author: Follett, J.

text:
    Charles Smith et al., App’lts, v. The Seattle, Lake Shore & Eastern Railway Co., Resp’t.

      (Supreme Court, General Term, First Department,

      Filed October 13, 1893.)

    1. Contract—Performance—Agreement to procure construction of RAILROAD.
    Defendant, a railroad company, agreed to pay plaintiffs a certain sum to secure a responsible person or company to build its road. A construction company was secured, and a proposed contract drafted, which, though approved by defendant’s trustees, was never executed by either party. At the time designated in such proposed contract for the commencement of work, the construction company had not funds sufficient to commence, but a few months later, by defendant’s aid, it obtained money enough, and a contract was entered into and work begun. Held, that plaintiffs had not performed their contract and could not recover the sum payable on its performance.

      2. Same—Interest of agent in contract made for principal renders IT VOID.
    The agent of defendant, who negotiated the contract between it and plaintiffs, was to receive a portion of the sum agreed to be paid on plaintiffs’ performance, Held, that although defendant had no knowledge of thereof, such fact rendered the contract voidable at the election of defendant, if it never ratified such agreement.
    3. Same.
    In such case the contract was voidable, even if the agreement between defendant's agent and plaintiffs was not entered into until after the contract was executed, it being an executory contract.
    Appeal from judgment dismissing the complaint.

      John H. V. Arnold, for app’lts; Edgar M. Johnson, for resp’t.
   Follett, J.

This action was brought to recover $150,000 damages, with interest from December 8, 1887, for the refusal of the defendant to deliver to the plaintiffs 150 of its first mortgage 6 per cent, gold bonds, of the par value of $1,000 each, alleged to have become due to the plaintiffs for services rendered in procuring a construction contract for defendant. Two defenses were interposed: (1) That the plaintiffs did not procure a construction contract to be entered into; and (2) that defendant’s agent, who negotiated and executed the contract under which the plaintiffs claim, was given an interest therein by the plaintiffs.

Prior to April, 1886, the defendant was incorporated under the laws of the territory of Washington, and authorized to construct a railroad several hundred miles in length. Its affairs were managed by a board of trustees, who possessed the powers usually exercised by boards of directors. From April to August 10, 1886, Daniel H. Gilman was one of the trustees of the defendant and was the general manager of its business. On the 17th of April, 1886, defendant’s board of trustees adopted a resolution appointing Gilman the agent of the corporation, with power to make a contract or contracts for the construction of the whole or any part of its line, subject, however, to the approval of the board. Immediately after the adoption of this resolution Gilman left Seattle for St. Louis, Mo., where, in the month of April, he met William P. Robinson, one of the plaintiffs, and Charles M. Sheafe. He disclosed to these.gentlemen his powers and his purpose, and asked for their assistance. Robinson stated to Gilman that sufficient aid to build the road could not be obtained in St. Louis, and that it should be sought in the city of New York, and gave him a letter of introduction to Charles Smith, Jr., one of the plaintiffs. Gil-man presented his letter to Smith, and they immediately began to contrive means to secure a contract for the construction of all, or of some part of defendant’s road. Shortly after Gilman and Smith had entered into negotiations, Robinson and Sheafe went from St. Louis to New York, at which city various consultations were had between these four gentlemen in respect to the enterprise. The result was that at some time (the date of its execution not very clearly appearing) a contract was entered into by Smith, in behalf of himself and Robinson, of one part, and the railroad company on the other part, of which the following is a copy :

“This agreement, made this 5th day of June, 1886, between the Seattle, Lake Shore & Eastern Railway Company, by D. H. Gil-man, its duly-authorized agent, party of the first part, and Charles Smith, Jr., broker, of the city of New York, party of the second part, witnesseth: Whereas, the party of the first part is desirous of securing a responsible person or company to build its road, and for that purpose is authorized to issue bonds at the rate of $25,000 per mile, and such amount of stock as may be necessary; and whereas, the party of the second part is willing to undertake to procure the making of a construction contract with such person or company upon sufficient consideration or remuneration being guaranteed to him: Now, therefore, in consideration of the premises, and of the sum of one dollar to it paid by the party of the second part, the party of the first part hereby agrees, in case said second party succeeds within a reasonable time in securing the making of such a contract, whereby the contractors receive stock at a rate not to exceed $15,000 per mile, and bonds at the rate of $20,000 per mile for the first forty miles, and $25,000 per mile thereafter, to pay said second party $150,000 in its first mortgage six per cent gold bonds, said bonds to be delivered as soon as they may be under the terms of the mortgage, after discharging the obligations of the party of the first part to the contractors. In witness whereof, the parties hereto have hereunto subscribed the day and year first above written.
“ Seattle, Lake Shore & Eastern Et. Co.
“ By D. H. Gilman, Agent.
“ Charles Smith, Jr.
“In the presence of L. Monaghan.”

Whether the foregoing contract was executed on the day of its date, or after the formation of the construction company about to be described, is left uncertain by the testimony. Eobinson, the only witness who speaks in respect to it, testified that he.was not certain whether the agreement was executed in July, and antedated, or whether it was signed on the day of its date. On the 3d of July, 1885, Daniel H. Gilman, Charles M. Sheafe, William P. Eobinson, Thomas Burke and Franklin M. Jones executed articles incorporating the Puget Sound Construction Company, with a nominal capital of $1,000,000, divided into shares of $100 each. The object of the corporation was to construct and equip railroads. It was provided that the five persons mentioned were to act as trustees until December 30, 1886. On the 9th of July, 1886, an agreement was entered into between the defendant and Jameson,' Smith & Cotting. of which the following is a copy:

“ Memorandum of agreement made this -9th day of July, 1886, between the Seattle, Lake Shore & Eastern Eailway Company, by D. H. Gilman, its duly authorized agent, party of the first part, and Jameson, Smith & Cotting, brokers, of Hew York, parties of the second part. In consideration of the parties of the second part aiding in obtaining and receiving subscriptions for five hundred thousand dollars to the Puget Sound Construction Company, for the purpose of building forty miles of said Seattle, Lake Shore & Eastern Eailway, the party of the first part agrees to pay and deliver to Jameson, Smith & Cotting, parties of the second part, fifty thousand dollars of its first mortgage six per cent gold bonds, and forty thousand dollars of its full paid capital stock, to be delivered to said parties of the second part as soon as said bonds and capital stock are ready for delivery; and, as a further part of this contract, in consideration of such services as parties of the second part may render in the extension of said railway, the parties of the first part agree, for themselves and their successors, to pay and deliver to said parties of the second part one thousand dollars per mile in the full paid capital stock of Seattle, Lake Shore & Eastern Eailway, as each section of ten miles is completed after the first forty miles are built, and such usual and regular commissions as are charged by first-class corporations or firms acting in the capacity of financial agents. In witness whereof, the said parties have hereunto subscribed their names the day and year above written.
“Seattle, Lake Shore & Eastern Eailway ■ Company.
“ By D. H. Gilman, Agent.
Jameson, Smith & Cotting. '
“ In the presence of Homer A. Hoits.”

At some time between July 3 and August 10,1886, a proposed agreement for the construction of a part of defendant’s road was drafted. By it the construction company undertook to commence work September 1,1886, and continue the work until the road was completed. On the 10th of August, 1886, at a meeting of the defendant’s board of trustees held at Seattle, there were present J. R. McDonald, Thomas Burke, F. H. Osgood, Thomas T. Minor and Daniel H. Gilman. At this meeting Burke and Gilman, who liad become interested in the construction company, resigned as trustees of the railroad. Their resignations were accepted, and their successors werq then chosen, and immediately qualified. After this had been done, Gilman reported to the board of trustees his action in the premises. His report set forth copies of the contract with the plaintiffs, dated June 5th, and the contract with Jameson, Smith & Getting of July 9, 1886, and also a copy of the proposed construction contract. This contract was never executed by the construction company nor by the railroad company, and there was no evidence that it was ever approved of by the trustees of the construction company. Indeed, Robinson, who was president of that company, and is one of the plaintiffs in this action, testified that he was never authorized by the board of trustees to execute that contract. At the date of this meeting, August 10, 1886, only 810 of the shares of the construction company had been subscribed for. Thirty-five thousand dollars had been subscribed by two persons through the solicitation of Gilman. These two subscriptions were subsequently paid. Robinson subscribed $20,000; a gentleman by the name of Honson, $5,000; and Kuowlton, $10,000. Hone of these subscriptions were ever paid. On the 10th of August the construction company was a mere shell; a corporation in name, but without a paid-up capital. Subsequently, Jameson, Smith & Gotting, in pursuance of their contract, secured a sufficient number of shares of the company to be subscribed and paid for to enable the company to undertake the woi’k of constructing the defendant’s road.

On the 1st day of January, 1887, Robinson ceased to be president of the construction company, and anotherperson was elected in 1ns stead. On the 12th of January, 1887, the contract was entered into between the construction company and the defendant under which a portion of the road was completed. This contract was executed by Mr. Sheafe, general manager of the construction company, and by Mr. J. R. McDonald, president of the railroad company. There is no evidence in the case which tends to show that the plaintiffs, or either of them, were in any way instrumental in securing this contract. The agreement under which the plaintiffs claim to recover is what is known as a “ brokerage contract’.’ Before a broker is entitled to recover compensation for his services, he must show that he has found a person able and willing to enter into the contract which he was authorized to negotiate. This rule is elementary, and does not require the citation of authority. The construction company, on the 10th day of August, 1887, had not the ability to undertake the construction of the work. It was without capital, and, besides, its board of trustees had. never authorized the making of the contract submitted to the defendant’s board of trustees. The plaintiffs, as was well held at the circuit, failed to show that they performed the contract under which they claim.

Again, Robinson, one of the plaintiffs, testified that Daniel H. Gilman, who was agent, and at that time a trustee, of the defendant, was to receive $50,000 of the $150,000 of the bonds which the railroad company was to’deliver under the contract with the plaintiffs. This evidence was not contradicted, although Smith was on the stand, nor was it explained, and it is quite evident that these plaintiffs and Gilman were equally interested in the brokerage contract of June 5th. It is not pretended that Gilman’s interest was disclosed to the trustees or officers of the defendant

It is an elementary rule of law that if A. enters into an executory contract with B. through 0., the known agent of B., and gives to 0., the agent, a secret interest in the contract, A. cannot recover damages from B. for his failure to perform the contract, unless the latter, with full knowledge of the situation, ratifies the agreement. This rule is founded on the plainest principles of justice. Agents are bound to exercise the'utmost good faith towards their principals, and cannot lawfully take secret interests in contracts which they are authorized to make. When an agent is employed to sell, he cannot lawfully become the purchaser, or, if he is authorized to buy, he cannot lawfully become the seller. When he violates these rules he commits fraud on his principal, and whoever gives an agent an interest in a contract which he is ■authorized to make becomes a guilty participant in the fraud of the agent, and a contract so entered into is voidable at the election of the principal. Munson v. S. G. & C. R. R. Co., 103 N. Y., 58; 3 St. Rep., 31; Risley v. Indianapolis, B. & W. R. R. Co., 62 N.Y., 240; Conkey v. Bond, 34 Barb., 276; affirmed 36 N. Y., 427; Twin Lick Oil Co. v. Marbury, 91 U. S., 587; Wardell v. Union Pacific R. R. Co., 103 id., 651; Salomons v. Pender, 3 Hurl. & C., 639; Harrington v. Victoria Graving Dock Co., L. R., 3 Q. B. Div., 549; Smith v. Sorby, id., 553 ; Panama &. S. P. Tel. Co. v. India Rubber G. P. & T. Works Co., L. R., 10 Ch. App., 515 ; Mayor, etc., of Salford v. Lever, L. R., 25 Q. B. Div., 363, affirmed in the court of appeals, 1891, L. R. 1 Q. B. Div., 168; Story Ag., §§ 210, 211. In Harrington v. Victoria Graving Dock Co., supra, the defendant repaired ships for the Great Eastern Railway Company. The plaintiff was employed by the railroad company as an engineer to advise in relation to repairing ships, and to estimate the cost of repairs. The plaintiff alleged in his complaint that the defendant agreed to pay him five per cent for superintending the repairs.

The defendant answered that the agreement was made „to induce the plaintiff to use his influence with the railway company to accept the defendant’s offer to make the repairs. The jury found that the agreement to pay the five per cent was partly in consideration of the plaintiff’s superintending the repairs, and partly in consideration of the plaintiff’s promise to use his influence with his employers, the railway company, to accept of defendant’s proposals. But the jury further found that the agreement did not bias the plaintiff’s judgment or action to the-detriment of the railway company. Notwithstanding, it was held that the agreement was a corrupt one, and that the plaintiff could not recover the compensation agreed to be paid. The learned chief justice, Lord Cockburn, in discussing the case, said :

“ I will assume, for the purposes of argument, that the agreement did not influence the mind of the plaintiff so as to induce-him to do anything dishonest towards his employers, the Great Eastern Railway Company. I entertain no doubt, however, that when a bribe is given, or a promise of a bribe is made, to a person in the employ of another, by some one who has contracted, or is about to contract, with the employer, with a view to inducing the person employed to act otherwise than with loyalty and fidelity to his employer, the agreement is a corrupt one, and is not enforceable at law, whatever the actual effect produced on the-mind of the person may be. The tendency of such an agreement as this must be to bias the mind of the agent or other person employed, and to lead him to act disloyally to his principal. It is intended by the party who promises the bribe to have that effect, and the other party knows such is his intention. Such a bargain is obviously corrupt.’’

In Mayor, etc., of Salford v. Lever, supra, it was held that a principal whose agent has received a consideration from the other party to the contract made or induced by the agent may recover the sum received by the agent in an action against him, and also all damages sustained from the agent and the contractor. This judgment rests on the ground that the defendant and the-contractor were joint wrongdoers.

But it is said in the case at bar that the evidence does not show that it was agreed before the contract of June 3d was made that Gilman was to have any part of the bonds to be given for the plaintiffs’ service. If this is true, it does not help the plaintiffs’ contention. The contract was an executory one, and the defendant was entitled to have the disinterested judgment of Gilman, its agent, who was authorized to negotiate a construction contract, as to the terms thereof, and also with whom it (the contract) should be entered into. When it was agreed between the plaintiffs and Gilman that the latter should have one-third of the bonds to which the plaintiffs would be entitled on procuring a satisfactory contract, Gilman had a direct pecuniary interest in accepting such a contract and contractor as the plaintiffs might tender. Gilman was no longer the defendant’s disinterested agent, but was under temptation offered by the plaintiffs to sacrifice the interest of his principal to his own.' This rendered the original agreement voidable, at the election of the defendant.

Robinson testified that in the latter part of December, 1886, Smith, his co-plaintiff, received a notification from the defendant that the agreement had been rescinded. Under such circumstances the plaintiffs cannot maintain an action upon the contract. It is urged that the stockholders of the defendant knew that Gil-man had an interest in the contract, and that whether they had ratified, his action or not was a question of fact for the jury. When it appears that an agent has an interest in the contract negotiated by him in behalf of his principal, the burden is on the party seeking to enforce the contract of showing that the agent made a full disclosure of his interest to his principal. Dunne v. English, L. R., 18 Eq., 524. Such knowledge on the part of the principal as would put a prudent person on inquiry is not sufficient. A principal and agent are not dealing at arm’s length, but sustain a confidential relation to each other, demanding the exercise of the utmost good faith. In the case at bar there is no evidence that, the defendant’s directors knew on the tenth of August, when they ratified the action of Gilman, that he was to have any interest in the contract under which the plaintiffs claim. The judgment should be affirmed", withccosts.

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


source: Caselaw Access Project

author: Van Brunt, P. J.

license: Public Domain

text:
    Simon Wormser et al., App’lts, v. John N. Brown et al., Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed October 13, 1893.)

    Injunction—Obstruction of view.
    The fact that certain, premises had been assessed for the benefits arising from the opening of a street, consisting of light, air and access, does not give the owner thereof a right of action for the removal of bay windows which extended into the street from a building thereafter ere. ted on an adjoining lot, and which obstructed his view, when it does not appear that they seriously interfered with such light, air or access.
    Appeal from a judgment of the special term dismissing the-complaint on the merits, with costs.

      Edgar M. Johnson, for app’lts; John L. Cadwalader, for resp’ts.
   Van Brunt, P. J.

Upon the trial it appeared that the plaintiffs were owners of a lot of land in the city of Hew York fronting on the Fifth avenue, between Sixty-fourth and Sixty-fifth streets, 25 feet front and 100 feet deep, and distant 50 feet 5 inches from the southeasterly corner of the Fifth avenue and Sixty-fifth street; that upon this lot of the plaintiffs there had been erected, for a number of years, a four-story building used and occupied by the plaintiffs for a residence; that the defendant trustees are-the owners of the lots fronting on the Fifth avenue, lying between plaintiffs’lot and Sixty-fifth street; that the Fifth avenue was-duly opened as a street 100 feet wide, and the land owned by the-plaintiffs was assessed for the benefit arising from such opening; that said Fifth avenue is the easterly boundary of the Central Park, which was laid out according to law, and the premises of the plaintiffs were assessed for the benefit arising from such laying out, and such assessment was duly paid.

Section 688 of the consolidation act of 1882, which was a reenactment of a portion of chapter 850 of the Laws of 1873, is as. follows:

“ Sec. 688. The determination of the lines of curb and other surface constructions, in all the streets and avenues within the •distance of three hundred and fifty feet from the outer boundaries of any public park or place which is now, or hereafter may be, under the control and management of the department of public parks, is vested in the said department, and the said department shall also have power to plant trees, and to construct, erect and establish seats, drinking fountains, statues and works of art, whenever they may deem it for the public interest so to do, on the said parts of said public streets and avenues; and the said parts of said public streets and avenues shall at all times, after the same are opened, be subject to such rules and regulations in respect to the uses thereof, and erections and projections thereon, as the said department may make therefor. Nothing in this section contained shall be construed to authorize the said department to do any work in the matter of regulating, grading, paving, sewering, curbing and guttering any of the streets or avenues herein mentioned which the department of public works is authorized by law to do.”

In or about February, 1892, an application was made on behalf of the defendants to the commissioners of the department of public parks of the city of New York for a permit for the erection of two bay windows to be attached to the building which they were about to erect upon the lot owned by them. The department of parks, in May, 1892, gave their consent to such erection, and the defendant trustees thereupon, in June, 1892, proceeded with the construction of their building, and of the bay windows, which extended about six feet beyond the building line, until on or about November 1, 1892, when, upon the application of the plaintiffs, without any notice to or hearing of the defendants, the said park commissioners revoked the permit theretofore granted, pending investigation, and until further order of the board. At this time the bay windows were nearly finished, only two or three days more of work being required to complete their construction. In November, 1892, the defendant trustees, upon notice to the plaintiffs, made an application to the said park board to rescind the resolution of said board revoking said permit; and the said board, after having heard both parties, on the 23d of November, 1892, rescinded said resolution of revocation, and reaffirmed said permit, and granted leave that the work might be completed under the permit originally issued. On or about the 11th day of November, 1892, and subsequent to the resolution of revocation, and prior to the rescission of the revocation, this action was commenced to restrain the defendants from completing said bay windows, and from permitting said bay windows erected in front of defendants’ house from remaining thereon. The,court found as a fact that the erection of the said bay windows interfered to a substantial degree with the light and air coming to the plaintiffs’ house, and affected the view from the windows of the plaintiffs’ house towards the Central park and surrounding property. The court stated in the findings that no evidence was offered on the trial by either party as to any laches of the plaintiffs, or the acquiescence of the plaintiffs in the construction of the windows, and that no evidence was offered as to the various separate defenses set up in the answer of defendants. It is difficult to see how this statement, although included in the findings of fact, can be considered as such, as it is a mere statement of a want of evidence, and is not a finding of a fact established by the evidence, and therefore ought not to have been included in the findings of fact. Upon the trial the court dismissed the complaint, and from the judgment thereupon entered this appeal has been taken.

In the determination of this appeal, it does not seem to me to be at all necessary to determine what powers were conferred upon the department of parks by § 688. of the Laws of 1882. It also seems to me that if the finding of the court below, that the erection of the bay windows interfered to a substantial degree with the light and air coming to the plaintiffs’ house, and affects the same, is sustained by the evidence, the plaintiffs were entitled to relief in this action, and that the legislature had no power, even if they attempted to do so, to permit any structure for private use to be erected within the street lines which.would substantially interfere with the light and air coming to the plaintiffs’ house. It appears that the Fifth avenue was opened under the act of 1807, and the plaintiffs’ premises were assessed for the benefit accruing thereto from such opening, which consisted of the additional light, air and access which would be enjoyed by said premises resulting from such opening. The levying of such assessment, and its payment, gave the owner of the plaintiffs’ premises, and his successors in title, the right to the enjoyment of such light, air and access which they had paid for; and it could not be taken from them for private' use at all, and for public use only upon compensation being made. This principle was first enunciated in the Story case, upon its affirmance by the general term of the court of common pleas, 11 Abb. N. C., 241, and carried to a much greater extent than the said court had sanctioned by the court of appeals, in its decision of that case, reversing the general term of the court of common pleas. But we do not find the evidence justifying this conclusion of fact. The bay windows undoubtedly interfere with the view from plaintiffs’ windows, but such interference forms no ground of action by them. There is not, and can be no serious interference with light and air. The projections are not sufficient to cause such an interference. The nearest one to plaintiffs’ premises is at some little distance from the plaintiffs’ windows, and does not obscure such windows at all.

This being the case, oven if the building of the bay windows into the street was unauthorized, the plaintiffs, suffering no special damage therefrom, cannot maintain any action for the removal of the same, whatever might be the right of the municipal authorities under such circumstances. The claim of the defendants that no relief could be granted to the plaintiffs because the windows had been finished, even if this action had been commenced as soon as their construction had been begun, citing decision in case of Fire Department v. Zeigler, to that effect, cannot be sustained. A party who, in the face of an action promptly brought for an injunction, goes on and completes the thing against which an injunction is sought, and which infringes a plaintiff’s rights, does so at his peril; and he may be compelled to undo that which he has done in defiance of a plaintiff's rights, and with full knowledge of his attempts to enforce them.

I am of the opinion that the judgment appealed from should! he affirmed, with costs.

Follett and Parker, JJ., concur.


author: Per Curiam.

text:
    Abel Crook, Resp’t, v. George E. Hamlin et al., Impl’d, App’lts.

      (Court of Appeals,

      Filed December 5, 1893.)

      1. Trial—Evidence not taken before court.
    The reading by the judge of the minutes of the evidence taken out of court, or of documents, may be dispensed with where counsel upon the trial or argument agree upon, or orally state to the judge, what the minutes or documents contain.
    2. Same—Mistrial.
    In such case the fact that the minutes so taken were not written out by the stenographer or presented by him to the judge does not require the judgment to be set aside on the ground of mistrial.
    (Earl and Gray, JJ., dissent.)
    Appeal from order of the supreme court, general term, second department, affirming order denying motion to vacate a judgment of the special term on the ground that the court neither heard the testimony of the witnesses, save a small portion thereof, nor read the same.

      Henry Thompson, for app’lts; John L. Hill, for resp’t.

      Affirming 54 St. Rep., 77.

   Per Curiam.

The motion is based on the ground that the case was decided by the judge without having heard or read the testimony. It is, of course, essential to a judicial trial that the evidence taken should in some form be presented to the judge before decision. The proceeding in this case was very informal, and the practice adopted was quite liable to lead to mistakes and misunderstandings both on the part of counsel and the court, to the prejudice of one or other of the parties, and ought not to be encouraged. But the judge before whom the trial was had has refused to set aside the judgment, and his order has been affirmed by the general term. The only question before us is whether there were any facts stated in the motion papers from which it could be found that the evidence taken out of court before the stenographer was brought to the attention of the judge before deciding the case. It is conceded that it was not written out by the stenographer or in any way presented by him to the judge, and it embraced a large part of the evidence in the case. But in answer to the moving affidavits the plaintiff presented an affidavit in which he stated that, although Justice Pratt was not actually present during all the time when testimony was taken, he was present during a large portion thereof, and so much as was not then heard by him was substantially conceded in the argument addressed to the court on both sides at the close of the trial.

This statement was not contradicted. The statement is to the effect that the evidence taken out of court was brought to the attention of the court on the argument by counsel on both sides, they conceding and agreeing upon the substance thereof. At least the .judge hearing the motion might so construe its meaning. It ' cannot be said as matter of law, upon this state of facts, that the evidence was not known to the court when the case was decided. The reading by the judge of the minutes of the evidence taken out of court, or of documents, may be dispensed with where counsel upon a trial or argument agree upon, or orally state to the judge what the minutes or documents contain, and for the purpose of review the minutes or documents so referred to may be incorporated in the case. Here the evidence taken before the ■court stenographer was potentially before the court, although not written out. Any disregard of the forms of administering justice, which may weaken the security of rights or subject them to prejudice from infirmity of memory, ought to be avoided when practicable. But we perceive no ground in law for interference with the decision of the motion.

The order should be affirmed, with costs.

All concur, except Earl and Gray, JJ., dissenting.


author: Maynard, J.

text:
    William S. O’Brien et al., Ex’rs, Resp’ts, v. Peter R. Weiler, Ex’r, App’lt.

      (Court of Appeals,

      Filed December 5, 1893.)

    1. Witness—Competency—Code Civ. Pbo., § 829.
    A release by a life tenant of her interest or claim to the moneys involved to which she and the remainderman are parties plaintiff against the executor of a claimant of the fund, does not render her a competent witness to testify in behalf of her co-plaintiff to a personal transaction with defendant’s testator, as the co-plaintifE in such case is her successor in interest.
    3. Same.
    An error in overruling an objection to a question calling for such a transaction or conversation, however, does not require a reversal of the judgment where the answer states only an interview between the deceased and another party in the presence of the witness, in which the latter took no part.
    Appeal from judgment of the supreme court, general term, first department, affirming judgment in favor of plaintiffs.

      John D. Townsend, for app’lt; Abram Kling, for resp’ts.

      Affirming 52 St. Rep., 17.

   Maynard, J.

The plaintiffs, as executor and executrix of the will of Peter T. O'Brien, deceased, brought this action against the Citizens’ Savings Bank of Hew York city to recover the sum of $3,076 standing to the credit of their testator as gtiardian of his daughter, Sarah E. O’Brien, upon the books of the bank, and which was originally deposited in 1871. Sarah E. O’Brien married the defendant Peter Weiler, and died intestate, and her husband was appointed the administrator of her estate; and in that capacity claimed the moneys standing to the credit of the father as her guardian upon the books of the bank. Upon the motion of the bank he was substituted as defendant in its place, and it was directed to hold the moneys subject to the order of the court when final judgment should be entered in the' action. Weiler was also one of the executors of the father’s will, and having refused to unite with the plaintiffs in bringing the aetion, he-was also made defendant in that capacity. The real issue litigated was the title to this fund. By the will of Peter T. O’Brien, the use of his entire estate, including these moneys, if recovered, was given to his widow, the plaintiff Freelove E. O’Brien, who is plaintiff in her capacity of executrix, and after her death the principal is bequeathed to his son, William S. O’Brien, who, as executor, is her co-plaintiff.

Upon the trial it became important to prove by the mother, the plaintiff Freelove E. O’Brien, a conversation between the father and daughter which took place in her presence. After she had been sworn as a witness the plaintiff put in evidence a writing executed by her under seal, and entitled in this action, in which she recited that whereas she had been produced , as a witness and had been objected to on the ground that she was interested therein, because under the will of her husband she was entitled to the whole income of his estate during her life, and would be entitled to the income upon the money in litigation in this action, therefore, in consideration of one dollar to her in hand paid, she thereby released and discharged the executors of the estate of and from all interest or claim she might have to the moneys involved in this action, and to the interest and income thereof.

She was then asked this question, “ Do you recollect any interview or conversation taking place in January, 1881, in reference to any moneys in a savings bank between your husband and your daughter and yourself; if so, state fully what it was,” which was objected to on the ground that the-witness was incompetent to testify to such a transaction or conversation, she being a party in interest. The objection was overruled, an exception taken, and the witness answered the question. It is plain that whatever interest the witness had in the fund in controversy was by virtue of this release transferred to her co-plaintiff, who, by the terms of the will, took the entire estate, subject only to the right of the witness to the income during her life. Even if the legal title was vested in the executors, he was one of the executors, but they held the legal title for the beneficiaries under the will, and as he had become the sole beneficiary so far as this fund was concerned, he had both personally and as executor acquired an interest in the subject of the controversy from the witness.

Section 829 of the Code prohibits a person from, through or under whom a party or person interested in the event of an action derives his interest or title by assignment or otherwise, from testifying in behalf of the party succeeding to his title or interest against the representatives of a deceased person as to any personal transaction or communication between the witness and the deceased. William S. O’Brien was both a party to the action and interested in the event of it. He derived his title to the income of this fund by assignment from his mother. She was under examination as a witness against the administrator of the daughter, and the question objected to called for a personal transaction and communication between her and the defendant’s intestate. All the conditions, therefore, existed which made the statutory prohibition applicable; the objection was well taken; and if any material injury resulted to the appellant because it was overruled the exception presents grounds for the reversal of the j udgment.

The form by which the transfer of interest is accomplished is not important. The effect alone is to be considered. If a general release is adopted, and it results in vesting the title to the property released in another person who is a party to the action or interested in its event, the witness is not by the execution of the release rendered competent to testify. If the party in whose behalf the witness is examined takes by assignment or otherwise ” from the witness, the examination cannot be allowed. The policy of the statute rests upon different grounds from the common-law rule excluding the evidence of interested witnesses. The examination is prohibited in the special cases mentioned, not simply on account of interest, but mainly upon the ground of the enforced silence of the other interested party to the transaction. If living he might give such an account of it as would materially affect the credibility of the surviving actor. It was not deemed fair to permit an interested party to have the benefit of testimony which might appear in a different light, or which might not be given at all, if the examination of the adverse party could be secured.

The restriction was not limited to an interested witness, called in his own behalf, but extends to all cases where it is sought to-examine the witness in behalf of a party or person interested in the event who derives title to the subject matter of the action by assignment or otherwise from the witness as against the representatives or assignee of a deceased person. If it is claimed that the witness has divested himself of interest, it does not follow that he is thereby rendered competent. The test is to be sought in the legal effect of the instrument by means of which his interest was extinguished. It matters not by what name it is called; if it operates in law to vest in another party to the action, or in a person interested in its event, the title or interest which the witness formerly had, the prohibition remains if it is proposed to use the testimony of the witness in behalf of his successor in interest The respondent cites In re Wilson, 103 N. Y., 374; 3 St. Rep., 613, and Loder v. Whelpley, 111 N. Y., 239; 19 St. Rep., 631, but they do not appear to be applicable. They were proceedings for the probate of wills, contested for the want of testamentary capacity. The witnesses offered were legatees under the will, and they executed a general release and discharge of their legacies. They were not offered as witnesses in behalf of any party to the proceeding or person interested in its event who had succeeded to their interest as legatees, and they were, therefore, held not incompetent to testify with reference to a personal transaction or communication with the testator.

While it must be held that in this case the instrument of release did not obviate the objection to the witness’ competency, still it was not reversible error to overrule the objection, unless the witness was, in fact, examined as to a conversation with the ■deceased in which she participated. It is not sufficient to require the exclusion of her evidence to show that it related to a transaction between the deceased and another in her presence, but in which she took no part. Cary v. White, 59 N. Y., 336 ; Simmons v. Havens, 101 id., 427. While the question called for a conversation with herself, the answer stated only an interview between the father aud the daughter, of which the witness was a silent auditor. She states that the two came into her room, and the husband said to the daughter that he had taken all her money out of the bank and bought railroad stocks with it. The daughter replied that she was very glad he had done so ; that the money would accumulate faster because of the better rate of interest which would be thus secured. This was the entire conversation, and the witness is not shown to have taken any part in it what•ever. She afterwards testified that her daughter subsequently told her that she had received the bonds, but no objection was interposed to this evidence, nor to the subsequent statement that her daughter said she had received the proceeds of the bonds and sent them to California to be invested.

The opinion of the learned judge at special term makes it very clear that no incompetent evidence was received and considered. He there states that it was only the testimony of the mother as to the conversation between the father and the daughter, in which the witness took no part, which he considers competent, aud that the question was reserved as to the declarations made by the daughter directly to the witness, and that lie had come to the conclusion that the witness was not competent to testify to these declarations, and that they must be stricken out. It is manifest that the testimony actually received and considered was unobjectionable, and that no sufficient grounds for reversal have been shown.

The judgment must be affirmed, with costs.

All concur.


author: Earl, J. O’Brien, J. (dissenting).

text:
    Eliza Babcock, Adm’rx, Resp’t, v. The Fitchburg Railroad Co., App’lt.

      (Court of Appeals,

      Filed December 5, 1893.)

    Eailboad—Negligence—Explosion op powder mill.
    Plaintiff's intestate was employed in a powder mill distant 200 feet from defendant’s tracks. As a freight train was passing on an ascending grade, the smoke from the engine settled on the mill and an explosion occurred immediately, by which intestate was killed. Negligence on the part of defendant was predicated on its use of diamond stack engines instead of extension front engines, which were then in use, but no witness testified that the extension front engines were safer or less liable to set fires than the diamond stack. The evidence tended to show that while the sparks from the latter were thrown towards the side of the road, those from the extension front were fewer in number, but larger and thrown directly upwards. Held, that there was a failure to show that the extension front engines were safer and less liable to cause fires than the diamond stack engines, and hence a failure to show negligence in the use of the latter by defendant.
    (Andrews, Ch. J., O’Brien and Maynard, JJ., dissent.)
    Appeal from judgment of the supreme court, general term, third department, affirming judgment in favor of plaintiff.

      T. F. Hamilton, for app’lt; Martin I. Townsend, for resp’t.

      Reversing 51 St. Rep., 115.

   Earl, J.

The plaintiff’s intestate, Fred Bennett, was killed on the 15th day of October, 1889, by the explosion of a powder mill, and the claim of the plaintiff is that the explosion was caused by sparks which escaped from the smoke stack of one of the defendant’s locomotives because it had not adopted suitable appliances to prevent the escape of the sparks.

The mill was nearly two hundred feet from the railroad track, and the locomotive was drawing a heavy train of cars upon an ascending grade, emitting large volumes of smoke, which was carried by the wind then blowing towards the mill, and as the smoke settled down over the mill the explosion occurred, wrecking the mill, into which the intestate had just entered.

The mill had been in the same location for many years, and the railroad had been operated since the year 1876 with the same kind of locomotives, without causing any injury to the mill.

The mill was a wooden building, twenty feet square, one story high, covered with tin and painted with fire-proof paint. There were no openings in the building on the side towards the railroad, and all the openings therein were kept closed except when the person working in the mill opened them. The mill was in operation only about six months each year, at intervals, as there was business for it.

The first question for the determination of the jury was whether the sparks from the locomotive caused the explosion. The sole evidence bearing upon this question is that Bennett was seen to enter the building a few moments before the explosion, and that the locomotive was approaching, emitting the smoke which was carried to and over the building, and as it settled down over the same the explosion occurred. Bennett was the only person in the building, and it does not appear what he was doing at the time. There is no evidence that any of the windows or doors of the building were open, or that there was then any occasion for having them open, or that there was any crevice or opening through which sparks could enter the building. Persons looking on from a distance saw the smoke, but no witness saw any sparks or cinders. It seems that powder mills are liable to explosion from defects in machinery or the carelessness of men, as mills near this place had exploded twelve or fifteen times in previous years, averaging a death of a human being at each explosion. Under such circumstances, how could the jury find the cause ot this explosion ? The smoke settled down upon the building at the time, and Bennett entered the building a few moments before. There was the coincidence of the smoke settling down and the explosion, and also the coincidence o£ Bennett’s entry into the building and the explosion. What caused» the explosion, the sparks in the smoke or some act of Bennett ? The jury might guess it was one or the other, and one guess might be more probable than the other and still it would be a mere guess. There may be moral evidence quite convincing and sufficient te influence the conduct of men in some of the ordinary affairs of daily life which yet does not rise to the standard of legal evidence for the consideration of a legal tribunal, and sufficient to form the basis of judicial action. McLoghlin v. National Mohawk Valley Bank, 139 N. Y., 514 ; 54 St. Rep., 803.

If there had been evidence that the explosion could have been caused only by fire passing or brought into the building from the outside, then there would have been some basis for the verdict. But there was no such evidence, and we know there could be none. If the natural tendency of the operation of the defendant’s railroad was to endanger this mill by the sparks emitted from its locomotives, the case would be different. But the locomotives on this road had been operated for thirteen years, under all conditions, in all kinds of weather, carrying long and short trains, and yet the powder mill had never been destroyed.

The plaintiff was bound to show that the explosion was not caused by the carelessness of Bennett, and that it was caused solely by the fault of the defendant. It cannot be presumed that he was free from carelessness; and the burden was upon the plaintiff in some way to prove it. Weston v. City of Troy, 139 N. Y., 281; 54 St. Rep., 493.

Verdicts must stand upon evidence, and not upon mere conjecture, however plausible, and if the situation be such that the plaintiff cannot furnish the requisite evidence, the misfortune is his. We think the plaintiff failed in this branch of her case. But she failed more signally in another branch of it.

The engine which is charged with this explosion is a diamond stack, and it was such as had been prior to about the year 1879 in universal use upon railroads in this country. About that time extension front engines began to come into use, and in 1889, at the time of this accident, there is evidence tending to show that they were coming into general use. In a diamond stack engine the cinders pass through the flues into the smoke box, and then are carried by the exhaust steam up the smoke stack against an inverted cone which acts as a deflector; and as they are deflected they are thrown up again and again until they are rendered quite small, when most of them are thrown through the wire netting across the smoke stack above the inverted cone. This netting has four meshes to the square inch. By the operation of the deflector the tendency is to throw the sparks out of the smoke stack to the sides of the road. In an extension front engine there is a large smoke box extending in front of the smoke stack into which the largest share of the sparks are thrown. There they are agitated by the steam, and some of them are thrown out of the smoke stack through a wire netting which has from two to two and a half meshes to the square inch. The sparks which pass into the smoke box accumulate there in large quantities, and are from time to time, when the engine stops, removed. Fewer sparks are emitted from the extension front engines, but they are larger, and from such engines the sparks are thrown directly upwards. No witness testified that the extension front engines were safer or less liable to set fire than the diamond stack. The only fact from which any inference can be drawn as to the comparative safety of the two engines is that in the diamond stack engines more sparks are emitted, but they are smaller.

The plaintiff seeks to charge the defendant with negligence solely upon the ground that it continued to use the diamond stack engines, and had not converted them into extension fronts, the proof showing that the engine in question was in perfect condition, and that all the appliances of the diamond stack were in perfect order. To maintain her action she was bound at least to show that the extension front engines were safer and less liable to cause fires along the railroad than the diamond stack. This, we think, she failed to do. She could have proved, if her claim be well founded, by firemen, engineers, railroad superintendents and mechanics, that in the operation of railroads the extension front engines are less liable to cause fires than the diamond stack engines. Upon this point there must be much experience and observation among railroad men, and there should be some proof upon the subject from which a jury could find the facts in reference to the comparative safety of the two kinds of engines.

But still further, there is no proof in this case that the extension front engine was invented or brought into use because it is safer or less liable to set fires than the diamond stack. All the witnesses who spoke upon the subject testified that the purpose of the extension front was to make the engine more efficient by giving more draft, and for economy in the use of coal.

We will briefly call attention to some of the evidence. One of -the plaintiff’s witnesses testified that he had noticed “ the coming out of sparks of the extension front engines and diamond stack engines many times.” Another witness testified that “ railroad managers are altering some of the old style of engines into the extension smoke box for the very object of obtaining more area of netting. The purpose of this is to get a better draft through the flues; ” that “ the purpose of this greater area of netting in the extension front is to produce a better draft; ” that “ an extension front, by breaking up the coals and cinders, reduces their size so as to force them through the netting, depending upon the mesh of the netting altogether; ” that “ there is no difference between the throwing of sparks by the diamond stack engines and the throwing of sparks by the extension front engines, if the netting is intact and sound. There is no difference as to the quantity that will be thrown; ” that “ there is no reservoir in the extension front to hold the sparks for any length of time. There is considerable more space in an extension front to hold the sparks than in an ordinary smoke box, probably double the quantity it will hold. As soon as it gets filled up to a certain extent it empties itself. It has got to thresh it through the netting to get out; ” that “ it breaks them up as it goes through the netting.” Another witness of the plan tiff testifies that the difference between the two kinds of engines is that “ the sparks ■do not go out so much from the extension front as they do from the old style diamond stack. I have seen good sized ones come ■out of an extension front the same as I have from a diamond stack, but not so many. * * * Some of these sparks in the •extension front engine that do not remain in the engine go out. All go out that can get through the netting. The spark that goes out depends upon the size of the netting.” Another witness for the plaintiff testified that “ in the extension front the sparks and cinders that are not deposited in the machines go out of the stack, and the size of the spark depends upon the size of the mesh in the netting.” A witness for the defendant testified that “the extension front is simply an elongation of the ordinary smoke box, partially designed for more draft. That is partly done to secure more draft. It is done for economy of repairs and economy of fuel;” that “the economy I speak of was through a saving of fuel. We don’t burn as much fuel in an extension front engine as we do in the other. I think that is a well-accepted theory, and has been known to be such for some years; ” that “most of the cinders, coal and ashes that pass into this extension front is not worked up directly by that exhaust, but •drawn up by induction through the netting after working out and churning around in this front Then they are caught by the exhaust and thrown up pretty straight and high ; ” that “ I have seen more cinders taken from the diamond stack engines than extension front engines. The ordinary smoke box in the diamond stack holds dead cinders." Another witness for the defendant testified : “I understand the purpose of the extension front to be to save coal,-for one thing; it is lighter on the fire. It saves coal by not being so hard on the fire. It is lighter on the fire. There is a longer pull for a fire to get around, and isn’t so direct.”

We, therefore, are unable to perceive how it was possible for the jury, upon the evidence, to find that the extension front engine is safer than the diamond stack, or that this accident would probably not have occurred if the extension front engine had been used rather than the diamond stack.

Our conclusion, therefore, is that the judgment should be reversed and a new trial granted, costs to abide the eve

O’Brien, J. (dissenting).

The plaintiff has recovered damages against the defendant for causing the death of her son and intestate on the 15th of October, 1889. The deceased was at work in one of the mills of the Schaghticoke Powder Company, which was blown up, as is claimed, by a spark from one of the defendant’s engines, thus causing his death. The mill in which the deceased was at work was situated on the northerly bank of the Hoosiclc river and about 195 feet from the track of the defendant’s road. The testimony tended to show that a freight train, composed of some twenty-two cars, was approaching in the direction of the mill, laboring hard upon an ascending grade, the stack of the engine emitting volumes of black smoke, which was carried by the wind towards the mill, over and around which it settled in what is described as a dense mass. When the train reached a point opposite the mill an explosion took place which utterly destroyed the building, and plaintiff’s intestate was instantly killed. The fact that the fire was communicated from the defendant’s engine to the mill rests wholly upon circumstantial evidence, but it was of such a character as to warrant the jury in finding that the explosion was produced by sparks from the defendant’s engine. It was shown that the train was laboring against an ascending grade of about thirty feet to the mile, requiring the frequent use of fresh coal, which was applied by the fireman, in order to furnish the necessary steam, the emission of thick smoke from the stack in unusual quantities was described, the direction of the wind was favorable, and when the smoke was seen to settle over the mill the explosion took place, and no other cause for the accident was discernible or even suggested. The screen of the smoke stack was so constructed as to emit sparks and burning coals of considerable size, which could have reached the building from the engine through the wind and smoke.

It is sufficient to say, without further reference to the testimony on this branch of the case, that the origin of the fire which produced the explosion presented a fair question of fact for the jury upon all the facts and circumstances of the case, and we are concluded by the finding and must assume, as the jury have found, that the explosion was caused by a spark from the defendant’s engine. But the defendant, was engaged in using fire to propel cars by steam, under the sanction and authority of law, and it is not liable for any damage resulting from its use unless it was guilty of negligence. It was the duty of the defendant to use every reasonable precaution to prevent the injury, and unless we can say, as matter of law, upon the evidence, that it has performed this duty, then the verdict must stand.

The defendant was intrusted by the legislature with an agent for propelling its trains of an extremely dangerous character, and the law imposes upon it the duty of observing due care, which must always be measured by the degree of danger or the risk incident to the exercise of its powers. When it neglects or fails to adopt and use such precautions as may reasonably be expected, under all the circumstances, to prevent injury to the person or to the property of others, it becomes liable for the resulting damages.

It is urged in behalf of the plaintiff that the engine which the defendant used on the pccasion, and which produced the accident, was so constructed as not to properly guard and control the sparks and cinders arising from the fires, and in this respect it omitted to perform the duty which the law imposed upon it of adopting every reasonable precaution against injury. The engine was what is known as the diamond stack engine, which is so constructed that the particles of burning coal, set free from the mass, are driven by the air and the power of the exhaust steam against the netting or screen upon the top of the smoke stack, until eventually they are forced into the air, and in this way coals and sparks of sufficient size to communicate fire to combustible matter in the vicinity are frequently emitted from the engine. At the time of this accident there had been another engine in general and common use upon railroads known as the extension front engine, which was so constructed that no particle of burning coal or other fire is driven in the first instance against the netting, but against a metallic diaphragm in front of the fire, and never comes within the sweep of the exhaust steam, but falls into a vault or box at the foot of the stack, from which it is removed as occasion may require.

There can be no doubt upon the evidence that by the use of this class of engines upon railroads the danger of communicating fire to buildings or property in the vicinity is very materially diminished. The evidence tended to show that these engines had been in general use since 1879, at least, by the great railroads of the country, and that the diamond stack engines were turned into use in the yards as shifters. That the defendant had in use eight or ten of the former at the time of the accident, as against about twenty-five of the latter. The extension front not only greatly diminished the risk of fires, but it saved fuel, so that in the end it might be economy to adopt them. Assuming that the engine which the defendant had in use on the occasion of this accident was, when first adopted, suitable for the purpose, or at least as safe as any then in use, the question arises with respect to its duty to the public to adopt safer and better appliances as they came into general use from time to time. The duty which the defendant owed to the public could not be discharged by adopting the new and safer appliances only when and as fast as the old and defective ones became worn out or otherwise useless. A railroad corporation, charged with such important duties to the public, does not exercise that degree of prudence and reasonable care which the law imposes upon it for the protection of life and property, unless, in its appliances and mode of operation, it keeps pace with human progress, and brings to its aid in every proper and reasonable way the improvements which science and human invention have .placed within its reach. When new methods of preventing or minimizing the danger have been introduced, and are in general use for a reasonable time, prudent management and reasonable care require the corporation to take notice of that fact, and its use thereafter of old, inferior or defective appliances may constitute evidence of negligence.

The measure of duty imposed by the law upon the defendant was thus stated by Judge Folger in Steinweg v. Erie Railway, 43 N. Y., 123 : “ The rule of law is that' the appellant was guilty of negligence if it adopted not the most approved modes of construction of machinery in known use in the business, and the best precautions in known practical use for securing safety. If there was known and in use any apparatus which, applied to an engine, would enable it to consume its own sparks, and thus prevent the emission of them to the consequent ignition of combustible property in the appellant’s charge, it is negligent if it did not avail itself of such apparatus. But it was not bound to use every possible invention which the highest scientific skill might have suggested, nor to adopt an untried machine or mode of construction.”

In that case, goods intrusted to the railroad, as a common carrier, were destroyed by fire communicated by a spark from the engine. The contract under which the corporation undertook to transport the property released it “ from damage or loss to any article from or by fire or explosion of any kind." The court held, however, that this did not exempt the carrier from liability for loss by fire caused by its own negligence. The case turned, not-upon any peculiar duty or obligation resting upon the railroad, or growing out of its contract as a common carrier, but solely upon the question of negligence in omitting to adopt any known appliances in practical use which would enable an engine to consume its own sparks. The defendant in that case had been released from the special and peculiar obligations of a common carrier, and its liability for the destruction of the goods left to depend upon proof of its neglect to perform the general duty which it owed to the whole public of providing reasonably safe appliances for the conduct of its business. The principle, therefore, applies to the case at bar, and it has been applied in other cases where recoveries have been had against railroads for causing fires upon lands, or to buildings, fences and property of a like character, upon the line of its operation by means of sparks or burning coals emitted from engines. Freemantle v. London & N. W. R., 10 C. B., N. S., 89; Crist v. Erie Railway Co., 58 N. Y., 638; Bedell v. L. I. R. R. Co., 44 id., 367; Webb v. R., W. & O. R. R. Co., 49 id., 420; Searles v. Manhattan Railway Co., 101 id., 661; Flinn v. N. Y. C. & H. R. R. R. Co., 67 Hun, 631; 51 St. Rep., 103; Bevier v. D. & H. C. Co., 13 Hun, 254.

In Searles v. Manhattan Railway Co., supra, the plaintiff recovered for an injury to his eye caused by a hot cinder which fell from one of the defendant’s locomotives. The judgment was reversed in this court upon the opinion of Judge Earl, for the reason stated that ‘‘ the undisputed evidence shows that all the appliances used upon the defendant’s locomotives to prevent the escape of sparks and cinders were skillfully made and were the ■best known,” thus recognizing the principle. In O'Neill v. N. Y., O. & W. Railway Co., supra, the plaintiff recovered damages ■caused by sparks communicated to woodlands from the defendant’s engines. The judgment was affirmed in this court. One of the questions submitted to the jury was “ whether the engine was supplied with the most approyed method of arresting sparks in known use." The liability of the defendant in case it was not was conceded in the motion for a non-suit and in the disposition made of the case in this court. In all these cases the proof with respect to negligence was much weaker, in my opinion, than that presented by this record.

A railroad company, in the construction and equipment of its -engines, is bound not only to employ all due care and skill for the prevention of in j ury to the person or property of others by the emission of sparks, burning cinders or other cause, but'it must avail itself of all discoveries which science or invention has placed within its reach for that purpose, provided they are such as, under the circumstances, it is reasonable to require it to adopt. But when the dangers to be avoided are insignificant, or not very likely to occur, and the remedy suggested very costly and troublesome, or such as interferes materially with the efficient working of the engine, it becomes a question for the jury whether, under all the circumstances, the company could reasonably be expected to adopt it. Am. & Eng. Ency. of Law, vol. 8, p. 3, 4.

In this case the learned trial judge submitted two questions to» the jury. First, whether from the testimony the explosion was produced by sparks or burning cinders from defendant’s engine entering the building through an open door or window and coming in contact with the powder, and, secondly, whether the defendant exercised due care and caution in running its trains with an engine so constructed as to emit sparks, when a better and safer one was attainable and in general use, not only upon its own road but others generally throughout the country. On the last question the jury were instructed that the defendant was not bound to use such appliances as the highest scientific skill can devise, yet it was bound to use such approved methods as had been adopted in the business, which were reasonably attainable by the company and in general use, as to afford proper security to the lives and property of others. The jury were fully informed by the proofs as to the comparative merits and safety of the two engines, the danger of communicating fire to combustible matter on the line of the road, the time that the extension front engine had been in' general use, the saving in the use of fuel and the additional expense involved in the change. In this state of the case the question whether the defendant did or did not perform the duty imposed upon it was not a question of law but one of fact for the jury, and as it has been determined upon sufficient evidence in favor of the plaintiff this court cannot disturb the verdict. The other exceptions in the record have been examined, and as they do not disclose any legal error the judgment should be affirmed.

Judgment reversed and new trial granted, costs to abide event.

Finch and Gray, JJ., concur with Earl, J., for reversal. Beckham, J., concurs with Earl, J., on second ground, and dissents from first ground of opinion.

Andrews, Oh. J., and Maynard, J., concur with O’Brien, J., for affirmance.


author: O’Brien, J.

text:
    The People ex rel. Amelia E. Reynolds, Resp’t, v. The Common Council of the City of Buffalo, App’lt.

      (Court of Appeals,

      Filed December 5, 1893.)

    1. Res adjtjdicata.
    Relator’s claim for compensation for injury to her property in the opening of a street was denied and she thereafter released such claim to the city for a valuable consideration. Thereafter the legislature passed an act authorizing the common council to audit and allow her claim, to be appraised by commissioners. An award was made, which was confirmed by the court, and an appeal was taken from the order of confirmation to the general term, where it was affirmed, and no further appeal taken, llel'd, that the judgment, in effect, affirmed the power of the legislature to pass-the law and held that the release was not an obstacle to the enforcement of the claim, and as long as such judgment remained unreversed, its validity and binding effect could not be questioned collaterally or in a proceeding, for its collection or enforcement.

      2. Statutes — Construction.
    Permissive words in statutes conferring power or authority upon public officers or bodies will be held to be mandatory where the act authorized to-be done concerns the public interest or the rights of individuals.
    8. Same—Repeal op remedial statute.
    An award made by commissioners under a remedial statute, which is confirmed by the court, has all the force and effect of a judgment creating an obligation on the part of the city to pay, and in this sense is a contract of the highest nature, which cannot be impaired by the repeal of the statute.
    Appeal from order of the superior court of Buffalo, general term, affirming order granting writ of peremptory mandamus.

      W. F. Mackey, for app’lt; O. O. Cottle, for resp't.

      Affirming 49 St. Rep., 576.

   O’Brien, J.

The order appealed from awarded to the relator a peremptory writ of mandamus, directed to the common council of the city of Buffalo, commanding them forthwith to audit and adjust the damages sustained by the relator, which had been appraised at $5,500, in proceedings for opening and regulating a street, and to cause that sum to be raised by a local assessment upon the property benefited by the improvement. The following facts appeared upon the application : In the year 1885 the city of Buffalo instituted proceedings under its charter for the extension of Elmwood avenue and took property for that purpose, the same having been appraised by commissioners duly appointed, and payment therefor was made by local assessment. The. relator appeared before the commissioners and offered to-prove that her property would be damaged by the removal of some buildings adjoining or near her premises. The commissioners refused to allow the proof for the reason, apparently, that the damages claimed were incidental and consequential, and that as none of her lands were actually taken there was no power to make an award in her favor. The report of the commissioners was confirmed by the common council May 11, 1886, and the assessment was directed. The relator appeared before the common council and by petition setting forth her claim asked that compensation be made to her for the damage which she alleged would result to her property. Her petition was heard but not granted, and the common council passed a resolution, which was approved by the mayor, requesting the legislature to authorize by law the payment of a just compensation to her. The legislature did not then act upon the resolution. On the 28th of July, 1887, the city and the relator entered into an agreement in writing whereby the relator, in consideration of the transfer to her by the city of certain building and furnishing material, released her claim and agreed to waive all objections on her part to the validity of the assessment made against her property to pay for the improvement.

The matter seems to have rested on this arrangement till the passage by the legislature of chapter 89S of the Laws of 1890, which authorized the common council to audit and allow the claim when appraised, and to raise the amount by local assessment and pay the same to her. The act provided that the damages should be appraised by three commissioners to be appointed by the superior court of Buffalo, upon notice to the city, and their report approved by the court, before presenting it to the common council for audit. The commissioners were appointed, heard the claim, and made an award for damages. On the 18th of February, 1891, the court, by its order, duly entered, confirmed the report. On the Sd of March, 1891, the legislature passed chapter 42 of the laws of that year, whereby the act of 1890, authorizing the audit and payment of the claim, was repealed. Moth withstanding this repeal the relator presented the claim to the common council for audit, and upon their refusal to allow it or to take any proceedings to provide for its payment by assessment, applied to the court for the writ of mandamus. After the confirmation of the report of the commissioners appointed to-appraise the damages under 'the act of 1890, by the special term of the superior court, the city appealed from the order to the general term, where the order was affirmed and no appeal to this court from that order was taken. The city now claims that the act of 1890, which authorized the audit of the relator’s claims, was unconstitutional because it impaired the obligations of the contract between the city and the relator, whereby she agreed to and did release all of her claims, and the relator insists that the repealing act of 1891 is void as to her, for the reason that the legislature had no power to affect the right which became vested by the confirmation of the report. As to the contention in behalf of the city, it is not necessary to inquire with respect to the power of the legislature to authorize claims founded in justice and equity to be paid by local assessment or otherwise, for the reason that it is not now in any position to question the award. It was made by commissioners appointed under a statute duly enacted. It was confirmed by the court at special term and that order affirmed at general term.

It has thus been adjudged that the relator has a valid claim, and this judgment involves the effect of the release as well as the power of the legislature to pass the statute. The questions which the city now seeks to raise against the award have all been passed upon adversely to its present contention in another proceeding between the same parties, and so long as that judgment remains -of record, unreversed and not set aside, its validity and binding effect upon all parties cannot be questioned collaterally, or in a proceeding for its collection or enforcement. The order of the superior court could not have been made without Affirming the power of the legislature to pass the law and, in effect, holding that the release was no obstacle to the enforcement of the relator’s claim. The city has acquiesced in the adjudication and in this proceeding is concluded. The right of the relator to the writ of mandamus for the enforcement of the award and the effect of the repealing act remains to be considered. It is contended that the act of 1890 simply conferred power upon the common council to audit the claim, leaving it to their discretion whether it should be exercised or not. The words are, that the common council “is authorized to audit and adjust the amount of damages ” and when appraised “ the same shall be raised * * * and the amount * * * paid over,” etc. It would be a liberal construction of this language in favor of the city to say that it was simply permissive, but assuming that it was, the rights of the parties must be governed by the rule of law that permissive words used in statutes conferring power or authority upon public officers or bodies will be held to be mandatory where the act authorized to be done concerns the public interest or the rights of individuals. People ex rel., etc., v. Suprs. of Livingston Co., 68 N. Y., 114; People ex rel., etc., v. Supervisors Otsego Co., 51 id., 401; People v. Common Council of Syracuse, 78 id., 56; Mayor, etc., v. Furze, 3 Hill, 612 ; Lower v. U. S., 91 U. S., 536 ; Barnes v. Dist. Col., id., 540.

We have seen that the report of the commissioners under the statute, awarding damages to the relator in the sum of $5,500, confirmed by an order of the court, had all the force and effect of a judgment creating an obligation on the part of the city to pay. Woodhull v. Little, 102 N. Y., 165; 1 St. Rep., 342; People v. C. C. of Syracuse, supra. It vested in the relator, when the order of confirmation was entered, an absolute right to receive the amount. It created an obligation on the part of the city to pay, and in this sense was a contract of the highest nature. Cornell v. Donovan, 14 Daly, 295; 14 St. Rep., 687.

All contract obligations are protected from impairment by state legislation by the provisions of the federal constitution. The obligation of a contract is impaired in the constitutional sense by any law which prevents its enfoVcement. or which materially abridges the remedy for enforcing it which existed when it was contracted, and does not supply an alternative remedy equally adequate and efficacious. McGahey v. Virginia, 135 U. S., 662. No property right acquired under a state statute can be divested by repeal. People v. O'Brien, 111 N. Y., 1; 19 St. Rep., 173.

The remedy subsisting in a state when and where an obligation is made or created and is to be performed is a part of the obligation, and any subsequent law of the state which so affects that remedy as substantially to impair and lessen the value of the contract is forbidden by the constitution, and is, therefore, void. Edwards v. Kearzey, 96 U. S., 595.

• This provision of the constitution cannot be evaded by indirect methods. The obligation of a municipal corporation cannot be impaired by restraining its power of taxation to the point of disabling it from performance, or by a repeal of the law under which the obligation was to be enforced, or by enacting statutes of limitation that do not allow a reasonable time for bringing the action, any more than by open and avowed assaults upon the contract itself. In this case the repealing act could have no other purpose than to prevent the audit and payment of the relator’s claim, but, whatever the motive which prompted the legislation, it is clearly inoperative and void as to the award made by the commissioners and confirmed by the court.

The order should, therefore, be affirmed, with costs.

All concur, except Gray, J., not voting.


text:
    William Wharton, Jr., & Co., App’lt, v. Charles F. Winch, Resp’t.

      (Court of Appeals,

      Filed December 5, 1893.)

    1. Contract—Breach—Prospective profits.
    Where the payments under a contract for the construction of a railroad are to be made in instalments as the work progresses, a mere failure to make punctual payment of an instalment due according to its provisions is not such a breach of the entire contract as to permit the contractor to refuse to proceed further under it, and recover damages for the profits which he would have earned had the contract been fully performed on his part.
    2. Same.
    In such a case the contractor might at once rescind the contract and refuse to proceed and immediately recover for the materials furnished and services rendered under it, or he might proceed with the performance of the contract and sue to recover for the past due instalment.
    3. Same.
    If, however, there is no rescission on the part of the contractor, and the acts and declarations of the other party are equivalent to an abandonment of the contract in its entirety, the contractor is entitled to recover prospective profits.
    Appeal from judgment of the New York common pleas, general term, denying motion for new trial, and ordering judgment for defendant on the verdict directed by the trial court.

      George W. Wickersham, for app’lt; Charles E. Rushmore, for resp’t.

      Reversing 46 St. Rep., 187.

   Maynard, J.

Defendant was the contractor for the construction of a street railway in Lincoln, Nebraska, and entered into an-agreement with plaintiff by the terms of which the latter was to furnish the materials and labor for the entire construction of the railway tracks in consideration of the sum of $56,000, to be paid by the defendant as follows: $5,000 within five days after the execution of the agreement; the market value with the freight added of the materials needed for the construction of the tracks-whenever and as soon as delivered in Lincoln; $11,200 when a half mile of double track shall have been laid, less the amount previously paid for materials used in its construction, and similar payments for each half mile of double track laid. The $5,000 first paid was to be deducted from the last payment due. The plaintiff began the construction of the tracks, and at the request of the defendant prepared to first lay down a single track for the whole distance of two and one-half miles, instead of constructing both tracks simultaneously, and on November 9, 1887, notified the defendant that all the materials for the construction of the single track were in Lincoln and the plaintiff was ready to proceed to lay the track upon receipt of §>12,000, the cost of the material. The plaintiff’s place of business was at Philadelphia and that of the defendant in New York, and it is evident that -defendant expected to raise the money in Lincoln from the sale of stock and bonds of the railway company to parties there, and he immediately informed plaintiff that he had' received word from Lincoln and that the check for the materials was on the way and would be forwarded without delay. The check, however, did not ■arrive, and there was further correspondence in which defendant ■explained the failure to make payment as expected, but on November 12th he forwarded a check for $4,000, and requested plaintiff to go ahead with the word at once without fail, saying that as soon as plaintiff began work the parties at Lincoln would send more money. Plaintiff replied on the 14th that it would begin work, but the amount sent was so small that it would have only , a small portion of the work done. Defendant again promised $5,000 or $10,000 cash by the next Wednesday, or other security, and urged plaintiff to keep working at Lincoln. Two days later plaintiff wrote defendant that it would lay down a half mile of single track, and .after recalling the terms of the contract and showing how it had not been kept by defendant, the plaintiff further stated that it most certainly did not intend to lay any more than the one-half mile of single track until defendant made payment as agreed.

Neither cash nor securities were forthcoming, and on Nov. 23 plaintiff telegraphed defendant that its men were idle at Lincoln and it should order them home in forty-eight hours. The defendant replied, proposing other security, and urging plaintiff to lay a half mile more before December 1st. Plaintiff telegraphed requesting defendant to come over the next day and bring the proposed security, and that probably they could arrange matters. Defendant replied that he would be there, but did not come. December 2d plaintiff wrote defendant, formally notifying him that his failure to comply with the terms of the contract had been the cause and was still the cause of considerable loss; that there were constantly daily expenses accruing for men, interest on materials, etc., which it would look to him to make good, and further notifying him that in view of the breach of the contract on the part of the defendant the plaintiff does not consider itself further bound thereby. The defendant replied the next day that he had telegrams and letters from plaintiff stating that it should withdraw its men from Lincoln on a specified date, and that if it had not done so the delay was upon its own responsibility. After this there was some correspondence with reference to the substitution of other parties in place of the defendant, but the plaintiff stated that the negotiations were favored with the full understanding that the defendant, by his own acts of omission to make payments as agreed upon, had already canceled the contract, provided the plaintiff chose to have it canceled. These negotiations failed, and no further work was done by the plaintiff under the contract, and no further payments made by defendant. The plaintiff brought this action Nov. 10, 1888, to recover the damages sustained by defendant’s breach of the contract. The contract price of the one-half mile of road constructed, including the materials, was $5,600, and the whole amount received under the contract was $9,560. The plaintiff has, therefore, received from defendant $3,960 more than the contract price of that part of the road actually built, but it claims that if it had been allowed to complete the construction of the road and had been paid for it according to the contract, that it would have made a profit of $13,871, and that it has, therefore, sustained damage to the amount of $9,911, and it is that sum which it seeks to recover in this action. The sole question thus presented for judicial decision is whether, upon the facts proven in this case, the plaintiff is entitled to recover prospective profits because of the failure of the defendant to pay the instalment of the contract price which fell due upon the delivery of the material at Lincoln, on Nov. 9th. The execution of the contract, and what the parties did under it, and what they failed or refused to do, are all matters about which there is no conflict or dispute in the testimony given upon the trial, and at the close of the evidence both parties requested the direction of a verdict, and the motion of the defendant was granted, to which the plaintiff excepted. The plaintiff then requested the court to submit to the jury the question whether or not the evidence in this case did not evince an intention on the part of defendant not to comply with the terms of the contract, and a total failure on his part, which was declined and an exception taken.

In view of the structure of this contract it would seem to be clear that the mere failure of the defendant to make punctual payment of an instalment due according to its provisions was not such a breach of the entire contract as to permit the plaintiff to refuse to proceed further under it, and recover damages for the profits which he would have earned had the contract been fully performed on his part.

In the able and elaborate brief submitted by the learned counsel for the appellant our attention has not been called to any case where the contrary of this proposition has been maintained. While the question does not seem to have been the subject of frequent discussion in this state, authority is not wanting to support this view.

In Moore v. Taylor, 42 Hun, 45; 5 St. Rep., 202, the plaintiff sought to recover prospective profits upon the failure to pay an instalment under a contract for railroad construction similar in its important features to the one before us, and it was held by the general term of thefifth department, Judge Bradley delivering the opinion of the court, that mere default in the payment of an instalment when it becomes due is not such a denial of the right of the contractor to continue in the performance of the service as in legal effect to constitute a breach of the entire contract. Such a failure is not of itself equivalent to a refusal on the part of the defendant to be further bound by the contract or to an abandonment of its provisions, by him. This rule was clearly recognized by this court in Nichols v. Scranton Steel Co., 137 N. Y., 471; 51 St. Rep., 277, where it was held that under a contract to deliver iron in specified portions monthly, the delivery for each month to be paid for on the 27th of the following month, the refusal to be further bound by the terms of the contract, or to accept further deliveries and to give-notes already demandable, and to give any more notes at any time or. for any purpose in the future, or to pay moneys at any time which were eventually to be paid under the contract, that all these things constituted a breach of the contract as a whole and gave a present right of action to recover damages sustained thereby. It is undoubtedly true that the defendant’s failure to pay the instalment was such a breach of the contract as absolved the plaintiff from all obligation to further perform on his part while the default continued. Nor was he bound to grant the defendant any indulgence and wait for any period of time in order to enable him to make good his broken promise. In that sense punctual payment was a condition precedent. The obligation of the plaintiff to proceed under the contract depended upon it. If it was not fulfilled, one of two courses was open to the plaintiff. He might at once rescind the contract and refuse to go on, and immediately recover for the materials furnished and services rendered under it; or he might proceed with the performance of the contract on his part, and at the same time, if he chose, bring suit to recover the past due instalment. In the present case the trial court has found that the plaintiff elected to rescind the contract, and as he had already received more than sufficient to compensate him for the work done under it, that he can recover nothing in this action. This finding has ample support in the evidence contained in the record. The plaintiff did not ask to go to the jury upon this question, and we are concluded by the verdict directed, even if conflicting inferences might be drawn from the acts and declarations of the parties.

The plaintiff did request that the jury might be permitted to determine whether the defendant had not abandoned the contract in its entirety ; but before that question could be reached the court was required to decide whether there had not been a rescission and abandonment of the contract by the plaintiff, and having determined that issue adversely to the plaintiff, there could be no recovery. One week after payment became due plaintiff notified defendant that it would not lay any more than one-half mile of single track until more money was sent. The next day it telegraphed the work would stop if more funds were not sent; six days later it telegraphs that the workmen would he ordered home unless the money was received in forty-eight hours; and on December 2d it formallv notified defendant that it did not consider itself as further bound by the contract. This all occurred within twenty-three days of the time when the instalment became due, and while the defendant was importuning the plaintiff to go on with the work, and had remitted $4,000 in part payment, and was endeavoring to obtain the means with which to pay the balance. What may have subsequently occurred is not important, except that it may be observed that in the future correspondence plaintiff is careful to insist that it must be understood that the contract is canceled, if it chose to regard it canceled. At the time when, according to the finding of the trial court, there had been a rescission and abandonment of the contract by the plaintiff, the conduct of the defendant had not been such as to indicate an intention on his part to abandon it. He had then advanced nearly $4,000 in excess of the contract price of the work actually done, and every motive of self-interest would lead him to desire to secure full performance.

There might be cases where mere delay in making the stipulated payments might be so inexcusable or unreasonable, or so indicative of an utter inability to perform the entire contract, as to be equivalent to a refusal to perform, and a denial of the plaintiff’s right to proceed under it, but there is no proof in this record from which an abandonment by the defendant can be inferred prior to the time when the plaintiff must be deemed, for the purposes of this appeal, to have elected to terminate the contract.

But my brethren, while-concurring as to the legal effect of a rescission and abandonment of the contract by the plaintiff, do not agree with me as to the conclusiveness of the verdict upon the record now here. As the plaintiff excepted to the direction of a verdict for the defendant, and requested to have the question submitted to the jury, whether upon all the evidence there was not a total abandonment of the contract by the defendant, it is thought that he is not precluded from now insisting that if the defendant relied at the trial upon a rescission of the contract by the plaintiff, that question should also have been submitted to the jury upon all the evidence in the case.

In this view the jury should have been instructed that if, from all that occurred between the parties relating to this controversy, they found that the plaintiff elected to rescind the contract because of the defendant’s default in not making payment as agreed, the plaintiff was not entitled to recover; but if they found that there had been no rescission, and that the acts, conduct and declarations of the defendant were equivalent to an abandonment by him of the contract in its entirety, the plaintiff was entitled to recover prospective profits as damages, less the amount received by him in excess of the value of the work done and materials furnished.

All concur for reversal and a new trial upon these grounds, except Maynard, J., who is for affirmance for the reasons stated by him.

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