author: Van Brunt, P. J. Daniels, J.

text:
    Henry Hentz et al., Resp’ts, v. Elizabeth F. Miner, App’lt.

      (Supreme Court, General Term, First Department,

      Filed December 29, 1890.)

    , Contract—Speculative nature oe may be shown under a general denial.
    Under a general denial in an action for advances made for and commissions on the purchase of merchandise, the defendant has a right to show that no valid contract for such purchase was ever entered into or contemplated, hut that they were wagering contracts intended to 'be settled by the payment of differences without delivery.
    Appeal from judgment on verdict directed hy the court.

      Samuel Ashton, for app’lt; T. H. Dewey, for resp’ts.
   Van Brunt, P. J.

The complaint in this action was for a sum due upon an account for money laid out and expended and commissions in the purchase and sale of wheat and coffee by plaintiffs as the agents of the defendant. The defense alleged in the answer was a general denial.

Upon the cross-examination of one of the witnesses on the part of the plaintiffs, who conducted the transaction out of which the alleged indebtedness arose, it was sought to prove that it was the understanding of the parties, at the time the orders were given for the purchases in question, that no merchandise whatever was to be delivered but that the purchases and sales were to be governed by the differences in the market price. This evidence was objected to upon the ground that it was incompetent, irrelevant and immaterial, and the same was excluded, and an exception duly taken.

There was no claim that the evidence could not be offered under the pleadings as they stood; but it was objected to generally, and excluded, apparently, as affording no answer to the claim made by the plaintiffs.

This we think was error. The defendant had a right to show as matter of fact, if such was the case, that it was the understanding and intention of the parties at the time of these alleged purchases and sales that no actual deliveries were to be made or were contemplated; and, therefore, the contract was simply a speculative contract depending upon the result of the market, and that it was never intended to purchase any merchandise, hut that the contract should be settled according to the differences in the market prices. This would be a wagering contract, and contrary to the statute. That such is the case is -expressly recognized in Bigelow v. Benedict, 70 N. Y., 202, and Story v. Salomon, 71 N. Y., 420, and no recovery could be had for losses or supposed losses thereunder.

It is urged upon the part of the respondent, however, that this was an affirmative defense which must be set up, and various authorities are cited claiming that they establish this proposition. We have examined all those which were decided by the courts of this state, not thinking that authorities of a foreign state can construe the rules of pleading in this state authoritatively, and we find no such proposition whatever laid down in any of the cases.

Under a general denial of a complaint alleging a contract, a defendant has a right to prove anything tending to show that no valid contract was ever entered into. It is only in those cases where there is a confession and avoidance that it is necessary to plead the special facts constituting the defense. If the so-called contract, forming the basis of the action, never was in law a contract because contrary to the law, a general denial authorizes the defendant to prove that fact. Therefore, in the case at bar, the defendant had a right to show that no valid contract for the purchase of merchandise was ever entered into between these parties, or ever contemplated in this transaction, and that they were merely wagering contracts intended to be settled by the payment upon the one side or the other of differences without the delivery of any merchandise.

The evidence which defendant sought to introduce by the ci’ossexamination of plaintiff’s witness tended to show this, and thereby the defendant brought himself within the rule laid down in Bigelow v. Benedict and Story v. Salomon, supra, in which it was held that contracts were not to be presumed to be illegal, but it was necessary to prove it

We think, therefore, that because of the exclusion of this evidence error was committed which calls for a new trial.

The judgment should be reversed and a new trial ordered, with costs to appellant to abide event.

Brady, J., concurs.

Daniels, J.

The plaintiff did not object to the form of the questions intended to elicit answers showing that the business out of which the claim arose was made ■ up of gaming transactions. Neither was the objection taken that this evidence was not admissible under the pleadings ; when that objection is intended to be relied upon, it must be presented at the trial. The general objection which was presented to these questions, that they were incompetent, irrelevant and immaterial, did not justify the exclusion of the evidence offered as not being within the issue. Schwarz v. Oppold, 74 N. Y., 807. The evidence was competent, relevant and material and it could not be legally rejected as not being of that character. For these reasons the judgment should be reversed and a new trial ordered, as the opinion of the presiding justice concludes.


source: Caselaw Access Project

author: Bartlett, J. Vaw Brunt, P. J. Barrett, J. (dissenting).

license: Public Domain

text:
    Ralph H. White et al., Plff’s, v. Samuel Eiseman et al., Def'ts.

      (Supreme Court, General Term, First Department,

      Filed December 29, 1890.)

    1. Partnership—'Limited—Affidavit.
    The truth of the statement in the affidavit as to .payment by the special partners of the sum speeifled in the certificate filed on the formation of a special partnership is to he determined as of the time when the affidavit was actually verified by the general partner who made it, and not with reference to the time when it was filed in the county clerk’s office.

      2. Same.
    Where such affidavit was false when made, the special partners are liable for the engagements of the firm, although the payments specified were made before the affidavit was filed with the county clerk.
    (Barrett, J., dissents.)
    Exceptions ordered to be heard in the first instance at general term, after the direction of a verdict in favor of the plaintiffs.

      A. Blumenstiel, for defts; Charles Austin McMahon, for pl’ffs.
   Bartlett, J.

Section 7 of the title of the Bevised Statutes relating to limited partnerships, requires that at the time of filing the original certificate an affidavit of one or more of the general partners shall also be filed in the office of the county clerk, stating that the sums specified in the certificate to have been contributed by each of of -the special partners to the common stock have been actually and in good faith paid in cash.

The next section, § 8, is in the following words: “ No such partnership shall be deemed to have been formed until a certificate shall have been made, acknowledged, filed and recorded, nor until an affidavit shall have been filed as above directed; and if any false statement be made in such certificate or affidavit, all the persons interested in such partnership shall be liable for all the engagements thereof as general -partners. ”

The question in the present case is whether the defendants Eiseman are liable as general partners in the firm of Spencer & Perkins by reason of the fact that a false statement was made in the statutory. affidavit.

The affidavit was made by Sidney S..Spencer,.one of the general partners in the firm, and was sworn to in the county of Bensselaer on the 3rd of August, 1886. The certificate, which appears to have been executed and acknowledged by all the partners on the same day, specified $10,000 as the sum contributed by the special partners Samuel Eiseman and Moses L. Eiseman to the common stock. The affidavit stated “that the sum specified in said certificate to have been contributed by the special partners to the common stock has been actually and in good faith paid in cash.” As.a matter of fact, however, no cash payment of the contribution of the special partners had actually been made at the time this affidavit was verified, nor was any cash payment thereof actually made at any time on the 3rd day of August, 1886. A check for $10,000 on the Pacific Bank, payable to the order of Spencer & Perkins, was drawn bv the defendants in the city of New York on August 3rd, 1886, and delivered to Sidney S. Spencer, the general partner who made the affidavit. The check was uncertified, but was certified 'on the following day, the 4th, and was deposited to the credit of the partnership a day later, on the 5th, in the city of Troy, at two o’clock in the afternoon. The certificate and affidavit were filed and recorded in the office of the county clerk of Eensselaer county on the same afternoon at a quarter to five o’clock. The check was paid in the due course of business on the 6th of August, 1886, to the Troy Bank, in which it had been deposited.

Upon these facts the plaintiffs insist that the defendants Eiseman are liable as general partners, because at the time the affidavit of the general partner was made it was not true as therein stated that the contribution of the special partners had been paid in cash; while the defendants contend that inasmuch as the check had been certified and deposited in the bank account of the firm before the certificate and affidavit were filed, the statement contained in the affidavit must be regarded as true, because the affidavit is to be deemed to speak, not from the time when it was verified, but from the time when it was placed on file in the office of the county clerk.

The defendants in support of their position cite the various decisions holding that a substantial compliance with the terms of the statute concerning limited partnerships is all that will be insisted upon by-the courts; that mere defects of form may be overlooked and disregarded and that the provisions of the act should not be too strictly construed. There is no occasion to question the correctness of any of these propositions in the slightest degree in the case before us. Here, if there has been any failure to comply with the requirements of the statute at all, it is a failure in a matter of substance. The truthfulness of the statutory affidavit is made by the very terms of the law itself essential to the valid constitution of a limited partnership, so that the only test which it is necessary to apply is a reference to the facts to ascertain whether they accord with the statements in the affidavit In the present case it'-is plain that they do not, if the affidavit is to be construed as speaking with reference to the existing state of things at the time when the general partner , swore to it On that day there had been no act by or in behalf of the special partners which amounted to a completed cash payment ,of their contribution to the capital, on any theory.

•The defendants cite Durant v. Abendroth, 69 N. Y., 148, and the Metropolitan Bank v. Sirret, 97 N. Y., 325, as authorities to the effect that the giving of a certified check is equivalent to a payment in cash; but whether that be so or not, no one pretends that the giving of an uncertified check by the special partners to the. general partners constitutes the cash- payment which the statute prescribes. The question upon which the case at bar, therefore, turns is simply this: Is the truth of the statement contained in the affidavit to be determined as of the time when the affidavit was filed with the county clerk, or with reference to the time when the affidavit was actually verified by the general partner who made it?

So far as the certificate is concerned, it has been held to be sufficient that it shall be true at the time of filing and recording it. Ropes v. Colgate, 17 Abb. N. C., 136. It may well be that this unverified instrument can properly be signed before the events of which it is intended to be evidence have actually come to pass, so long as the signers are actuated by the intent that it shall not be used in any manner until the statements which it contains actually accord with the facts. Under such circumstances, until the certificate is placed in the hands of the county clerk to be filed and recorded, it is like a deed in escrow. But I do not see how any such view can possibly be taken of the affidavit. An affidavit must be true when it is made, or it can never be true at all. The subsequent occurrence of the events therein stated to have happened cannot make the' statement true that they had already happened at the time the affiant swore to'it. In other words, affidavits cannot be made in escrow, because the affiant hopes or believes that what he swears to will afterwards come true. To tolerate or sanction the doctrine that an affidavit speaks only from the time when it is used, instead of from the time when it is made, would be to encourage careless swearing and perjury.

I see no room for doubt in this case that the statement contained in the affidavit of the general partner was false, and therefore rendered the special partners liable for the engagements of the firm. It is my opinion, therefore, that the exceptions in behalf of the defendants Eiseman should be overruled, and that the plaintiffs should have judgment upon the verdipt

Vaw Brunt, P. J.

I concur in the conclusion reached by Mr, Justice Bartlett in this case. The statute in respect to the formation of limited partnerships exempts the special partners from the ordinary personal liability of a partner if certain requirements of the statute are complied with, one of which is the making and filing of an affidavit that the special capital has been actually paid in cash; now, as I understand it, an affidavit false when made always remains false, and the subsequent appearing of the event sworn to does not make it true.

An affidavit cannot be made and delivered to be held in escrow, to become an affidavit if the events sworn to as having taken place, but which have not in fact happened, do at some future time occur, otherwise to be null and void. The requirements of the statute are simple enough and easily followed. If the special partner thinks they are otherwise, he need not embark in the adventure. The hardships referred to by Mr. Justice Barrett seem to me to be more imaginary than real, and if following the plain requirements of the statute is deemed impossible, nobody is bound to incur any risk, as no one is required to seek the shelter of the statute. ■

Barrett, J. (dissenting).

I am unable to concur with my brother Bartlett in this case. It seems to me that the strict letter of the statute should not be applied against a special partner where every essential has been complied with. Here the special partner’s certified check for the amount of his contribution to the capital was actually on deposit in the firm’s bank at the time when the certificate and affidavit were filed. Every statement containéd in these papers wa's true at the moment of such filing. If this affidavit, just as it stood verbatim et literatim, had been reverified a moment before the filing, it is not pretended that the special partner would have been liable. A special partner cannot make this affidavit. That must be done by one or more of the general partners. If the affidavit is false, the special partner is nevertheless liable. Thus the burden is put upon him to see to it that a truthful affidavit is filed. If here the special partner had read the affidavit at the moment of filing, he would have seen that the exact truth was stated therein. Yet he is sought to be held because he did not happen to observe the precise date of the jurat. Upon this construction of the statute, even lynx-eyed observation of the date of the jurat would not always avail the special partner. For, as a matter of fact, the affidavit might have been sworn to upon the very day when the cash was actually paid in, but yet a few hours before 'such payment. Such a claim, if allowed, would sacrifice substance to form, and if pursued with regard to the statute, generally, would ruin innocent people upon pure technicalities. In my judgment, the false statement contemplated by the statute, whether made in the certificate or in the affidavit, is a statement which, when it meets the eye of the public, is in any particular misleading. “ The object of the statute,” said Folger, J., in Van Ingen v. Whitman, 62 N. Y., 520, “ is, by the payment into the capital of a specified sum in cash, to give reasonable security to the portion of the public likely to deal with the partnership; and to insure the payment of that sum, thus, it requires the affidavit that the payment thereof has been thus made before the partnership can start as a limited one. The statement of the amount of the cash payment is required so that the public may guage thereby the extent of its dealings with the firm. The affidavit is called for, that the public may have reliance upon the existence op the fact of payment."

That the statute should receive a reasonable construction was held by the court of appeals in President v. Laimbeer, 108 N. Y., 582; 13 N. Y. State Rep., 869. In that case, Peckham, J., speaking of the plaintiff’s contention that the statute must be strictly construed, and all its provisions fully and even technically complied with before exemption from general liability can be claimed, observed :

“Acts providing for the formation of a limited partnership should receive a reasonable construction, not such as to make its formation almost impossible, and .not such that where the slightest and most innocent (and to third persons entirely harmless) deviation from the strictest construction that can be given to a statute shall work results to the special partner of possibly a most disastrous and utterly ruinous nature, including liability for enormous debts incurred by the general partners where the credit given was not in the least based upon any liability of the special partner greater than the capital he. had contributed.”

In Durant v. Abendroth, 69 N. Y., 148, the certificate and affidavit were actually filed on the 23d of December, 1870, and the partnership did not commence until the first day of the following January, nor was the capital actually paid in until the 2d of January. Both the certificate and affidavit, therefore, were untrue at the time when they were filed, but even with reference to that state of facts, Peckham J., in the Laimbeer case, supra, said:

“ I think it was a very stern and technical application of the statute, because confessedly, before one particle of business was transacted by the firm, and on the earliest possible day after the commencement of the term of partnership at which it could be done, the check was paid and the cash contributed by the special partner to th e general fund. It does not seem to me as if the principle of that case should be extended.”

The Laimbeer case seems to be a distinct authority against a. technical construction of the statute, especially in non-essentials, and in favor of the sufficiency of a substantial compliance with its terms.

I see no distinction in principle between the present case and Ropes v. Colgate, 17 Abb. N. C., 136. In that case Justice Brown said that: “ What is required of parties desirous of availing themselves of the privileges conferred by the statute in question, is a substantial compliance with its terms. Of what importance is it whether the capital contributed by the special partner is paid in a few minutes before or a few minutes after the certificate is signed, so long as it is paid' in good faith before the partnership comes into existence? In my judgment, if, at the moment the partnership is formed by the act of filing the certificate, all its statements are true, there isboth- a .substantial and a literal compliance with the statute, and the special partner is not liablé to the creditors of the firm.'-”'

The statute in this respect makes no distinction between the certificate -and the affidavit If either is false, the. specified consequences follow. In one case there is a false statement, in the other a false oath. If either tends to thwart the statute, mislead the public 'or induce any one to rely upon a fact .which .does not exist at the moment of filing of the papers, the liability of general partoer'follows. It"is not' until- that, moment.that the partnership becomes complete' and it is not. until that moment that the affidavit becomes material. It is not' a - question of the criminal law, nor yet"-of moral obliquity. It is simply a question- of a statement placed on file for the inspection and advice of persons about to deal with the firm.

What difference can-it possibly make to such persons-whether the truthful facts placed before them on the files were sworn to on the day of filing' or ,tbe day before ? On the day when the check was cashed or 'the day before? Where, then, the special capital has been paid in, in cash, prior to the filing of .the certificate and affidavit, and these documents, so state,'everything, essential or substantial has been done. To hold a special partner liable under these circumstances is simply to. fine him the debts of the firm, not because of his own perjury, but because of an anticipatory statement made by another person technically inaccurate at the time it was verified, but true when used pursuant to the requirements of the law, and which could not possibly have .affected any person who ever had dealings with the firm.

I think the exceptions should be sustained and a new trial ■ordered.

Exceptions overruled, and judgment ordered for plaintiffs on ■ verdict.


author: Barrett, J.

text:
    The Strobridge Lithographing Co., Resp’t, v. William H. Crane, App’lt.

      (Supreme Court, General Term, First Department,

      Filed December 29, 1890.)

    1. Injunction—Contract nor personal services.
    Equity will not interfere to restrain the violation of a restrictive covenant in relation to personal service, except where such service is special, unique and extraordinary.
    Same.
    The test as to whether service of a given character is special, unique or extraordinary is whether a substitute can be readily procured, and whether such substitute will substantially answer the purpose of the contract.
    Appeal from an order granting an injunction pendente lite to Testrain the defendant from working for the Metropolitan Job Printing Company, or for any other corporation or person, as a lithographic designer or lithographic sketch artist.

      George H. Hart, for app’lt; John T. Walsh, for resp’t.
   Barrett, J.

As a general rule, equity will not interfere to restrain by injunction a violation of a restrictive covenant in relation to personal services. Exceptions have been made where the service was special, unique and extraordinary, Pom. Eq., § 1343, as in the case of singers, actors, authors, artists and the like. It may sometimes be difficult to say just what is a special, unique and extraordinary service, or whether the employe possesses special, unique or extraordinary qualifications. The solution may generally be reached by an inquiry as to whether a substitute for the employe can readily be obtained, and whether such substitute will substantially answer the purpose of the contract. In other words, whether the individual service specially contracted for is essential to prevent irreparable injury.

The foundation of the jurisdiction is the inability of the law to afford adequate redress. In many cases the damages could not possibly be ascertained and the injury would in every just sense be irreparable. Where however, a proper substitute can readily be secured, and the service demands no exclusive individuality, the reason for this exceptional departure from common law principles fails, and the parties should be left to their ordinary remedies.

To entitle a party to an injunction pendente lite in this class of cases, the plaintiff must bring himself clearly within the principles upon which this exceptional jurisdiction rests. He must establish the and he must also show an immediate necessity for the extraordinary remedy. It must not be overlooked that such an injunction grants, preliminarily and without a trial, the entire relief sought to be obtained by the final judgment. Such an injunction should be granted with great caution, and only in a case free from doubt, where the necessity is urgent. These views necessarily lead to the reversal of the order appealed from. The defendant’s employment was not special, unique or extraordinary. It -called for nothing peculiar or individual to him. He was to give the plaintiffs the benefits of his talents in all branches of the art of lithography and designing, and he was also to “ color sheets, mark colors and work on stone.” Much of this was_purely mechanical, but even with regard to the higher branches of the- art there was nothing uncommon in the defendant’s qualifications. He is simply a talented and rising young member of the guild of lithograph sketchers. His name adds no special value to the good work he does, and his withdrawal entailed no serious loss upon the plaintiffs. Indeed, there is no proof that his place cannot be adequately filled. The only allegation in the complaint on that head is that 11 it is impossible to supply defendant’s place at this season of the year with an equally competent person, all such persons being now engaged.” And this allegation, fortified only by the general statement of the plaintiff’s New York agent, is expressly denied.

Nor is there any proof of damage or of actual injury. The plaintiff is an Ohio corporation, doing business in Cincinnati. Whether it transacts business in this city does not appear, although Mr. Stewart speaks of himself as the “ Manager of 'the New York branch of the plaintiff.” How the plaintiff in Cincinnati will be irreparably injured unless the defendant is enjoined from working for the Metropolitan Job Printing Company in New York is not apparent We have, in fact, but little doubt that the plaintiffs can supply the defendant’s place with an equally competent person, and that the loss of his services has involved no serious detriment to their business.

Both upon the facts and the law the injunction should have been denied, and the order should, therefore, be reversed, with ten dollars costs and disbursements, and the injunction dissolved,, with ten dollars costs.

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


text:
    The Strobridge Lithographing Co., Resp’t, v. William H. Crane, App’lt.

      (Supreme Court, General Term, First Department,

      Filed December 29, 1890.)

    Injunction—Contract—Parties.
    In an action to restrain the performance by defendant of services for a particular corporation not a party, in violation of an alleged restrictive contract, such corporation has an interest in the subject of the action vithin the meaning of § 453 of the Code, and is entitled to be brought in as a defendant.
    Appeal from an order denying a motion made by the Metropolitan Job Printing Office to be made a party defendant herein.

      George H. Hart, for app’lt; John T. Walsh, for resp’t
   Barrett, J.

The application to bring in the appellants as parties defendants should have been granted. They had an interest in the present controversy and in the subject thereof within' the meaning of § 452 of the Code. The action is not merely to enjoin Crane from working generally in violation of his contract with the plaintiffs, but from working for these appellants under a contract which he has made with them. In other words, to restrain the execution of that contract. The appellants have thus a direct interest in the controversy. They certainly have a right to be heard before they are deprived by injunction of the services of a person who is ready and willing to fulfill his engagement with them. This principle has always been recognized, and it has been the common practice both in England and this country to proceed against the party who may be injuriously affected by the injunction, as well as against the employe who is charged with violating the restrictive covenant. De Polkle v. Sohlke et al., 7 Robt., 280; Fredericks v. Mayer and Gurney, 13 How., 566, affirmed by the general term in 1 Bosw., 227; Hamblin v. Dinneford et al., 2 Edw. Ch. 529; Lumley v. Wagner, 1 De Gex., M. & G., 604; and see Mr. Abbott’s note to McCaull v. Braham, 16 Fed. Rep., 37.

The general rule that all parties whose interests are to be affected by a judicial decree should be brought in, has been broadly applied. See Clay v. Clay, 21 Hun, 609, and Tilby y. Hayes, 27 id. 253.

In The People v. Albany & Vermont R. R. Co., 77 N. Y., 232, the court of appeals held that the lessee of a railroad corporation whose charter was sought to be annulled was entitled to be made a party defendant. That action was brought by the attorney general for the purpose of enforcing an alleged forfeiture of the charter of the lessor corporation and dissolving it, because of non-user of part of the road. Rapallo, J., speaking for the court, said: The lessee has such an interest in the subject of the action, and in the real estate to be affected by the judgment, as to entitle it to be heard.” The subject of the action was the alleged forfeiture, with which the lessee had no privity. The real estate was not the subject of the action and could only be affected by the legal consequences flowing from dissolution. Yet the court held that it would be unjust to cut off the rights of the lessee without a hearing, and reversed the order which denied the lessee’s application.

In the case at bar, the appellants’ contract with Crane, and its fulfillment by the latter, are directly involved. They should not, therefore, be denied a hearing.

The order appealed from should be reversed, with ten dollars costs and disbursements, and the application of the appellants granted.

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


author: Van Brunt, P. J.

text:
    The Third National Bank of Springfield, Resp’t, v. Orlando B. Hastings, App’lt.

      (Supreme Court, General Term, First Department,

      Filed December 29, 1890.)

    1. Insolvency—Effect of discharge upon rights of surety.
    Where the debtor and creditor reside in the same state, and the discharge in insolvency would be operative whether the creditor appeared and proved his debt or not, the proving of the debt or the taking of a dividend by the creditor does not discharge the surety.
    2. Same—Subrogation.
    In such a case the decree discharges the debtor absolutely and there are no rights against the debtor to which the foreign surety can be subrogated.
    Appeal from judgment entered on verdict rendered by direction of the court

      F. B. Candler, for app’lt; J. L. Bishop, for resp’t
   Van Brunt, P. J.

This action was brought to recover a promissory note made by the defendant under the firm name of Hastings & Todd, to the order of the Hurlburt Paper Co., properly endorsed and delivered to and held by the plaintiff. The defendant made the note for the accommodation of the Hurlburt Paper Co., under which name Thomas 0. Hurlburt and H. C. Hurlburt conducted business as copartners. The Hurlburts were afterwards adjudged insolvent under the laws of the state of Massachusetts in proceedings instituted in the court of insolvency for the county of Berkshire, in that state. The plaintiff proved its debt under the insolvency proceedings, which resulted in a composition and discharge of the debtors under said act, by which it was adjudged that upon the debtors paying into court a sum sufficient to pay to their creditors twenty per cent, of their indebtedness a certificate of discharge should be granted them. They made the payment and the discharge was granted. The plaintiff received twenty cents on the dollar upon the claim proved, which claim included, among other things, the note in suit

This plaintiff is a national banking association organized under the United States , statute at Springfield, in the county of Hamilton and state of Massachusetts, where it was located and had its place of business. The Hurlburts were both residents of the state of Massachusetts, and the defendant was a resident of this state.

The question presented at the trial was whether the discharge of the Hurlburts under the Massachusetts insolvent laws furnishes a defense to the defendant as against his liability as mater of the note in suit

The court directed a verdict for the plaintiffs and from the judgment thereupon entered this appeal is taken.

It is urged upon the part of the plaintiff that conceding that the defendant occupied the position of accommodation maker and the Hurlburts were principal debtors, the discharge of the Hurlburts in the insolvency proceedings would not discharge the liability of the defendant, because under the insolvent laws of Massachusetts, it is expressly provided that a discharge shall not release or discharge a person liable for the same debt as partner, joint, contractor, endorser, surety or otherwise. This proposition it does not seem to be necessary to decide in the disposition of this case. But it is doubtful whether the courts of this state as against a resident of this state would give effect to this provision of the statute law of Massachusetts in contradiction of its own policy in that regard.

But we think there is another proposition which is fatal to the defendant’s contention, and that is the plaintiffs, the owners of the debt, and the Hurlburts, the debtors, were both residents of Massachusetts. The insolvency court acquired jurisdiction, both of the subject-matter, vía : of the debt due to the plaintiff, and of the persons,- both debtors and creditor. Their discharge under the insolvent laws discharged the debt as to them whether the creditor appeared or not, and, therefore, the appearance of the creditor and the taking of the dividend in no way deprived the surety of any rights which he could have maintained had not such appearance been had.

It is a well established principle that where debtor and creditor reside in the same state and the debtor is discharged by the insolvent laws of that state that the discharge is valid everywhere.

And it is equally well settled that where a debtor and creditor are residents of different states a discharge -under the bankrupt laws of the state where the debtor is domiciled will not operate as a discharge of the debt in the state where the creditor is domiciled.

It was for this reason that it was held in the cases cited by the defendant that the appearance of the creditor in the bankruptcy court and thus conferring jurisdiction upon the bankruptcy court, although not a resident of the country over which the court had jurisdiction, and the accepting of a dividend discharged the surety. In such a case, unless the creditor had intervened, the discharge would have had no effect upon the debt in the jurisdiction where the creditor and the surety lived, and the property of the debtor which might come into that jurisdiction could be made subject to the payment of the debt

. But no case has been found and no principle adverted to, where the debtor and creditor reside in the same state, and the discharge would be operative whether the creditor appeared and proved his debt or not, holding that the proving of a debt or the taking of a dividend by the creditor discharges the surety.

The whole theory oi these decisions is that the surety is entitled to be subrogated to the rights of the creditor; and that in a case where the discharge becomes operative as to the debtor the right of the surety is cut off without his having an opportunity to be heard, and where that is done voluntarily by the creditor he cannot subsequently come upon the surety for any portion of the debt

But where the discharge has taken place involuntarily, or where whether the creditor appeared or not the same result would have followed, except that the surety’s liability would have been increased because the debt would not have been diminished by the dividend, the rule in the cases cited cannot apply.

It is urged upon the part of the appellant that the mere fact that the creditor resided in the state with the bankrupt would not destroy a foreign surety’s right to subrogation. But in this propbsition the learned counsel ovérlooks the principle which is conceded in the cases of Gardner v. Oliver Lee’s Bank, 11 Barb., 558, and Phelps v. Borland, 103 N. Y., 406; 4 N. Y. State Rep., 233, that if the bankrupt court acquired _ jurisdiction- of the creditor without his intervention, the debt would have been discharged and the surety would have lost no rights. And those cases were,, decided as they were only because the creditor voluntarily intervened, and gave the court jurisdiction to so-discharge the debt that tbn rights of the surety were gone. If a bankruptcy court having jurisdiction of the person of the creditor could not discharge the debt so that the right of the surety would be extinguished, it could ■ not do so where the creditor having appeared, being a non-resident, thus conferred jurisdiction. But the contrary is the rule recognized by the cases above cited, viz.: that where the court has jurisdiction of the person in proceedings of this description, where the creditor is a resident within the jurisdiction of the insolvency court, its decree discharges the debtor absolutely, and there areno rights against the debtor to which anybody can be subrogated.

The judgment should be affirmed, with costs.

Daniels and Brady, JJ., concur.


text:
    Julius Goldman, Resp’t, v. John Banta, App’lt.

      (Supreme Court, General Term, First Department,

      Filed December 29, 1890.)

    "Vendor and purchaser—Title—^Presumption as to issue oe execution.
    The-title to premises contracted to be sold by defendant came through a sheriff's deed, but no execution could be found. It was shown, however, that subsequent to such sale the defendant in the execution identified before a commissioner of deeds the grantor in a deed conveying a portion of the premises claimed to have been sold thereunder, and that no claim had been made to the premises by the defendant in the execution or his representatives for more than forty years. Held, that from such facts the presumption necessarily arises that an execution was issued and a sale had thereunder, and that a title was made out free from reasonable doubt.
    Appeal from judgment entered upon the decision of the court without a jury. ■

      J. A. Marpes, for app’lt; J. A. Koons, for resp’t.
   Van Brunt, P. J.

This action was brought to foreclose a-lien for money advanced on the purchase price of land and also to recover the expenses of searching title.

In March, 1880, the defendant contracted to sell to the plaintiff a certain plot of land and to give an unencumbered title to the premises by full covenant and warranty deed subject ondjr to a party wall agreement; $1,000 was paid at the time of the signing of the contract; and upon examination the plaintiff," having ascertained the fact that the title of a portion of the premises came through a sheriff’s deed and no execution having been found, brought this action to recover the amount paid and the expenses of searching the title.

The question as to the validity of this title was before this court in the case of Goldman v. Kennedy, 49 Hun, 157; 17 N. Y. State Rep., 488. That case was decided upon an agreed statement of facts. It" was contended that the recitals in the sheriff’s deed, and in a certificate of sale, raised a presumption that an execution had been issued, and it was there held that these recitals could have no such- effect, particularly as the statute provided what the certificate should contain, and that such certificate should be received as presumptive evidence of the facts therein contained. The statute having thus defined as to what extent the certificate could be presumptive evidence it seemed clear that it could not be claimed to be presumptive evidence, of assumed factss tated therein, which had no warrant in the statute to be so included, and it was held that this being the sole proof there was not sufficient evidence of the issuing of the execution. That case differed from the case of Leland v. Cameron, 31 N. Y., 115, in that in the latter there was extrensio evidence of the issuance of the execution.

In the proof in the case at bar extrinsic evidence that the execution must have been issued and a sale had thereunder was also presented in the fact that the defendant in the execution identified before a commissioner of deeds the grantor in a deed conveying a portion of the premises claimed to have been sold under this execution. ‘The defendant in the execution thus knew that others were dealing with the title to this property of which he had been the owner, and of which it is claimed he was divested by a sale under an execution, and assented thereto, showing that he supposed that his title to the premises had been extinguished.

This proof is proof of record, and not contradicted. It further appears that for over forty years no claim whatever has been made by the defendant in the execution or his representatives to this property; and in view of this circumstance we think that there was sufficient evidence to show that the defendant in the execution believed his title had been extinguished by a sale under an execution, and that the purchasers at such sale acquired title thereto, from which the presumption necessarily arises that an execution was issued and a sale had thereunder.

We think, therefore, in view of the additional facts presented to the court, that a title has been made out which is free from reasonable doubt.

The judgment should be reversed and a new trial ordered, with costs to appellants to abide event.

Daniels and Brady, JJ., concur.


author: Daniels, J.

text:
    Daniel Paxton et al., Individually and as Executors, App’lts, v. Eliza Brogan, Impl’d, Resp’t.

      (Supreme Court, General Term, First Department,

      Filed December 29, 1890.)

    1. Will—Probate—Injunction.
    It is the right of all persons interested in the estate under a will that the instrument shall he proved, and they cannot he deprived of that right by reason of any preceding act of the person named as executor.
    2. Same.
    The testator left two wills, the first of which was admitted to probate. The person named as executor in the second will was the residuary legatee in both, and has received part of the estate under the first will. Held. that this fact did not affect the other legatees under the second will, and it was the duty of the executor named therein to present it for probate for their benefit, and, therefore, that an action could not he maintained to restrain such proceedings for probate on that ground.

      Appeal from an interlocutory judgment sustaining a demurrer to the complaint.

      William H. Hamilton, for app’lts; Wm. G. Choate, for resp’t.
   Daniels, J.

John Patterson at the time of his decease left two instruments executed as his last wills. The first is dated on the 18th of April, 1888, and the last on the following day. The first has been admitted to probate by,the surrogate of the county of New York, and letters testamentary issued ■ to the plaintiffs, who are the executors named in that will. The second has been presented for probate by the defendant George W. Patterson, one of the executors named therein, and he has also applied- for the revocation of the probate of the preceding instrument This action has been brought to restrain those proceedings for the reason that the defendant George W. Patterson, who. is named as residuary devisee and legatee in both instruments, has received part of the estate, together with other benefits, under the first will. The defendant Eliza Brogan, who is a legatee, has demurred to the complaint, assigning as one of the grounds for her demurrer that the complaint fails to state facts to .present a cause of action.

This defendant, as well as other persons, are entitled to legacies under the will proposed to be proved. And as the principle invoked by the complaint has no application to them, it was the duty of the defendant named as executor to present the instrument for probate for their benefit, and to prove and establish it as a will, if that can be done.

To the surrogate also the jurisdiction has been given to take proof of the instrument as a will, and this jurisdiction is in its nature exclusive. ' It is the right of all persons interested in the estate that the instrument shall be proved, and they cannot be deprived of that right by reason of any preceding act of the person named as an executor. And, when the proper proof has been given, it is imperative on, the surrogate that the instrument must be admitted and established as a will. Code Civ. Pro., §§ 2472, 2614 and 2623. While the principle relied upon to support the action is extremely well settled, it has no application to the proceeding taken for the proof of this will. And if it shall be proved, then it necessarily will supersede the proof of the preceding will, and annul the letters issued under it to the plaintiffs as executors. The action is wholly without support, there being nothing sustaining it even in Matter of Soule, 19 N. Y. State Rep., 533, and the judgment should be affirmed, with costs.

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


text:
    Henry C. Bowen, App’lt, v. William L. Bull, President of the N. Y. Stock Exchange, Resp’t.

      (Supreme Court, General Term, First Department,

      Filed December 29, 1890.)

    Attachment—Pboof of levy.
    The only proof of the levy of an attachment upon the seat or membership of the defendant named therein in a stock exchange, was the evidence of the attorney for the plaintiffs in the attachment action that it had heen regularly levied. His testimony as to the place where and the manner in which the levy was made is contradictory, and it was evident that he had no recollection of the method of levying the attachment, but was swearing to a conclusion. Held, that a finding that there had been a levy would not have been justified by this evidence.
    Appeal from judgment entered upon the report of a referee.

      George C. Holt, for app’lt; L. C. Ledyard, for resp’t.
   Van Brunt, P. J.

This action was brought against the New York Stock Exchange to recover damages for its refusal to recognize claimed rights of the plaintiff in a seat or membership in the exchange.

The questions involved are whether a membership in a stock exchange is property capable of being attached and sold, and ápplied to the payment of debts by creditors, and, secondly, if it is such property, whether there was any valid levy and sale of the seat in the Open Board of Brokers, which formed the foundation of the plaintiff’s claim.

It appeared that in 1868-an action was commenced by Henry Pitch and Edward E. Bowen against John Perry, Jr., then a member of the Open Board of Brokers. This board was an unincorporated association, doing business similar to that of the New York Stock Exchange, and was after the commencement of said action consolidated with it. An attachment was issued against the property of Perry in the action above mentioned, and it is claimed that a levy was made upon the seat of the then defendant in the Open Board of Brokers under the attachment. Judgment was entered by default and execution issued, and thereupon the sheriff executed and delivered to the plaintiff in the present action-a bill of sale of Perry’s interest in such membership.

The only evidence of the attempted sale of this seat is contained in the recitals of the bill of sale by the sheriff, no proof whatever upon the subject having been offered. And the only evidence of the levy of the attachment offered was that of the attorney for the plaintiffs in the action in which the attachment was issued. His testimony utterly fails to establish any such levy. All that he could swear to was the conclusion that the attachment had been regularly levied.

In one place he states the levy to have been made at the office of the president of the Open Board of Brokers, locating the office at a place which was not the place of business of the board. He then defines his idea of a regular levying of the attachment upon a share or seat of the board in such a way that it makes it necessary that the levy should be made in the board room" of the Open Board of Brokers. And the witness seems to be equal to the occasion and shifts his evidence to meet his definition. This evidence was utterly unreliable. It was evident that the witness was swearing to a conclusion and had no recollection of the method of levying the attachment, and did not know whether it was to be levied upon this property as though it was a chattel capable of being touched and taken possession of, or whether it was to be levied upon as though it was a share of stock in an association. His testimony evidently was intended to meet either horn of the dilemma.

We think the referee would not have been justified by such evidence in finding that there had been any levy of this attachment.

This is the foundation of the plaintiff’s claim, and without considering other questions which may be presented by the record, we think for this reason alone, if for no other, the report of the referee should be confirmed.

Judgment affirmed, with costs.

Brady and Daniels, JJ., concur.


text:
    Edward G. Dickson et al., Resp’ts, v. Mark Mayer et al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed December 29, 1890.)

    1. Corporations—Judgments against insolvent.
    A judgment recovered against an insolvent corporation is not void under the statute unless recovered by the active procurement of an officer of such corporation.

      2. Same—Affidavit.
    Inferential averments of an affidavit drawn from facts not set forth, to the effect that the president of the corporation waived credit to permit recovery of such judgment, are insufficient to prove that he was active in procuring such judgment, especially when such averments are denied.
    3. Same.
    The fact that the president conveyed a message from his wife to the attorney for the corporation, who was not an officer thereof, asking him to commence a suit in her name against the company, does not establish a, violation of the statute.
    Appeal from an order continuing an injunction order restraining the payment of money obtained under sales of property by-virtue of executions until the further order of the court

      Blumenstiel & Hirsch and Mark M. Schlesinger, for app’lts; S. F. Kneeland, for resp’ts.
   Daniels, J.

The plaintiffs are attaching creditors of the corporation known as Mark Mayer. Under their attachment the-property of the corporation was seized by the sheriffs of the counties of New York and Kings. Since then the property has-been sold under judgments recovered against the corporation, and the proceeds of the sales are now in the possession of the sheriffs-making. the sales. The judgments under the executions upon which the sales have been made are alleged to have been recovered by the procurement of Mark Mayer, the president of the corporation, in violation of the statute forbidding an insolvent corporation, as this corporation was at the time when the suits were commenced, making any assignment, or transfer of its property to any person or persons whatever, in contemplation of its insolvency. 2 R. S., 6th ed., 399, § 4.

The judgments especially brought in question were two recovered by Dessa Mayer, the wife of Mark Mayer, and others by Charles Kaufman, as assignee of Louis Auerbach. These judgments will absorb all the proceeds of the sales 'if they are to be thereby paid. And to avoid their payment in this manner, and preserve the proceeds of the sales, for the payment of the plaintiff’s demand when judgment shall be recovered, is the object of this action.

To maintain the action and entitle the plaintiffs to the injunction it is necessary that the fact shall be maintained that these judgments have been recovered by the active procurement of the president of the corporation, for no other officer has been alleged to have in any form interfered to set on foot or promote the proceedings in which they have been obtained. The affidavit, which was presented to prove that the president of the corporation had procured these judgments to be recovered, to divert its property to their payment, was made by one of the attorneys for the plaintiffs. In that affidavit he has stated that at a meeting of creditors held on the 31st of July, 1890, it appeared from statements made by Mark Mayer, and his attorney, Mark M. Schlesinger, and from a list of creditors submitted by the corporation, that nearly all the indebtedness to Auerbach, upon which judgments had been recovered, were upon promissory notes, and not for goods sold, nearly all of which were not due, and that the defendant had waived the credit to permit the recovery of such judgments. This averment of the affidavit is wholly inferential from facts or statements not set forth. And whether the inference was supported the court, therefore, has no means of knowing. If these statements would supply any ground for believing that the debt was in part not due, they should have been set out in the affidavit, instead of confining it to what was inferred from them by a person listening to them. It is quite too common to deduce such inferences from statements not warranting them to make them the foundation of adverse legal proceedings.

They are no more evidence for an attachment, injunction, or order of arrest than they would be on the trial of an issue of fact, where they are uniformly rejected as not being proof for any purpose. But this inference has been stated, in the affidavit made by Louis Auerbach, to be unfounded. For he has sworn that the money loaned and the prices for which the goods were sold, and delivered to the corporation, were due and owing to him when the suits were commenced in which the judgments had been recovered. And in that statement he has also been sustained by the affidavit of Mark Mayer, who has sworn that the debts were due. These affidavits are sufficient against the defective affidavit of the attorney for the plaintiff to deprive the injunction of its support, so far as it depends upon the Kaufman judgments. For it has not been proved that they were recovered on debts not then due, or at the instance or by the procurement of the president of the corporation, to dispose of any jpart of its property for the benefit of this creditor. Permitting the judgment to be recovered presented no case violating this restraint of the statute. Varnum v. Hart, 119 N. Y., 101; 28 N. Y. State Rep., 262.

This affidavit further affirms that it appeared by the statements-of the same persons, made at'the time already mentioned, that, the president of the corporation procured the commencement of a suit on behalf of Dessa Mayer, and that the attorney of the corporation was the attorney in that suit. But it was not stated that, the attorney was an officer of the corporation. And this part of the case consequently must depend upon what the president himself is stated to have done. But while this statement that the suit was procured by the president is purely inferential, it wasafterwards shown what did in fact take place. And that was that-this attorney was asked in the presence and hearing of the president, whether Mayer authorized him to commence the suit in the name of his wife, and he answered, “ He authorized me in the name of Mrs. Myers.” This statement standing by itself would not be sufficient to sustain this injunction, for it was not shown that Mayer acknowledged or acquiesced by omitting a denial of’ its correctness.

And further affidavits made by Mrs. Mayer, Mr. Mayer and Mr. Schlesinger have been added, stating that he did no more than to convey to the attorney a message from his wife, and that it was at her instance that the suits were commenced and her judgments recovered. The fact that the president of the corporation conveyed this message to the attorney did not establish a violation of this section of the statute, as it has been construed by the authority previously mentioned. And as the action of the plaintiffs has been brought to secure to them the benefit of its provisions, it has not been so far maintained as to entitle them to the injunction. It may be that there was no debt owing to Dessa Mayer, as the statement produced by its omission appeared to indicate. But the further evidence now presented is that the amounts claimed and recovered were .owing to her. If the fact, shall prove to be otherwise, her judgments will be vacated by a proper action for that object. But that fact has not yet been maintained. At most there is but a .suspicion of its existence-which will not sustain the present proceeding. The order should, therefore, be reversed, with the usual costs and disbursements, and the motion denied.

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


text:
    Theodore C. Boyd, Resp’t, v. Angus J. McDonald, App’lt.

      (Supreme Court, General Term, First Department,

      Filed December 29, 1890.)

    1. Pleading—Counterclaim.
    While a defendant may set forth in his answer as many defenses or counterclaims as he chooses, each defense or counterclaim must he complete in itself, and allegations contained in another part of the answer, not referred to in the counterclaim, cannot avail to help out the pleading.
    2. Same.
    In an action to enforce the liability of a stockholder in a foreign corporation upon a note given by such corporation, the answer in one paragraph alleged that the note had been paid by B., the president of the corporation, but that to keep it alive' against the company it had been transferred to plaintiff, and that the real party in interest was B. In another paragraph a counterclaim was set up for damages sustained through false representations made by B., by which defendant was induced to buy stock, but such paragraph did not repeat the allegation that the suit was prosecuted for the benefit of B., nor refer to the preceding paragraph. Held, that such paragraph failed to state'any cause of action which defendant could avail himself of either as a counterclaim or set-off.
    Appeal from, interlocutory judgment sustaining the plaintiff’s demurrer to the counterclaim set up in the eleventh paragraph of the answer.

      T. Cleveland, for app’lt; F. P. Jennings, for resp’t.
   Van Brunt, P. J.

The complaint alleges the incorporation of the California Land & Timber Company, under the Laws of California, with a capital stock of $1,000,000, divided into 10,000 shares, and that at the time the debt therein set forth was incurred 6,000 shares of capital stock had been subscribed, and no more; that at the time said debt was contracted the defendant "was the owner and holder, and there stood in his name upon the books of the corporation 400 shares of the capital stock of the corporation; that on said date the said corporation duly made and executed to one Davidson its promissory note, payable thirty days after date, for $10,000, and at the time of the making of said note one James T. Boyd was the president and H. I. ISTation was the secretary of said company, they being the parties who executed the note on its behalf; and that in March, 1888, said Davidson for a good and valuable consideration, assigned, transferred and delivered the promissory note in question to the plaintiff, who thereupon became and still is the lawful owner and holder thereof. The complaint then sets up § 322 of the Civil Code of the state of California, which provides that the stockholders of a corporation shall be individually and personally liable for such proportion of its debts and liabilities as the amount of the stock owned by him bears to the whole subscribed capital stock of the corporation.

Then follows the allegation that the note had not been paid, and a demand of judgment against the defendant for the sum of $666.66.

The defendant by his answer admits the incorporation of the California Land & Timber Co., but for want of knowledge and information denies the allegations as to the issuance of the stock. He admits that at the time the alleged debt or liability is stated to have been incurred he was the owner of 400 shares of the capital stock of said company. The balance of the complaint he denies.

By the tenth paragraph of his answer and for a further and separate defense he alleges that said James T. Boyd, on or about the 23d of March, 1888, paid this note to Helena Davidson and that in order that the alleged claim of said Davidson might be kept alive against the company or its stockholders or both, for the benefit of said James T. Boyd, said .obligation was transferred nominally by said Davidson to the plaintiff, James T. Boyd's brother; and the answer alleged that the real party in interest was the said James T. Boyd.

By the eleventh' paragraph of the answer the defendant for a further and separate defense by way of counterclaim alleged upon information and belief certain representations made by the agent of James/T. Boyd and the other directors of the company to the defendant to induce the purchase of certain shares of stock,-which representations were false, and that the defendant, relying thereon, purchased the stock and was damaged to a large amount

The plaintiff demurred to the defense set up in the tenth paragraph upon the ground that it was insufficient in law upon the face thereof; and to the eleventh paragraph upon the grounds, first, that the alleged counterclaim is not of the character specified'in § 501 of the Code, or one that is available 'to the defendant, and, second, that the said counterclaim does not state facts sufficient to constitute a cause of action.

Upon the hearing of this demurrer by the court. below the demurrer to the tenth paragraph was overruled and the demurrer to the defense by way of counterclaim in the eleventh paragraph of the answer was sustained, and from the interlocutory judgment thereupon entered this appeal is taken.

The whole argument of the appellant to sustain his appeal rests upon some supposed allegation contained in the counterclaim that this action was being prosecuted for the benefit of James T. Boyd • and that the question as to the validity of the counterclaim was to be treated in the same manner as though James T. Boyd was the plaintiff in the action.

We have examined the counterclaim in vain to find any such allegation. It is true that it is alleged in the tenth paragraph that James T. Boyd is the real party in interest. But that allegation relates only to the defense set up in that answer, namely, the defense of payment. When we come to the counterclaim we find no such allegation. It is a familiar rule of pleading that a defendant may set forth in his answer as many defenses or'counterclaims as he chooses; but it is equally well settled that each defense or counterclaim must be separately stated and numbered, § 507, Code Civil Procedure, and, therefore, each defense and counterclaim must be complete in itself and allegations contained in another part of the answer not referred to in the counterclaim cannot avail to help out the pleading.

In the case at bar the counterclaim contains no allegations of any relations between James T. Boyd and the plaintiff. It contains no reference to any allegations contained in the separate answer wherein it is alleged that James T. Boyd was the real party in interest. Under such circumstances the allegations in the counterclaim utterly failed to state any cause of action which the defendant might avail himself of either as a counterclaim or set-off.

Under this condition of the pleadings it is clear that the demurrer was well taken, and although the decision in the court below did not proceed upon this ground, yet still it seems to be apparent; and it is not necessary to discuss the other questions raised as long as this defect exists.

The judgment should be affirmed, with costs, with leave to defendant to amend the answer in respect to the counterclaim upon payment of costs of the appeal and of the court below.

Brady and Daniels, JJ., concur.


text:
    The People, Resp’ts, v. Thomas F. Wynn, App’lt.

      (Supreme Court, General Term, First Department,

      Filed December 29, 1890.)

    Gaming—Registering wagers.
    Defendant was indicted for recording and registering bets or wagers, and for keeping and employing devices and apparatus for that purpose. The only evidence to prove the offense was that of a detective that he visited defendant’s rooms and found therein a blackboard and desk; that he told defendant he wanted to put five dollars on a certain horse; that defendant said he would not bet, but would send his money to the race track for a consideration and get the best odds he could, and gave him a ticket containing a direction to place that sum of money on said horse at the racé track during the progress of the race, and at no other place or time. Held, that this evidence was not sufficient to justify a conviction. •
    Appeal from judgment of general sessions, convicting the defendant of a misdemeanor.

      W. F. Howe, for app’lt; McKenzie Semple, for resp’ts.
   Van Brunt, P. J.

The indictment under which the defendant was convicted contained five counts. The first count charged him with keeping a room for the purpose of recording and registering bets and wagers and selling pools upon the result of trials and contests of speed and power of endurance of beasts; the second charged him with being the occupant of a room for the same purpose; the third, with keeping, exhibiting and employing devices and apparatus for the purpose of recording and registering bets or wagers; the fourth, with recording and registering bets and wagers, and the fifth, with the crime of pool selling.

Upon the termination of the case for the People, the counsel for the defendant moved the court to advise the jury to acquit the defendant on each count of the indictment separately. The court granted the motion as to the first, second and fifth, and denied the same as to the third and fourth counts. After this decision of the court, the counsel for the prisoner asked the court to advise the jury to acquit the defendant upon the third count, which the court declined, and an exception was taken. The same motion was made as to the fourth count, and the same declination and exception. The jury rendered a general verdict of guilty, and from the judgment thereupon entered this appeal is taken.

The only evidence offered upon the part of the People was that of a police officer, who was a detective attached to the second precinct. He testified that on the 17th of May he saw the defendant in a room at 5 Barclay street. He described the premises as being situated in a basement, and consisting of‘a small room into which you first entered, from which a door opened into a large room with one large blackboard, and behind the counter was a great big long desk; upon entering the witness found three men there, one of whom was the defendant. He followed the defendant into the large room, who asked him what he wished. The witness told him he wanted to put five dollars on the horse Fordham running at Gravesend. The defendant told witness he would not bet him, but would take or send his money to the race-track on condition that he would pay twenty-five cents commission, and would put it there at the best odds he could get The witness then gave him $5.25, and the defendant gave him a ticket upon which he ’had marked “ $5. Fordham.”

The following is the ticket: “Please execute for me, on the race-track at Brooklyn, at the races to be held this day on the grounds of the Brooklyn Jockey Club, at Brooklyn, in the county of Kings, state of New York, and at no other place or time, the sum of $5 on Fordham; but do not, under any circumstances, accept odds in this race at the said race-track at a less price than -. I desire it to be positively and distinctly understood, and for this reason only do Í place in your charge my money, that you place my said money for me only on said horse above mentioned, and at no other place than on the grounds of the said Brooklyn Jockey Club during the progress of the races this day, and for this purpose I make you my common carriers; for the expense incurred by you in so placing of said Brooklyn Jockey Club I agree to pay the sum of 25 cents.”

The officer thereupon arrested the defendant and took him to the station house. The People thereupon rested their case and the motions hereinbefore mentioned were made.

It was clearly error to submit to the jury any question as to the guilt of the defendant under the third count of the indictment. There was not a particle of evidence which can be possibly twisted or tortured into an offense therein described. The only evidence is that there was a blackboard on the wall. What that blackboard was ever used for is not at all explained by the evidence, and there is no presumption of guilt. It is true that the witness stated that the room was not fitted up as a schoolroom. But blackboards may be innocently used for many other purposes and in many other places than schoolhouses. There was not the slightest particle of evidence which would justify the submission of any question under the third count; and it was clearly error in the court to deny the request of the defendant as to this count of the indictment.

There does not seem either to be sufficient evidence to justify a conviction under the fourth count.

There was no such recording or registering of a wager as brought the defendant within the prohibition of the statute. Although the detective sought to entrap the defendant into a violation of the law, there was a refusal so to do, or to enter into any contract or agreement which would be a violation of the law or from which could be inferred an intention to violate the law. The detective undoubtedly intended to get evidence to convict the defendant of a violation of the law, but the defendant seems to have been too wary to be caught by the chaff which the detective held out to tempt him. If the action of the defendant is capable of an innocent construction he is entitled to receive the benefit of it, and unless no other conclusion can be drawn than that of an intention to violate the law the defendant is entitled to the presumption of innocence.

We think, therefore, that the judgment appealed from should be reversed and a new trial ordered, and the case remitted to the court of general sessions for further action.

Daniels and Brady, JJ., concur.


author: Brady, J.

text:
    Orlando P. Dexter, App’lt, v. Warren Joseph Alfred, Resp’t.

      (Supreme Court, General Term, First Department,

      Filed December 29, 1890.)

    Venue—Trespass.
    An order changing the place of trial of an action for trespass on lands to the (ounty where such lands are situated will be sustained, especially where the value of the land is small, and the convenience of witnesses and the ends of justice will he promoted and the expense of trial reduced by the change. •
    Appeal from an order granting defendant’s motion to change the place of trial from New York county to Franklin county.
    The following is the opinion at special term:
    Beach, J.—The action is brought to recover damages for alleged trespass upon the plaintiff’s realty by defendant. The lands are situate in the county of Franklin. The venue named in complaint is the county of New York, which the defendant moves the court to change to Franklin county upon two grounds: that the county of New York is not the proper county, and that the convenience of witnesses and the ends of justice will be promoted by the change. It seems to me that the decision of the general term of the second department in Fasten v. Booth, 19 W. Dig., 552, upon the point that Franklin is the proper county, under § 982, Code of Civil Procedure, is properly controlling in this court None of the authorities cited by plaintiff’s counsel seem to touch the point except Polley v. Wilhisson, 5 Civ. Pro., 185. This case was decided by the general term of the city court of Brooklyn, and while entitled to great consideration, cannot have the effect here of Fasten v. BootJi, supra. The defendant, under the latter decision, is entitled as matter of right to the change of venue. The like result has also been reached by the general term of the second department in Freeman v. Thomson, 50 Hun, 840 ; 20 N. Y. State Rep., 194.
    With two authoritative adjudications in this court it would be a departure from sound rule to ignore them. Upon the other branch of the motion there can be no doubt but what the convenience of necessary witnesses would be promoted by the change. Almost if not all are residents of Franklin county, and to impose upon the defendant the expense, necessarily onerous, both of time and money, might result in a denial of justice. The idea that the action cannot be fairly tried in Franklin county because of defendant’s local influence I cannot concur in. I am unable to conceive that there is any locality within the jurisdiction of this court where a legal contention between citizens cannot be fairly disposed of. A community may become so interested in local questions of a public nature as to render obtainment of a proper jury difficult or impracticable.

      This is not a case of that character. Motion granted, with ten dollars costs to abide the event.

      Rufus P. Livermore, for app’lt; Thomas Cantwell and William P. Pickett, for resp’t.
   Brady, J.

J.— The motion to change the venue in this case was granted by Justice Beach for the reasons that under the provisions of the Code the county of New York was not the proper county for the trial, the cause of action relating to a trespass committed upon real estate in Franklin county, and that the convenience of witnesses and the ends of justice would be promoted by the change.

The latter ground is sufficient to justify the order made in the court below. Whatever doubt may exist with regard to the provisions of § 982 of the Code on the subject of local actions, as stated by Justice Beach, there are two authoritative adjudications that an action like this is embraced within the section mentioned and which provides that the actions named in it must be tried in the county in which the subject of the action or some part thereof is situated.

The application made to change the place of trial is one characterized by very great zeal and is presented in most elaborate form, affidavit being filed upon affidavit, and each ground assumed by defendant fought with great earnestness and great dexterity; but the fact remains that the action relates to a trespass committed in Franklin county, and upon a piece of property of comparatively small value, and one which, for the purpose of securing a trial here, the appellant is willing -to stipulate has no actual value beyond the sum of $400; and further that the actual damages to the land resulting from the defendant’s trespass would not exceed the sum of sixty dollars. Although these offers are accompanied by. one to pay $400 to defray the expense of the defendant’s witnesses, if the place of trial be changed, yet the proposition to allow that sum is so coupled with curious conditions that it does not appear to be very desirable and certainly has not proved acceptable to the respondent. In such an action as this an order made by the court below after a deliberate consideration of the whole subject should be sustained, in the absence of very controlling reasons which do not exist here. Under all the circumstances it seems to have been a very proper direction that the action should be tried in the county in which the cause of action originated. It may be said, also, that there can be no doubt that the expense of the trial of the action in the city of New York would be very much enhanced over that which would attend it in Franklin county, an important consideration which should not be lost sight of in applications kindred to this.

For these reasons, in addition to those assigned by the learned judge in the court below, it is thought that the order appealed from should be affirmed.

Yak Brunt, P. J., and Daniels, J., concur in the result.


author: Learned, P. J.

text:
    Beulah Rouse, by Guardian, Resp’t, v. The Catskill & New York Steamboat Co., Limited, App’lt.

      (Supreme Court, General Term, Third Department,

      Filed February 4, 1891.)

    Civil damage act—Does not apply to liquor sold on a vessel.
    Defendant owned a steamboat running between New Baltimore and New York. It allowed the steward of the boat to conduct a bar, for his own profit, in the forward part of the boat. This bar was never open except when the boat was making a trip. In an action to recover damages for the death of plaintiff's father, alleged to have begn caused by liquor sold at the bar, Held, that a vessel is not a “building” or “premises,” within the meaning of the civil damage act.
    Appeal from a judgment in favor of plaintiff and from an order denying a new trial.

      Hallock, Jennings & Chase, (Peter Cantine, of counsel), for app’lt; Cady & Hoysradt (J. Rider Cady, of counsel), for resp’t.
   Learned, P. J.

This is an appeal by defendant from a judgment on verdict and from an order denying a new trial. The action is brought under the so-called civil damage act to recover damages sustained by plaintiff in her means of support, by the death of her father, Frederick W. Rouse, whose death is alleged to have been caused through his intoxication occasioned by his drinking liquors, sold to him by one John Little. It is not alleged or claimed that the defendant sold the liquors. But it is claimed that defendant rented to Little a part of the building in which the liquors were sold and had knowledge that liquors were to be sold therein.

There are several questions of importance in this case. One is whether there was evidence of the intoxication of the deceased to go to the jury. Another, 'and one of very great weight, is whether there was evidence for the jury that the death of the deceased was caused by intoxication. Still another, is whether the verdict was not excessiva

But in the view which we take of this case, we pass these over without expressing any opinion thereon.

The defendant is the owner of the side-wheel steamboat, called the Walter Brett, running nights on the Hudson river between New Baltimore and New York city, and stopping at intermediate landings. There was in the bow of the steamboat a barroom below deck. In the forward end of the barroom was the bar. The bar was never opened except on the voyages of the steamboat up and down the river and after she got out in the stream from the dock. John Little ran the bar and had the proceeds. He was also steward of the boat, bought the provisions, and boarded the crew. He was the steward on the Catskill and the Brett and all the boats the defendant had, except one. Although he. was thus in the defendant’s employment as steward, it is not alleged m the complaint or proved that the sales of liquor at the bar were made by defendant. Indeed it appears that Little was himself the proprietor of the bar, and it is not claimed that the defendant was interested therein.

The claim of the plaintiff is, then, that the defendant is liable because it permitted the occupation of the bar by Little or rented it to him, having knowledge that intoxicating liquors were to be sold there.

Of course there is no _common law liability. If liable at all, defendant is liable by force of the statute, chap. 646, Laws 1873. The material part is: “ Any person, or persons, owning or renting or permitting the occupation of any building or premises, and having knowledge that intoxicating liquors are to be sold therein, shall be liable,” etc. The question is whether this steamboat was within the words “building or premises.”

In examining this question, we must notice that the act of Little in selling liquor to the deceased was an unquestionably lawful act, and that the act of the defendant in permitting Little to occupy the bar, with knowledge of his intent, was also unquestionably lawful. A statute, then, which exposes an innocent defendant to possible liability for damages by reason of a lawful act should not be extended beyond its evident meaning.

The word “ build ” is derived from a word “ bold,” meaning a dwelling. A building is defined to be a structure in the nature of a house built where it is to stand. Murray’s Dictionary. As commonly understood, a house for residence, business or public use, or for shelter of animals or storage of goods. Century Dictionary. And very generally, though not always, the idea of a habitation for the permanent use of man, or an erection connected with his permanent use is implied in the word “building.” Bouvier defines the word as “ an edifice erected by art and fixed upon, or on the soil, composed of different pieces of stone, brick, marble, wood, or other proper substance, connected together, and. designed for permanent use in the position in which it is so fixed.” A building is a part of the land. One would not call a tent a building.

As said in one case of the word building: “In its broadest sense it can mean only an erection intended for use or occupation as a habitation or for some purpose of trade, manufacture, ornament or use, constituting a fabric or an edifice, such as a house, a store, a church, a shed.” Truesdell v. Gay, 79 Mass., 311. A vault for the interment of the dead, although above ground, is not a building under the statute against burglary. People v. Richards, 108 N. Y., 137; 13 N. Y. State Rep., 515. Whether it would be a building under this statute we need not inquire. But we are confident that it would be a great misuse of language to speak of a steamboat as a building. If one were to say that he saw a building floating down the river with many people in it, he never would be thought to mean a vessel. ■ A vessel is not fixed in the earth, and does not form a part of the land. Even when fastened to the shore it would not pass by a conveyance of the land. And though, in some exceptional cases, buildings may be removed from the land, still the prevailing idea is that of permanence.

The cases cited by plaintiff under the criminal law of England . as to burglary speak of permanent buildings, not of vessels. So in our own statutes it was deemed necessary to declare that the word “building,” as used in the chapter on burglary, includes a railroad car, vessel, etc. Penal Code, § 504. So, also, in regard to the crime of arson. § 493. From these sections it may be inferred that without such definition of the word a vessel would not be included.

We next come to the word “ premises.” The word in its legal use originally described the first of the eight parts of a deed, viz: all which preceded the habendvm. The object of this part of the deed was to rightly name the feoflier and the feoffee, and to comprehend the certainty of the lands to be conveyed by the feoffment. Coke, Lit. 6a. It is very easy to see how from this meaning, of the word it came to designate the lands. A large part of the portion of the deed thus named was taken up with the description of the lands. Hence the word premises in the latter part of the deed was used as meaning the lands only; as for instance “ the above described premises.” In this way the word has come into general use with the meaning, lands, affording an instance, among many others, of the tendency to use a general and indefinite word, rather than one of precise and definite meaning. But the word, however loosely used in this way, always means land and the building thereon. It is not applied to vessels. The plaintiff cites cases from Alabama, where parties were convicted of selling liquor to be drunk on the premises, although the land on which it was drunk was not their own. Whether the convictions were correct or 'not is immaterial on the present point. Premises certainly meant land of some one.

Flor is there anything in' the language of the statute in question which should change the views above expressed. It speaks of renting or permitting the occupation of any building or premises. These are words which in ordinary use are applied to the renting or permitting the occupation of land. “Rent” is a profit out of lands and tenements. To rent is to grant the right to occupy lands, paying a certain sum therefor. It is true that in a loose way “renting” may be used for “hiring.” But certainly it would be extending the meaning of the word in this statute to make it applicable to vessels.

In construing this statute we cannot be much aided by decisions. We must try and ascertain what the words fairly mean. That is one guide to the intention of the legislature. We must take what they said. If they meanj; more, they should have said so.

Whether or not the legislature should forbid the sale of spirituous liquors on vessels and on railroad cars is not for us to say. This statute does not forbid any selling in any place. We havfe no reason to suppose that the legislature intended to make railroad companies responsible for injury to means of support occasioned by the sale of such liquors in their cars with their knowledge. And it is well said by the defendant that, if the plaintiff’s construction is correct, the owner of a foreign steamer coming to any port in this state would be liable, as this defendant has been made liable.

We have no right to extend .this statute beyond the plain and distinct meaning of the words under a wish to prevent some of the-evils of drinking spirituous liquors.- Though not strictly a penal statute it imposes a new liability, and that, too, on an innocent party. And it cannot be extended by implication.

We are of opinion that the vessel was not included in the words “building” or “premises;” and that the judgment and order must, for that reason, be reversed. Whether there was sufficient evidence as to the cause of the death of the deceased, we do not decide.

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

Landon and Mayham, JJ., concur.


text:
    Theresa Wells, as Treasurer of Excelsior Assembly No. 4120 of the Knights of Labor, Resp’t, v. Edward H. Monihan et al., App’lts.

      (Supreme Court, General Term, Third Department,

      Filed February 4, 1891.)

    1. Associations—Right to súb.
    An unincorporated association consisting of more than seven persons was formed under a warrant and charter issued by the General Assembly of the Knights of Labor. Subsequently this charter was revoked. Held, that whether such revocation was within the powers of the General Assembly or not it did not affect the right of the association, under Code Civ. Pro., § 1919, to sue upon a note taken in its name for money loaned by it.
    2. Bills and notes—Statute op frauds.
    A note was as follows: “Amsterdam, ¡N\ Y., ¡November 26, 1886. I, undersigned, promise to pay six months after date the sum of $500, which was received by the Local Executive Board K, of L. from Excelsior-Assembly 4120, K. of L., to Excelsior A. 4120, or their treasurer. E. H. Monihan. John Stack.” Held, that the note did not show on its face that it was necessarily a promise to pay the debt of another, for although - its consideration was expressed to be the receipt of money by the ¡Local Executive Board, the money might have been borrowed by the makers! and yet have been by their order or consent paid to some one else.
    3. Same—Consideration need not be expressed.
    It is not necessary to the validity of a note that the consideration be expressed or in the first instance proved.
    4. Same—Uncertainty.
    The note is not void for uncertainty because it states that payment will-be made to the Assembly “or their treasurer.” These latter words quoted are either surplusage or declarative of the agent by whom the payee will receive payment.
    5. Same—Ownership.
    If the General Assembly of the K. of L. did annul the charter of the Local Assembly the latter -was not by that act alone deprived of its-property.
    Appeal, from a judgment in favor of plaintiff entered upon the-report of a referee.

      N. H. Anibal (E. J. Meegan, of counsel), for app’lts; George S. Devendorf (Charles S. Nisbet, of counsel), for resp’t.
   Learned, P. J.

This is an appeal by the defendants from judgment bn the report of a referee in an action brought upon a promissory note made by the defendants.

This action is brought by the plaintiff, as treasurer of an unincorporated. association, consisting of seven or more, known as Excelsior Assembly, No. 4120 of the Knights of Labor. This association was formed in pursuance of what is called a warrant and ■charter, issued by the General Assembly of the Knights of Labor in August, 1885. ■ It is shown that on May 26, 1887, a circular letter was issued by the general executive board, stating that they had revoked this charter. The defendant produced a book called ■a record of the decisions of the general master workman; and read therefrom certain, so called, decisions. They do not seem to be decisions of any controversy made on a hearing of parties, but to be in the nature of by-laws or additions to the constitution. We are unable to see how the authority to lay down such bylaws is obtained. One of these so called decisions states that a local assembly which refuses to obey the lawful command of the general executive board may be suspended. But on ex.amining the constitution for the powers of this board we do not discover such power of suspension.

We do not, however, deem it necessary to decide on the validity of the action of this board.

Certainly a number of persons amounting to seven or more may associate without obtaining the permission of any other body. And when they have thus associated and have a president and treasurer they may sue in the name of either of said officers. If they can do this without the consent of any other body, ■clearly no other body can take away the right given by statute to sue in this manner.

If it be claimed that on this annulling of the charter the property is to be forwarded to some general secretary, that question is not to be tried in this action. Wicks v. Monihan, 54 Hun, 614; 28 N. Y. State Rep., 89. Whatever, the board did, we suppose that the association of' seven or more persons might still remain, so far as to permit the plaintiff to bring the action. Section 1919, Code Civil Procedure, is very extensive in its application. Any company of persons which has a president or treasurer is an association under that section. And the persons who form this association of which plaintiff is treasurer are not annulled, even if their charter is.

The note in suit is as follows:

“ Amsterdam, N. Y., November 26,1886.
I, undersigned, promise to pay six months after date the sum of §500, which was received by the Local Executive Board K. of L., from Excelsior Assembly 4120 K. of L., to Excelsior A. 4120, or their treasurer.
“E. H. Monihan.
“ John Stack.”

The defendant insists that this note is void under the statute of .frauds, in that it is a promise to pay the debt of another and the consideration does not appear.

But the note does not show on its face that it is necessarily a promise to pay the debt of another. It is true that its consideration is expressed to be the receipt of money by the local executive board. But the money may have been borrowed by the makers of the note, although received by some other person. The borrowers of the money could request that it be delivered to another person. " And it might be that such other person would be under no liability to the lender.

In the case of Carnwright v. Gray, decided in this court September, 1890, 33 N. Y. State Rep., 98, it was held that even in the case of a non-negotiable promissory note, sued upon by the payee, it was not necessary that a consideration should be expressed, or in the first instance proved. Under that decision, therefore, the statement of the receipt of the money contained in the note in question was not necessary to the validity of the note. For there can be no doubt that the instrument in question is a. promissory note; as it is an absolute promise to pay a certain sum of money at a definite time. That it is payable to the assembly or their treasurer does not make it 'payable to one or the other of two persons. The words “ or their treasurer ” are either surplusage or declarative of the agent by whom the payee will receive payment.

The defendants then can only insist that such statement shows on the face that the note is a collateral undertaking to the liability of some other person. We think that that does not appear on the' face of the note.

The referee has found as a fact that the consideration of the note was $500 paid and advanced on or about the date of the note' to the defendants by Excelsior Assembly No. 4120. The defendants say that this finding is erroneous. It appears that at a meeting of this assembly, November 24, an application was made by the executive board. K. of' L., Textile workers, for a loan of $500, which it was voted to grant. The plaintiff testifies that she was directed by the master workman to pay the money to Monihan; that she had an interview with defendant Monihan; that he signed the note and obtained the signature of defendant Stack, delivered the note to her and she paid him the money. The defendantMonihan denies that the money was paid to him. One Sheeby also says that he was present when the money was received; and that defendants were not present as he saw.

There is a conflict of testimony upon this point But it is quite possible that, while the Assembly No. 4120 "was willing to part with its money to be used by the other body, it was not willing-to part with it except by lending it to some responsible person, and not trusting to the very indefinite responsibility of an executive board. It does not appear that there was any promise by the executive board to re-pay. Qf course if the loan were made to that board, an obligation to re-pay would arise without an express promise.- But it is quite possible, as the referee finds, that the loan was really made to these defendants, although they borrowed the money for the use of the executive boord. So at least-the note implies. This seems to have been the view of the plaint-riff, and we think that the finding of fact of the referee'as to the-actual transaction has evidence to support it, and should be sustained.

Any claim that by the alleged annulling of the so-called charter the assembly was deprived of its property, is disposed of by Austin v. Searing, 16 N. Y., 112.

It is of coui’se true that an agreement without a consideration will not be enforced. The defendants insist that this is the agreement to answer for the debt of another, and that to make such an agreement valid the consideration must be expressed therein. We do not think it necessary to pass on this question for the reasons above stated. But we do not understand the decisions cited by the defendants to hold that where the consideration is executed it must necessarily be expressed. Thus it is said of the contract: “ It must show on its face what the whole agreement is, so far as the same is executory, and remains to he performed, and rests on unfulfilled promise.” Drake v. Seaman, 97 N. Y., 234. Again: “ The existence, or acknowledgment of the existence, of a legal consideration is absolutely indispensable.” Barney v. Forbes, 118 N. Y., 585; 29 N. Y. State Rep., 980.

W e have examined the question raised by the defendants as to admission of evidence against their objection. We do not think there was any material error.

The judgment is affirmed, with costs.

Landon and Mayham, JJ., concur.