text:
    James Smith, App’lt, v. Philip G. Hubert et al., Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed January 18, 1895.)

    1. Lease—Construction.
    Where the lease of a hotel provides that the lessee should make certain repairs and pay for them out of the gross proceeds of the business and that he should pay to the lessor out of the proceeds of the hotel a certain sum as rent, and also one-third of the net profits, the word “ proceeds,” in the provision for rent, was held to'be equivalent to “ receipts” or “gross proceeds.”
    2. Same.
    The agreement, in this case, was construed to constitute the relation of landlord and tenant, and not that of partners, between the parties.
    Appeal from a judgment entered on a verdict, directed by the ■court in favor of defendants.

      Albridge C. Smith, for app’lt; Clifford W. Hartridge, for resp’ts.
   O’Brien, J.

On April 1, 1890, the defendant Hubert leased to one Eva Brumfield a hotel at Stamford, Oonn., known as the Hamilton House,” for three years from April 1, 1889, at the yearly rent of $2,200. The lessee also agreed to furnish board to the lessor, his family or friends, occupying the second floor of the ■Swiss cottage, at the rate of $5 per week for each person. On May, 6, 1890, Eva Brumfield, the above-named lessee, entered into an agreement with the plaintiff in terms as follows :

“ This agreement, made this sixth day of May, 1890, between James Smith, of the city, county, and state of Mew York, of the first part, and Eva Brumfield, of the same residence, of the second part, witnesseth, that the said party of the first part agrees to devote his entire time and attention, from the opening of the summer season until the close thereof, in running as a hotel the premises known as 1 The Hamilton House and Cottage,’ at Stamford, Conn. ; that he will, prior to the opening thereof, fully and properly stock said house, out of his own funds, and keep the same invested during the entire season, and oversee and attend to the improvements and repairs to be made thereon, viz. the outside of said house and stable shall be painted, and a fireplace constructed in the hall of the main hotel, and such other necessary repairs and improvements as may be deemed advisable to make by the parties hereto, the same not to cost a sum exceeding five hundred dollars, which said improvements and repairs shall be paid for out of the gross proceeds arising from the business conducted at the said premises ; and all of the said expenses shall be paid on or before the first day of August, 1890. And the party of the first part further agrees to furnish to the party of the second part a suitable room and board from the opening until the said house shall be ■closed ; and the said party of the first part further agrees to pay, ■out of the proceeds of said house, the sum of two thousand two hundred dollars, as rent therefor during said season, in three equal payments, on the 1st and 15th of July and the 30th day of August, 1890, and at the close of said season to pay to the said second party one-third of the net profits derived from such business ; and the said second party shall have the right, at all proper times, to •examine the books, accounts, etc., kept in such business, so that she may at all times be advised concerning the same. And the party of the first part further agrees that Messrs. Hubert and Frohman shall retain the entire second floor of the cottage above mentioned, and shall have board for the period of twelve weeks, for four persons, at the rate of five dollars per week for each person. And the party of the second part, for and "in consideration of the •covenants and agreements hereinbefore specified on the part of the party of the first part, agrees to and with said first party that she will permit him to have possession of said premises, and the control thereof, for the purposes above mentioned, and will accept and receive the performance of the first party’s covenant in full and complete payment for the same, and will, by her influence, in all manner, aid in the success of the business so to be conducted. And whereas, it is expected that certain lots and portions of said premises may be sold by the said second party during the continuation of this agreement, in case said sales are effected, the said .second party agrees to pay to the said first party one-half of the net commissions made by her on such. sale. It is further agreed that the party of the first part shall have the right to continue the terms and conditions of this agreement for a period covering the summer season of 1891 and 1892. He shall, however, make his election so to continue this contract on or before the first day of Hovember, 1890. In witness whereof, the said parties have hereunto set their hands and seals the day and year first above written. James Smith.

“Eva Brumfield."

During the summer season, Hubert and Frohman, and the latter’s wife, child, and maid, occupied the cottage, and took their meals at the hotel. In addition, a number of actors and actresses brought by Frohman also boarded at the hotel, for whom it was alleged and decided that defendants were liable; so that at the end of the season the total account against the defendants was $807.50, to recover which the present action was brought.

The answer set up two defenses: First. That whatever plaintiff furnished to defendants and other persons at defendants’ request should be applied on the rent due during the season of 1890 from Eva Brumfield to defendant Hubert, and that the rent accruing was more than enough to pay the indebtedness in the complaint. Second. That, by virtue of the agreement between the plaintiff and Miss Brumfield, the former became responsible to pay the rent to the latter out of the proceeds, and that all her interest in that contract she assigned to the defendants; and they counterclaim the $2,200, the amount of the rent, against the plaintiff’s claim and demand. The plaintiff’s reply denied the agreement as to the set-off of board against rent, and also denied that there were any proceeds from the season’s business applicable to rent. At the"close of the case, the court directed a verdict for the difference between the $2,200, amount of rent due, and the plaintiff’s claim.

There is no appeal from any 'order denying a motion for a new trial, but, upon the exception to the direction of a verdict, the legal question is. presented as to whether or not the construction given by the court to the contract between the plaintiff and Miss Brumfield was correct, and, if so, whether the defendants, by virtue of the assignment to them of Miss Brumfield’s rights thereunder, are entitled to counterclaim against him, and obtain an affirmative judgment for the difference. We say these are the real questions upon this appeal, for, though there was a controversy in regard to whether or not plaintiff’s claim was to be applied on the rent due from Miss Brumfield to Mr. Hubert, there being upon this point a conflict of evidence, it would have been necessary, if this entered into a determination of the rights of the parties, to submit it, as a question of fact, to the jury. If, however, the plaintiff was liable to Miss Brumfield for the $2,200 rent, and she assigned her claim to the defendants prior to the commencement of the action, then, under well-settled principles of law, apart from the question whether plaintiff’s claim was to be applied on the rent due from Miss Brumfield to Mr. Hubert, the court was justified in directing a verdict for the defendants for the difference between the respective claims.

The plaintiff insists that he was entitled to go to the jury upon the question of whether or not the counterclaim had been assigned to the defendants before the bringing of this action ; and he refers to the testimony of one of the defendants (Hubert), who at first testified that “it was delivered immediately after the suit was begun,” but who subsequently modified this by saying he did not know whether the suit was begun or not when the assignment was made; and then, when his attention was called to the date of the assignment, which was November 1,1890, he stated positively that it was executed on that day. The summons in this action is dated December 15, 1890; and while Miss Brumfield said she did not know whether the suit was begun, or not, when the assignment was made, there is nothing in the record that contradicts or destroys the effect of the instrument itself, or the positive statement of Hubert that it was executed, upon the day it bears date, which was, concededly, prior to the commencement of the suit. Under the agreement, the question is whether the plaintiff and Miss Brumfield were partners in the venture, or whether thp plaintiff leased the Hamilton, house from her. This consideration, together with the meaning of the word “proceeds,” as used in that portion of the agreement providing that the rent was to be paid “out of the proceeds of said house,” must determine its true construction. A reference to the first clauses might furnish an argument in favor of the contention that they entered into the enterprise as a joint venture, and, being interested in its profits, might be regarded as partners ; but the absence of any covenant upon the part of Miss Brumfield to share losses, together with the fact that all the covenants are affirmative ones on the part of the plaintiff, strengthens the construction which is enforced by the latter part of the agreement, that the arrangement was one by which, upon certain conditions, he obtained the lease of the premises from her. Thus, it reads that she “ will permit him to have possession of said premises, and the control thereof, for the purposes above mentioned, and will accept and receive the performance of the first party’s covenants in full and complete payment for the same, and will, by her influence, in all manner, aid in the success of the business so to be conducted.” Our construction of this agreement, therefore, is that it was a lease from Miss Brumfield to the plaintiff, and that the consideration therefor contains, among other things, an agreement on the part of the plaintiff that he will “ pay out of the proceeds of said house the sum of two thousand two hundred dollars, as rent therefor. * * *” It appears that the receipts of the house—or the “proceeds,” if that word is used as synonymous with “ receipts”—were more than sufficient to pay the rent, although it likewise appears that there were no profits in the business, the expenses being more than the receipts. Upon this last is placed appellant’s contention that he was not liable for the rent, except in the event that there were profits out of which the rent would be payable. In determining the question whether the word “ proceeds” is to be construed the same as “ net profits,” or as “ receipts,” or “ gross receipts,” resort must be had to the contract itself for the meaning which the parties themselves intended should be given thereto. It will be noticed that, in regard to the improvements and repairs that were to be made by the plaintiff, the provision is that they were to be paid for out of “ gross proceeds arising from the business conducted at the said premises and, further, that at the close of said season the plaintiff was to pay to Miss Brumfield “ one-third of the net profits derived from such business.” - If the rent was payable out of profits only, why were not apt words used ? We think it was intended to use the word “ proceeds” out of which the rent was to be paid, as equivalent .to “receipts” or “gross proceeds”; and in this we are confirmed, not only by the fact that when net profits were intended those specific words were used, but also from the attitude of the parties with respect to the property itself. We are of opinion that the construction given by the court was the correct one ; it appearing that by virtue of the assignment of such contract from Miss Brumfield to the defendants, by which they secured a claim against plaintiff for $2,200 before this action was brought, they were entitled to counterclaim this sum, and were entitled to judgment therefor, less the amount of plaintiff’s claim. The judgment, accordingly, should be affirmed, with costs.

All concur.


source: Caselaw Access Project

author: O’Brien, J.

license: Public Domain

text:
    William Guichard, an infant, etc., Appl’t., v. Jacob New, Resp’t.

      (Supreme Court, General Term, First Department,

      Filed January 18, 1895.)

    1. Negligence—Act of 1892.
    The question whether an automatic gate, at an elevator shaft, three feet high is sufficient protection, is one for the jury, where the space between the gate and the elevator is only two and one-half inches.
    ' 2. Same—Contributory.
    So also, it is a question for the jury, whether a child of the age of eight and one-half years is guilty of contributory negligence in thrusting his head into an elevator shaft.
    8. Same.
    An act, though contributing tó the injury, if not, under all the circumstances appearing, negligent, will not prevent a recovery.
    4. Same.
    The proposition that, after the boy had left the elevator for the purpose of returning to the street, the owner of the premises owed him no obligation, is not tenable.
    Appeal from a judgment, dismissing the complaint.

      G. E. Waldo, for App’lt.; C. C. Nadal, for Resp’t.
   O’Brien, J.

This action is brought to recover damages for injuries sustained by the plaintiff.' On September 13, 1892, the defendant was the owner of premises on South Fifth avenue, in this city, which were a five-story building, rented in floors to manufacturers, some of whom employed a large number of hands ; among ‘them, young girls. At the rear of the hallway in the building is an elevator used for both freight and passengers ; very little of the former being carried thereon, it having been mostly used for passengers. The elevator, by facing, is plainly visible from the street. On each floor, at the opening into the elevator shaft, there was an automatic wooden gate, three feet high, which slid up and down like a window, and a gate of the same construction guarded the shaft at the street floor. Attached to and on the elevator car was a flexible iron gate, which was open at the time of the accident, and was so rusted that it could not be closed. Between the wooden gate on the landing and the iron gate on the car, there, was a space of 2% inches, and between the top of the iron gate on the car and the iron bar at the top of the car, there was a space of about 10 inches. On the date mentioned, the appellant, then an infant eight years and seven months of age, and about four feet two inches in height, was playing on the sidewalk in front of the adjoining building. The man employed to run the elevator for respondent called the boy inside the door of the hallway, and told him to get a pitcher and get a pint of beer to pay for which he gave the boy 10 cents. The boy went home for a pitcher, and thence across the street to a saloon, where he got the beer, and returned to the premises, and gave it to the elevator man, in the front part of the hall. The latter requested him to go up on the third floor with him on the elevator, which he did. There they got off, stayed just long enough for the elevator man to drink the beer, and then both got on again, and went down to the first or street floor, where the boy got off, and started towards the street. The elevator man shut the wooden gate, and started the car down towards the basement. . The boy, after having gone a little way towards the street door, returned to the elevator shaft, and, seeing the elevator moving down, and the shaft gate closed, looked over, and at the same time asked the elevator man where lie "was going ; but before he got an answer the top iron crossbar or frame of the elevator caught oil the top of the boy’s head, tore his scalp completely off, and otherwise injured seriously his face, teeth and head. It appeared that the boy had played frequently in front of the entrance to the premises; knew of the existence and position of the elevator, but had never been in it or in the hallway before, and had never spoken to the elevator man nor the latter to him, prior to the day of the accident, “in addition to plaintiff’s witnesses, tenants in the building were examined, who testified to the condition of the elevator, and the rusty condition of the gate on the car, which prevented its closing, and also" that they had notified the defendant of the danger which they apprehended from such conditions, and from the low gates on the landings, that guarded the elevator shaft. Upon such testimony, supplemented by chapter 275 of the Laws of 1892 (section 28), which requires that elevator shafts similar to the one in question “ shall be provided with and protected by a substantial guard or gate,” the plaintiff relied for a recovery.

At the close of plaintiff’s case, a motion to dismiss the complaint was made, placed upon three grounds: (1) That no negligence on defendant’s part was shown ; (2) that no evidence that plaintiff was free from contributory negligence was given, but, on the contrary, the evidence was that plaintiff himself contributed to the injury; and (3) that plaintiff was a trespasser on the premises, or, at most, was there by mere sufferance, and thus assumed the conditions as they existed" there, the defendant owing him no special duty. The learned trial judge granted the motion upon the two latter grounds assigned, viz. the absence of evidence showing, plaintiff’s freedom from contributory negligence, and that for the reason that the accident happened after the boy had quitted the elevator to go to the street, and upon his return, the defendant could not be held responsible. We might confine our attention, therefore, to these grounds; bot as the other question, of the absence of any negligence on the part of the defendant, is also urged to support the judgment, it will be necessary to refer briefly to the three grounds upon which the motion was made.

First, was there sufficient evidence to submit to the jury the question of whether or not the defendant was negligent? As stated, the construction and use of the elevator and shaft were not that of a hoistway, but of a passenger elevator, with a close-fitting car, so that the slightest projection of a person’s head or limbs into the shaft would be dangerous, the distance between the iron bar at the top of the car and the wooden gate at the landing being but 2^- inches. To prevent injury to those in the car from the projection of their .persons, as well as to prevent their getting on or off while the car was in motion, a flexible iron gate was provided. On account' of the rust, this was not in a condition, at the time of the accident, to be closed, and, so far as appears, had not been used for some time prior thereto. It is true that the boy was not injured while on the car, but while on the landing; but there is something in the suggestion made by one of the witnesses, who testified:

“ There are prongs go up from this iron gate, and those prongs slip through the iron bar on the top of the car. If this gate had been shut, that iron frame,,couldn’t have caught the boy’s head, unless he put it in between the top of the gate and this car. In-that case his face would have struck that, if he had put his head over the gate.”

According to this witness, if the flexible ' gate of the car had' been closed, the projection of the boy’s head over the low, wooden gate on the landing would have brought his face against the gate of the car, unless he happened to run his head in the space (assuming the gates to be closed) that would be left between the top of the gate and the iron bar at the top of the car, which, as testified to by one of the witnesses, was about eight inches. Apart, however, from this, considering the character of the construction of the sliding gate on the landing, which was only three feet high, and which cannot be held, as a matter of law, to have been fully adequate for the protection of the passengers, coupled with the fact that the danger to be apprehended from this low gate was brought home to the defendant, we think a question was presented as to whether such a construction was proper and safe, and a compliance with the statute, and upon this branch, as to defendant’s negligence, sufficient to go to the jury.

Upon the second ground, that there is no evidence that the plaintiff was free from contributory negligence, there was sufficient in the case upon which the learned judge should have submitted this, also, to the jury. It has been frequently held that an infant, although sui juris and thus chargeable with his own negligence which contributed to his injury, is not to be held to the same standard of prudence and judgment as a man of mature years and experience. In O'Mara v. Hudson River Railroad, Co., 38 N. Y. 449, the court say :

“It is to be considered, also, that -the deceased was a lad eleven and a half years old, to whom greater indulgence should be extended than to an adult. He was of that age that he was quite fit to be trusted with the care of his own person in the streets of a country village, and yet it is not probable that he would exercise as much prudence and caution as an adult. * * * The young are entitled to the same rights, and cannot be required to exercise as great foresight and vigilance, as those of maturer years. More care towards them is required than towards others. In the case of a child of but two or three years of age, no knowledge or foresight could be expected. This an engineer is bound to know, and, if the child is within his view, to act accordingly. In a case like the present,—that of a boy eleven and a half years of age,—the jury were not bound to require the same demureness and caution as in the case of an older person.”

See, also, McGovern v. N. Y. C. &. H. R. Railroad Co., 67 N. Y. 421; Byrne v. N. Y. C. & H. R. Railroad Co., 83 N. Y. 621; Wendell v. N. Y. C. &. H. R. Railroad Co., 91 N. Y. 420; Brown v. City of Syracuse, 77 Hun, 411; 60 St. Rep. 16.

No doubt, as urged by the respondent, the act of the boy, in putting his head over the gate to call to the elevator man, contributed to the injury.' But an act, though contributory to the injury, if not, under all the circumstances appearing, negligent, would not prevent a recovery. In other words, it is not the contributing act, but contributory negligence, that defeats recovery; and this distinction has been pointed out in the case of Schmidt v. Cook, 30 Abb. N. C. 285-290; 53 St. Rep. 84. We do not think, therefore, as a matter of law, it could be held that a child of the age of the appellant, who was injured in the manner described, was guilty of contributory negligence which would bar a recovery, but, upon the facts here appearing, that question should have been submitted to the jury.

The final ground, that after the boy left the elevator, for the purpose of returning to the street, the defendant owed him no obligation, does not seem to us to be tenable. That the boy was not a trespasser appears from the fact that he was invited upon the premises by the elevator man, who used him in doing an errand ; and, in the absence of express rules to the contrary, there was nothing wrongful in sending the boy upon a message. If, instead of sen cling him for beer, the elevator man had sent him for food, or for water to quench his thirst, we do not think, unless there was a rule of the defendant forbidding his employes sending a boy on such an errand, that it would be wrongful in him to do so. There is no prohibition against a workman having a pint of beer, with which to quench his thirst, any more than there is against his having food or water. Nor is there sufficient in the fact that it was beer, instead of either food or water, to justify the conclusion that the boy, while on the premises, where he bad been brought by the invitation of one having the apparent right to do so, was a trespasser. By this we do not mean to hold that the one who sends the boy, or the one who sells the beer to him, may not do wrong, but only that the boy’s status, by the mere fact of going, is not changed from a rightful into a wrongful one. It is unnecessary, however, for us to determine just what the boy’s status was, because, even if technically a trespasser, it would not, as a matter of law, preclude a recovery. But we do not think he could be regarded, even technically, as a trespasser.

Upon all the testimony, as inferences favorable to the plaintiff, upon all the grounds, could have been drawn, and as it cannot be said, as a matter of law, that any or all should have been resolved in defendant’s favor, we think it was error to dismiss the complaint; and for such "error the judgment should be reversed, and a new trial ordered, with costs to appellant to abide the event.

All concur.


author: Parker, J.

text:
    Edward V. Thebaud et al., Resp’ts, v. Great Western Insurance Company, App’lt.

      (Supreme Court, General Term, First Department,

      Filed January 18, 1895.)

    1. Insurance—Marine—Seaworthiness.
    Where both parties attempt to insure for an ocean voyage a vessel which they well knew was not intended for ocean navigation, and not capable of being made seaworthy as a seagoing vessel, the only implication as to seaworthiness which can consistently arise from such intention, is that the: vessel should be made as seaworthy for the voyage insured against as a. vessel of her kind can reasonably be made.
    2. Same—Warranty—Parol evidence.
    Even where there is an express warranty, it is competent, for the purpose of avoiding it, 'to show by paroi evidence that the insurer knew at. the time of the facts constituting the breach.
    3. Same—Delay in sailing.
    Whether a delay of two months in fitting a river steamer 'for an ocean voyage, is a reasonable time in which to make her seaworthy, is a question. for the jury.
    4. Same—Trial trip.
    A trial trip, made by a new vessel before beginning the voyage insured against is not a deviation.
    Motion for a new trial on exceptions, ordered to be heard at. general term in the first instance.

      Everett Hasten, for pl’ffs; Prescott Hall Butler, for def’t.
   Parker, J.

On a former appeal, this court reversed a judgment in favor of the plaintiffs, on the opinion in Thebaud v, Phoenix Insurance Co., a companion case. Upon that trial, plaintiffs proved that the Dos Hermanos, which was insured: by the' defendant “at and from Philadelphia to Frontera, Mexico,” was built for river navigation, and that she was staunch and strong for the purposes of river and smooth-water navigation, but no evidence was offered tending to show that any substantial precaution was taken to protect her against the dangers to-which vessels of this construction was peculiarly subject upon the ocean, namely, the action of the sea upon her hull, nor was evidence offered tending to show that the plaintiffs, appreciating her structural weakness, had attempted to strengthen her for an ocean voyage-which the insurance was intended to recover. The court held that the facts did not permit a submission to the jury of the question of seaworthiness; for, indisputably, the voyage insured against was one for which the vessel was not struct nr ally fitted, and there was an entire absence of evidence tending to show that any additional precaution had been taken for the purpose' of providing against the perils of a sea voyage. The plaintiffs, upon the retrial, have introduced evidence bearing upon all the points which were discussed on the former appeal :

(1) Plaintiffs offered evidence tending to show that the boat was a good, strong, and well-constructed vessel of her class. Thomas M. Rees, who had had much experience in the construction of similar vessels, and was familiar with the peculiarities of their navigation, testified that the Dos Hermanos was much more strongly constructed, than is usual with vessels of her kind. He said that he constructed the Tres Hermanos, which was built from similar specifications as the lost Dos Hermanos, and to take her place, and that she was made 50 per cent, lighter. Other testimony, corroborating Rees as to the character of her construction, was given by Lavendeyra, a skilled engineer, who superintended her construction ; by Capt. Weir, the master of the vessel, and familiar with vessels of this sort; by Capt. Stuart, the defendant’s inspector, who was also an experienced engineer, and who had examined the Dos Hermanos; and bj' Capt. Swasey, who, in addition to making an examination of her, had charge of her on the first trial trip.

(2) Evidence was also presented for the purpose of showing that the Dos Hermanos was made as seaworthy for the ocean portion of the voyage as a vessel of her class could be made. Capt. Stuart, who was at one time defendant's inspector, in response to the inquiry, “ What, if anything, could be done to strengthen the vessel for the sea voyage, which she necessarily would encounter ?” replied:

“ Well, to protect her from seas that might break over her, it is always well to shut her in with light joiner work, as far as possible, to protect the engines and boilers, and also to protect the vessel from heavy sprays, shipping seas, etc. By ‘ shutting her in,’ I mean simply planking her up. She was a vessel with a single deck, and houses above; stanchions run up to the houses. Carry the houses over the top of the stanchions, and inclose her with light material, that don’t weigh her much, just to keep the sea from going in. I don’t know of anything more that could be done for the protection of the vessel for a sea voyage. That railing or inclosure ought to be extended to protect the boilers forward and aft; to the engines, to protect the machinery also. I don’t know of any other protection that could be added to such a vessel. I don’t know of any, providing that covering is put on properly. That is the only means I know of, as far as adding anything to it is concerned. If a railing composed of 3x3 scantling, on both sides, spiked-to the deck stanchions, were added to the-boat, also partitions aft, nailed to the after stanchions, and carried up to the upper deck, running athwartships, were added, that, in my opinion, is the only thing that could be done to her, to make the vessel as seaworthy as such a vessel could be made.”

All this, it appears from plaintiff’s evidence, was done, and, in addition, cross timbers, X-shape, were fitted under the hurricane deck, to stiffen it in the sea, and heavy wooden stanchions were placed in the hull, beneath the deck, to strengthen the vessel, and a breakwater fitted forward.

Touching the preparations intended‘to make her as seaworthy as possible for such a vessel to be, the witness, Rees, to whom we have already referred, and who had built a large number of vessels of the same kind, which were taken on similar voyages to the South, testified that nothing more could be done to make the vessel seaworthy. He was supported in this position by the testimony •of Capt. Stuart, Capt. Weir, and Commander Field. The evidence to which we have referred makes it apparent that the jury were entitled to find, as they have, under a proper submission by the court, that the boat was a well-constructed vessel of her class, and that, while not a seagoing vessel, she was made as seaworthy for the ocean portion of the voyage insured against as it was possible to make a vessel of her kind. It further appears that defendant’s officer who accepted this risk knew that the vessel was not an oceangoing steamboat, but, instead, was constructed for river navigation only. The first evidence tending in this direction was produced by the defendant, and consisted of the specifications in accordance with which the Dos Hermanos was then being constructed. These specifications were given to Mr. Smith, defendant's vice president, by the broker, Bascom, who made application for the insurance for plaintiffs; and they were retained thereafter by the defendant, and produced on the trial in response too notice given by the counsel for plaintiffs. The first part of the specifications was as follows :

“ Specifications of a Stern-Wheel Steamer.
“Dimensions: Length, 90 feet. Beam, 22 feet. Draught, loaded, 33 inches. Depth at side, 4ft. 3 in.”

It is difficult to conceive of anything necessary to be added to the statement we have quoted, in order to assure these entirely familiar with the construction of vessels that the Dos Hermanos was not an. oceangoing steamboat. But, if more were needed, it was furnished by the details of the specifications, which, because •of their length, we refrain from quoting. Whatever may be urged against the admissibility of the conversations had between the applicant for the insurance and the defendant’s representative, for the purpose of showing knowledge on the part of the insurer of the character of the vessel, certainly could have no force, as against written evidence of this character, presented to the defendant as a necessary step in the application for insurance, and retained by it for its protection. There was other evidence showing that the defendant not only understood the- character of the vessel, but that an increased premium was charged. Capt. Stuart, ■defendant’s ihspector, prior to the application for the insurance, was upon the vessel Dos Hermanos, and inspected her by request of the officer in charge. He testified that the vice-president, Mr. Smith, who accepted the risk, asked him whether he bad seen the ■steamer, and what he thought of her, and he said, in reply :

“ I had seen it there at Gforringes’ yard. I told him, of course, it was a fancy risk. I mean by that simply that she was built for the river trade, and I didn’t consider she was just the thing to attempt all weathers on the coast, going around there. * * *

1 Fancy risk’ means there ought to be an excessive rate charged,— .something more than would be usual for an ordinary risk.”

It appears that the premium charged was about double the usual rate.

We have presented, then, a case where both the parties attempted to insure for an ocean voyage a vessel which they well knew was not intended for ocean navigation, and was not capable •of being made seaworthy, as a seagoing vessel; and it could seem that the only implication, as to seaworthiness, which would consistently arise from such intention, would be that the vessel should be made as seaworthy for the voyage insured against as a vessel of her kind could reasonably be made. It was intended to effect an insurance, and any other implication would defeat such intention, and amount to a fraud on the part of the insurer. The evidence in this case, considered in connection with the inferences of fact necessarily found by the jury, brings this action within Burges v. Wickham, 3 Best & S. 669, in which case the policy was issued upon a vessel built at Liverpool for river navigation on the river Indus. On account of her construction, the vessel was not fitted for ocean navigation. The insurance was sought to cover the risk of the voyage to Calcutta. In an action upon the policy to recover for the loss resulting, the plaintiff had judgment. In discussing .the question involved, the court said, in part:

“The warranty must be construed in such a way as not to be repugnant to the general adventure in which the parties are engaged. * "x" * If such an adventure is insured, the underwriters, when fixing the rate of premium, consider what will be the risk of a ship, jf the ship be put in the shape in which she ought to be put for such adventure; but what that state is must depend on the whole nature of the adventure. The assured warrants that she'shall be put in that state, but he warrants no more. * * * It is true that, when all was done, it appears the adventure was more dangerous than the ordinary voyage to India; but the assured do not, in any case, warrant the prudence of the adventure. This is for the underwriters to consider, when fixing the premiums; and, to enable them to do so, the assured are bound to disclose eveiy material circumstance.”

Clapham v. Langton, 5 Best & S. 729, was a declaration on a policy of insurance on a ship “at and from the Tyne to Odessa, or another port in the Black Sea,” the length, breadth, drought, and tonnage whereof were specified in a memorandum on the face of the policy at the time of making the same. Issue was joined on the plea as unseawortliiness. On the trial it appeared that before the execution of the policy the plaintiff wrote letters to the defendant, describing the-dimensions of the ship, and stating that she was a new iron steamer, and took no cargo, only coal enough for her use to Gibraltar. The ship was intended, after accomplishing the voyage, to be employed in river navigation only, and was, as to her hull, built and adapted to such navigation exclusively, and could not, by any strengthening appliances, be rendered fit to encounter the ordinary perils of the voyage; but, before commencing the voyage, certain appliances were put into and upon her hull, to assist her in encountering the perils of the voyage. The lord chief justice instructed the jury that if, in their opinion, the plaintiff had, before' the execution of the policy, brought to the knowledge of the defendant the nature and description of the vessel intended to be insured, and the more than ordinary risk that such a vessel would necessarily encounter on the voyage insured, and if, in their opinion, the vessel, at the time of' commencing the insured voyage,' had been and was, by the strengthening appliances put into and upon her hull, made as seaworthy for the insured voyage as a vessel of such a nature and description could reasonably be made, they should find a verdict-for the plaintiff on that issue. The jury having found for the plaintiff, an appeal was taken, which resulted in an affirmance of the judgment on the authority of Burges v. Wickham, supra. It should be said that in Clapham’s Case no opinion whatever was expressed upon the question whether paroi evidence as to the character of the vessel was admissible to qualify an ordinary warranty of seaworthiness in a policy; and it may have been that the fact that the policy contained the dimensions of the vessel, showing that it could not possibly have been seaworthy as a seagoing vessel, had a controlling influence in bringing about the decision made; but the fact appears that paroi evidence as to the character1 of the vessel was received by the trial court, and, on the appeal, Blackbübn, J., contended that an ordinary warranty of seaworthiness could not be qualified by evidence of that character,, but upon that proposition the court expressed no opinon.

Our attention is not called to any case in this jurisdiction where this question has been considered, but in fire insurance cases the court of appeals has held that, even where there is an express warranty, it is competent, for the purpose of avoiding it, to show by paroi evidence that the party for whose benefifit was intended knew at the time of the facts constituting the breach. It is difficult to discover any principle upon which a distinction between the two classes of cases can be found. In the case of Bidwell v. Insurance Co., 24 N. Y. 802, paroi evidence was admitted to show scienter on the part of assured at the time of the application, and the court says:

“Indeed, it is not easy to perceive'why an insurance company, by reason of formal words of a general and comprehensive nature in a policy, intended to meet broad classes of contingencies, should ever be allowed to avoid liability on the ground that facts df which it had full knowledge at the time of issuing were then not in accordance with the formal words of the policy. The contract would be broken eo instant^ to the knowledge of the company, and to allow the company to take the premium without taking the risk would encourage a fraud.”

In each of the cases of Van Schoick v. Niagara Fire Insurance Co., 68 N. Y. 434; Woodruff v. Imperial Fire Insurance Co., 83 N. Y. 133 ; and Short v. Home Insurance Co., 90 N. Y. 18,—oral evidence was received, showing a situation in .contravention of an express warranty contained in the policy, and that the insurer had knowledge of such situation when the policy was issued. Evidence of this character was received, not for the purpose of contradicting the written agreement, but to demonstrate that the insurer had knowledge of the' facts at the time the policy was issued, which it relied upon on the trial as constituting a breach of warranty. Upon such proof was predicated an estoppel, the object of the rule being to prevent fraud, and to render it impracticable for insurers to attempt acquisition of premiums upon policies understood by them to be invalid when issued.

The defendant further contends that the plaintiffs were not entitled to recover, because of the vessel’s delay in going on the voyage, after the issuing of the policy. The statement or title of the policy was, “ Steamer on Voyage,” and the insurance was “at and from Philadelphia to Frontera, Mexico,” which constituted an implied warranty on the part of the assured, among other things, that the vessel, at the time of the issuing of the policy, was about to sail upon her voyage, subject only to such reasonable delay as should be proper and necessary to enable her to complete her loading, and immediate preparations for the voyage. When a delay, which is relied upon by the insurer to avoid a policy, occurs in the ordinary course of loading and unloading, and making such preparations for the voyage as the insured deems necessary and- proper, the question whether the delay is reasonable or unreasonable is ordinarily a question of fact for the jury. Mount v. Larkins, 8 Bing. 108; Arnold v. Pacific Mutual Insurance Co., 78 N. Y. 7. But the defendant urges that where the delay is occasioned by circumstances outside of the ordinary course and procedure of the voyage insured against, which amount to a distinct change of risk, or which, in the nature of the voyage, necessitate a nonfulfillment of any of the warranties expressed or implied on the part of the insured, the delay avoids the policy. The defendant cites the following statement of the rule from Arn. Ins. (5th Ed.) 484: “ In short, whenever the delay exists an unreasonable time, or is incurred for purposes unconnected with the true object of the voyage insured, it will amount to a deviation.” In the. former case, it is said whether the delay is reasonable or unreasonable is for the jury, but the latter, if the facts are undisputed, presents a question of law for the court. This rule has been frequently the subject of application by the courts, and discussion by text writers. 3 Kent, Comm. 313; Arn. Ins. §§ 228-405, 457-484; Williams v. Shee, 3 Camp. 469; Hermann v. Insurance Co., 13 La. 517; Insurance Co. v. Stanton, 2. Smedes & M. 340; Foster v. Gardner, 11 Am. Jur. 21; The Henry Ewbank, 1 Sumn. 400, Fed. Cas. No. 6,376 ; Hammond v. Reid, 4 Barn. & Ald. 72; Tasker v Cunninghame, 1 Bligh, 87.

The evidence conclusively establishes that the risk of taking a vessel of this character to Frontera is far greater in September than in July. A number of witnesses testified, and without any contradiction whatever, that the risk was greater in August than in July, and greater in September than in August. The policy of insurance was issued June 28th, and not until August 27th did the Dos Hermanos start on her voyage. fichus, there is before the court evidence tending to show that the risk was in fact enhanced by the delay ; but, entirely independently of that fact, the defendant contends that the delay was not in the ordinary course and procedure of the voyage, but was occasioned by circumstances outside of those contemplated by the contract of insurance, “ as and from ” one port to another, and therefore the policy was avoided. But as we read the decision in Fernandez v. Great Western Insurance Co., 48 N. Y. 571, it is directly in point, and against defendant’s position. In that ease, defendant insured plaintiff’s vessel, then lying in the port of New York, undergoing repairs, “ at and from New York to Havana.” Evidence was given to show that the underwriter was informed that the vessel was undergoing extensive repairs, and was being thoroughly remodeled. The coui;t said :

“ The insurance covers the vessel while in port, preparing for her voyage. The rule is that such delay must be for a reasonable time only. * * * Were there no excusing facts in the case, a delay of 45 days in the clearing ofz a ship whose intended voyage would occupy only five or six days would appear to be unreasonable. * * * If, on the other hand, the vessel was in good order for river navigation, but was being remodeled and substantially rebuilt to fit her for an ocean steamer, several weeks might well be exhausted in that duty. Again, this vessel, while under repairs, met with various disasters and calamities, which delayed her completion. I cannot discover such a state of facts as, upon the principles of law laid down by the appellants, would justify the court in saying that, as matter of law, and necessarily, there was a breach of the warranty that the vessel should sail in a few days. The jury might have so found, but the question was not submitted to them, and neither party asked that it should be.”

It is clear that under this decision the facts in the case under review presented a question for the jury, whether the delay was for an unreasonable time; and the court did not err in refusing to hold, as matter-of law, that the delay constituted such a deviation as to avoid the policy.

The Fernandez Case is cited by the defendant as authority for' its further contention that the trial trips of the steamboat Dos Hermanos constituted such a deviation as to avoid the policy. In that case, after the policy had been issued, the vessel went on a triaj trip to Elizabeth, N. J., a distance of 16 miles, to test her engines, and to take on coal. After being loaded, she returned to New York, subsequently sailed to Havana, and, while prosecuting her voyage, was destroyed by fire. The court held that the trip to Elizabeth was in violation of the terms and conditions of the policy, and operated to avoid it, because not excused on the ground of necessity. The plaintiffs sought to obviate the difficulty by the argument that the trip to Elizabeth was a trial trip, but to this the court made answer:

“ No necessity is shown for the vessel, in this case, to go out of the limits of the port of New York. Apparently, she could have been tested as well by going down the bay to Staten Island as by going to Elizabeth. * o* * The opportunity to test her fitness for the sea could have been perfectly attained without going to another port, in another state, at a distance of eighteen or twenty miles.”

Thus was recognized the necessity of trial trips for new vessels, which are both usual and customary. The trial trips of plaintiffs’ boat seem to have been of this character. On the first one, defects were developed which necessitated their correction, and the engineer directed a second trial trip, which was taken down the river. The vessel did not land on either of the trips, and the testimony of the witness Tucker was to the effect that the vessel did not go out of the limits of the port of Philadelphia. The most favorable view of this question which the trial court could have taken for the defendant was that it was for the jury to say whether the trial trips were prudent or necessary, and the defendant is without exception to the charge of the court in such respect. Defendant’s exceptions should be overruled, and judgment directed for the plaintiffs, with costs. All concur.


author: Van Brunt, P. J.

text:
    Charles L. Berg, Resp’t, v. Henry Parsons, App’lt.

      (Supreme Court, General Term, First Department,

      Filed January 18, 1895.)

    1. Negligence—Dangerous business.
    It is the duty of a person to employ for a business, concededly dangerous in its character, a suitable and competent person.
    2. Same.
    If he employs an incompetent person, there is no obligation upon the part of an adjoining owner to take legal active measures to restrain the action of such incompetent person, so improperly employed.
    3. Same—Inquiry.
    When it does not appear that the employer was informed that the contractor had ever done any work of the kind for which he was employed, the evidence does not show that he made sufficient inquiries as to the contractor’s incompetency.
    4. Appeal—Error cured.
    If the defendant subsequently supplies evidence which would have made it proper to deny a motion to dismiss, had it been made in the case prior to the making of the motion, the error is cured.
    5. Evidence—Negligence.
    In an action for damages caused by the incompetency of a contractor employed by defendant, plaintiff cannot give in evidence an injunction obtained by him against the continuance of the work by the contractor.
    Appeal from a judgment in favor of plaintiff,, and from an order denying a motion for a new trial.

      A. Thain, for app’lt; C. W. Pierson, for resp’t
   Van Brunt, P. J.

This action was brought to recover damages for defendant’s negligence and want of care in employing an incompetent contractor to engage in blasting operations in proximity to the plaintiff’s house. It appeared that the plaintiff was the owner of the house and premises known as “No. 315 West Ninety Second Street;” and that the defendant was the owner of certain vacant lots adjoining the plaintiff’s house on the west; and that defendant employed one Michael Tobin to excavate in his lots to a depth of 10 feet below the curb line. Tobin, in performing this contract, by his carelessness caused injury to the plaintiff’s house, compensation for which was sought to be recovered from the defendant' in this action upon the grounds above stated. Evidence having been taken upon both sides, the case was submitted to the jury, who found a verdict in favor of the plaintiff ; and, an order having been made denying a motion for a new trial, from such judgment and order the present appeal is taken.

It is claimed upon the part of the appellant that there was no evidence upon which the jury were warranted in finding that the defendant was negligent, or that the plaintiff was free from contributory negligence, and that the burden of proof was upon the plaintiff as to both of these propositions. The claim of contributory negligence seems to be founded upon the fact that the plaintiff did not stop Tobin from continuing his reckless career as a blaster as soon as he might have done, and before he had sustained as much damage as he did; and that the plaintiff had a right to in terfere with the contractor, while the defendant had not; and that, if Tobin was carrying on his work carelessly, and in a manner likely to endanger his property, the plaintiff might have applied for and obtained, before the accident, an injunction, which injunction,-it appears, he did procure after the injury was done. The force of this reasoning we are unable to see. The plaintiff was not bound to take legal measures to restrain trespasses committed by persons employed upon the part of the defendant. It was the duty of the defendant to have employed for this business, conceded to be dangerous in' its character, a suitable and competent person ; and, if he did not employ such a person, there was no obligation upon the part of the plaintiff to take active legal measures to restrain the action of this incompetent person, so improperly employed.

Another objection to the recovery is that there was .no evidence from which the jury were warranted in finding that the defendant was negligent. Upon an examination of the case, it appears that, although the defendant originally swears that he .made inquiry in respect to the capacity of Tobin to do the work in question, upon further examination it is evident that he made no inquiries whatever, except from a clerk in a lawyer’s office, and that he claimed to have seen a piece of blasting done by the contractor which was reasonably well done. But, from all the information that the defendant got in respect to the capabilities of the contractor, he was not informed that he had ever done the kind of work called upon to be done on this occasion. He had done some blasting for sewers, but nobody ever knew that he had excavated a cellar. We think, therefore, that the defendant did not, so far as this record discloses, perform that duty which is incumbent upon a man who is about to employ another to do a dangerous piece of work.

It may, perhaps, be proper to notice that the objection is taken that some of this evidence of negligence in regard to the defendant’s inquiries in respect to Tobin came.out upon the defendant’s case; and that, therefore, it was error not to dismiss the complaint, upon the motion of the defendant, at the termination of the plaintiff’s case. But it is a' well-established principle that, if the defendant subsequently supplies evidence which would have made it proper to deny a motion to dismiss had it been in the case prior to the making of the motion, the error is cured. The objection, therefore, is not available.

We think, however, that there was error in the admission of evidence, and also in the charge of the judge. The plaintiff having obtained an injunction against the defendant and Tobin restraining the continuance of the work, that injunction was offered in evidence, and received, notwithstanding the objection of the defendant. This, we think, was error. As is claimed upon the part of the defendant, the effect of the introduction of these papers might have been to lead the jury to believe that the court had already adjudged, not only that Tobin had been negligent, but that tile defendant himself had also been negligent.

We think, also, that the court erred in charging the plaintiff’s request, as follows:

“ In considering the question whether defendant exercised due and reasonable care in the selection of a contractor, the jury may take into account defendant’s failure to make inquiry as to such «contractor’s record at the offico of the fire department, where permits to blast must be obtained by the contractors before they can lawfully begin operations ; and also the failure to make inquiries of persons familiar with the manner in which the contractor had performed previous jobs.”

This charge was objected to. It seems to us that the part relating to the fire department was clearly erroneous. It is manifest from the regulations of the department that the permit referred to in such regulations as applicable to the case at bar related to the keeping of combustibles upon any work in progress; and, as a result, until the contractor had obtained the contract for performing the work, he would not be likely to pay fees to the fire •department for permission to keep combustibles upon the premises in question. If inquiry had been made at the fire department, •nothing would have been found there against Tobin, as the evidence shows; and the fact that he had no permit to keep combustibles in this particular place would have argued nothing against his competency to do the work in a proper manner.

For these reasons, we think that error has been committed, and that the judgment and order appealed from must be reversed, and a new trial ordered, with costs to the appellant to abide the •event.


text:
    Annie Butler, App’lt, v. James B. Townsend et al., Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed January 18, 1895.)

    Negligence —Dangerous premises.
    Executors, to whom the legal title to real estate is devised, are not liable for its dangerous condition, when the use is given to another and they are not authorized by the will to make repairs.
    Motion for a new trial on exceptions, ordered to be heard at 'general term in the first instance.

      Ira Leo Bamberger, for app’lt; John A. Beall, for resp’ts.
   O’Brien, J.

The plaintiff seeks to recover damages for injuries sustained by her through the negligence of the defendants. The allegations are that, as executors and trustees under the will of Charles A. Coe, deceased, the defendants were in possession find control of the premises, and that plaintiff’s injuries were sustained through their carelessness and negligence in allowing the premises to get out of repair, and neglecting their duty to have the stairways supplied with a proper banister or railing, and in allowing the same to remain in an unsafe, defective and dangerous condition, of which the defendants had due notice. The defendants denied possession, or that they were under the obligation to take the care and management and control of the premises, claiming that the widow of Charles A. Coe, deceased, had been since his death, and at the time of the accident was, in the sole use, occupation, control, and management of the said house and premises. The will provides as follows:

“And also I direct my executors and trustees to allow my said wife the use of my dwelling-house in the city of Rew York, and also the one I now have at Hastings ; and, in case either or both of my said dwelling houses should be sold, then the use of any other dwelling house in the city of Rew York and in the country not costing more than the dwelling house sold; and I do authorize and empower my said trustees to purchase for her use a dwelling house in the place of each one they may sell, said house or houses so purchased not to cost more than the price realized for those sold.”

It was conceded that, subsequent to the probate of the will, the-widow had occupied the premises pursuant to its provisions; and also that the defendant Townsend, who was one of the executors and trustees, and his family, had resided in the house, upon the invitation of the widow, from the fall before the accident to a period shortly prior thereto, but were absent therefrom at the time of such accident. The broad question presented, therefore, is whether the defendants or the widow were responsible for injuries resulting from the unsafe and defective condition of the premises of which they had notice. Its solution must depend upon a determination whether, according to the provisions of the will and the conceded facts-as to the occupancy by the widow, the defendants, as executors and trustees, had any such use, occupation, control, or management of the house as would render them liable, even though they had knowledge, for injuries resulting from the defective condition of the premises. By the will the legal title to the premises was vested undoubtedly in the defendants, but such title was subject to the right of the widow to use the house. Apart from the portions of the will which clearly determine as to the legal title, and confer upon the widow the right to use the house, there is nothing therein, that in any way bears upon the duties of the defendants in respect to such' house. With the title in the executors, therefore, and with the rights conferred upon the wife under the provision of the will quoted above, the question proposed is to be determined.

As the defendants were not entitled to the possession, use, or management, and as the will itself makes no provision for repairs, and confers no authority upon defendants to devote any part of the estate coming into their hands to that purpose, we fail to see upon what theory they can be held liable; It has been many times held that the duty of keeping the premises in safe condition, in general, must pertain to occupancy, not to ownership ; and this principle has been many times applied in accident cases where the owner has leased the premises without a covenant giving a right of entry for the purpose of making repairs, and in none of which, so far as our attention has been called, has the owner been held liable for damages occasioned by neglect to repair. If the defendants had the power and had rented the premises, without a covenant to repair, for a long term of years, and while in possession of the lessee injuries happened to a third person by the neglect to repair, we do not think it would be seriously claimed that they, though holding the legal title, would be responsible for such damages.' The hypothetical case is in principle, however, analogous to the one at bar. Here the use and occupation of the property were given to the widow by her husband’s will. The defendants had never been in the control or management or occupancy of the premises. They would have no right to expend any of the money of the estate, because the authority was not conferred upon them to make repairs; that duty devolving upon the widow, with the use of the premises. Having no obligation placed upon them, therefore, to manage or repair the premises while the same were in use by the widow, the defendants would not be responsible for their unsafe and defective condition, even though they had knowledge thereof. We think that the judge below was right in dismissing the complaint, and that the exceptions should be overruled,- and judgment entered in favor of the defendants, with costs. All concur.


text:
    Farmers’ Loan and Trust Company, Resp’t, v. Bankers and Merchants’ Telegraph Company et al., Def’ts. In the Matter of the Third National Bank of the City of New York.

      (Supreme Court, General Term, First Department,

      Filed January 18, 1895.)

    Corporations—Insolvency.
    A person, who lends money to a corporation, is not entitled to a pre feren'ce over mortgage creditors on the ground that some of the money loaned by him was used for purposes for which receiver’s certificate might have been issued.
    Appeal from an order confirming the referee’s report.

      E. P. Wheeler, for app’lt; W. W. Cook, for resp’t.
   Van Brunt, P. J.

Prior to June, 1884, the Bankers’ and Merchants’ Telegraph Company was engaged' in business in the construction and operation of certain telegraph lines. On or about said month, an application was made to the Third Rational Bank, by one of the officers of that company, for a loan of $50,000, for the purpose, according to his .statement, of meeting current supplies, contract payments, etc. It was' also stated that the company was in great straits for want of the amount thus requested, but that with the aid of such advance the company could meet its pressing liabilities of the description thus stated, and would also be able to pay its coupons on its first mortgage bonds, which would fall due on the 1st of July. On the 3d of June, 1884, the Third National Bank loaned to the Bankers’ & Merchants’ Telegraph Company $50,000 upon its note, and upon its giving as collateral security $300,000 of the first mortgage bonds of the company. The note was payable 60 days after date, and authorized the bank to sell the securities forthwith, an failure to pay the note, without notice. Upon the maturity of the note, on August 4, 1884, a payment of $10,000 on account was made, and a new note for $40,-■000 was given, and an additional $100,000 of the bonds were deposited as collateral for the payment of the same. In September, 1884, a creditors’ action was commenced against the company, and on the 24th of September receivers of all the property of the company were appointed. In December, 1884, the bondholders commenced a suit, and the same receivers were appointed. In the latter part of March, 1885, the Third National Bank was served with a copy of the judgment in the bondholders’ suit. About April 25, 1885, the Farmers’ Loan & Trust Company, as trustee under a $10,-000,000 mortgage, commenced a suit to foreclose the same, and a receiver was appointed to succeed the receiver who was then holding in the bondholders’ action. He turned over to the receiver in the foreclosure suit all the property of the Bankers’ & Merchants’ Telegraph Company. On the 1st of May, 1885, receivers were appointed in the foreclosure suit; and on the 5th of May, 1885, the Third National Bank commenced attachment suits in Rhode Island and Massachusetts. On the 11th of June the bank was enjoined from prosecuting the same, and upon the next day obtained leave to sell the bonds that it held as collateral security; and on the 26th of June, it gave notice that it would sell the col-laterals, which it sold on the next day for the sum of $19,361.80. On the 24th of June the Farmers’ Loan & Trust Company obtained its judgment of foreclosure and sale. On the 25th of July a stipulation was made on behalf of the Third National Bank, as follows:

“ It is stipulated that in case the petitioner shall establish, on a reference to the order herein, that it is entitled to share in the proceeds of the sale in preference to the bondholders, then the petitioner shall be paid the amount that it may be itself entitled to receive out of such proceeds before the distribution of the proceeds, and that, in case the proceeds are distributed before the decision on any such reference, the petitioner shall be givep, before such distribution, a bond in the penal sum of $25,000, with satisfactory sureties, contingent for such payment as aforesaid.”

On the 31st of July, 1885, the property of the Bankers’ & Merchants’ Telegraph Company was sold under the judgment of foreclosure. On the 16th of September the bank obtained an order of reference under and by virtue of the stipulation aforesaid. On the 23d of January, 1886, the bank filed a petition to set aside the injunction that had been granted on the 12th of June, 1885, and for leave to go on with its attachment suits in Rhode Island and Massachusetts. On the 18th of February, 1886, an order to show cause was obtained, requiring the Third National Bank to show cause why the said bank should not withdraw, cancel, and annul the attachments obtained by it as above mentioned; and on the 19th of March, 1886, it was ordered and adjudged, among other things, that the Third National Bank cancel and annul of record the attachments in these suits, and that, in case the petitioner should establish on the reference thereinafter ordered that it is entitled to share in the proceeds of the sale in preference to the bondholders, it should have the same priority in the distribution of such proceeds as it would have had under the laws of said states, respectively (referring to the states in which the attachments were issued), with respect to the property levied upon. And thereupon a referee was appointed to take proofs, and report to the court, witli his opinion thereon, as to the liens of the said attachments. and the value of the property upon which the same were levied ; and, in case the said Third National Bank should establish that it was entitled to share in such proceeds of the sale in preference to the bondholders, the referee was directed to report the interest of the bank in said proceeds by virtue of .said attachments, etc. The referee, after a héaring, reported that the Third National Bank had no claim which could be considered superior to the bond, or would entitle it to rank with the receiver’s certificates. And from the order thereupon entered this appeal is taken.

The foundation of the claim of the appellant rests upon the doctrine of subrogation ; and we are called upon to extend a preference to its claims, as though it held receivers’ certificates (these certificates having been invented for the purpose of giving a preference to unsecured claims over liens acquired by express contract, a recognition of which invention by our courts has brought such discredit upon all classes of our securities in the eyes of the commercial world) for borrowed money, for which collateral security was taken at the time, but which subsequently turned out not to be quite as valuable as was imagined, upon the ground that the money borrowed had been partially expended by the borrower for purposes for which the receivers might have asked the court to borrow money upon receivers’ certificates. We have examined the interesting brief of the learned counsel for the appellant to ascertain whether contractual rights had been, to this degree, set aside by the courts, but have been unable to find that, with all their liberality towards the payment of unsecured claims in the case of insolvent corporations, they have yet taken this step. It is apparent, upon reading the stipulation to which attention has been called, that the Third National Bank released its claims under the attachments, if any it had, and elected to base its claims upon a right of payment in preference to the bondholders, and that it was only in case (upon this reference so ordered) such right was established that such bank was to be entitled to participate in the distribution of the amount realized upon the foreclosure sale. There seems to be no other interpretation to be given to this stipulation, and, it having so elected, it cannot now be permitted to establish a claim by reason of the attachment, if any it may have had. We are of opinion, therefore, that the order appealed from should be affirmed, with costs.

Parker, J., concurs; O’Brien, J., concurs in result.


text:
    New York Bank-Note Company, Resp’t and App’lt, v. Hamilton Bank-Note Engraving and Printing Company, App’lt and Resp’t.

      (Supreme Court, General Term, First Department,

      Filed January 18, 1895.)

    1. Contracts—Validity.
    Contract prohibiting personal property from being used in a particular way, is valid.
    2. Same.
    In respect to all persons buying with knowledge of such restriction, the party, for whose benefit it was made, will have a right to enforce the same, without tendering its value.
    8. Same.
    In an action to enjoin the purchaser from using the property contrary to such restriction, the seller is a necessary party plaintiff.
    Appeal from so much of an interlocutory judgment as sustains a demurrer to the complaint for insufficiency of facts ; defendant appeals from so much of such judgment as overrules a further objection, assigned in the demurrer, of a defect of parties defendant.

      Edward P. Lyon, for pl’ff; W. L. Turner, for def’t.
   Van Brunt, P. J.

This action was brought to restrain the defendants from using the press bought by them from the Kidder Press Manufacturing Company so as to compete with the plaintiff in strip-ticket printing. The complaint alleged the organization of the defendant, and that the Hew York Bank-Note Company, a corporation organized under and pursuant to the laws of Hew Jersey, on the 12th of October, 1891, entered into a contract with the Kidder Press Manufacturing Company, whereby the Kidder Press Manufacturing Company, for considerations in said contract expressed, agreed ngt to sell any presses on which strip tickets might be printed. This restriction, however, was not to deprive the Kidder Press Company from selling their presses to be used for other purposes; and the Kidder Press Company further agreed not to make alterations or additions to any existing presses, that would enable such presses to print strip tickets, without requiring the parties owning such presses to make the same terms and agreements regarding the same as though they were new machines. The complaint further alleged that prior to the time of said contract, and at the time and subsequent to the making of the same, one C. E. Gray was the secretary of said Hew York Bank Note Company, and sustained towards it the most close and confidential relations; that he was familiar with the first press made by the Kidder Company for said Hew York Bank Note Company, and with such attachments, etc., and also with the provisions of the contract above referred to; that, soon after the making of the contract, Gray -severed his connection with the Hew York Bank Note Company, and became associated with the defendant corporation, and its vice president and general manager; that the defendant, by its officers, conceiving the idea of duplicating said presses, and of using said Gray, and the knowledge he had acquired in liis confidential relationship with the New York Bank Note Company respecting the said presses, their said attachments, and the said strip-ticket printing business, and contracts therefor, and well knowing the terms of the said contract between said Kidder Press Manufacturing Company and said New York Bank Note Company, and well knowing that said Kidder Press Manufacturing Company had no legal right to sell or furnish to the defendant, orto any person, a Kidder Perfecting Press, except in such manner as should prevent said press from ever being used, with or without alterations, for strip-ticket printing, procured said Kidder Press Manufacturing Company, in violation of the terms of its said contract with the said New York Bank Note Company, to sell, furnish, and deliver to it (the defendant) a Kidder Perfecting Press, of substantially the same pattern as the ones to which said Kidder Press Manufacturing Company had made said attachments for the New York Bank Note Company, and that the defendant procured attachments to be added to the press, in such way as to enable the defendant to print strip tickets on, equally favorable terms with, and in substantially the same manner as was done by, the said New York Bank Note Company, and thereafter, and in the year 3.893, with full knowledge of the rights of the plaintiff under said .contract, procured another press, etc. The complaint further alleged that on or about the 1st day of January, 1893, the plaintiff was organized under the laws of West Virginia, and succeeded to all the rights of the New York Bank Note Company, bv assignment, etc., and prayed an injunction restraining the defendant from using any of the presses which it acquired from the Kidder -Company for the purpose of strip-ticket printing, etc. The defendant demurred to this complaint on the ground that it did not state facts sufficient to constitute a cause of action, and that there was a defect of parties, in that the Kidder Press .Manufacturing •Company had not been joined as a defendant in this action. The -court, upon hearing the demurrer, sustained the same, upon the ground that it did nos state facts sufficient to constitute a cause of action, in that the plaintiff had not paid, or offered to pay, the value of the press furnished to the defendant, or, at any rate, had failed to tender a compliance with the terms of the contract upon its part, and overruled the demurrer as to the defect of parties.

We do not see upon what theory the plaintiff was bound to tender anything. If the defendant purchased from the Kidder Company the press in question, having knowledge of the contract between that company and the plaintiff’s predecessors, whereby the Kidder Company agreed not' to sell any presses, except under restriction, it is difficult to see why the plaintiff is not entitled to enforce its contract. The result of the contract detween the Kidder ■Company and the plaintiff’s predecessor enabled the Kidder Company to give only a qualified title in the presses which it might produce. That company,had, by its contract, agreed that its productions should be used only in a certain way , and, when parties took those productions with knowledge of the restriction which accompanied the Kidder Company’s title, the purchaser’s title must necessarily i>e affected the same as the seller’s. Independent of the acts in relatian to the filing of chattel mortgages, if a party purchases personal erty, knowing that the same is mortgaged, can it be claimed that he would acquire a title relieved from the mortgage ? It seems-hardly necessary to discuss such a proposition. So, in the case at bar, the defendants in this action, knowing that the Kidder Company had no right or authority to sell their presses, except with a restriction, which restriction the plaintiff had purchased, can it be said that in purchasing from the Kidder Company they acquired an absolute title, relieved from such restrictions ? Clearly not. The party purchasing under such circumstances takes the property burdened with the contracts made by its owner in reference thereto, and which he had the power to make. Contracts prohibiting the manufacture of goods in certain localities are held to be valid. Contracts restraining the carrying on of a trade or business within certain limits are held to be valid. Why not contracts-prohibiting personal property from being used in a particular way ? Is place different in this respect from method ? It would not be argued for a moment that, if the contract between the Kidder Company and the plaintiff had been that no Kidder presses-should be used within the city of New York, such contract could not be enforced against the persons purphasing such presses with knowledge of this contract. What difference in principle is there: because it is not an absolute prohibition from using, but only from a particular use ? It seems to be clear that the Kidder Company could place this restriction upon the use of its manufacture, and,, certainly, in respect to all persons buying with knowledge of this restriction, the plaintiff, for whose benefit it was made, would have a right to enforce the same.

The next question is in regard to the knowledge of the defendant of this restriction. It is alleged in this complaint as distinctly and as positively as any allegation therein contained. The allegation is that the defendant, by its officers, well knowing the terms-of said contract between the Kidder Company and the New York Bank-Note Company, and well knowing that said Kidder Company had no legal right to sell or furnish to the defendant, or to-any person, a Kidder Perfecting Press, except in such manner as should prevent said press from ever being used for strip-ticket printing, procured said Kidder Company, in violation, etc. What, more distinct allegation of knowledge, could be made by the plaintiff than is therein contained ? It is true, the allegation is accom-, ponied by allegations with regard to Gray’s instrumentality. But these are not qualifying words by any means. If true, they would show, not only knowledge upon the part of the officers of the defendant, but a fraudulent design to evade the restrictions, of which they had knowledge. We think, therefore, that, the complaint stated facts sufficient to constitute a cause of action ; and we-know of no reason why the plaintiff should be required to pay anything to anybody because of the breach of its contract by the Kidder Company by the sale of these presses to the defendant, the defendant being fully aware of the existence of the contract.

The objection, however, in regard to the defect of parties, seem» to have a better foundation. The question involved, among Others, is as to the right of the Kidder Company to confer a title upon the defendant, of its presses, with an absolute right to use the same for any purpose for which they were adapted. When this right is assailed, as it is by the plaintiff’s action in this proceeding for an injunction against a vendee of the Kidder Company, it seems to us that that company is entitled to be heard, and that the question of its right to deal with its property as it sees fit cannot be adjudicated upon without its presence, where the objection is taken in time, as it is in the case at bar. For these reasons, we think that the demurrer should have been sustained upon the ground of defect of parties. The judgment, therefore, should be reversed, so far as it holds the complaint defective as to facts, and also so far as it holds the complaint sufficient as to parties, without costs of this appeal to either party; the plaintiff to be allowed to amend by bringing in the Kidder Press Company as a party, upon payment of the costs of the court below, and serving an amended complaint. All concur.


text:
    The People, Resp’t, v. James Gorman, App’lt.

      (Supreme Court, General Term, First Department,

      Filed January 18, 1895.)

    Trial—Charge.
    Where the testimony of a witness at the trial contradicts his evidence given on the preliminary examination, it is reversible error for the court to intimate which statement he believes to be true.
    Appeal from a judgment of conviction for assault in the second degree.

      Hugh J. Pentecost, for app’lt; John D. Lindsay, for the people.
   Parker, J.

The only exception taken by the defendant upom the trial was to a denial of his motion, made after the people had rested, to take the case from the jury, on the ground that there was not “enough evidence to go to them.” After a careful reading of the record, we are satisfied that this motion was properly denied by the court. But as section 527 of the Code of Criminal Procedure vests in the supreme court the power and duty to order a new trial, “if it be satisfied that the verdict against theprisoner was against the weight of evidence or against law, or that justice-, requires a new trial, whether any exceptions shall have been, taken or not, in the court below,” certain questions brought to our attention by the counsel for the appellant will be considered.

In August, 1894, Margaret Fitzgerald, a married woman, residing in Bristol, Conn., visited New York, accompanied by her two-children, the elder of whom was between four and five years old. During her stay she was a guest at her brother’s house, where the defendant, an old acquaintance of her husband’s, frequently visited her. In the afternoon of August 6th, Mrs. Fitzgerald, accompanied by her two children and the defendant, boarded the steamer C. H. Northam, on her return journey home. A few hours later, the captain of the steamboat, hearing a disturbance in stateroom. No. 89, which had been assigned to the defendant, hastened to it to learn the cause. He found the door of the stateroom bolted, but succeeded in getting it partly open, when he saw a woman’s hand dripping with blood. Summoning assistance, the stateroom was entered, and the woman found to be suffering from stab wounds on her neck and left hand, the defendant being similarly out. The officer who arrested defendant within a few minutes after the stateroom had been opened testified that the woman, in his presence and that of defendant, and in response to an inquiry by the officer, said that “he [meaning defendant] cut me.” When .asked with what, she answered, “ A razor,” whereupon the officer produced a razor blade, still wet with blood, and asked her if that was the razor, to which she replied, “Yes.” The officer further testified that the defendant, on the way to the Chambers Street Hospital, voluntarily said, “I intended to do it,” and, when asked why, said : “ It was a matter of jealousy. I didn’t cut her. She out me. I did intend to do it.” Not until the 15th of August was the woman able to get about, and then was brought before a magistrate, and, in the presence of the defendant, made a formal •complaint against him. Upon the trial, however, she testified that her former statement was entirely false, and that the defendant was in no way answerable for the injury which she had received. Her accounts of the occurrence then was that, after some general -conversation in the stateroom, the defendant accused her of being intimate with a cousin of hers, and threatened to tell her husband; that she asked him whether he believed it, and when he said, “ Yes,” she first struck him with a glass, then picked up the razor blade, which she had noticed lying on the washstand when she •entered the stateroom, and cut her own neck with it; that the defendant tried to take the razor away from her, and in the struggle •she cut her hand. If her testimony upon the trial was true, defendant was not guilty of the crime charged. If, on the other hand, her sworn statement before the magistrate was true, he was ;guilty. How the jury should find upon that question was therefore one of much moment to the defendant That the woman had been guilty of perjury, upon either one occasion or the other, was beyond question, and she was justly entitled to the censure which the court meted out to her; indeed, she merited far greater punishment.

But, however great her offense against the law, it was the defendant’s right to have her testimony weighed by the jury, in connection with all the other facts proved, to the end that they should determine upon which of the two occasions she told the truth. The trial court was evidently of the opinion that the witness told the truth before the police magistrate, and not upon the trial; and, both by inquiry of the witness and comment on her answer, he indicated very strongly to her, and to the jury as well, what his opinion was, as will appear from some quotations which we take from the record:

“ By the Court: Q. You lied either in the police court, or you lied here, didn’t you ? A. Yes. The Court: Then we have got to find out when you lied. When people admit that they lie, sometimes it is pretty hard to tell when they tell the truth, especially when they swear to lies. * * * The Court: You have just said that he cut you. You want to be careful, or you will be tripped up. If you don’t tell the truth I will lock you up. You may be sure of that. The court will not be trifled with. * * * The Court; Is she in the House of Detention ? Mr. Weeks: Ho The Court • Then do not let her leave the court room until the" •case is concluded.”

These inquiries and comments by the court are not referred to as furnishing sufficient ground for reversal, but rather because they show the impression which her testimony had’made upon the mind of the court, and give emphasis to the portions of the charge to which reference will now be made.

.The court in its charge said:

We find the situation of a person, having complained, at the time the person is presented to her, identifying him; going to the police court, and making a complaint there; going before the grand jury, and making a complaint there; going to the defendant this morning, and appearing upon the stand in this court, and making a different statement”

And, again.

Certain it is that she was so coherent in that statement, and it was made in so satisfactory a manner, that a criminal complaint was founded upon it; and certain it is that subsequently she was in sufficient health and intelligence to go before the grand jury .and repeat that statement. It resulted in an indictment, which has brought this defendant to this bar.”

We are not able to find in this record any evidence that the woman even appeared before the grand jury. Thus, it appears that twice in the charge to the jury the court asserted the existence of a fact which, if true, could have none other than an important influence upon their minds, when there was no evidence before the ■court to support such assertion. Again, the court, after charging the jury that, if they believed she had made a misstatement under ■oath on one occasion or the other, they would be left in a situation not to believe her, said :

“But, at the same time, if you believe, in accordance with common sense, reason, and the evidence, that the story that she now tells is a falsehood, and that the story that she admits having told in the police court is the true one, she should not be allowed to humbug you or the court, or trifle with its process, or make a bargain with the defendant, to the end that he may escape the consequences of crime, if that be the situation.”

IE the jury up to this time had been left in doubt touching the view of tlie court as, to how they should find upon this question of vital importance to the defendant, certainly they could doubt no longer ; for not only was the opinion of the court thus communicated to them, but the opinion of the court was, in effect, asserted to be in accordance with common sense, reason, and the ■evidence., This, undoubtedly, liad the effect of causing the jury to feel that they were in some measure, at least, relieved from the necessity of estimating for themselves the full value of the evidence bearing upon the probable truthfulness or'untruthfulness of the evidence of the woman Fitzgerald as given upon the trial, and therefore was material error. McKenna v. People, 81 N. Y. 360. We think the charge of the court, in the respects pointed out, presents such error as calls for a reversal of the judgment. The judgment should be reversed, and a new trial ordered.

All concur.


author: Per Curiam.

text:
    Communipau Coal Company, Resp’t, v. Albert Gray, App’lt.

      (Supreme Court, General Term, First Department,

      Filed January 18, 1895.)

    Teial—Stipulation.
    The effect of .the stipulation of counsel at the opening of the case, considered in connection with plaintiff’s formal proof, was held to admit part of the amount in suit and to leave the balance open to litigation.
    Appeal from a judgment entered on a verdict in favor of plaintiff, and from an order denying a motion for a new trial.

      Herman Fromme, for app’lt; William G. Wilson, for resp’t
   Per Curiam.

It was alleged in the complaint that prior to April, 1892, the plaintiff sold and delivered to the defendant coal of the value of $2,111.30 ; that shortly thereafter the defendant, being pressed for .payment, represented to plaintiff that he was the owner of certain parcels of unincumbered real estate, and thereby induced the plaintiff to accept notes, aggregating $883.25, for coal delivered during the preceding months of September and October ; that such representations were false, and, knowledge of the-fact coming to the plaintiff, it elected to return the notes and canael the extension of credit which they were given to secure. The answer put in issue every allegation in. the complaint, and set up-a counterclaim, to which the plaintiff interposed a reply. When the action came on for trial, the defendant was permitted by the court to withdraw so -much of his answer as alleged a counterclaim. Thereupon the counsel for the plaintiff and Mr. Fromme, counsel for the defendant, caused to be entered upon the record in open court the following:

“Plaintiff’s counsel: How about the denial of the circumstance under which the credit was obtained? Mr. Fromme : Yes; that-is the only issue,—the denial of false representations. Plaintiff’s counsel: There is no question about the amount of the sale? Mr. Fromme: Mo; we will expedite the matter. There is no question about the coal having been received, as far as that is concerned ; simply on the question of fraud,—as to whether we were guilty of any fraud.”

The effect of these stipulations was to leave open for further controversy .the right of the plaintiff to recover in that action the amount represented by the notes. Upon that question the plaintiff presented such evidence of fraud as entitled it to go to the jury, and the trial court so decided, the result being a verdict for the plaintiff in the full amount claimed.

During the progress of the trial, testimony was elicited tending to show that, at the time defendant made the representation as to his responsibility, it was understood that he should have an extension of time within which to pay the entire sum due, but how much time was not stated. Thereupon the defendant asked leave to amend his answer by inserting a clause to the effect that the action was brought before the debt became due, because the time of payment was extended. This was refused, and, in view of the stipulation of counsel to which we have referred, and the facts then before the court, we think the discretion of the court was properly exercised.

Nor did the court err in directing the jury to find for the plaintiff the amount claimed, less that represented by the note. The effect of the stipulations of counsel at the opening of the case, considered in connection with plaintiff’s formal proof, was such as to entitle the plaintiff to a direction in its favor except as to the notes. Touching the amount of the indebtedness for which notes were given, and afterwards returned, no complaint is made of the manner in which the questions involved were presented to the jury.

The judgment should be affirmed, with costs.