text:
    Caroline M. Conner et al., Resp’ts, v. Ann E. Watson, as Executrix, etc., et al., App’lts.

      (Supreme Court, Appellate Division, First Department,

      Filed January 24, 1896.)

    Dowek—Devise.
    A widow is not put to her election between a will and her right to dower in addition to the provision made for her in the will, where the testator directs his executors to distribute his estate among his widow and children in such a manner as in their judgment should be best.
    Appeal from an interlocutory judgment, denying the right of the widow to dower ■
    The appellant’s right to dower in some portions of the real estate sought to be partitioned is not adjudged, and of this she complains. James M. Conner, at the time of his death, was the owner of an undivided interest in the real estate. He left the appellant, his widow, and several children; and he left a will wherein lie instructed his executors to distribute, and apportion to his widow and children, his estate, in such a manner and at such times as should, in their judgment, be for the best interest of his widow •and children, and gave such executors full power to sell as much of his real and personal property as they should deem best, and to invest or distribute the proceeds of such sales as they deemed best for the interest of all The plaintiff accepted the provisions of the will made for her benefit, and claims she is also entitled to flower in the real estate sought to be partitioned.
    Clarence D. W. Rogers, for app’lt.
   WILLIAMS, J.

—Under the will the widow and children were entitled to an equal proportion of the property. 1 Rev. St. pt. 2, c. 1, tit. 2, § 98,—which provides that where a disposition under a power is directed to be made to or between several persons, without any specification of the share or sum to be allotted to each, all the persons designated shall be entitled to equal portions. Such being the construction of the will, the question raised' here is settled by the authority of Konvalinka v. Schlegel, 104 N.Y. 125; 5 St. Rep. 562, and the cases therein referred to. In that case the will, after providing for the payments of debts and some specific legacies, gave the residue of the estate to the executors, to sell and dispose of the same, and divide the proceeds equally between the widow and children, share and share alike. It was held.that the widow was not put to her election, but was entitled to dower in addition to the provision made for in the will; that the devise to the executors was void as a trust, but valid as a power in trust, and the lands descended to the heirs subject to the execution of the power; and that the execution of such power was not inconsistent with the dower interest, but the sale would be subject thereto. The appellant here is clearly entitled to dower as claimed by her, and provision should be made for it in the interlocutory judgment appealed from.

The judgment should be modified accordingly, and as modified affirmed, with costs to appellant from the fund out of which dower is payable.

All concur.


source: Caselaw Access Project

author: BARRETT, J.

license: Public Domain

text:
    William J. Reynolds, App’lt, v. Joseph Moore et al., Resp’ts.

      (Supreme Court, Appellate Division, First Department,

      Filed January 24, 1896.)

    1. Referee—Misconduct—Settins aside report. Any indiscreet action of a referee, on which improper inferences can be drawn, suffices to set aside his report.
    The facts, in this case, were held to establish that the referee’s action was not only indiscreet, hut improper, and to render it necessary to set aside his report.

      Appeal from court of common pleas, special term.
    Action by Wiliam J. Reynolds against the mayor, aldermen, and commonalty of the city of New York, Joseph Moore, and the Mt. Morris Bank, to foreclose a mechanic’s lieu, originally brought in the court of common pleas of the city and county of New York. An order denying a motion to set aside the report of the referee for misconduct was entered June 3," 1895, and an appeal therefrom was taken to the general term of the court of common pleas, and was argued at the November term following, before Judges Bischoff and Pryor. The judges failed to agree, and a re-argument was ordered. The re-argument now comes on for hearing in the appellate division of the supreme court, to which all litigation pending in the superior city courts on January 1,1896, was transferred by the judiciary order of the constitution of 1895.
    On the healing in the general term of the court of common pleas, Judges Bischoff and Pryor each delivered an opinion (December 2, 1895), as follows:
    BISCHOFF, J.—Where the fact of the operation of undue influence upon a referee is actually proven, the courts have never hesitated to set aside the report on motion, and this irrespective of the degree of the influence and its probable weight with the referee when rendering his decision. But the charges must be established by affirmative proof, and no rule of policy renders a mere opening for surmise or suspicion of their truth sufficient to rebut the presumption of rightful action upon the official’s part. The reconsideration by him of an opinion informally expressed to counsel has little, if any, weight in the matter. Gray v. Fisk,
    . JL2 Abb Prac. (N. S.) 213; Ayrault v. Sackett, 17 How. Prac. 507, In this case the charge made was met. by the oaths of opposing affiants, and a conflict of evidence as to the fadt resulted. Apart from the evidence for the respondent, offered in the form of affidavits, uncontradicted testimony was given in open court in absolute disproof of the claim that the referee had any pecuniary interest in the stenographer’s fees, which alleged interest formed the basis of the charge made; and since the learned judge below, having the witness before him, was impressed with the truth of this evidence, we are not to hold that the contrary was to be taken as proven merely upon the controverted allegations of the opposing affidavits, showing circumstances which might be viewed either as supporting a suspicion of irregular action or the reverse. The whole question was one of fact, and the result arrived at in the original tribunal, that the moving' party’s position was not sustained by probf, should remain undisturbed.
    Order affirmed, with $10 costs and printing disbursements.
    PRYOR, J.—The learned judge at special term refused to set aside the report of the referee, for insufficient evidence of “ the charge of corruption and molfeasance.” I do understand that by the law of New York,' proof of a mercenary or improper motive in his decision is requisite to invalidate a referee’s report. In Stebbins v. Brown, 65 Barb. 272, while a case was pending before a referee, he accepted a retainer in a cause from the plaintiff Held, that on this ground alone the report should be set aside; the court saying that “we do not deem it important to inquire whether the decision of the referee was or was affected favorably to the plaintiff by his retainer. * * * The rule should be inflexible that such a fact will, ipso facto, avoid the report of a referee. . No other rule will protect the referee from the approach of temptation or shield the administration of justice -from the suspicion of impurity.” In Yale v. Gwinits, 4 How. Prac. 253, where a referee, during an adjournment, personally examined a piece of machinery the utility of which was the subject of the litigation, and received explanation of its operation by two of pi an tiff’s witnesses, without the knowledge or consent of the defendant, a report in favor of the plaintiff was set aside; the court saying that “a referee ought to place himself in a situation which may expose him to be influenced in his decision by conversations with persons, in the absence of the parties.” In Dorlon v. Lewis, 9 How. Prac. 1, speaking of private convesations of a referee with the attorney of a party, the court said: “A referee, under such circumstances, owesdt to himself, not only to avoid all improper influences, but even the appearance of evil. Whether satisfied with the decision or not, no one should be left, for a moment, to question its fairness.” In Rooso v. Turnpike Road Co., 12 How. Prac. 297, “ although nothing in the case would justify the conclusion that the referee had, in the least degree, intended to swerve from an honest discharge of his duty,” his report was set aside; the court saying: “All agree that the administration of the law must be pure and impartial. But it is scarcely less important that the conduct of those to whom its administration is intrusted should be such as to furnish to those who litigate no just ground of suspicion.” In Carroll v. Lufkins, 29 Hun, 17, the court said that “ whether or not the referee had been influenced or was likely to be influenced” by the fact alleged against him “is immaterial He may be affected by it unconsciously; and the rule suggested should prevail if for no other reason, to protect referees from temptation and the suspicion of having been influenced by improper motives.” In Greenwood v. Marvin, 29 Hun 99, in affirming an order setting aside the report of a referee, the court said: “Referees ought, like jurors, to be vigilant to avoid evil; to avoid taking a line of conduct which may affect their freedom of mind and neutrality.' Ex parte treaties and conversations with either party as to any fact, point, or fee ought to be avoided.” In Burrows v. Dickinson, 35 Hun, 492, in setting aside the report of a referee, the court at general term said: “Even the appearance of improper influence and bias must be avoided. If it is not, the confidence of the public in this mode of trial will be utterly subverted and destroyed, and injustice will likewise be promoted through the neglect, if not by the direct countenance and approval, of the courts themselves. That ib only to be prevented by vindicating the right of the parties to an impartial and independent trial.” In Livermore v. Bainbridge, 14 Abb. Prac. (N. S.) 227, the report of the referee, “a gentleman of high standing and character,” was to set aside b@= cause he had advised the party against whom he was about to decide to a compromise, and this although his suggestion and its rejection by the unsuccessful party had no influence upon his mind; the court, per Davis, J., saying: “We think it improbable that the referee was affected by the mistake' he made; but the interests of justice require tjiat the general rules designed to prevent suspicion of impurity in its administration should be rigidly adhered to.” In Leonard v. Mulry, 93 N. Y. 392, although* there was “no evidence that, in reaching a conclusion in favor of the plaintiff, there was either interest or improper conduct on the pai't of the referee,” the court of appeals says:
    “Nor was it necessary to inquire whether the referee would be influenced by the new relating which he sustained to the cause. He might be affected by' it unconsciously; and the rule of exclusion has regard, not so much to the motives which in any given case may be supposed to bias the judge as to the apprehensions or even the over-anxious suspicions of litigants, and the preservation of confidence in the adminstration of justice.” These authorities I adduce, not as adjudications upon the facts of this case, but as propounding the rule that should be observed in its determination.
    What are the conceded facts of the case, — admitted, I mean, by the referee? That, at a private interview which he solicited, he said to defendants’ counsel that he thought he would have to decide in defendants’ favor, and he was then writing an opinion in the case; that he suggested the subject of stenographer’s fees, and thereupon a dispute arose between the-referee and the counsel as to which party should pay them, the referee contending that, by stipulation, the successful party should pay the whole fees, while defendants’ counsel insisted that he should pay one-half; that the referee said the successful party would have to pay the referee’s fees and the stenographer’s, and that the stenographer looked to' him (the referee) for payment of bis fees; that defendants’ counsel stubbornly declined to pay more than half of the stenographer’s fees; that this stenographer had been substituted by the referee instead of one already engaged by the parties; that in the end, the referee gave his report to the plaintiff, who paid him all the fees of the stenographer. Assuming, as the referee alleges, that his change of opinion in the case was the effect of a subsequent brief from the plaintiff’s attorney, and no wise influenced by the refusal of defendants’ counsel to yield to his demand for payment of all the-stenographer’s fees, is the principle enunciated by the authorities any the less applicable ? Is not the administration of justice in the case exposed to grave and well-founded suspicion? Is the defeated party without appearance of j ustification in the belief he avows that he has not had a fair and impartial, trial ? Do not the interests of justice entitle him to a hearing before, a tribunal whose decision shall not be challenged by circumstances of such sinister import as infect the report of this referee? If thei plaintiff has a valid cause, he can lose nothing by recourse to another court, of unquestioned and unquestionable impartiality. If! the defendants’ case be infirm, the clearer the integrity of the judge who determines it the less reason to apprehend its prevalence. Independently, however, of the interest of parties, the public is profoundly concerned that the distribution of justice by its courts should be exempt even from suspicion of illicit influence.
    I am for reversing the order, and setting aside the report.
    Alexander Thain, for app’lt; James Kearney, for resp’ts.
   BARRETT, J.

—The discussion at special term was solely upon the question whether the referee had been proved guilty of corruption uby very clear and convincing proof.” The learned judge examined the facts carefully, and came to the just conclusion that the case on that head had not been made out. The error consisted in limiting the consideration of the facts to this charge. The real question here was not whether the referee was guilty of actual corruption but whether the fairness of his decision was justly questioned. It is the settled law of this state that any indiscreet action of a referee, from which improper inferences can be drawn, suffices to set aside his report. Yale v. Gwinits, 4 How. Prac. 253 ; Dorlon v. Lewis, 9 id. 4 ; Roosa v. Turnpike Road Co., 12 id. 297 ; Greenwood v. Marvin, 29 Hun, 99 ; Carroll v. Lufkins, id. 17 ; Burrows v. Dickinson, 35 id. 492 ; Livermore v. Bainbridge, 14 Abb. Prac. (N. S.) 227 ; Leonard v. Mulry, 93 N. Y. 392.

Our courts have invariably taken an elevated view of this question. Thus, in Roosa v. Turnpike Road Co., supra, HARRIS, J., concluded his opinion with this remark:

“ All agree that the administration of the law must be pure and impartial. But it is scarcely less important that the conduct of those to whom its administration is intrusted should be such as to furnish to those who litigate, no just ground of suspicion.”

In Livermore v. Bainbridge, 44 How. Prac. 363. Justice FAHCHER quotes with approval an observation which was made in Dorlon v. Lewis, as follows:

“A referee owes it to himself, not only to avoid all improper influences, but even the appearance of evil.”

In the same case, upon appeal, DAVIS, J., said :

“ The interests of justice require that the general rules designed to prevent suspicion of impurity in the administration of justice should be rigidly adhered to.” 14 Abb. Prac. (U. S.) 232.

In many of the cases the integrity of the referee was unquestioned, while in one, at least, his high character was adverted to.

In the present case the conduct of the referee was not only indiscreet, but improper. Upon his own statement, he conversed with the defendants’ counsel upon the merits of the case, in the absence of the plaintiff’s counsel. This of itself was an impropriety. What he said, however, was grossly improper, namely, that “ he thought he would have to decide in defendants’ favor on the law point” ; that he was writing an opinion on the case ”; and that the plaintiff’s testimony “ was given in an unsatisfactory manner, and needed corroboration.” This is the referee’s own account of his language, while the attorney’s version of what transpired characterizes the language used as- much more decided and emphatic. The attorney’s version need not, however, be scrutinized, as, upon the referee’s own showing, his conduct was inexcusable. At this very interview too, there was a difference between the referee and the defendants’ attorney with regard to the stenographer’s fees. This was significant in view of the referee’s statement that the stenographer looked to him for payment of the bill. It was also significant in view of the fact that this stenograrapher was selected by the referee after a stenographer previously agreed upon by the parties had been discharged by him. The referee says, to use his own language, that he “disputed” this attorney’s “evidently forced, unjustifiable construction ” of a stipulation which had previously been entered into with regard to stenographer’s fees. The • attorney said he objected to the bill as excessive, and that he also claimed that his client was bound to pay but one-half of these fees. The referee insisted that the attorney was liable for the whole bill. The attorney finally offered to tax the stenographer’s bill, and then to pay the defendants’ share of it. Subsequently, the stenographer called upon the attorney, but the latter adhered to his position; namely, that he would only pay one-half of a proper bill. There this matter rested until not quite a month later, when the referee reported against the defendants, and then it was learned that the plaintiff had paid in full the stenographer’s bill to which the defendants’ attorney had so persistently objected. I say in full, but to be concise, the bill was $326.54, and the payment $325. It was entirely natural, under these circumstances, that even a professional mind should view the referee’s change of opinion with suspicion. . But what must the client have believed '? And what, indeed, was he quite justified in believing? Surely, that the referee was “ with him” at the tim'e of the interview with his attorney, and that the opinion which the referee then said he was then writing was unquestionably in his favor. What must he have thought when he subsequently learned that the referee had completly changed his mind after the dispute regarding the stenographer’s fees ? When he learned, too, that the plaintiff had not been as injudicious as he, and had paid the whole bill without question ? He was certainly justified in the belief that there was some sinister connection between his counsel’s persistent attitude with regard to the stenographer’s fees and the referee’s extraordinary change.'

Our conclusion is that the referee’s action was not only indiscreet, but improper, and that his report cannot be permitted to stand. Few laymen could be brought to believe,' upon such a state of facts, that they had had a fair trial; and the administrations of justiefe would fall into disrepute were the court to sanction indiscretions, and improprieties, tending to weaken the faith of the lay mind in its purity.

The order appealed from should be reversed, with costs, the motion to set aside the report granted, and the order of reference vacated.

All concur.


author: ADAMS, J.

text:
    Genesee and Wyoming Valley Railway Company, Pl’ff, v. Retsof Mining Company, Def’t.

      (Supreme Court, Monroe Special Term,

      Filed November, 1895.)

    1. Injunction—When granted.
    A court will enjoin, pendente lite, the destruction of property of which a lessor has repossessed himself by fraud and trickery of the lessee.

      %. Evidence—Parol.
    Where there is nothing vague or equivocal in the language of a written contract, its effect cannot be limited by any verbal understanding dehors the contract itself.
    S. Corporations—Powers op directors.
    In the ordinary every-day business affairs of a corporation, the action of the directors is all that is necessary, and, when such action is once taken, and the interest of a third party intervenes, such interest cannot be impaired by any action of the stockholders.
    4. Injunction—Trespass.
    Where the injury already done, and that which may he accomplished by a continuance of a trespass, is so serious as to be incapable of measurement by any pecuniary standard; the court will interfere by injunction, even though it may perchance entertain some doubt as to the final result of the controversy.
    Plaintiff moves for an injunction to restrain any interference by defendant with plaintiff’s railroad pending the action.
    The parties are corporations duly organized, under the laws of this state; the plaintiff being engaged in the operation of a railroad originally constructed by the defendant, which is the owner of large and valuable salt mines and interests in the town of York, Livingston county, as well as of the fee of the land upon which a portion of the railroad was constructed. In June, 1891, the plaintiff became the assignee of a lease made by the defendant to William Foster, Jr., and Charles Q. Freeman, of the railroad above mentioned, and the equipment thereof, for the term of 999 years. This lease contained certain covenants and provisions of mutual benefit and obligation, one of which is the principal source from which flows the controversy between the parties. This provision reads as follows, viz.: “Third. The rates of freight to be charged by the lessees, or their assigns, of said railway company from Eetsof, shall at no time be more than one cent per barrel (or per 300 lbs. of merchandise in not less than car-load lots) in excess of the rates from time to time in effect from the existing junction points of said road on the Delaware, Lackawanna and Western Railroad and Western New York and Pennsylvania Railroad, and such additional tariff shall be charged only on such shipments as are not covered by contracts between the Genesee and Wyoming'Valley Railway and. connecting railroads.” And it is followed by another, which permits the defendant, in the event of the failure of the lessee to observe any and all of the covenants of said lease, “ to enter upon and take possession of and use and dispose of and for its own exclusive right all and singular the premises, property, and rights hereby demised, and all contracts, fixtures, improvements, and permanent' property and appurtenant rolling stock which may be hereafter constructed on, or added to the demised premises, or any part thereof; and to exclude the lessees and all other persons wholly therefrom.” Subsequently, and upon the 25th of October, 1894, the parties hereto-entered into a supplemental agreement in writing, by the terms of which the defendant agreed to ship all the “ salt and products of manufacture produced by it at the works at Retsof,” and to receive “ all merchandise and material of every description which shall be coming to it,” upon the plaintiff’s railroad, in consideration of which the plaintiff agreed that it would “ transport the same at not exceeding the rates that are charged and received by other railroad companies for similar transportation and service.” After this agreement had been entered into, the plaintiff undertook to transport the products of the defendant’s mines to the various connecting lines of railroad, and in doing so charged therefor a rate which was in excess of one cent per barrel, but which was not greater than the rates charged by other railroads, and by this very road while it was owned by the same parties who compose the defendant’s corporation, for similar service. The defendant’s officers, claiming that the plaintiff had violated its contract, undertook to avail themselves of the re-entry clause of the-lease. But, instead of resorting to the usual legal remedy, they waited until all the plaintiff's employees save a solitary watchman had returned to their homes upon the night of October 30, 1895, and then sending, for the watchman to come to the defendant’s-office upon the pretext that they desired to make him a present, delivered to him a written notification of the alleged violation of the third clause of the lease, and of their intention to enforce the penalty therefor; and while this interview was in progress a gang of men, numbering more than 100, armed -with clubs, and some of them with guns, took possession of the plaintiff’s railroad and rolling stock, and proceeded to tear up the tracks, and destroy or render useless all the property upon the premises. In order to. make certain that the work of .destruction should be completed, cans of dynamite were^ subsequently placed at convenient points along the bank and in the abutments of the railroad bridge, a few rods from the head house, and these were connected with electric wires, so that they could be exploded upon a moment’s notice in the event of any attempted interference upon the part of the-plaintiff. Fortunately, at this juncture the court intervened with a preliminary injunction, and the parties responsible for the condition of affairs above described were considerate enough to forbear the further assertion of their rights in the manner at first attempted until this motion could be heard and decided.
    Saterlee, Yeoman & Taylor, for pl’ff ; Charles J. Bissell and William B. Putney, for def’t.
   ADAMS, J.

—This motion involves the question of whether or not one corporation, for some real or fancied wrong received, at the hands of another rival or obnoxious corporation, may take the law into its own hands, declare war, and proceed to destroy property and imperil human life. Incidentally, to be sure, some questions of construction are to be considered, the decision of which, in ordinary circumstances, would be controlling upon the rights of the parties. These will, of course, receive proper attention ; but, after all, the important and overshadowing subject of inquiry is the one first adverted to. It is difficult to contemplate the condition of affairs which the undisputed facts of this case present with judicial calmness, or to characterize conduct such as some of the officers of the defendant have been confessedly guil'ty of, without indulging in language more or less fervid. Not only have they resorted to force and violence, and thereby occasioned a disturbance of the public peace in the attempted assertion of what they have determined to be their legal rights, but they have wantonly destroyed property of great value, and have not hesitated to proclaim their entire willingness to incur even more serious consequences if their work of destruction was interfered with. Now, I am not unmindful of the rule of law which enables a landlord who has obtained peaceable possession of premises under the reentry clause of the lease, where there has been a breach of covenant, to maintain the possession therein obtained as against the lessee and the whole world. Cain v. Flood, 38 St. Rep. 196 ; Alexander v. Griswold, 44 id. 121 ; Wood v. Phillips, 43 N. Y. 152 ; Bliss v. Johnson, 73 id. 529. Nor do I overlook the language of the lease in question, which provides that the defendant, in the event of a breach thereof, may not only enter upon and possess itself of the demised property, but may also “ use and dispose of it for its own exclusive rightand, had the lessor in this case contented itself with resorting to nothing worse than trickery to obtain possession, and, having thus obtained it, maintained its possessory privileges in a quiet and orderly manner, no other question could have arisen than' the rights secured to the respective parties by the original lease and in the supplemental contract, Wood v. Phillips, supra. But that is not this case. Not only was fraud employed to compass possession, but, as soon as it was obtained, force was resorted to, in order that it might be maintained, and, instead of resting satisfied with securing the possession of the demised property, its utter destruction was attempted, which, had it been accomplished, would have worked great and irreparable injury to the plaintiff, and vrould likewise have rendered wholly worthless the security upon which $500,000 worth of bonds had been issued with the knowledge and consent of the defendant.

For the reasons stated, and because fortunately there has never, so far as I am ayvare, been any necessity for applying the law to this precise state of facts, none of the authorities which have been or can be cited exactly fit the case; but it is not conceivable that in this enlightened period of the world’s history a party can obtain possession of property in the manner in which this defendant's officers and agents admit they have—that is, by fraud and trickery—and then work all manner of destruction and injury in a disorderly and tumultuous manner without rendering themselves amenable to the injunctive process of a court of equity. At all events, this court is willing to become responsible for a precedent •which must be respected at least until it is reversed by some higher authority. A criminal proceeding might, it is true, punish the wrongdoers, but I fail to see. wherein it would afford any adequate protection to the plaintiff for the destruction of its property in the event that it shall be ultimately determined by the courts that it has any property to protect. Before leaving this branch of this case, however, it is but simple justice to the counsel for the defendant to say that they have disclaimed all responsibility for the indefensible conduct of their client, although, in view of their well-earned reputation as gentlemen of practical common sense, as well as lawyers of conceded ability, such' a disclaimer is quite superfluous.

IE correct in the views already expressed, it would seem that the plaintiff’s motion might be ^disposed of without considering the questions to which counsel addressed their principal argument upon the hearing. Nevertheless it is desirable, perhaps, that the court should indicate as briefly as possible the conclusion it has reached respecting the main issue, and its reason therefor; and especially is this so in view of the fact that the learned counsel for the plaintiff did not appear to attach to the question already considered the importance of its relation to this particular proceeding which the court accords it. It will, of course, be necessary, in order to determine the relative rights of the parties, to give proper effect and construction to the agreement of October 25, 1894, for upon the part of the plaintiff it is claimed that this instrument, by its terms very materially modifies the third clause of the original lease, while, upon the other hand, the defendant insists that no such effect can be given it, and that it would not aid the plaintiff if such a construction were possible. In approaching the consideration of this vital question it is important; I think, to bear in mind that the construction for which the defendant is contending involves the forfeiture upon the part of the plaintiff of property and interests of very great value, and, this being the case, it is bound to -establish its claim in the most satisfactory manner by reason of the well-established' rule that the law does not regard forfeitures with much favor. Baley v. Insurance Co., 80 N. Y. 21. The agreement of October 25th does not, it is true, in express terms either supplant or supplement the conditions of the original lease. It does even refer to the last-mentioned instrument. But it does contain all the essentials of a complete and independent contract, and one which is apparently mutual in its character, and which likewise bears upon its face evidence of mutual consideration. By its terms the plaintiff agrees to transport the defendant’s salt at the same rates which other transportation companies receive for similar service, and the defendant agrees to pay such rates for the term of ten years. In order to break the force of this new contract, affidavits are produced upon the part of the defendant tending to show that it was not designed by either party that it should in any way alter or modify the terms of the original agiee nent, save in one particular; that it should relieve the defendant from, the payment of any freight whatever upon the salt taken from its mines to the connecting lines of railroad. However this may be, there is nothing vague or equivocal in its language, which, as has been shown, does establish new rates; and its effects can hardly be limited by any verbal understanding dehors the contract itself. At least, such an issue as that cannot very well be tried upon affidavits. But it is further argued this contract is of no force, even if entitled to receive the construction which the plaintiff has been pleased to put upon it, for the reason that it was executed by the directors of the defendant, who were, at the time of its execution, also interested in the plaintiff corporation; and for the further reason that it was subsequently revoked by a resolution of the defendant’s stockholders. The answers to these propositions, it seems to me, are quite obvious. In the first place, the management of the business of a corporation is always confided to the board of directors. It is true that they possess no authority, independent of the stockholders, to make any material and permanent alteration of the business or constitution of the body they represent (Mor. Priv. Corp. § 12), but in the ordinary every day business affairs of the corporation their action is all that is necessary, and, when such action is once taken', and the interests of a third party intervene, it would be singular if those interests could be impaired by any action of the stockholders. If such a rule should once obtain, it would seriously derange the business interests of the country; for, to illustrate, the directors of a railroad company might contract with a manufacturer for 10,000 tons of steel rails, and just before their delivery the stockholders could get together, and revoke the contract, and the manufacturer would be remediless. How the contract of October 25th pertains to the ordinary business relations of the two corporations, viz, the transportation" of freight and the rates therefor. It would seem, therefore, that if the board of directors was clothed with any independent authority whatever it must have related to just such matters as these. The objection that the directors of the defendant were also interested in the railroad company at the time this supplemental contract was entered into is not, in the absence of fraud or bad faith, I apprehend, entitled to much weight, and it is not intimated that either of the parties to this instrument was guilty of bad faith. On the contrary, it was executed because it was supposed it would prove beneficial to both. It was said in the case of Wallace v. Railroad Co., 12 Hun, 460, that the facts that the same persons were directors of the leasing and leased railroad might of itself entitle either corporation to avoid its contract, but that it was insufficient to avoid it at the instance of one or more stockholders. This, however, seems to be the mere expression of an opinion, and does not harmonize with the language which precedes it, wherein it is stated that all acts of the directors of a corporation, within their corporate powers, and “ done in 'good faith, are valid and binding, not only upon •the corporation, but on each stockholder thereof.” The rule contended for by the learned counsel for the defendant has been considerably relaxed of late years. Indeed, it would be difficult to conduct the affairs of the multifarious corporations of the country, many of which, although apparently sustaining the relations of rivals in business, are nevertheless practically controlled by the same directors, if the element of good faith, instead of individual interests, were not established as the basis of intercorporate action. Van Cott v. Van Brunt, 82 N. Y. 535 ; Gamble v. Queens Co. Water Co., 123 id. 91 ; 33 St. Rep. 88 ; Oil Co. v. Marbury, 91 U. S. 587.

■The court has been reminded that the injury complained of is at most a trespass, and that its injunctive power should not be exerted to redress a wrong of that character. If this were the case of > an ordinary trespass, in which the injury could be compensated for in dollars and cents, it would have been unnecessary to have urged any other objection to the granting of this motion than the one mentioned. But it is not. The injury already done, and that which may be accomplished by a continuance of the trespass, are so serjous as to be incapable of measurement by any pecuniary standard, and the case seems a proper one for the interference of the court in the manner asked for, even though it. may perchance entertain some doubt as to the final result of the controversy. Injunctions do, it is true, to some extent at least, anticipate the ultimate judgment of the court, and for that reason, if for no other, they should be granted cautiously, and perhaps even reluctantly-; but the right to grant them nevertheless resides in the discretion of the- court, and this power should be exerted whenever the protection of such vast interests as are at stake in this action seems to require it. People ex rel. Gaynor v. McKane, 78 Hun, 155 ; 60 St. Rep. 196.

. The motion should therefore be granted, with $10 costs.


author: HARDIN, P. J.

text:
    Edward C. Wright, Resp’t, v. Syracuse, Ontario and New York Railroad Company et al, App’lts.

      (Supreme Court, General Term, Fourth Department,

      Filed December 26, 1895.)

    1. Powers—Informal execution—Validity. ■
    A conveyance by one, empowered, by will to execute it. is not ineffectual to pass title, though signed in his individual name, without addition, where the instrument itself shows the source of his authority.
    2. Injunction—Railroads—Unlawful occupation.
    Where a railroad is unlawfully constructed in a street, the adjacent owner, whose title extends to the center, may bring an action in equity to restrain the operation of the road.
    Appeal from a judgment in favor of plaintiff.
    Ashbel, Green & Waters and McLennan & Waters, for app’lts ; E. C. Wright, in pro per.
   HARDIN, P. J.

—It was found by the trial court that plaintiff owns “ the land in what is now known as 1 Canal Street ’ between the center line thereof and the south line thereof.” Upon studying the maps used at the trial and the evidence produced during the progress of the trial, we are of the opinion that the finding of fact is supported by the evidence. In re Ladue, 118 N. Y. 213 ; 28 St. Rep. 821 ; 2 Am. & Eng. Enc. Law, p. 507, subd. 6 ; Syracuse Solar Salt Co. v. Rome, W. & O. R. Co., 67 Hun, 153 : 51 St. Rep. 520. The court properly found as matter of fact that the plaintiff, “at the time of the commencement and trial of this action, was, and for a long time had been, the owner in fee and entitled to the possession of the parcel of land particularly described in the findings of fact, being the same lands described in the plaintiff’s complaint.” When the state assumed to grant the lands in question, it acted as proprietor of the land, and the effect of its conveyance is to be ascertained and declared as though the grant was made by a private individual. City of Oswego v. Oswego Canal Co., 6 N. Y. 265 ; Smith v. City of Rochester, 92 id. 473. It was competent for the plaintiff to become a purchaser of the lands, and take a deed thereof from Newell at the time he receive 1 the conveyance, and in doing so we are of the opinion he did not violate the provisions of section 130 of the Penal Code. That statute evidently was aimed to shut off purchasers of pretended titles. Joseph Newell, deceased, had title to the premises described in his deed, and he died leaving a 'will creating a trust, and authorized his son, George, to execute the trust, and to convey at public or private sale any lands owned by him. In making such conveyance we are of the opinion George A. Newell did not violate the statute to which reference has been made. The possession of tire lands constructively was in Joseph Newell at the time of his death, and subsequently in his trustee. Bliss v. Johnson, 94 N. Y. 235. We think the conveyance executed by Geoi’ge A. Newell in virtue of the power given to him in the will of Joseph Newell was sufficient to pass to the plaintiff all the right, title, and interest in the premises theretofore held and owned by Joseph Newell.

Appellants call our attention to Townsend v. Corning, 23 Wend. 435. In looking into that case we find that the facts are quite unlike those found in the case before us, and that the case does not sustain the contention of the appellants. We think it quite obvious that the testator intended to give George A Newell power to convey any real estate left by the deceased, and his power to oonvey is derived from the will, and the conveyance refers to the will as the source of the power for its execution. Bradstreet v. Clarke, 12 Wend. 603. 1 Rev. St. p. 737, § 124. In Myers v. Insurance Co., 32 Hun, 321 ; affirmed, 99 N. Y. 1, it was held that, where the power of attorney described the party “as executrix and sole legatee under the will of M.,” and the executrix signed it simply in her own name, “and the description was sufficient to show that it was executed by her as executrix, the failure to add her official character to the signature did not impair its effect.” We think the instrument executed by George A. Newell was sufficient to carry to the plaintiff ail the right, title, and interest in the premises theretofore held by the testator, Joseph Newell. We are of the opinion that the defendants have failed to show a right to maintain the tracks, switches, and obstructions upon the plaintiff's laud, and that the plaintiff, as an adjacent owner, ns entitled to maintain this action according to the doctrine laid down by us in Syracuse Solar Salt Co. v. Rome, W. & O. R. Co., 67 Hun, 161 ; 51 St. Rep. 520. In the opinion there delivered it was said:

“Where a railroad is unlawfully constructed in a street, the adjacent owner, whose title extends to the center, it would seem, has three remedies: (1) He may bring successive suits to recover his damages; (2) he may bring an action inequity to restrain the operation of the road; or, (3) when the highway has 'been exclusively appropriated, he may maintain ejectment. Uline v. Railroad Co., 101 N. Y. 98. That in cases like this a suit in equity may be maintained to restrain the defendant from unlawfully using the plaintiff’s land, and for damages sustained by such use, is well established by the authorities in this state.”

Upon the evidence before the court the damages were assessed at six cents and the value of the property at $50. We think the assessments are moderate, and ought not to be disturbed on account of the amount thereof.

We think no prejudicial error was committed in receiving evidence as to the value of the premises affected by the occupation of the defendants. The case before us differs widely from Roberts v. N. Y. E. Railroad Co., 128 N. Y. 455 ; 40 St. Rep. 454. as in that case a question was held to be improper which called for" an opinion of an expert “as to what would have been the value of plaintiff’s property had defendants’ road not been built and operated.” Daring the progress of thctrial an admission was made in the following language: “The defendant admits, for the purposes of this trial, the incorporation of defendants as alleged in the complaint, and the operation of the roads, tracks, and sidings as alleged in the complaint.” Under that admission and the evidence which was received relating to the several acts of the defendants in the premises, we are of the opinion that there was no error in awarding relief against both defendants.

Our attention is called to Prouty v. Railroad Co., 52 N.Y. 363. That was an action brought to recover a balance of certain dividends on certain guarantied ten per cent, stock, and is quite different from the case now before us. Plaintiff was very moderate in his demand for damages, “on the argument before the trial term having.waived all claim for actual past damages.” The award was made of six cents only, and the court find that on the argument at the trial term the plaintiff limited his “request for future damages to $50,” and therefore only that sum was found in favor of the plaintiff against the defendants. By the second conclusion of law the defendants are given the option to pay the $50 “in full for the value of so much of the plaintiff’s interest in his land aforesaid in said street as is necessary to maintain the tracks and structures they are using therein, and to store, use, and operate engines and cars in the same manner as heretofore has been done. In the event the option is availed of, the plaintiff is required to execute, acknowledge, and deliver a deed at his own expense to the defendants, or such parties as they may desire, releasing his interest in the land in the street. The judgment seems to be in accordance with the justice of the case as revealed by the evidence.

,, Judgment affirmed, with costs

All concur.


author: PER CURIAM.

text:
    William Milligan, as Administrator, etc., et al., Resp’ts, v. Octavius O. Cottle et al., App’lts.

      (Supreme Court, General Term, Fourth Departments

      Filed December 26, 1895.)

    Appeal—Action on undertaking.
    Section 1309 of the Code is complied with by the service of a copy of the order of dismissal of the appeal, having on the back an endorsement .by the clerk showing the date of its entry and the name of the attorney for the respondent.
    Appeal from a judgment in favor of plaintiff.
    Edmund P. Cottle, for app’lts ; Lansing & Lansing, for resp’ts.
   PER CURIAM.

—On the 16th of October, 1875, in an action in the supreme court wherein Moses Petrie, executor, etc., of David Petrie, deceased, and Fannie P. Cottle, administratrix, etc., of Joram Petrie, deceased, were plaintiffs, and William Gr. Milligan and Jane Gr. Dann, administrators, etc., with the will annexed, of Catharine M. Lansing, deceased, and Robert Lansing, were defendants, a judgment was entered and docketed in the office of the clerk of Herkimer county, whereby the complaint of the plaintiffs therein was dismissed, and the said Robert Lansing recovered of the plaintiffs therein the sum of $250.35, costs, and the said Milligan and Dann recovero.! of the plaintiffs therein the snm of $81.01, costs. The plaintiffs in that action thereupon appealed to the general term, and, in order to stay execution on the judgment, the defendants in the present action and one McEwen, on the 29th December, 1875, duly executed an undertaking that the appellants on that appeal would pay all costs and damages that might be awarded against them on the appeal, not exceeding $500, and also that if the judgment appealed from, or any part thereof, should be affirmed, or the appeal be dismissed, the appellants would pay the amount directed to be paid by the said judgment, or the part of such amount as to which the said judgment should be affirmed, if it should be affirmed only in part, and all damages which should be awarded against the appellaints on the appeal. Thereafter proceedings were taken towards the making and settlement of a case, and before it was finally settled, and on or about January 1, 1878, Moses Petrie died. Nothing further was done on the,appeal until April, 1893, when proceedings were commenced by Milligan as surviving administrator of Catharine M. Lansing, deceased, to procure a dismissal of the appeal. This resulted in an order made by the general term on 28th November, 1893, “ that the appeal in this action be, and the same is hereby dismissed, without costs of appeal to either party thereto, and without costs of this motion to either party.” Robert Lansing, one of the defendants when the appeal was taken, died on the 4th October, 1878; and on the 10th October, 1878, his will was duly proved, and letters testamentary issued to John Lansing, executor therein named.

The present action is brought by Milligan, as surviving administrator, etc., of Catharine M. Lansing, deceased, and by John Lansing, as executor, etc., of Robert Lansing, deceased, to recover on the undertaking the amounts awarded in the judgment appealed from to Milligan and Dann, as administrators, etc., and to Robert Lansing. It is claimed by the defendants that the appeal has not been dismissed as to Robert Lansing or the party representing his estate. The order of dismissal was made upon notice to all parties interested, whether parties to the suit or not. The executor of Robert Lansing was notified and appeared on the motion, and was interested in having a dismissal. The action was by creditors of Frederick Lansing, deceased, of whose estate Robert Lansing was executor; and it was claimed that Robert Lansing and Catharine M. Lansing held certain lands as trustees for the benefit of creditors of Frederick Lansing. The order to show cause upon which the motion was brought on was for a dismissal generally, and so was the order of dismissal. We must, we think, assume that the court intended an entire dismissal of the appeal. The question of laches was in the proceeding, as well as the right of a party under the provisions of section 1298 of the Code. Without doubt, the court had jurisdiction to make the order.

The main question on this appeal arises on the claim of the defendants that the plaintiffs did not, before they commenced this suit, give the notice required by section 1309 of the Code. By that section, as it stood when this action was commenced, it was provided that an action upon an undertaking like the one here involved shall not be maintained “ until ten days have expired since the service upon the attorney for the appellant of a written notice of the entry of a judgment or order, affirming the judgment or order appealed from, or dismissing the appeal.” The order of dismissal was duly filed.and entered on December 18, 1893, and it is found-that on the 19th December, 1893, a certified copy of the order was served on O. 0. Cottle, attorney for the appellants on the appeal The copy order so served was indorsed' on the back as follows: “Supreme Court. Fannie P. Cottle, as Administratrix, and Another, v. W. G-. Milligan, as Administrator, and another. Copy Order. 0. J. Palmer, Survivor of Burrows & Palmer, Attorney for Wiliiam Gr. Milligan. Herkimer County Clerk’s office. Filed and entered December 18, 1893. D. M, Richardson, Deputy Clerk.” Service of a copy of the order so indorsed was admitted, in the following form: “Service of a copy of this order admitted Dec. 19, 1893. O. 0. Cottle, Atty,” etc, Mr. Cottle appeared for the plaintiffs therein on the motion to dismiss. The argument on the part of the appellants is -addressed chiefly to the proposition that there was no sufficient notice of entry of the order. There was no specific notice signed by the attorney that the order had been entered, but the order as served bore a certificate of the clerk that it had been filed and entered. It was also indorsed by the attorney, so that it was, in effect, a notice from, the attorney that the order had been entered. Written information was conveyed that fully answered all the requirements of the statute. We are referred to numerous cases involving the construction of notices given for the purpose of limiting the time to appeal In such cases it is said that the notice must be regular in every respect, and the party must be held to strict practice. This rule does not apply to cases like the present, and that, very clearly, was the view taken by the court in Evans v. Back, 101 N. Y. 289, 292. A notice quite similar to the one here was held in Baker v. Hatfield, 3 Civ. Proc. R. 303, by the general term in the Second department, to be sufficient even to limit the time to appeal. We are inclined to the opinion that a sufficient written notice of the entry of the order was given, and that it inured to the benefit of both the present plaintiffs. Ho other question need to be specially considered. The judgment should, we think, be affirmed.

J udgment affirmed, with costs.


author: GAYNOR, J.

text:
    In the Matter of Application by John Quinn for Habeas Corpus.

      (Supreme Court, Kings Special Term,

      Filed January 9, 1896.)

    Police .justice—Term of office.
    Chapter 601 of 1895, which abolishes the office of police justice in the city of New York, does not violate § 22, article 6 of the Constitution of 1895.
    Application by John Quinn for habeas corpus.
    William Sullivan, for petitioner; Noah Davis, George Hoadley, and A. L. Pincoffs, opposed.
   GAYNOR, J.

—John J. Ryan, claiming to be a police justice of the city of Hew York, issued a warrant on October 22d last for the arrest of the petitioner for the abandonment of his wife, and leaving her without adequate support. The said warrant was indorsed by a police justice of the city of Brooklyn with a direction that it might be executed in the city of Brooklyn, and thereupon he was arrested in that city. He sues out the writ of habeas corpus, claiming to be illegally deprived of his liberty. He contends that the said Ryan was not a police justice of the city of Hew York when he issued the warrant, and that therefore it was void. He bases this contention upon the act (chapter 601, Laws 1895) which in terms abolished the office of police justice in the city of Hew York from and after June 30, 1895, and provided for the appointment of city magistrates instead. On the other hand, it is contended that the said act is unconstitutional, and therefóre void, which would leave the said Ryan a police justice.

After the case was.argued, counsel for the said city magistrates intervened and made a private suggestion to the' court that the proceeding was collusive, and should not be heard. Out of regard to the eminent counsel who had appeared in and argued the case, the court declined to entertain such a suggestion unless it were substantiated by affidavits. Thereafter affidavits were handed in, and, being submitted to the counsel in the case, affidavits in opposition were handed in. The court disavows responsibility for the main affidavits submitted by the intervening counsel. , They were not obtained under any proceeding or authority of the court. Instead, papers purporting to be subpoenas from the district attorney of New York county were served upon the said Quinn (the petitioner herein), and the Marshal who arrested him, to appear before the grand jury of New York county as witnesses “in a criminal action prosecuted by the people of thb state of New York against John Doe.” Upon presenting themselves they were hot taken before the grand jury, but before an assistant district attorney, who put them through a rigid examination, in the presence of the said intervening counsel, which was taken down by a stenographer. Quinn was then put in the custody of an officer by the direction of the said assistant district attorney, and taken through the streets to the private, office of the said intervening counsel, to sign his examination after the stenographer should have written it out. No charge or warrant was pending against Quinn, and no official or officer had the right to detain him, or take him through the streets, nor does it appear that any criminal action concerning the matter was pending before the grand jury at all. The subpoenas mention a criminal action against John Doe, viz., some one whose name was not known. Moreover, testimony given before the grand jury is made secret by law. I regret that it was thought that evidence obtained in this way could find favor with any court. The straining of the machinery of the criminal law, whether to get convictions or for any other purpose, is a dangerous evil. Immediate results may be so obtained, but they do not stand the test of either just opinion or review upon appeal. As to the so-called examination of the marshal, obtained in the way I have stated, .it is not sworn to at all.

Coming to the merits of the case, and the question of law involved, I am of opinion that the said statute abolishing the office of police justice is valid. Concededly, before the constitution of 1894 was adopted, the legislature had full power over the tenure of police justices in New York city. It was able to shorten it, or abolish the offices altogether. But it is claimed that section 22 of the judiciary article of the said constitution put the terms of office of the then existing police justices beyond the power of the legislature. It is as follows:

“Justices of the peace and other local judicial officers provided for in sections 17 and 18, in office when this article takes effect, shall hold their offices until the expiration of their respective terms.”

Reference to the history and terminology of prior constitutions shows that this provision was adopted only out of caution, lest a question might arise whether the general effect of the revision might not be to oust such judicial officers from their offices. It grew out of that overcaution common in constitutional and statutory revision. 'It was not meant to take away the power of the legislature over the tenure of such police justices. That would produce the strange result of giving such immunity to the then incumbents only; and upon the expiration of their terms, those of their successors would again be at the pleasure of the legislature. I see no reason for such an interregnum of legislative power. I cannot find any intention in the constitutional convention to deal with such incumbents with such strange favor and tenderness. The reference to the terms of the said police justices by the words in the said section of . the constitution, viz., “ until the expiration of their respective terms,” was to their terms as they then were, or as they might thereafter be abridged by the legislature.

The petitioner is discharged.


author: BEEKMAN, J.

text:
    Emil Oelbermann et al., Pl’ffs, v. New York and Northern Railway Company et al., Def’ts.

      (Supreme Court, New York Special Term,

      Filed October, 1895.)

    1. Corporations—Stockholders—Minority.
    The majority stockholder, controlling, as he must, the direction of the company, shall not use the power he is thus permitted to exercise' in the promotion of acts by the officers of the corporation which are contrary to the interest of the corporation, and which are promoted by an ulterior purpose of personal advantage detrimental to his co-stockholders. There" must be an abuse of power, and a violation of duty on the part of the directors of the corporation, in the exercise of the corporate powers, which is subversive of the trust confided to them, and, in such case, the majority stockholder becomes responsible as a guilty participant.
    3. Same.
    To warrant the interposition of the. court in favor of the minority shareholders in. a corporation or joint-stock association, as against the contení-' plated .action of the' majority, where such action is within the corporate powers, a case must be made out which plainly shows that such action is so far opposed to the interests of the corporation itself as to lead to the clear inference that no one, thus acting, could have been influenced by any honest desire to secure such interest, but that he must have acted with an intent to subserve some outside purpose, regardless of the consequences to the company, and in a manner inconsistent with its interests.
    8. Same.
    The court is not justified in interfering, even in doubtful cases, "Where the action of the majority may be susceptible of different constructions.,

      4. Same.
    Where misconduct is relied upon, or the plaintiffs’ cause of action grows out of equities existing in his favor, the facts which disclose the misconduct, or out of which equities arise, become ultimate facts, which are properly embraced in the pleading and' which can be stated without minor details. , . ;
    8, Same—Pleadings.
    Charges by stockholders of mismanagement of a corporation, without stating tiie facts showing the acts of its managing officers to have been illegal or fraudulent, do not state a cause of action.
    6. Same.
    A court will not interfere with the management of a corporation, on complaint of stockholders, unless the complaint states facts constituting mismanagement, resulting in wrong or damage to plaintiBs.
    7. Same.
    Minority stockholders in a corporation cannot complain of the acts of the majority stockholders so long as there is no misconduct of the directors amounting to a breach of trust.
    Demurrer to the complaint.
    Simon Sterne, for pl’ffs ; Erank Loomis and Ashbel Green, for def’ts.
   BEEKMAN, J.

The complaint in this action was demurred to for insufficiency, and the demurrer was sustained by Mr. Justice INGRAHAM at special term, who granted the plaintiffs leave to plead over. An amended complaint was accordingly served, to which the defendants have also demurred on the ground among others, that it does not state facts sufficient to constitute a cause of action, and the issue thus raised is now before me for determination. The amended complaint is very voluminous, and contains much of an introductory character that seems to be redundant. The gravamen of the complaint is that the defendant the New York Central and Hudson. River Railroad Company and those interested in promoting its designs, secured such control over the affairs of the New York &jNorthern Railway Company as to prevent the earning by the latter of sufficient money with which to meet the interest charges on its second mortgage bonds, by reason of which a foreclosure of the mortgage had been instituted and a sale of the property of the company threatened, which'will destroy the interests of the stockholders. The motive alleged is the advantage to the Central Company of possessing itself of the property and franchises of a competing road, and.the means employed "to make the plan successful is stated to be the acquisition by the Central Company of a majority of the second mortgage bonds and of the stock of the New York & Northern Railway Company, through which the directors of the corporation could be and were used to further the plan of purchasing the property at a foreclosure sale, or of otherwise acquiring exclusive control of it for the benefit of the Central Company. The complaint asks, among other things, for injunctive relief, against further proceedings in the foreclosure suit. Before entering upon a discussion of the case, it will be well to note the fact that the .question which has been raised respecting the power of the Central Company to purdí ase and vote upon the stock of the other company is removed from my consideration, inasmuch as its power to do so has been settled in the affirmative by the general term of this court on appeal from an order at special term denying a motion made in this action for a preliminary injunction to restrain the Central Company from voting upon such stock. Oelbermann v. N. Y. & N. Railroad Co., 77 Hun, 332 ; 60 St. Rep. 876. It is the law of this case, and must be followed without question until reversed by a higher court. Nor am I at liberty to consider the sufficiency of the complaint an open question, in so far as it remains unmodified by ameiKlment. To that extent the decision of Mr. Justice IN-GRAHAM is, I conceive, also binding upon me, as a matter of propriety in the orderly administration of justice. So that the inquiry here is, in effect, limited to the question whether the amendment which the original complaint has undergone meets and overcomes the insufficiencies for which it was held to be bad. The charge of the plaintiffs, it wiil be remembered, is that the Central Company acquired the stock and bonds of the New York & Northern Railway Company with the preconceived design and purpose of absorbing the latter into its own system ; that, in the accomplishment of its purpose, it has disregarded the interests of the minority stockholders of the New York and Northern Railway Company, by failing to provide means with which to pay the defaulted interest on its second mortgage bonds, by preventing the company from earning enough to pay such interest, and by promoting a foreclosure.of the mortgage which secured the bonds. The principle contended for, upon which the "equity of the complaint is based, is that a trust relation exists between the majority and minority stockholders, out of which springs a duty resting upon the former to act, in the conduct of the affairs of the corporation, in entire good faith, with exact regard tor the rights and interests of the minority stockholders, and in a manner which shall be neither inequitable nor oppressive, as against -them. While, as thus stated, the proposition involves an element of truth, it in no sense partakes of the character of exact definition. It It does not mean that the majority stockholder is bound to contribute any portion of his personal means in support of the corporation, or that he is bound to any greater activity in forwarding corporate interests than any other stockholder, or that he may not remain perfectly passive, leaving the affairs of the corporation to the uninfluenced management and control of its directors. It certainly does not mean that a majority stockholder may not insist upon the enforcement of his rightful claims against the corporation, nor does it mean that the corporation may not acquire and enforce its obligations. It is too well settled to admit of dispute that not only a stockholder, but even a director may do this. Inglehart v. Hotel Co., 32 Hun, 377 ; and cases there cited. The true meaning of the doctrine is that the majority stockholder, controlling, as he must, the direction of ths company, shall not use the power he is thus permitted to exercise in the promotion of acts by the officers of the corporation which are contrary to the interests of the corporation, and which are promoted by an ulterior purpose of personal advantage detrimental to his co-stockholders. In other words, there must be an abuse of power, and a violation of duty on the part of the directors of the corporation, in the exercise of the corporate powers, which is subversive of the trust confided to them ; and when this takes place the majority stockholder becomes responsible, as a guilty participant. Misconduct on the part of those performing the corporate functions must necessarily be present as an essential element in substantially every case in which the doctrine relied upon by the learned counsel for the plaintiffs is invoked. I think it will be found, upon an ex ami nation of'the cases cited by him in support of this proposition that, in each, misconduct amounting to a breach of trust on the part of the trustees or directors was a concomitant of the action complained of. A clear statement of the doctrine as it exists in this state will be found in the case of Gamble v. Queens Co.Water Co., 123 N. Y. 91; 33 St. Rep. 88. In giving the opinion of the court, Peckham, J., says (page 98, 123 N. Y., and 33 St. Rep. 88):

“I think that where the action of the majority is plainly a fraud upon, or in other words, is really oppressive to, the minority stockholders, and the directors or trustees have acted with and formed part of the majority, an action may be sustained by one of the minority stockholders, suing in his own behalf and in that of all others coming in, etc., to enjoin the action contemplated, and in which action the corporation should be made a party defendant. It is not, however, every question of mere administration or of policy, in which there is a difference of opinion among the Stockholders, that enables the minority to claim that the action of the majority is oppressive, and which justifies the minority in coming to a court of equity to obtain relief. 'Generally, the rule must be that in such cases the will of the majority shall govern. The court would not be justified in interfering, even in doubtful cases’, where the action of the majority might be susceptible of different constructions. To warrant the interposition of the court in favor of minority shareholders in a corporation or joint-stock association, as against the contemplated action of the majority, where such action is within the corporate powers, a case must be made out which plainly shows that such action is. so far opposed to the interests of the corporation itself as to lead to the clear inference that no one thus acting could have been influenced by any honest desire to secure such interests, but that he must have acted with an intent to subserve some outside purpose regardless of the consequences to the company, and in a manner inconsistent with its interests.”

I have, for the sake of emphasis, italicized portions of the above opinion. The decision of Judge Ingraham upon the original complaint in the action was a logical application of the principle so well stated by Judge Peckham. He found that the complaint did not set out any unlawful act on the part of the Central Company, and that, in the absence of any such averment, its motives, intent, and purposes in enforcing its legal rights were immaterial. Oelbermann v. N. Y. & N. Railroad Co., 58 St. Rep. 462. As ' I have already said, I do not consider it proper for me to review that decision, the only question for discussion being whether the new matter embodied in the amended complaint supplies the deficiencies adjudged to exist in the original. I do not think that it does. Charges of evil intent, conspiracy, and fraudulent purpose abound; but they are merely words and phrases, entitled to consideration only in so far as they properly characterize acts which, under the rules of pleading, must be set forth. The fraud must appear from the acts, and not from the mere assertion of the pleader that there have been frauds. In fine, the facts which disclose the alleged fraud, and not the conclusions of the pleader drawn from them, are the facts which the law requires in the statement of a cause of action. In the absence of these, charges of conspiracy, fraudulent combination, evil intent, and other similar words of malign import, are mere matters of denunciation, upon which no relief can be predicateed. It is the'wrong or damage which the facts disclose that constitutes the cause of action, and such facts must be alleged as well as proved. It is true that the amended complaint charges that through the influence of the New York Loan & Improvement Company, a former stock and bondholder of the New York & Northern Railway Company, and after that company had ceased to be a holder of such stock and bonds, through the influence of the Central Company, to whom they had been transferred, the New York & Northern Railway Company was not permitted to pay the defaulted coupons, but-that its earnings were diverted by its directors. But it appears in the complaint, elsewhere, not that the company could have paid the defaulted coupons, for it never had the money with which to do it, but that its resources were in the way of increasing and that it would have it been in a position in the near future to pay the same, if its business had not been imporperly interfered with by the Central Company, or that financial arrangements might have been made, through _ the efforts of the Central Company, by which the coupons could have been met. It further appears from the complaint that the Central Company did not become the owner of the bonds and stock in question until about March, 1893, whereas the default upon the coupons in question took place on June 1, 1892. The complaint thus leaves the mind in utter uncertainty as to the import of the charge, unless we find it in the the collocation of the charge with the statement that the earnings of the company were diverted by the directors; but what that diversion was, whether it was a diversion in any obnoxious sense, in what respect it involved a breach of duty on the part of the directors,— in fact, whether it involved any breach of duty at all, — are matters which can be determined, and the proper inferences drawn, only upon a statement of .the facts and circumstances constituting the act, and showing the relation of the Central Company to it. The conclusion of the pleader is thus again made to stand for the "facts from which the conclusion is drawn. The allegation then boils down to a mere expression of opinion on the part of the pleader upon the aspect of a state of facts which he does not disclose. It might well appear that the action of the directors was justifiable, or, if they were mistaken, that they were honest in their purpose, or that their action was as consistent with an innocent as with a guilty intent, in either of which alternatives the pleading won la be bad.

The new matter which charges the directors, managers, and executive officers of the New York & Northern Railway Company with refusing business over the railway, and with declining to enter into any arrangement by which the earning capacity of the road might be increased, is open to precisely the same objection. It is a mere hostile characterization by the pleader of acts or omissions which if stated with circumstance, might be found to bear quite a different construction. In other words, it is again the mere conclusion of the pleader from facts which he fails to disclose. The same may be said in respect to the allegation that profitable business would have been obtained, had it not been for the willful refusal of the management of the New York & Northern Railway'Company “through the influence and domination of the New York Central Railroad Company, to enter into profitable contracts which were tendered it on behalf of the New York & New England' Railroad Company, with which road it connected at Brewster’s.” The facts and circumstances which, of themselves,* would reflect the motive of the board in refusing such contracts, and give character to the. charge, are utterly ' absent. The refusal may have been based upon the insolvency of the New England road, which is elsewhere stated in the complaint, or on the financial inability of the New York & Northern Railway Company to assume the contracts so tendered, or on a lack of facilities to execute them properly, or on some other ground quite reconcilable with an honest purpose, even though it might involve a mistaken exercise of judgment by the directors. How is it possible to say, from the allegation as it stands, that the action of th’e board in this regard was corrupt ? There is a fatal absence of pleadable facts, which expletives and the coloring of the personal opinion of the pleader cannot replace. It is unnecessary to pursue an examination of each of the other amendments. They are either open to the same objection, or are expansions of the original complaint relative to the importance to the Central Company of acquiring the road of the New York & Northern Railway Company, the eagerness of the company in pursuit of that object, and the plans which had been set on foot to realize it. If the means employed were not lawful (and, as far as the complaint discloses anything, they were not), and if the object thus sought was within the sanction of the law (and it cannot be said that it was not), no cause of action arises by reason of such attempts, for the amended complaint does not state any additional facts which would warrant a finding that, in the transaction which it outlines, any one act of the Central Company, or of the directors of the New York & Northern Railway Company, was corrupt, or tainted With illegality. It is well at this point to recur to what was so well said by Judge Peckham in Gamble v. Water Co., supra, and which seems to support the conclusion to which I'have come upon this pleading:

“A case must be made out which plainly shows that such action [the action of the majority stockholders] is so far opposed to the true interests of the corporation itself as to lead to the clear inference that no one thus acting could have been influenced by any honest desire to secure such interests, but that he must have acted with an intent to subserve soma outside purpose, regardless of the consequences to the company, and in a manner inconsistent with its interests.”

And again:

“The court would not be justified in interfering, even in doubtful cases, where the action of the majority might be susceptible of different constructions.”

It is no answer to the contention that the facts should be pleaded to say that they are evidentiary facts, and therefore not properly pleadable. The distinction between the ultimate facts of a case, which are to be pleaded, and the subordinate facts on which they depend, that are matters of evidence, is easily perceived in each case; and where misconduct is relied upon, or the plaintiff’s cause of action grows out of equities existing in his favor, the facts which disclose the misconduct, or out of which the equities arise, become the ultimate facts, which are properly embraced in the pleading, and which can be stated without minor details,—plainly matters of proof.

In conclusion, the case sums up as follows: The Central Company had the right to buy the stock of the New York & Northern Railway Company, and to vote upon it. This was so decided at general term. Oelberman v. N. Y. & N. Railroad Co., 77 Hun, 332 ; 60 St. Rep. 876. It had the right to buy the mortgage bonds of the same company, and to collect the debt by foreclosure proceedings. This was so decided in the case of Farmers’ Loan & Trust Co. v. New York & N. Ry. Co., 78 Hun, 213 ; 60 St. Rep. 217. It has the right to purchase at the foreclosure sale, and thereafter to use the property so purchased in any manner allowed by law; and what that use may be is certainly no concern of the plaintiffs, whose interest in the property after the sale would have ceased. It has no right, however', to do, or cause to be done, in the management of the affairs of the corporation, any unlawful act, which, in respect to the rights of the stockholders, is a breach of trust, or violation of that duty which springs out of the relation of trustee and cestui que trust which subsists between the directors and stockholders. But as the amended complaint does not, within the rules of pleading, disclose any such acts, it fails to set forth facts sufficient to constitute a cause of action, and it accordingly follows that the demurrer must be sustained.

Judgment for defendants upon the demurrer, with costs, with leave to plaintiffs to serve an amended complaint on payment of costs.


author: LEWIS, J.

text:
    John E. Walls, as Administrator, etc., Resp’t, v. Rochester Railway Company, App’lt.

      (Supreme Court, General Term, Fifth Department,

      Filed December 28, 1895.)

    1. Negligence—Contributory.
    The question of contributory negligence, in this case, was held to have been properly submited to the jury upon the evidence.

      2. Damages—Excessive.
    A verdict for $1500, for the death of a widow, seventy-two years old, who was in good health, strong and hearty, and who did the work for the family, consisting of herself, son and daughter, is not excessive.
    Appeal from a judgment in favor of plaintiff.
    Charles J. Bissell, for app’lt; Thomas Raines, for resp’t.
   LEWIS, J.

—The intestate, Catharine Walls, was killed while •attempting to cross the tracks of the defendant’s railway on Monroe avenue, in the city of Rochester, by a car belonging to, and operated by, the defendant. The defendant has a double track in Monroe avenue, from Clinton street easterly on beyond Chestnut street. Chestnut street enters Monroe avenne at right angles from the north. Between the points mentioned, the railroad tracks run practically east and west, upon quite a down grade towards the east; so much so that a car will run by its own gravity. On the 1st day of October, 1891, between three and four o’clock in the afternoon, the plaintiff’s intestate left a store omthe north side of Monroe avenue, one door west of Chestnut street. She walked to Chestnut street, and started to cross to the south side of Monroe avenue by way of the west crossing of Chestnut street. She crossed the northerly track, and, when nearly across the southerly track, she was struck by one of the defendant’s cars, running •easterly upon the southerly track, and received injuries from which she died in a few days.

The evidence justified the jury in finding that the defendant’s negligence caused the injury to the deceased. The serious question, and one upon which we have had sone doubt, is whether the deceased was shown to have been free from contributory negligence. The evidence on that question is quite conflicting, as is not unusual in such cases. Witnesses of such accidents are usually under great excitement, and are quite likely to differ when relating what they saw. As the deceased approached the crossing, she was seen to look in the direction of the approaching car. She undoubtedly saw it, and evidently concluded that she would have time, to pass over the tracks with safety before the car arrived at the crossing. She presumably misjudged the speed of the car, which the evidence tends to show was moving quite rapidly, at a much greater speed than the ordinance of the city permitted, and more rapidly even than was usual for cars passing along that down grade. The witness Groh was standing in the doorway of his store, a distance of from 90 to 100 feet west of the cross walk on which Mrs. Walls was walking. • When he first noticed her, she going south upon the cross walk, and was about to step on the north trade. She then turned her head, and looked towards the approaching car, and continued on; and when she had crossed the space between the two tracks, a distance of about four feet, and was about to step on the south track, the car was passing the witness’ store, a distance of 90 to 100 feet west of the deceased. The motorman at that time commenced ringing the gong. The deceased again looked towards the car, and started on a run or trot, as if to hurry across the track. In speaking of the speed of the car, this witness stated that he noticed it was coming down unusually fast; that he was accustomed to observe the speed of cars; and that it was moving faster than the ordinary movement of cars, faster even then they usually run down that grade. He further stated that the usual movement of cars down that grade was quite rapid. He did not notice any change in the speed of the car after the gong sounded until after the accident. There was evidence tending to show that the car was not brought to a stop until it had reached a point about 100 feet east of Chestnut street. The motorman testified that he applied the brakes when he was about 100 feet west of Chestnut street, and that he employed all the means provided for stopping the car. It had been raining that day, and the track was muddy and slippery, which, the evidence shows, made the stopping of the car more difficult. The fact that the motorman was not able to stop the car until it had run some 200 feet tended to corroborate the testimony that the car was running at quite a rapid speed. There was evidence tending to show that, if the track had been dry, the car could have been stopped in a distance of from thirty to forty feet.

The deceased, manifestly, failed to appreciate the speed of the car when she concluded that she could safely cross the track. She was not in a position to form a correct judgment of its speed, as it was coming directly towards her. Had the car not been running at a speed exceeding the rate fixed by the city ordinance (seven miles an hour), the deceased would have passed over the track safely. Had the motorman, as was usual, slackened the speed of the car when approaching the street crossing, the accident would not have occurred. Had the deceased been one step further on her journey, she would have passed beyond the reach of the car. She was struck by the south front corner of the car. There was evidence permitting the jury to find that after the intestate had passed over the north track, and was about to step upon the southerly track, the car was from 90 to 100 feet distant from the crossing. If this was the situation, she, perhaps, was justified in believing that she could safely cross. After she had made up her mind to cross the southerly track, she evidently saw that there was danger, but, in the excitement of the moment, did not. judge correctly as to' the situation. Had she understood that the car was running at such a rapid rate it was a negligent act to attempt to cross, relying upon the motorman to slacken the speed of the car.

Whether the motorman did anything to lessen the speed of the-car alter he discovered that Mrs. Walls intended to cross the tracks in front of the car was a disputed question. He testified that he did do all he could to lessen its speed. 'Other witnesses who observed the course of the car testified that they did not observe any attempt on his part to check the speed of the car.

We are, upon the whole case, of the opinion that the question of contributory negligence was properly submitted to the jury.

The verdict was for $1,500. It is clained by the appellant that it was excessive. Mrs. Walls was a widow, about seventy-two years of age, in good health. She had not been subject to any sickness; was strong and hearty. She did the general housework for the family, consisting of herself, son and daughter. We cannot see that, under the circumstances, the verdict was excessive. We.see no reason for disturbing the verdict.

The judgment and order appealed from should be affirmed.

BRADLEY and WARD, JJ., concur; ADAMS, J., dissents.


author: PRYOR, J.

text:
    Frederick Sturz, Pl’ff, v. Frederick T. Fischer, Def’t.

      (Supreme Court, New York Special Term,

      Filed January, 1896.)

    1. Attachment—Dissolution—Practice.
    . A motion to dissolve an attachment founded on the papers on wh'eh it ■ - was granted, is not a “litigated motion," which rule 1, appellate division rules, requires to be heard in part 1 of the court, but is within rule 5.
    3. Same—Grounds—Statement.
    An affidavit for an attachment, reciting that defendant “has assigned, disposed of or secreted his property," is not an alternative statement of the grounds.
    Action by Frederick Sturz against Frederick T. Fisheft Defendant moves to vacate an attachment.
    Leopold Leo, for motion; Hastings & Gleason, opposed.
   PRYOR, J.

—The application being, on notice,.to vacate a warrant of attachment' on the papers upon which it was issued, the preliminary question is presented whether the motion can be entertained by the justice presiding in part 2 of the special ferm. By rule 1,- appellate division rules, “ litigated motions ” must be heard in part 1. By rule 5, “ application for all court orders ex parte, * * * or where notice is not required, must be made to the special term for the transaction of ex parte business.” An application to vacate an attachment, when founded only on the papers upon which the warrant was granted, if the warrant was granted by a judge, out of court, must be to the same judge, in court or out of court, and with or without notice, as he deems proper. Code, § 683. “Litigated motions,” as intended in rule 1, I take to be motions which can be heard only on notice. As this application may be heard “ with or without notice,” manifestly notice “ is not required;” and so, by rule 5, it may be heard at the special term for uhe transaction of ex parte business. By section 641 of the Code, “ the warrant must recite the ground of the attachment,” else it is void. Cronin v. Crooks, 143 N. Y. 352; 62 St. Rep. 307. In the case before me, the recital of the ground of attachment is that the defendant “ has assigned, disposed of, or secreted his property,” etc. In Cronin v. Crooks, supra, the court held that a statement of" two grounds disjunctively and in the alternative is a statement of neither ground, since, obviously, to affirm one or the other proposition is to affirm neither. A statement that an attachment proceeds upon one or the other of two distinct grounds fails to indicate upon which ground it proceeds. It stands not upon the one, but upon the one or the other, and the averment leaves in question whether upon the one ground or upon the other. Hence, if defendant’s position be valid, that the warrant in controversy exhibits alternatively two distinct grounds of attachment, there would be no escape from the conclusion for which he contends.

But, as well upon reason as authority, the proposition that the defendant “ had assigned, disposed of, or secreted ” his property, involves a single ground of attachment only. It is by putting his property beyond the reach of creditors, no matter by which means, whether by disposing of, assigning, or secreting it, that the debtor subjects it to attachment. The baffling of creditors is the controlling fact, and it exists whether by one expedient or another of those mentioned in the clause. The three agencies of fraud in the group, namely, assigning, disposing of, and secreting, are legally identical and equivalent. Van Alstyne v. Ervin e, 11 N. Y. 331, 389. “ Secreting does not mean hiding alone, but any making away with property which shall put it unlawfully out of the reach of the creditor.” 21 Am. & Eng. Enc. Law, p, 994. One may secrete property by putting legal impediments in the way of cred-tors. Gault v. Dupault, 4 Can. Leg. News, 321. Where the disjunctive “ or ” is used, not to connect two distinct facts of different natures, but to characterize and include two or more phases of the same fact attended with the same result, but a single ground of attachment is stated. Drake, Attachm. § 102. In Garson v. Brumberg, 75 Hun, 336; 58 St. Rep. 209, it was held that a warrant is not invalidated by the recital of these grounds of' attachment, namely, that “ the said defendant did not depart from the state with intent to defraud his creditors, or to avoid the service of a summons, or keeps himself concealed therein with the like intent.” In Smith, Perkins & Co. v. Wilson, 76 Hun, 565; 58 St. Rep. 245, the precise point in controversy was adjudicated; the court holding that the statement in a warrant of attachment that “the defendants have assigned, disposed of, or secreted their property,” is a recital of one class only of the grounds set forth in section 636 of the Code, and is sufficient. The defendant contends, however, that the authority of this ruling is discredited by the decision of the court of appeals in Cronin v. Crooks, supra. But the case are not identical. In the latter the recital in the warrant was that the defendant “has assigned or disposed of, or is about to assign or dispose of, her property.” Where the recital in the warrant under review the same, then, of course, Cronin v. Crooks would control the decision. Contrary to first impression, my conclusion is that the warrant is valid.

Motion denied.