dismissed the plaintiff’s complaint

It does not seem to be urged on this motion that this action was not of the character and kind that comes within the designation in the Code of difficult and extraordinary actions; but the motion was denied, as appears from the order, on the ground that there was no basis in the subject matter of the action on which an additional allowance can be estimated.

The language used in the order clearly indicates that the decision was solely upon that ground. The order is as follows: “ Ordered that said motion for an extra or additional allowance of costs to the defendant in the above entitled action be, and the same hereby is, in all things denied upon the sole ground that the action being to restrain the defendant from employing a particular system only and over a part only of its road, the franchise was not involved, and there is therefore no basis on which an allowance can be estimated.” The complaint in this case asked no other relief than an injunction, restraining the defendant from the use of this motive power on the part of the road running through Broadway.

The defendant’s railroad and franchises connected with the same extended from South Ferry street in the city of Albany to West Troy, embracing several miles in extent not within the city of Albany. So that the action was not to restrain the defendant in the use of its franchise, but only to restrict its use upon Broadway in Albany. The subject matter of controversy was not, therefore, the value of the plaintiff’s railroad or its franchise, and its value could not therefore be taken as a basis upon which to estimate or compute an additional allowance. Hor do we think any estimated capacity of plaintiff’s railroad for earning money could be taken as a basis for such an estimate. The complaint makes no claim for damages nor does the answer set up any claim for affirmative relief, but simply with other defensive matters denies that the plaintiff is entitled to an injunction. Any evidence upon the trial tending to establish the value of either franchise, or the amount of damage either company had sustained, would have been inadmissible under the pleadings.

There is no allegation in the complaint of the amount of damage suffered by the plaintiff by reason of the acts of the defendant sought to be restrained in this action, nor is there any allegation in the answer of the damage which has or will result to the defendant by reason of the injunction prayed for in the complaint

In Conaughty v. The Saratoga Bank, 92 N. Y., 404, Ruger, Ch. J., in discussing the question of additional allowance, says :

“ In determining this question the pleadings furnish the sole evidence as to what was the subject matter involved, and the value of such matter can be arrived at only by competent evidence, tending to establish the fact”

In the case at bar the only question which could under the pleadings be litigated, was the right of the plaintiff to an injunction. The value of the franchise of the plaintiff was in no way involved. If the plaintiff had succeeded in the action it is not perceived upon what basis it could have demanded or received an additional allowance.

Nor does it appear upon what basis the defendant can predicate a claim for an additional allowance upon the value of the subject matter involved. What was involved ? Certainly not the defendant’s tracks and cars. Not its corporate franchise as a railroad company. If it is answered that its right to use electricity in some manner as a motive power was involved then the answer is that the value of that right was not in issue under the pleadings in this action.

In the case of the Atlantic Dock Co. v. Libby, 45 N. Y., 504, which was an action for an injunction, Chief Justice Church in discussing the question of an additional allowance under § 309 of the Code of Procedure, which was substantially like § 3253 of the present Code, uses this language: “ The action was brought to restrain the carrying on of certain business, and for $1,000 damages. No damages were recovered,, but the action was sustained for the injunction. The question therefore is, whether the subject matter involved in the action was the value of the premises and machinery ? I think not.”

But it is urged that the defendant suffered loss by reason of the operation of the temporary injunction, and the proximate estimate of that loss is sought to be proved by affidavits used on this motion. As we have seen, that was not in issue by the pleadings in this action, and cannot, we think, be tried on this motion. Presumably the plaintiff gave a bond to protect the defendant against that loss, upon which the defendant in a proper proceeding may be indemnified. The statute makes no provision for protecting against such loss by any additional allowance of costs.

We think that the learned judge at special term was right in ' holding that there is in this action “no basis on which an allowance can be estimated.”

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

Learned, P. J., and Landón, J., concur.


author: Learned, P. J.

text:
    Isaac Hoag, Pl’ff, v. The Town of Greenwich, Def't.

      (Supreme Court, General Term, Third Department,

      Filed September 9, 1891.)

    1. Town bonds—Validity.
    Commissioners of the defendant town, appointed for that purpose, in 1871, executed bonds to the amount of $40,000, payable in 1891, but a portion thereof were not issued until after the passage of chapter 925 of that year, authorizing the issue of bonds payable at less than thirty years. In an action upon said bonds brought by a purchaser thereof, Held, that the bonds issued after the passage of the act were valid, although payable in twenty instead of thirty years, but those issued before that time were invalid.
    2. Same—Over-issue.
    The mere fact that the commissioners issued over ten per cent of the bonds, payable in one year, does not render such invalid in the hands of a purchaser, as such fact is an extrinsic one not discoverable by the purchaser.
    8. Same—Bar.
    A judgment of the court of appeals dismissing the complaint in an action to reform such bonds, but not upon the merits, does not prevent a subsequent recovery upon the same bonds.
    Appeals by both parties from a judgment of special term, declaring the invalidity of certain bonds issued by the town of Greenwich, ■ and declaring the validity of certain other bonds issued by said town, and directing judgment for the interest on the latter bonds.
    Cowen, Dickerson, Nicoll & Brown (Esek Cowen, of counsel), for pl’ff; Westfall & Whitcomb (D. M. Westfall, of counsel), for def’t.
   Learned, P. J.

—By a general act, chap. 907, Laws of 1869, the general railroad law was amended, and through commissioners appointed as therein directed, municipal corporations, including towns, were authorized to make issue, sell and dispose of their bonds, and to use the avails in the manner therein prescribed. Such issue and sale of bonds was undoubtedly a borrowing of money by the municipal corporation. For the bonds had no validity until issued; and their issue was, therefore, not in accurate language a sale of .property. But the money received by the commissioners was, in fact, borrowed by the municipal corporation through its agents. Coddington v. Gilbert, 17 N. Y., 489. The commissioners were agents of the municipal corporation. Gould v. Town of Oneonta, 71 N. Y., 298.

Under this amendatory act a majority of the taxpayers of the town of Greenwich took proceedings to have the town borrow $40,000. The matter was heard before the county judge, and his adjudication thereon was made, which by § 2 of the statute has the same force and effect as other judgments and records in courts of record in the state. He adjudged that the petitioners represented a majority of the taxpayers and of the taxable property, and he appointed the commissioners authorized by the statute. These commissioners executed bonds of said town of Greenwich, and sold them at par during th.e year 1871. Thus, as is shown above, the town borrowed from the so-called purchasers of the bonds the amount paid for them.

The commissioners for the town invested the money received in bonds of the Greenwich & Johnsonville E. E. Co., according to the provisions of the said statute and the petition of the taxpayers aforesaid. The money thus received by the railroad company was expended in the construction of a bridge into said town of Greenwich and in depot and terminal buildings in said town.

Up to the year 1877 the railroad company, instead of paying the interest on its own bonds held by the town, paid the coupons on the town bonds to the holders thereof. For the years 1877 and 1878 the town of Greenwich paid the semi-annual interest on its bonds to the holders thereof with moneys raised by taxation, including the coupons payable January 1, 1879. Since that time the town has paid no interest or coupons; and since 1880 has repudiated the said bonds and coupons.

The plaintiff was one of the original lenders of money to the town as above stated, and received a bond therefor. He is also the assignee of the bonds and the rights of many other lenders; and in all holds thirty of these bonds of $500 each.

In February, 1880, the bonds were tendered to the supervisor of the town and several demands were made on him, viz., payment of interest and coupons; issue of bonds in accordance with chap. 907 aforesaid in place of the bonds tendered; payment of the several sums of $500 each as moneys paid for the use and benefit of the town. These demands were refused.

The ground on which the town denies its liability is that by § 4 of the statute aforesaid the bonds are to be payable thirty years from their date, while «the bonds in question are dated "March 25, 1871, and are payable July 1, 1891.

We have then this condition of affairs. The defendant has borrowed money of the plaintiff and his assignors for a purpose and in a manner (except as to the time of maturity of the bonds) authorized by statute. It has received this money and has invested it in securities, as it was authorized to do. It refuses to pay its own obligations given therefor on the ground that they were made payable at too short a time; it refuses to give other obligations in the place of these, payable at the proper time; and it refuses to return the money which it has borrowed and for 'which (as it claims) it issued void obligations. Whatever may be the law in such case, it is plain that justice demands that plaintiff shall have some relief. Common sense says that it is wrong that a person shall borrow money and shall escape repaying it by giving a void obligation therefor. That is what this defendant has done up to this time in respect to most of this indebtedness. Chapman v. City of Brooklyn, 40 N. Y., 372 at 380.

It may be well in the outset to examine previous litigations in regard to the class of securities here in question.

One Potter, in 1880, commenced an action against the defendant in respect to one of these bonds. His complaint contained three counts. The first set forth the proceedings under which the bonds were issued. It averred in substance that the bonds were, by mistake, issued for twenty years instead of thirty; and that the then plaintiff had tendered his bond to the commissioners and requested them to execute one according to the statute, which the commissioners declined to do.

The second count set forth more briefly the issue of the bonds by defendant; the payment therefor by Potter; the refusal of defendant to pay the coupons on the ground that the bond was illegal; the offer to surrender the bond and the demand of the money.

The third count was a simple count for money paid, laid out and expended by Potter to the lawful use of defendant and defendant’s promise to repay, with interest.

The judgment demanded was a reformation of the bond, if not; then a recovery of the amount.

The defendant demurred to the second and third counts and answered the first

The special term overruled the demurrer, with leave to answer over. Defendant did not answer over.

The case subsequently came on to be tried on the first count and judgment was rendered for plaintiff, Potter, practically giving the equitable remedy of reformation.

On appeal to the general term, the majority of the court reversed the judgment on the trial of the issue of fact, and also reversed the judgment on the demurrer. Potter v. Greenwich, 26 Hun, 326. On appeal to the court of appeals, the judgment on the demurrer was affirmed on the prevailing opinion below, and an opinion was given affirming the judgment on the trial of issues. 92 N. Y., 662.

The court of appeals, therefore, said that a count for money paid to the lawful use of a town was not good, for that was the only question raised by the demurrer to the third count How that decision is consistent with Hathaway v. Cincinnatus, 62 N. Y., 434, as cited in Horn v. New Lots, 83 id., 106, I am unable to say.

The judgment in that case was at first entered as a judgment dismissing the complaint on the merits. Subsequently this was modified, So that the judgment is now simply a dismissal of the complaint without saying that it is on the merits. That judgment, therefore, does not prevent a new action for the same cause. Code, § 1209. The same is true of the other actions commenced at the same time, and which were to abide the event of the Potter action.

The case of Brownell v. Town of Greenwich, 114 N. Y., 518 ; 24 N. Y. State Rep., 6, affirming 44 Hun, 611; 8 N. Y. State Rep., 737, arose on five other of these bonds, and was heard'on a submitted case filed as of December 31, 1884. The opening sentence of the opinion might be considered to be an answer to the statement that a town is not'shown to be liable by a complaint alleging money paid to its use. It says that the defendant is “a municipal corporation with power to borrow money on an extensive scale and to invest it in stock or bonds,” etc. It proceeds: “ The plaintiff when he paid his money for the bonds in question, paid it to the town, and the town received it and invested it in railroad bonds, which it is presumed to still hold, and which, in the absence of proof to the contrary, are presumed to be of value.” The defendant contends that he (the plaintiff) received nothing of value because, as it claims, the bonds are void.

It was held in that case that the actual delivery of the bonds determined the date when they were issued, and that the bonds then in question were issued July 1, 1871; and after the passage of chap. 925, Laws of 1871, which was passed May 12th, which amended § 4 of the bonding act and authorized the issue of bonds payable at less than thirty years. Judgment was rendered for the interest, or coupons, then payable.

In applying these decisions to the present case, it is to be observed that the learned justice found that of the thirty bonds in suit all numbered from fifteen upwards were issued after May 12th, being twenty-six in all, and that these were valid; that the others, viz. : Nos. 8, 9, 10 and 11 were issued before that date, and are void. Now, in regard to these twenty-six, the decision last cited is applicable, unless the present case is affected by a clause in the amendatory act above cited, which says: “But they shall not so issue the bonds that more than ten percent of the principal of the whole amount of bonds issued shall become due and payable in any one year.” These twenty-six bonds were all issued in 1871, so that more than ten per cent of the whole issue did become payable in one year; and the defendant insists that for this reason the bonds are void. Now, if the defendant is right on this point, then the five bonds in the Brownell case were void. For they, as well as the twenty-six above specified, were all payable at one time; and, therefore, they violated that statutory provision that only ten per cent should be payable in a year. It would seem, however, from the case and the opinions that there was no affirmative statement then before the courts whether any bonds other than those of Brownell had béen issued after May 12th. The defendant urges that the issue and delivery by the commissioners of more than $4,000 of bonds payable in one year, made ■ all beyond that amount void. On this, defendant cites Thompson v. Town of Mamakating, 37 Hun, 400; aff’d 106 N. Y., 674. That was a . case where commissioners were authorized to issue $175,000 of bonds. By mistake they issued still another bond “ without any consideration therefor ” and delivered it to one David, who immediately agreed to surrender it, but afterwards disposed of it. It was held that it was void.

It appears, therefore, that the bond was issued without authority and without any consideration. The particulars are not stated, but it would seem that the bond had no real delivery ; issued by mistake, and without consideration; and not claimed by the person who received it to belong to him. In these respects that bond was entirely unlike those in question. They were delivered for a full consideration and not by mistake. Both parties intended to- make a valid transaction. And if there is any fraud in connection with the affair it is on the part of the defendant, which has obtained the plaintiff’s money on the pretence of giving a good obligation, and refuses to return the money, while it claims to have put off a void obligation upon the plaintiff.

How, these commissioners, under the amendatory statute, could, after May 12th, issue these bonds, and all of them, so that they would be valid. They did not, as in the Mamakating case, issue a larger amount of bonds than they were authorized to issue in all. It was entirely out of the power of any person who loaned his money to ascertain how many bonds had been previously issued. The knowledge of that fact was with the commissioners only. A person who loaned his money and received therefor eight of the bonds in question, could not ascertain whether any had been previously issued, or if they had been, whether such previously issued bonds were payable in 1891 or in 1890 or in some other year. It cannot be supposed that the statute was intended as a trap to enable the commissioners to swindle unsuspecting lenders by pretending that they had not previously issued any bonds payable in 1891, when they had done so in fact Suppose a lender had inquired of one of the commissioners and they had informed him that no bonds payable in 1891 had been issued, he could not ascertain the falsity of the statement, if it was false. For he could not know in whose possession the issued bonds were, as is clearly pointed out in the Brownell case, at page 530.

As is said in Gould v. Sterling, 23 N. Y., 463: “ It being shown by other evidence that the agency existed and that the act done was within the general scope of the power, the principal is bound by the representation of the agent as to any essential facts known to the agent but which the party dealing with him had no certain means of ascertaining.” So in Farmers & Mechanics' Bank v. Butchers & Drovers' Bank, 16 N. Y., 134, the same doctrine is stated. Here the commissioners were agents of defendant The general scope of the power was to issue bonds. The extrinsic fact which is claimed to have limited that power in the present case was the previous issue of $4,000 of bonds, payable in 1891. Just as in the case last cited the extrinsic fact which limited the teller’s power to certify checks was the want of funds of the drawer. But these extrinsic facts were known to the agent and were not known to the person dealing with him. As to these then such person could rely on the agent’s representations.

The argument of the defendant applied to the case last cited of the certification of a check by a teller of a bank, would hold that such certification was a false representation of the existence of his power to certify. For certainly the authority given to him is only to certify when the drawer has funds, So in the present case we may, for the sake of argument, admit that the authority given was to issue bonds payable in 1891 when $4,000 payable in that year had not previously been issued. But the general scope of the power was to issue the bonds. The limitation was an extrinsic fact, not discoverable by the lender. We think, therefore, that the court held correctly as to the twenty-six bonds.

But the defendant urges that eighteen of these bonds were involved in the Potter litigation, and that the judgments in that litigation are conclusive against them.

Where, under § 191, subd. 1, the appeal contains the assent that judgment absolute may be given, and the appellant fails on his appeal, the judgment then rendered ends the action, and is therefore called absolute. But it is not more absolute than any other final judgment. If a plaintiff were non-suited 'at the circuit and that non-suit were finally affirmed by the court of appeals, the judgment would still be a judgment of nonsuit and nothing more. As in the Potter case, the plaintiff recovered at the special term; the general term reversed the judgment and granted a new trial. What would have been proved at the new trial we cannot determine. The plaintiff appealed to the court of appeals, and that court dismissed the complaint. That decision adjudged that on the former trial the plaintiff had not made out a case for relief. But the complaint was not dismissed on the merits. Thus, the plaintiff was not, as above stated, barred of another action. The judgment was like a non-suit As a precedent, of course, the case showed that the facts proved did not justify the equitable relief which the special term had granted. But it expressly appears that the judgment was not on the merits. Therefore the merits were not decided. The action was brought to a trial of fact on the count to reform the bond, and the plaintiff failed. If the special term had done what the court of appeals held right, it would have dismissed the complaint, not on the merits, on the first count, and would have given judgment for defendant on the demurrer to the second and third.

If we look at § 1209, we shall see that the language is unequivocal : “A final judgment dismissing the complaint, * * * does not prevent a new action for the same cause of action, unless it expressly declares, or it appears by the judgment roll that it is rendered upon the merits." In the present case we have a final judgment which does not expressly declare that it was “ upon the merits,” but from which those words have been stricken out by the court.

As is remarked in Bell v. Merrifield, 109 N. Y., at 213 ; 14 N. Y. State Rep., 796, “It does not appear, either in the record or outside, upon what ground the general term granted a new trial to defendant, nor upon what ground the order granting it was affirmed in this court. The general term may have reversed, * * * not upon any question affecting the merits of the controversy.”

We are, therefore, of the opinion that the decision in the Potter case, and those cases which took the same course, does not prevent a recovery here.

As to the remaining bonds, viz., the eight which were issued prior to May 12th, the opinion in the Potter case seems to forbid a recovery. For myself,-however, I see no justice in permitting a person, natural or artificial, authorized to borrow money, to refuse to repay the money which has been borrowed. If the writing given as evidence of the loan is invalid, still the debt remains, and the debt can be recovered in an action for money had and received. In this present case the only difficulty is that, probably by a comparison of two statutes, the bonds were made to run for twenty years instead of thirty.

The court of appeals has held that the bonds cannot be reformed and that a recovery cannot be had upon those issued before May 12th in their present shape. Therefore the defendant borrowed the money and gave no valid instrument for it Then it should repay the money or else should give such instrument as should have been at first given. To do otherwise is dishonest; and no decision will make it anything else. If the town insists that the money was not to be repaid for thirty years, at least the interest was to be paid semi-annually.

By this bonding legislation towns obtained the right of borrowing money to a large extent for purposes foreign to their municipal business. With the right to borrow comes the obligation to repay what has been borrowed. Otherwise the right to borrow would be a right to steal. And that obligation to repay is not discharged when the agent of borrower delivers to the lender an invalid promise to repay.

Let us suppose by way of illustration that the lender had handed his money to the commissioners and that they had neglected or refused to deliver any bonds of the town to him. Would he be remediless ? But how would such a case differ in its merits from the present, where the commissioners have delivered a paper purporting to be a bond, but which is held to be invalid ?

If these commissioners had executed these bonds in the present form with the fraudulent intent of cheating the borrowers out of their money, I suppose that the town, on receiving the money, could not have relied on the fraud as a defense against re-payment. It could not accept the benefit of the fraud without being liable to restore what it had received. But unfortunately the commissioners were honest and only made a mistake. Therefore, as the Potter case seems to hold, the town receives the benefit of the mistake and the lender loses his money.

The judgment is affirmed on both appeals, with costs.

Land on and Mayham, JJ., concur.


text:
    Isaac Hoag, Resp’t, v. The Town of Greenwich, App’lt.

      (Supreme Court, General Term, Third Department,

      Filed September 9, 1891.)

    Appeal from order granting an extra allowance to plaintiff.
   Learned, P. J.

—The order granting that allowance is affirmed, with ten dollars costs and printing disbursements.

Landon and Mayham, JJ., concur.