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

text:
    Henry W. Gray, Receiver, etc., App’lt, v. The Oxnard Bros. Co., Impl’d, Resp’t.

      (Supreme Court, General Term, First Department,

      Filed January 13, 1891.)

    ■Corporations—Sugar Trust—Receiver of one member cannot maintain ACTION FOR ACCOUNTING OF PROFITS.
    Plaintiff was appointed receiver of the N. R. Sugar Refining Co. under a judgment dissolving the corporation because it had become a party to an illegal combination formed for the manufacture and sale of sugars, etc. He brought this action for his share of profits alleged to have been earned by the combination; and the action was based upon the provisions of a deed entered into by the various persons and corporations interested in that trade. Meld, that the action could, not be maintained. The fruits of . an illegal transaction, depending upon an illegal agreement, which latter is invoked, and its enforcement sought, cannot be recovered by a party thereto. f
    Appeal from a judgment sustaining a demurrer to the plaintiff’s complaint.

      DeLcmeey Nicoll and John M. Bowers, for app’lt; John B. Parsons and Blihu Boot, for resp’t.

       Affirming 31 N. Y. State Rep., 968.

   Daniels, J.

The plaintiff was appointed the receiver of the property and effects of .the North Eiver Sugar Eefining Company under a judgment dissolving the corporation on account of its having become a party to an illegal combination formed for the manufacture and sale of sugars, syrups and molasses. The judgment dissolving the corporation was brought by appeal before this general term, where it was affirmed. People v. North River Sugar Co., 54 Hun, 354; 27 N.Y.State Rep., 282. An appeal was then taken to the court of appeals, upon the disposition of which the judgment was again affirmed. People v. North River Sugar Refining Co., 121 N.Y., 582; 31 N.Y. State Rep.,781. By the complaint it appears that the plaintiff as receiver has obtained possession of the money and property of the North Eiver Sugar Eefining Co. and now has the same under his undisputed control.

But it is further alleged that the company entering into and forming the combination, which was formed between it and other incorporated companies, created a partnership under which the business has since been carried on. And that gains and profits have been derived from the business, which, by the deed creating the association, are to be divided and distributed,- and that he as receiver of this company is entitled to participate in that distribution. And judgment has been demanded that the partnership or association shall be dissolved on account of the dissolution by operation of law of the North Eiver Sugar Eefining Company, and that a settlement of its affairs shall take place. The theory of the plaintiff’s action is that he, as receiver of the North Eiver Sugar Eefining Company, is entitled to maintain this action for the settlement of the affairs of the combination and the distribution of its assets. And his authority to maintain the action must necessarily depend upon the fact that the company represented by him as receiver is entitled to the relief in whole or in part which he has demanded. If he as receiver has no interest in or right to recover any part of the assets or profits of the combination, then it follows that the action which he has instituted cannot be maintained.

Whether he has that right must be determined by the consideration of the deed under which the combination was formed and the transactions following the execution of that deed. The deed itself will be found in the report of the case of the People v. The North River Sugar Refining Co., in the court of appeals, supra. By this deed the combination which was formed was denominated the Sugar Refineries Company. Its affairs were to be managed by a board of eleven trustees, which might be increased to thirteen by a vote of a majority of its own members. And it was provided in this deed that the capital stock of each corporation becoming a party to it should be transferred to this board, and that in lieu of such stock there should be issued 500,000 shares of $100 each, by the board, and distributed as was after-wards provided. The form of the certificates to be issued in this .manner was made a part of the deed or agreement. These certificates were made transferable by endorsement in like manner as the shares of stock issued by a corporation. It was further provided that the shares of the capital stock of the several corporations should be transferred to the names of the board of the Refineries Company as trustees, to be held by them and their successors as joint tenants, and that this board should hold the stock so transferred with all the rights and powers incident to stockholders in the several corporations. And certificates to be issued in place of these shares were to be apportioned among the different corporations which became parties to the deed. And it was then provided that the shares assigned to the several refineries should be distributed by them to and among the parties interested therein, and that holders of stock in the refineries companies should be entitled to so many of the shares allotted to each refinery as should be in the proportion of his stock to the capital of such company. And that shares for stockholders of any refining company who should not surrender their stock might, under the direction of the board, be deposited for their account with the right to receive the same upon the surrender of their stock.

It was further provided that, in the allotment of shares, fifteen per cent of the certificates should be left with the board. The deed then declared that the profits arising from the business of each corporation should be paid over to the board, and the aggregate, or such amount as might be designated for dividends, proportionately distributed by the board to the holders of the certificates issued by it for capital stock. It is quite plain from this, as well as other provisions contained in the deed, that it was intended as a part of the plan that the entire shares of stock in each of the eorporations becoming a party to it should be surrendered to this board and afterwards held by the board, and that in place of the shares transferred in that manner the combination, or Sugar Refineries Company, through the board, should issue equivalent certificates of its own, which would pass over to the owners of the shares in the several corporations, and that the profits of the business carried on by the combination should be paid and distributed among the persons holding these certificates. The complaint then proceeds to allege that, shortly after the execution of the deed, the entire capital stock belonging to each of the corporations was assigned and transferred to the board of the Sugar Refineries Company, and that certificates were issued in the manner provided by the agreement and delivered in return therefor to each of the corporations, and that certain of such certificates were distributed among the original stockholders in the corporations, in accordance with the terms of the deed or agreeement. It is further alleged as to this particular corporation that at or about the time of the execution of the agreement, the entire capital stock of the North Eiver Sugar Eefining company was purchased by or on account of Henry 0. Havemeyer and other individuals as the trustees of the Sugar Eefineries Company, and that the same had been delivered to them, and that new certificates had been issued by the Sugar Eefineries Company and delivered by them. But what, was the object of that delivery the plaintiff alleges he had not been informed.

These allegations disclose the fact to be that after the deed or agreement was entered into its requirements were so far complied with as they provided for the delivery of the stock or shares of the North Eiver Sugar Eefining Company to the Board of Trustees of the Sugar Eefineries Company, and that this board had issued for the benefit of the persons entitled to receive them under the agreement the certificates which were to be exchanged for such shares. It does not appear by the complaint that either one of these certificates at any time became the property of the North Eiver Sugar Eefining Company; neither does it appear that any share of its own stock was surrendered by it to the board of trustees to be replaced by the certificate or certificates to be issued by the Eefineries Company. But the plain inference sustained by the complaint is that the shares of the North Eiver Sugar Eefining Company were outstanding in the hands of persons who had previously acquired the title to them, and that these shares had all been purchased by Mr. Havemeyer and the Trustees of the Sugar Eefineries Company, and that it was in place of these shares that the Board of the Eefineries Company issued their certificates. And they, from the tenor of the deed or agreement, may reasonably be presumed to have been passed over to the holders of the shares in the corporation in place of which the certificates were issued. These holders of the certificates consequently became the persons entitled to the earnings and profits of the Eefineries Company. The North Eiver Sugar Eefining Company is not shown to be entitled, as against the holders of the certificates, to participate in these profits, or either directly or indirectly to own any part of the assets of the Eefineries Company. And the result appears to follow that the title to these assets or profits never in any form vested in this receiver and he consequently has no right to recover the one or the other in this action. And that the persons who are entitled to the earnings and the assets of the Sugar Eefineries Company are the holders of the certificates issued by its own board, and that they, and not the corporations becoming parties to the agreement or deed, are the persons entitled to insist upon a dissolution of the combination and the distribution of its assets if that may legally be accomplished.

This receiver has by his own statements received all the property of the North Eiver Sugar Eefining Company. There is nothing further for him to obtain. But what has accrued from the combination and the transaction of the business is, by the terms of the deed as well as of the certificates, distributable only among their holders, and he is not one of those persons.

While the North Eiver Sugar Eefining Company continued^ to be a party to this combination it does not appear that anything was earned by it, or paid over for the use of its property to the Board of the Sugar Refineries Company : neither does it appear that any other advantage has been secured from it by that board beyond the circumstance of its having become a party to the combination. In addition to that, what has taken place has been for the benefit of the holders of the certificates and not of this company, or of the plaintiff as its receiver. His complaint presents no proprietary right whatever which can be asserted or maintained in this action for the reason already stated , that upon its face he has presented no title to the earnings, dividends or assets of the Sugar Refineries Company.

' It has also been alleged in the complaint that the combination was entered into for the unlawful purpose of controlling the manufacture' and sale of sugar, syrup and molasses throughout the United States, and increasing or advancing the prices thereon, and that this was an unlawful and illegal object. And so it was held by this general term when the case of the People was decided by it. If the plaintiff could maintain the action it could only be by enforcing the agreement or deed which was made against the Board of the Sugar Refineries Company and the other parties to the action. It is not for a rescission of the instrument and the recovery of any money or property of the North River Sugar Refining Company that the action has been brought, and the case therefore is not within the principle of Spring Co. v. Knowlton, 103 U. S., 49. But it is for the recovery of the profits and earnings of the combination in the execution of this unlawful agreement, and to recover those profits or earnings the terms of the agreement must be maintained and enforced. And when that is the case the law has become settled that a party to such a combination cannot maintain an action dependent upon the agreement. Keene v. Kent, 4 N. Y. State Rep., 431; Woodworth v. Bennett, 43 N. Y., 273.

This latter authority seems to be specially applicable to this appeal, for the action there was by one of the parties to an illegal partnership for the recovery of its effects so far as they were designed to be secured to him by the unlawful agreement And it was held by the court that the action could not be maintained. A very large number of authorities have been collected and cited in the brief of the counsel for the appellant illustrating the cases in which the parties to an unlawful agreement were not deprived of redress by reason of its illegality, but they all differ so essentially from this case as not to require any special examination. Some of them are peculiar in their consideration of the legal principle applicable to illegal contracts, but neither has gone so far as to maintain the right of a party to recover the fruits of the illegal transaction when an appeal to and dependence upon the terms of the agreement is required for that purpose. On the contrary, the courts have uniformly held that an action for redress under those circumstances cannot be maintained. And this has been finally sanctioned by Leonard v. Poole, 114 N. Y., 371; 23 N. Y. State Rep., 753.

Upon each of the. grounds which have been considered this action does not appear - to be capable of being • sustained. The plaintiff has presented no title or interest to or in the assets or earnings of the Sugar Refineries Company which will entitle him to recover any part or portion thereof. And if he had disclosed an interest which under the terms of the agreement might entitle him to maintain this demand against the defendants, his dependence upon the enforcement of the illegal contract would deprive him of success. The demurrer, therefore, which was interposed by the Oxnard Brothers Company to the complaint, has been properly sustained, for it does not, as the demurrer has presented the objection to it, state facts sufficient to constitute a cause of action. The judgment should be affirmed, with costs, but with leavh to the plaintiff to amend his complaint within twenty days, upon payment of the costs of the appeal and of the demurrer.

Van Brunt, P. J.

I cannot concur in the conclusion arrived at by Mr. Justice Daniels, that even if the combination which resulted in the formation of the Sugar Refineries Company had been lawful, that the receiver of one of the combiners would have no right to an accounting for profits earned by the company because all such profits belonged to the holders of the certificates issued by the trustees of the combination. Because, as the receiver represents both the stockholders and creditors of the corporation of which he has been appointed receiver, and as the certificates issued by the combination simply represent the stock held in trust by the combination, and as it is because of the deposits of this stock that certificates were issued to the depositors of the stock by the combination, the receiver of the corporation representing this stock seems to have the right to enforce any obligation inuring to the advantage of the stock. The corporation having died, its shares of stock, as such, have been extinguished, and the receiver has succeeded to all the rights of the stockholders to gather in property which they, as stockholders, have the right to claim. The certificates issued by the combination represent nothing but this stock; stand in lieu of it, and when all the rights arising from the holding of the stock are transferred by operation of law, it would seem that no rights could be enforced by the holder of a certificate issued to represent the stock but which no longer did so.

I concur in the view that the action cannot be maintained because of the illegal character of the contract by which the combination was formed. This action is brought for the enforcement of the provisions of that agreement, and as a court will never lend itself to the enforcement of an illegal contract this action must fail.

Brady, J., concurs.


source: Caselaw Access Project

author: Daniels, J.

license: Public Domain

text:
    Cassa Marittima, Resp’t, v. The Phœnix Ins. Co., App’lt.

      (Supreme Court, General Term, First Department,

      Filed January 13, 1891.)

    Insurance (marine)—Insurable interests—Loans.
    The master of a vessel hypothecated it and its freight to plaintiff for a loan. Plaintiff’s regulations regarding such loans stipulated that neither owner nor master should take any further advances upon the same freight, or in such case must hold themselves bound to return the loan made, even though the vessel were lost. Subsequently, without the knowledge or consent of plaintiff, the captain obtained a further loan on the freight. Later the defendant insured the vessel for plaintiff "on advances against captain's draft upon the freight, etc.” A loss occurred. Held, that plaintiff's insurable interest under the policy was not affected by the subsequent loan procured by the captain in violation of the regulation; that plaintiff had two remedies : one against defendant upon the policy, the other against the captain or owner under the stipulation above stated.
    Appeal from a judgment entered upon the decision of the court without a jury. -

      Edward P. Lyon, for app’lt; Edward E. Jones, for resp’t.
   Daniels, J.

The recovery herein is for the amount of a loan made by the plaintiff, a corporation existing and doing business in the city of Naples, in the kingdom of Italy, to the master of the vessel Buoni Amici, for the payment of which her freight was hypothecated, as well as the vessel herself. The loan was made at Pensacola, in Florida, where the vessel was then lying, that, being a foreign port, and she being an Italian craft

When the loan was made the agent of the^ plaintiff took from her master the following instrument:

£400. Pensacola, Fla., August 31, 1886.

Fifteen days after arrival at the port of destination, River Plata, or other intermediate port at which shall end the voyage of my vessel, denominated Buoni Amici, I promise to pay "to the order of the Oassa Marittima of Naples the sum of four hundred pounds sterling, value received in cash as a loan on freight for the last expenses necessary to the undertaking of the voyage from Pensacola to River Plata, and I hereby assign therefor, to the said Oassa Marittima, enough of the present freight to cover the sum of the above loan with power to collect when due, and I hereby hypothecate ship and freight for repayment of said loan with priority over every other credit, and in case of total loss the amount received as loan shall not be paid back and I accept all the conditions set down in the regulations of the Oassa Marittima relating to loans on freight of which I received a copy. B. Quartino.

Among the stipulations or regulations, accompanying and made a part of it, that numbered fifteen is the only one important to be specially considered in the determination of this appeal. By that regulation it was declared that the owner or captain shall not take any other advances upon the same freight at’ the port of loading or in such case hold themselves bound to return the present loan, even though the vessel be lost.

The master did in fact violate this regulation by obtaining & further loan before the commencement of the voyage, upon a similar hypothecation, amounting to the sum of $1,100. But that loan was made without the knowledge, privity or consent of the plaintiff.

After these loans had been made the .defendant made and delivered to F. Dassoir, for account of whom it might concern, its policy of insurance “ on advances against captain’s draft upon the freight of all kinds of lawful goods and merchandise laden or to be laden on board the good bark Buoni Amici.” The vessel subsequently proceeded upon her voyage, but before reaching its termination she was so much damaged by perils of the sea as to render it -necessary to make the nearest port, and she was taken to Port Eads in the state of Louisiana, where by a survey it was found that she had been so badly damaged as to be unfit to continue her voyage. It was thereupon ended, the cargo discharged and the vessel sold. Notice thereof, and proof of loss, was served upon the defendant, which refused to pay on account of the violation of this fifteenth regulation by the making of the second loan, while the vessel laid at Pensacola, and before the commencement of her voyage.

It "is, without doubt, essential to the right of the plaintiff to recover on the policy, that it should be authorized to resort to the freight for the reimbursement of the loan and that this authority should continue unimpaired. For without that there would be no insurable interest in the plaintiff, and that right depended upon the fact that payment could alone be secured by the earning of the freight through the delivery of the cargo at its port of destination. But as the making of the second loan was without the plaintiff’s knowledge or consent, this right or interest was not defeated by it. The lien or right was created by the loan and the instrument subscribed by the master. It thereby became vested in the plaintiff and the master was incapable of divesting it by any act or wrong on his part short of satisfaction of the debt. The fifteenth regulation did not of itself defeat the interest or lien of the plaintiff’s in the event of a subsequent loan. It did no more than to entitle the lender to proceed" against the owner and master for the recovery of the loan in case it elected so to do. It was in no sense made obligatory that it should abandon its lien upon, or interest in, the freight if a violation of this regulation should take place by the act alone of the master. The most that was done was to provide another remedy, which the plaintiff was at liberty to follow or not as it elected. It did not elect to accept that remedy, and in its effort to secure it for the defendant’s benefit by a suit in Italy against the owners, it was, in fact, defeated. But, to indemnify itself, the plaintiff has asserted and relied upon the continuance of an insurable interest in itself, arising out of the terms upon which the loan was made. And that it was entitled to do, for this right could only be avoided by its own consent or surrender, or a release or satisfaction having the same effect McKnight v. Dunlop, 1 Seld., 537, 544. The wrong of the master, unsanctioned and unapproved by the plaintiff, it is clear on principle, as well as authority, could not be attended with that result. Conrad v. Atlantic Ins. Co., 1 Peters, 386, 437; Ship Virgin, 8 id., 538, 553.

In the cases of Stainbank v. Fenning, 11 Com. B., 51, and Stainbank v. Shepard, 18 id., 418, no maritime, lien, or interest, whatever, was at any time created, and no hypothecation of the ship or freight took place. • And for that reason they maintain no principie which would turn the plaintiff over to the master and owner personally for indemnity, while in this instance that lien or interest was regularly and legally secured. The Brig Draco, 2 Sumner, 157. And it was.not, and could not be, displaced, or contravened, by the wrong of the master, who in no manner represented, or acted for the plaintiff. If it be admitted that it gave the plaintiff another ground of action, it was not bound to -resort to it, but it could insist still upon the security which in good faith had been created and provided for it The Brig Hunter, 1 Ware, 251.

There was no concealment or misrepresentation on the part of " the plaintiff, or its agent, affecting its right to resort to the policy for indemnity after the loss of the vessel, neither was there any breach of warranty established. That is not claimed to have arisen, unless it was created by the final, and second loan. But no assurance was given that it should not be made, neither did the policy contain anything prohibiting it, as long as it was without the knowledge or assent of the plaintiff. The most that was done by the fifteenth regulation was, that if such a loan were made, the plaintiff might then resort to the master and owner personally to recover its money. It was a privilege secured to it, not a remedy which it was obliged to adopt. Mo warranty whatever to this effect appears by the policy. And that fact seems fatal to its existence. For it has been held that a warranty, whose breach produces a loss of the insurance, should appear on the face of the policy. It must be evident in terms, or from necessary construction. Jefferson Ins. Co. v. Cotheal, 7 Wend., 72, 80. And neither has here been established Owens v. Holland Purchase Ins. Co., 56 N. Y., 565, 572-3; Vilas v. N. Y. Central Ins. Co., 72 id., 590.

Upon no other ground was any defense presented to the plaintiff’s action. But its right to recover was legally maintained, and the judgment should be affirmed, with costs.

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


author: Brady, J.

text:
    Theodore E. Macy et al., Resp’ts, v. The Metropolitan Elevated R. Co. et al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed January 13, 1891.)

    1. Trespass—Elevated railroads—.Release oe easements by lessee.
    The plaintiffs leased premises to S. Subsequently and before this action S. released to plaintiffs all interest in the street in front of the premises and any easements appurtenant thereto which were assigned by the lease or which the lessee had or which were taken or appropriated by defendants. Held, that under Code Civ. Pro., § 1665, .notwithstanding the demise to S., plaintiffs were entitled to maintain an action for damages caused by the defendants, and were entitled to an injunction, and that the latter was not to be postponed until the lease expired.
    2. Same.
    The release of S.’s interest in the street and easements to plaintiffs was valid. It was not a severance of the easements, but reinvested them in the owner of the land.
    Appeal from a judgment rendered at special term.

      Burrill, Zabrishie & Burnll, for resp’ts; Davies & Rapallo, for . app’lts.
   Brady, J.

This action was commenced June 13,1889, and resulted in a judgment awarding to the plaintiffs $1,200, for loss of rents, and granting an injunction unless the defendants paid for a conveyance of the easements appurtenant to plaintiffs’ premises the sum of $5,000. It is found by the learned judge who presided at the trial that the plaintiffs’ testator united, while living, and a member of Macy & Co., in a lease to one William Simpson, for five years, of the whole of the locus in quo from September 1, 1888, and that the lessee, since that time, had been in possession of the premises. Upon this.fact and the time of the commencement of the action, the defendants requested the court to find as follows:

Twenty-first. On the 28th day of August, 1888, said Theodore E. Macy and Charles H. Macy, comprising the firm of Macy & Co., leased to William Simpson the whole of said property for the term of five years from September 1, 1888, at the yearly rental of $4,200, and said Simpson has since that time been in possession thereof as tenant under said lease.” Which was refused. This presents the appellants’ first point on the brief, in which it is contended that the judgment should be so modified as to be operative only upon the expiration of the demise to Simpson. It is not disputed that the plaintiffs are entitled to an injunction for the protection of their reversionary interest, but insisted that such interest is amply protected by an injunction which becomes operative when the estate rests in possession. This view is fallacious. The right of the owners of the reversion to protect the inheritance seems to be settled lav* The Code of Civil Procedure, § 1665, provides that a person seized of an estate in reversion or remainder may maintain an action founded upon an injury done to the inheritance, notwithstanding any intervening estate for life or for years; see, also, Mortimer v. El. Ry. Co., 57 Super. Ct., 509; 29 N. Y. State Rep., 262. But, if any doubt exist, it is dispelled by a release from the lessee of all interest in the street and avenue in which the premises are situate, and in any easements appurtenant thereto which were assigned or transferred by the lease, or which the lessee had or owned, or which was taken or appropriated by the Manhattan Elevated Railway Co. or Metropolitan Railway Co. This paper was executed at the request of Mr. Macy, and without consideration. It was regarded by Mr. Simpson as of no value to him, and he signed out of courtesy to Mr. Macy. The facts of its execution and delivery still exist, however, and as Mr. Simpson does not claim any relief in reference to it, and abides by it and. its effect, whatever that may be, it is not in the power of the defendants to assail or question it, except as to its legal effects upon the defendants in this proceeding. If it convey nothing to the grantees, it is of no value to them; if it does, it must be placed to their credit.

It is not an attempt, however, to accomplish such a separation, but a reunion with the fee in the owner of the fee, being a release of the interest described by the tenant to his landlord, and not a release of the demise itself. In other words, there was no intention to yield the right to light and air as appurtenant to the demise, but to any right to compensation for any attempt to interfere with it and thus to meet what might be regarded as a technical objection to the right of action by the plaintiffs in presentí. There is nothing in the adjudication of Newman v. The Metropolitan El. Co., 118 N. Y., 625; 30 N. Y. State Rep., 36; or Kenkele v. Same, 55 Hun, 400; 29 N. Y. State Rep., 95, affecting the question discussed. All they decide is that easements cannot be considered as property separate and distinct from the land to which they are appurtenant in the estimation of damages; not that no interest in them can be transferred.

And in Reise v. Enos, 8 L. R. A., 617 (Wisc.), also cited, it appears that the plaintiff was the owner of a lot known as Ho. 3, adjacent to which was a lot known as Ho. 4, across the rear of which there was a right of way appurtenant to lot Ho. 3. The plaintiff sold lot Ho. 3 and in the deed inserted this clause:

“ It is intended to specially reserve hereby from the operation of this conveyance the right of way to the parties of the first part, their heirs and assigns forever, the free and uninterrupted right of way across the rear o'f said lots 3 and 4.”

It was held that the reservation was ineffectual so far as it concerned the right of way across lot Ho. 4 for the reason that the grantor had sold lot Ho. 3 from which the right sprung and could reserve nothing appurtenant to it; he could not separate the easement from the land in other words. This is wholly different from the question considered. The proposition therefore advanced in behalf of the appellants that there was an attempted severance of the easements from the land is not sustained. It is true that an easement separated or attempted to be from the land can be of no value. Here, however, the effect was to re-invest it in the ownér of the fee and to transfer an interest in it, not to detach it, and which would enable the owners of the reversion to protect any encroachment upon it. The act seems to be above criticism when the object designed to be secured by it is understood. And again, whether the release granted anything or not its introduction if improper could not have been prejudicial to the defendants. The law gave the right of action to the plaintiffs as owner of the fee notwithstanding the'release.

The second point argued is that the judge at special term erred m finding that hot coals, grease and water fell from the defendants’ structure and penetrated into and upon the plaintiffs’ premises and in finding that disagreeable odors . and gases emanated from such structure. This would be technically correct if it be intended to exclude the locomotives as part of the structure, but such is not the finding. That the result of the use of the structure for traffic is to drop and scatter and create these different factors is clearly established by the evidence of several witnesses taken together, namely, Theodore E. Macy, Bates, Elliott, Stemle, Simpson, Runk, O’Halloran. and the second point is not maintained.

There is nothing collaterally discussed on this point which calls fór any further examination of it, and it must be overruled.

The third point taken but not discussed is that ■ the judgment should be reversed, but as this is predicate of the first and second points and they have not been sustained, it follows that the judgment must be affirmed, with costs.

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


author: O’Brien, J. Earl, J.

text:
    William S. Forbes, App’lt, v. Theodore Chichester, Ex'r, Resp’t.

      (Court of Appeals,

      Filed February 24, 1891.)

    1. ExEOUTOBS AMD ADMIKISTBATOBS—RbFEBEITCE OF DISPUTED CLAIM-Dismissal.
    In a proceeding upon a claim against a decedent’s estate, plaintiff, after-producing evidence, rested and defendant then moved to dismiss the complaint on the ground that there was “ no employment proved at all, and nothing which can justify any such charge as has been made.” The referee rendered a written opinion in which he concluded, after carefully examining the evidence, that a nonsuit was proper and granted defendant’s motion. The case was reopened and, on the renewed motion of defendant, the referee dismissed the complaint. Held, that this was anon-suit and not a decision on the merits.
    2. Same.
    Plaintiff’s evidence showed that decedent invited claimant, a physician, and his wife to accompany him on a trip to Europe and paid their expenses, and that he requested to be kept informed of their movements in case he might need professional treatment when they traveled separately, although no professional services were ever rendered. Held, that the referee erred in holding as a matter of law that, upon the evidence adduced, claimant had utterly failed to establish a cause of action, and that the non-suit was, therefore, improperly granted.
    Appeal from judgment of the supreme court, general term, second department, affirming judgment confirming report of referee dismissing plaintiff’s complaint in action against decedent’s estate for professional services as a physician.

      George A. Strong, for app’lt; Walter Edwards, for resp’t.

       Reversing 30 N. Y State Rep., 370.

   O’Brien, J.

The plaintiff, a physician of very high professional and personal standing, presented a claim of $5,000 to the defendant as executor of' the will of Robert Lenox Kennedy, deceased. The claim having been disputed was referred, under the statute, and the referee reported against it, and the court at special term confirmed the report and directed judgment against the plaintiff, which was affirmed at the general term.

In the year 1887 the plaintiff and his wife accompanied the deceased on a journey to Europe at his request or upon his invitation. The deceased furnished the plaintiff with fifty dollars before starting for the purpose of defraying any small expenses in preparing for the journey, also the passage tickets for himself and wife and a letter of credit for $1,000. The executor resisted the claim, upon the ground that the plaintiff accompanied the deceased on the trip to Europe as an old friend and guest, and not upon an employment professionally. There is some evidence in the case tending to show that the deceased, who was a resident of the city of New York, while visiting in Philadelphia in the early part of the year 1887, consulted the plaintiff professionally and then arranged the trip to Europe. The party sailed on the 14th of May, 1887, but the plaintiff and his wife remained abroad only until the 26th of June following and arrived home on the 4th of July, the deceased and the rest of the party remaining in Europe. After arriving in England the plaintiff and his wdfe did not remain with the deceased but travelled by themselves, selecting the places visited according to their own desire and convenience, and the plaintiff saw the deceased while abroad only three times, once at Southampton on the day after the arrival of the steamer at that place and twice in London a few days later, and received no communication from him except one letter, which was not produced at the trial, and the contents of which do not appear.

The plaintiff was not a competent witness to testify to any personal transaction between himself and the deceased, as against his executors, and no express contract of employment was shown, but it is claimed that such a contract could have been found or inferred from the facts shown. There was evidence in the case competent for the consideration of a court or jury on the question of employment professionally. It was certainly not of such a character as to require the referee to find in favor of' the plaintiff. If, after weighing it and drawing such inferences as seemed to him just under all the circumstances he found against the claim, this finding could not be held to be against the evidence or without evidence, so as to present a question of law reviewable in this court. On the other hand, if this was an action triable by a jury and the court, upon evidence such as appears in the record, should nonsuit the plaintiff and refuse to submit the case to the jury, such a ruling would be clearly erroneous. In all cases involving disputed questions of fact, which are to be found or determined from circumstances or other facts capable of different inferences, or where the inferences to be drawn are not certain and incontrovertible, it is for the jury to ascertain and determine what the truth is, and, of course, the same rule applies to a court or referee on the trial of a question of fact. This appeal must turn upon the question whether the judgment under review is a judgment of nonsuit or a determination upon the merits. If it is true that the referee and the special term in. this case did not weigh and consider and pass upon the evidence offered by the plaintiff, but simply decided that there was no evidence to be weighed or considered in sunport of the claim, then it is a nonsuit. Scofield v. Hernandez, 47 N. Y., 313. On the other hand, if the referee has considered the evidence given and passed upon its weight and effect, and after doing so has drawn inferences and made findings adverse to the plaintiff’s claim, then this court has no right to review his findings, as it cannot be said that they are without evidence to sustain them. It is, therefore, necessary to examine the proceedings upon the trial before the referee, and subsequently at the special term, in order to determine the true nature and character of the judgment

The plaintiff’s counsel, after giving such proof as he desired, announced that he rested the case and the counsel for the defendant then moved to dismiss the complaint on the ground that there was no employment proved. The case then states that the referee reserved his decision, “ and subsequently rendered the following opinion.” Then follows an elaborate opinion of the referee, in which he notes and refers to all the facts and circumstances, enumerates the facts that he deems established and such as he concluded were not, states the inferences drawn by him and concludes in these words: “ I think the defendant’s motion should be granted. I have reached this conclusion after a most careful examination and analysis of the evidence. ■ The facts and circumstances proven, so far as they go, are not inconsistent with the plaintiff’s claim, but they do not prove it in any legal sense.”

The case was then reopened by consent and the claimant gave further evidence and again rested, whereupon the defendant’s counsel again moved to dismiss the complaint. ISTo disposition was made of this motion at the time, but the referee reserved bis decision. The defendant offered no testimony. The referee subsequently made his report, containing findings of fact and conclusions of law. After finding all the facts and circumstances which the plaintiff claims established the fact of employment, the referee found “ that no employment of the plaintiff to attend said Kennedy in a professional capacity upon the trip referred to in the fourth foregoing finding of fact has been proved,” and that the claim of the plaintiff should be dismissed. If this report was irregular in that it assumed to pass upon the evidence when it was not considered at all, and to find facts after a ruling that there was no competent evidence offered in support of the claim, then the claimant should have applied to the court to have the report sent back to .the referee for correction and to strike out the findings of fact and insert a statement that the plaintiff was nonsuited for want of any evidence to sustain the claim. Instead of adopting this course, the plaintiff filed exceptions to the report of the referee, a practice wholly unnecessary, if not inadmissible, providing the referee bad, as is now claimed, simply decided that there was no evidence for bis consideration as in a case of non-suit. This was not an action, but a special proceeding under the "statute. Roe v. Boyle, 81 N. Y., 305; Mowry v. Peet, 88 id., 453.

There were no pleadings except the claim itself, and when the defendant’s counsel moved, after the evidence was all in, to dismiss the complaint, that motion amounted to a request that the referee should, upon the evidence offered, direct judgment in his favor. But no judgment could have been entered upon the report of the referee until it had been confirmed and approved by the court. This motion came on for hearing at the special term upon the case, exceptions and report, the plaintiff relying upon his exceptions, and the defendant moving to confirm. The order of the court states that both sides consented that the motion be heard and decided upon the merits, and the court, after hearing both sides, directed judgment for the defendant. After such proceedings have been had in a case of this character, it seems to me like a misapplication of terms to call the judgment a nonsuit, which decided nothing except that there was no evidence offered competent for the consideration of the referee. It seems to me to be a case where the parties gave all the evidence that they had, and submitted the case to the referee, who, after weighing and considering the testimony, found that a fact absolutely essential to the plaintiff’s case was not established. It is difficult to suggest anything more that the parties or the referee could have d.one in order to make the judgment a determination upon the merits. It is generally a safe test of the question whether the result in any case is a nonsuit or a judgment upon the merits to inquire whether the determination would be a bar to another proceeding for the same relief between the same parties.

The Code, § 1209, provides that a judgment dismissing the complaint is not a bar to another action for the same cause between the same parties unless it so declares or appears by the judgment roll that it was rendered upon the merits. When the complaint is dismissed for failure to appear at the trial or for other reasons not involving the merits of the case the judgment will not constitute a bar to another action. But when as in this case the plaintiff gives all his evidence and the case is submitted to the referee who afterwards reports with findings of fact and law ordering judgment dismissing the claim and this report is confirmed by the court, upon an application for that purpose in which both parties stipulate that the case may be heard and decided upon the merits, I cannot doubt that the judgment would be a perfect bar to another proceeding. This court has held in Van Derlip v. Keyser, 68 N. Y., 443, that a judgment like this cannot be reviewed as a nonsuit. In that case, as in this, the defendant’s counsel at the close of the evidence moved to dismiss the complaint. Eo decision of this motion was made at the time. The referee subsequently made his report in the ordinary form with findings of fact and conclusions of law adverse to the plaintiff; and as a conclusion of law found “ that the complaint in this action be dismissed.” The plaintiff duly excepted to the findings of fact and conclusions of law. The general term having affirmed the judgment there was an appeal to this court. ' The counsel for the appellant claimed that the decision of the referee was to be regarded the same as if a motion for a nonsuit had been granted without passing upon the evidence and that if, upon any view of the evidence, the plaintiff was entitled to recover, the decision was erroneous. That is precisely the position of the appellant in the case at bar. This court, however, held that the case was to be reviewed here as a decision of the referee upon the evidence before him and as the evidence was of such a character as to permit different inferences or conclusions the findings were conclusive upon this court. In that case the plaintiff had rested when the motion was made and some evidence had been given by the defendant, while in the case at bar the motion was made when the plaintiff rested, no evidence whatever having been offered by the defendant. But surely the fact that the defendant rests his defense upon testimony elicited from the plaintiff’s witnesses is not a circumstance that changes the character or nature of the judgment which followed. It seems quite clear to me that this case cannot be reviewed as a non-suit presenting only a question of law, but as a decision made by the referee in which the effect of the evidence was considered and passed upon and in which his findings upon the evidence given are conclusive on this court. If these views are correct they would necessarily lead to an affirmance of the judgment. But as my brethren do not agree with me as to the nature of the judgment and are all of the opinion that it is a non-suit and not a decision on the merits, the judgment must be reversed and a new trial ordered, costs to abide the event.

Earl, J.

I agree with Judge O’Brien that the plaintiff could not, upon the evidence presented by him, have been nonsuited. But I think he was nonsuited and that for that reason the judgment should be reversed.

The plaintiff, after producing evidence, rested and the defendant then moved to dismiss the complaint on the ground that there was “no employment proved at all, and nothing which can justify any such charge as has been made.” The referee reserved his decision and subsequently rendered a written opinion on the motion in which he concluded, after carefully examining the evidence, that a nonsuit was proper, and that the defendant’s motion should therefore be granted.

The case was then reopened by consent and the plaintiff gave some further evidence and again rested. The defendant then renewed his motion to dismiss the complaint and the referee granted the motion and the plaintiff excepted. The referee then made formal findings embodied in his report, in which he stated that the defendant, at the close of plaintiff’s evidence, moved to dismiss the claim of the plaintiff on the ground that no employment of the plaintiff h,ad been proved and nothing that could justify the charge made, and that he granted the motion, and that plaintiff’s counsel excepted to his decision, and then he made formal findings of fact and law, as he should have done, and proper exceptions were taken to them by plaintiff’s counsel. The court at both the special and general terms also treated the case as one in which the plaintiff had been properly nonsuited.

I think the court erred in holding as matter of law that upon the evidence adduced the plaintiff had utterly failed to establish a cause of action, and the case should go back and be heard upon correct principles of law. The plaintiff may fail to satisfy any court, upon all the evidence, that he is entitled to recover. But he has the right to have his evidence properly weighed.

I concur, therefore, that the judgment should be reversed and a new trial granted, costs to abide the event

All concur, on grounds stated by Earl, J.


author: Earl, J.

text:
    The American Rapid Telegraph Co., App'lt, v. Jacob Hess et al., Resp’ts.

      (Court of Appeals,

      Filed February 24, 1891.)

    1. Highways—Streets—Bights of telegraph company in.
    Chapter 265, Laws of 1848, as amended, which gave the right to -telegraph companies to erect poles, etc., in the streets of New York, granted no interests in the streets of the city to the corporations organized under it, and at most conferred an authority or license to enter upon the streets for certain purposes and subject to certain conditions, and the legislature can revoke the license or modify it in any way or at any time when the public interests may require it.
    3. Same.
    But even if some grant of interest had been made to the telegraph company, the state could regulate the size and location of the poles, the height of the wires from the ground and their location, and where they become a serious obstruction and nuisance could remove them or require them to be placed underground.
    3. Same.
    Where the state has provided by legislation for certain commissions for constructing and managing subways, and for notice to be given to telegraph companies to place their wires therein, which the latter refuse to do, the cutting down and removing the poles and wires in compliance with the provisions of the act does not constitute a taking of private property for public use.
    4. Same.
    The statutes of the United States relating to rights of telegraph companies over post roads,, etc., cannot deprive the state of its control over its highways, and its right to regulate their use under the police power for the public welfare.
    Appeal from judgment of the supreme court, general term, first department, affirming judgment of special term refusing to grant an injunction to restrain the municipal authorities of New York city from removing plaintiff’s poles and wires from the streets of that city.

      Wm. 6r. Wilson, for app’lt; D. J. Bean, for resp’ts.

       Affirming 85 N. Y. State Rep., 606.

   Earl, J.

Prior to 1883, the plaintiff was incorporated under the act, chap. 265 of the Laws of 1848, the general act for the incorporation and regulation of telegraph companies, and the acts amendatory thereof; and prior to that year it had erected its lines of telegraph poles and wires in the streets of the city of New York, described in the complaint. It also had extensive connecting lines in other states and throughout this state which constituted a system of telegraphy then in active use and operation.

Section 5 of the Act of 1848 provides as follows: “ Such association is authorized to construct lines of telegraph along and upon any of the public roads and highways, or across any of the waters within the limits of this state, by the erection of the necessary fixtures, including posts, piers or abutments, for sustaining the cords or wires of such lines; provided the same shall not be so constructed as to incommode the public use of said roads or highways or injuriously interrupt the navigation of said waters; nor shall this act be so construed as to authorize the construction of any bridge across any of the waters of this state.”

The act, chap. 471, of the Laws of 1853, amends the act of 1848, and § 2 thereof provides as follows: “Such association is authorized to erect and construct, from time to time, the necessary fixtures for such lines of telegraph, upon, over or under any of the public roads, streets and highways; and through, across or under any of the waters within the limits of this state, subject to the restrictions in the said recited act contained.”

The plaintiff constructed its telegraph lines in the streets of the city of New York under the acts referred to, without any special grant or authority from the city.

The claim of the plaintiff is that these acts operated as a grant to it of a franchise to use the streets for its poles and wires, and that therefore an inviolable contract was created which is under the protection of the federal constitution, and hence that neither the state nor the city under its authority could cause its poles and wires to be removed from the streets, except upon compensation to it ascertained in the manner prescribed by the constitution and laws for cases where private property is condemned for public use.

We think the act of 1848, as amended in 1853, can in no proper sense be said to have granted any interests to the plaintiff in the streets of the city. There certainly was no formal grant and the statutes contain no terms or phraseology appropriate to a grant. They at most confer upon the plaintiff an authority or license to enter upon the streets for its purposes, and subject to certain con-" ditions. The people of the state do not own the streets, and the only authority the legislature has over them is to deal with them as streets, and to regulate their use as streets for public purposes; and by these acts it in effect determined that one of the purposes for which the streets could be used was the erection of poles and stringing of wires for the business of telegraphy; and that that was a public use not inconsistent with the use of the streets for general street purposes. These were general, public legislative acts in the exercise of the police power of the state, and, therefore, they were not beyond the reach or touch of future legislation. The legislature did not intend to divest itself and could not divest itself of its control over the streets for the public welfare, and we must infer from the language used that it did not intend to bind itself by an irrevocable grant. If, therefore, these acts are to be construed as merely conferring a license which has been acted upon by the plaintiff, the legislature could revoke the license or modify it in any way or at any time when the public interests might require it.

But in this case it is not necessary to hold that the plaintiff did not, by the acts referred to, obtain some sort of franchise in thp streets of the city. We may, for the present purpose, construe these acts as constituting, in some sense, grants of interests in the streets to the companies organized under them and contracts sub modo with such corporations, and yet the contention of the plaintiff in this case must fail.

In the exercise of its rights under the assumed grant and contract, this corporation was subject to the regulation and control of the legislature. By giving the franchise the state did not abdicate its power over the public streets, nor in any way curtail its police power to be exercised for the general welfare of the people; nor did the state absolve itself from its primary duty to maintain the streets and highways of the state in a safe and proper condition for public travel and other necessary street and highway purposes. The grant, if any, was made in reference to the streets and their maintenance and regulation forever as streets. The state could at all times regulate the size and location of the poles, the height of the wires from the surface of the ground and their location in the streets; and when the poles and wires became a serious obstruction and nuisance in the streets, from any cause, it could take such action and make such provisions by law as were needful to remove the nuisance and restore the utility of the streets for public purposes. The right of the plaintiff to maintain and operate its wires in the streets could certainly be no greater than the right of railroads which, by public authority, occupy the streets and highways of the state. The state, in the exercise of its police power and the regulating control which it has over corporations created by its authority, may exercise a general supervision over such corporations. It may prescribe the location of the tracks, the size and character of the rails, the precautions which shall be taken for the protection of the public, and the character and style of highway crossings; and no one has ever questioned that it may do whatever is necessary and proper for the public welfare in the control and regulation of the franchises which such corporations have obtained by statutory authority.

How what has the legislature attempted to do in this case? By the act, chap. 534 of the Laws of 1884, it was provided that all telegraph, telephonic and electric light wires and cables in all cities of the state having a population of 500,000 or over “shall hereafter be placed under the surface of the streets, lanes and avenues ” of the city, and that it should be accomplished before the first day of Hovember, 1885. It was further provided that in casé the owners of the property specified should fail to comply with the act within the time specified the local governments of the cities should remove, without delay, all such wires, cables and poles wherever found in their respective cities. Under that act no property was or could be taken from any of the owners specified. They were simply required to remove their poles and wires from the surface of the streets and place their wires under ground. Their property was not taken, but the use of the franchise was regulated. In 1885 chap. 499 was enacted, which provided for the appointment of a Board of Commissioners of Electrical Subways, and that board was charged with the duty of enforcing the provisions of the act of 1884. It was made the duty of that board to cause to be removed from the surface of the streets and put and maintained underground, wherever practicable, all electrical wires and cables, so as to enable and require all duly authorized companies operating the same to transact their business with underground conductors wherever practicable. All subways for underground conductors of electrify were required to be built under the direction and control of that board, and no electrical wires or cables were to.be allowed above the surface of the streets without the permission of the board. Commissioners were duly appointed under that act, and in 1886 the Consolidated Telegraph & Electrical Subway Company of New York having been incorporated under the laws of this state, the commissioners entered into a contract with it, whereby it contracted to build, with its own capital, the necessary subways for the electrical conductors, the subways to be constructed in all respects subject to the approval of the commissioners. It was also provided in the contract that all ■corporations owning and operating electrical wires above the' streets should have the right to place them in the subways, under certain conditions specified.

In 1887 the legislature enacted chapter 716, entitled “ An act in relation to electrical conductors in the city of New York.” By that act the agreement made between the subway commissioners .and the Consolidated Telegraph & Electrical Subway Company, above referred to, was ratified and confirmed; and the act provided that whenever, in the opinion of the board of electrical control constituted by that act, sufficient conduits or subways under ground shall have been made ready, the board shall notify the owners or operators of the electrical conductors above ground in .such streets or locality to make such electrical connections in such underground conduits or subways as shall be determined by the board, and to remove their poles and wires from the street within ninety days after such notice. This provision was made a police regulation in and for the city of New York, and in case it was not complied with by the telegraph and other companies referred to, it was made the duty of the commissioner of public works to cause the poles, wires, etc., to be removed forthwith by the bureau of incumbrances upon the. written order of the mayor to that ■effect.

Subways having been constructed in certain of the streets of the city of New York by the Consolidated Telegraph & Electrical .Subway Company, under the supervision and with the approval of the Board of Electrical Control, notice was given to the plaintiff, as provided in the act, to remove its poles and wires from the streets and place its electrical conductors in such subways. Having refused to comply with such notice and with the provisions of the act, the commissioner of public works of the city caused the poles to be cut down and the wires to be removed from the streets, and this is what the plaintiff complains of.

Its property was not taken for public use. It was simply removed from the streets where it had become a nuisance, and the public authorities had the same right to remove it from the streets, doing no unnecessary damage, that it had to remove any other incumbrance therefrom. After the passage of the acts referred to and the building of the subways and the notice to the plaintiff, it had no right longer to maintain its poles and wires. above the surface of the streets. They were then there without authority and thus became a nuisance, and hence the public officials had the right to remove them. It is quite true that the plaintiff could not remove its electrical conductors into the subways without some expense, but the same is true of railroads occupying streets. They cannot change from one style of rail to another, nor from one place in the street to another, nor make a change of grade without a considerable expense; and yet the mere fact that they are subjected to expense is no answer to the right of the public, in pursuance of law, to require them to comply with the prescribed regulations.

If the authority did not otherwise exist to require these poles and wires to be removed from the streets, it could be found in § 5 of the act of 1848, in which is contained the authority to construct telegraphic lines upon public roads and highways, with the proviso that the same shall not be “ so constructed as to incommode the public use of such roads or- highways.” Who shall judge whether they incommode the public use of the streets. It is unquestioned that they do, and the legislature has determined that fact, and when the plaintiff maintained its wires and poles in the streets in such a manner as to incommode the public -use of the streets, the legislature had the right to provide that they should put them under the streets, so that the streets above the surface could be devoted to the public uses for which they were intended.

The plaintiff seeks to strengthen its position in reference to the use of the'streets of the city of New York under the laws of the United States, to which we will make brief reference. It is provided in section 5263 of the Revised Statutes of the United States that “Any telegraph company now organized, or which may hereafter be organized under the laws of any state, shall have the right to construct, maintain and operate lines of telegraph through and over any portion of the public domain of the United States over and along any of the military or post roads of the United States which have been, or may hereafter be, declared such by law, and over, under or across the navigable streams or waters of the United States; but such lines of telegraph shall be so constructed and .maintained as not to obstruct the navigation of such streams and waters, or interfere with the ordinary travel on such military or post roads.”

Section 5268 provides that: “Before any telegraph company shall exercise any of the powers or privileges conferred by law such .company shall file their written acceptance with the postmaster-general of the restrictions and obligations required bylaw.”

Section 3964 provides that all letter-carrier routes established in any city or town for the collection and delivery of mail matters are post roads; and by the act approved March 1, 1884, it is enacted that “ all public roads and highways, while kept up and maintained as such are hereby declared to be post routes.” The plaintiff filed the written acceptance with the postmaster-general required by § 5268. The precise scope and range of operation of these sections within a state are not quite apparent, and cannot be easily defined. But this much, at least, must be true, that under them no telegraph company could interfere with the use of the streets and highways of the state, except under regulations prescribed for the control of all telegraph companies within the state, nor could such companies interfere with streets and highways in the state so as materially to impair their usefulness as ordinary highways. Nor could these congressional acts deprive the state of its control over its highways, and its right to regulate their use under the police power for the public welfare. The laws of con-are perfectly satisfied by the permission granted to the plaintiff of which it is perfectly feasible for it to avail itself, to place its electrical conductors in the subways constructed beneath the surface of the streets.

We have carefully scrutinized the contract entered into by the Board of Electrical Control with the defendants, The Consoli- ■ dated Telegraph & Electrical Subway Company, and we find nothing in its provisions unreasonable or impractical, and the power of the legislature to authorize such a contract and to confirm it when made is beyond doubt. These acts of 1884, 1885 and 1887 have been under consideration in several cases and have uniformly been upheld and enforced. People v. Squire, 107 N. Y, 593; 12 N. Y. State Rep., 832; People v. Squire, 1 id., 633; United States Illuminating Co. v. Hess, 19 id., 883; United States Illuminating Co. v. Grant, 27 id., 7670; Western Union Tel. Co. v. The Mayor, etc., opinion by Wallace, J., in U. S. circuit court.

We are, therefore, of opinion that the judgment should be affirmed, with costs.

All concur.


author: Finch, J.

text:
      In re Accounts of Calvin J. White.

      (Court of Appeals,

      Filed February 24, 1891.)

    1. Will—Constbuctiosf of—Residtjaby legatee.
    Testatrix, by will, bequeathed a certain, house and lot to appellant, if it was in possession of testatrix at the time of her death ; if not, she directed her executors to pay appellant $2,000 on certain conditions. After various other legacies it was provided that if there was an excess of the estate, the executors should pay it to “the above persons” in the proportion their bequests are to the whole amount, and if a shortage there should be an abatement. Held, that the gift to appellant of the house and lot was a specific devise, and she was neither a general nor residuary legatee and was entitled to nothing out of the estate beyond the house and lot of which. „ testatrix died seized.
    2. Same.
    The clause as to substitution of $2,000 in case of sale was purely one of substitution, not controlling testatrix’ intention.
    Appeal from judgmentof the supreme court, general term, fifth department, reversing decree of surrogate adjudging among other things that Mary E. Emerson was not a residuary legatee under the will in question,

      Theodore Bacon, for app’lt; Wm. H. Smith', for resp’t

       Reversing 26 N. Y. State Rep., 591.

   Finch, J.

We are required on this appeal to determine the construction of a will aboutwhich the courts below have disagreed. The testatrix owned a house and lot of the value of two thousand dollars and disposed of it by the first clause of her will, which reads: “ After all my lawful debts are paid and discharged I give and bequeath to Mary F. Emerson, wife of B. H. Emerson, or his heirs, my house and lot in the village of Dundee, if I am possessed of one at my death, and if I am not posssessed of one I order my executor hereinafter named to pay to the said ¡Mary F. Emerson two thousand dollars on condition that the said Mary F. Emerson pay a yearly or annual payment to my brother John Emerson of sixty dollars as long as he survives me; and the said Mary F. Emerson must, at the time of payment of the two thousand dollars to her or the conveyance of .my house and lot to her, execute a bond of security to satisfy my executor that the sixty dollars will be paid annually to my brother John Emerson.” The devisee named in this clause was the wife of Benjamin Emerson, who was a half brother of deceased, as was also John Emerson, named as annuitant. Then follow in the will seven separate bequests of one hundred dollars each to seven different persons, three of whom were relatives of the testatrix and four strangers in blood, but two of the latter being the person named as executor and his wife. One of the relatives was William Emerson, a half-brother of the testatrix.

The will then proceeds: “ I order that in case my estate exceeds the amount of the above bequests to each individual then my executor must pay to the above persons the excess in the proportion as the amounts of the bequests are to the whole amount; and in case my estate falls short, then each of the above bequests must share in the shortage in the same proportion. In other words the excess or shortage must be shared pro rata as the bequests are.”

The surrogate decided that the gift to Mrs. Emerson of the house and lot was a specific devise, and that she was neither a general nor residuary legatee and was. entitled to nothing out of the estate beyond the house and lot of which the testatrix died seized, and which as a consequence passed by an effectual devise. In. settling the accounts of the executor the surrogate ascertained that there was a surplus for distribution amounting to $3,885.63 after paying all expenses and legacies, and thereupon decreed that each of the seven legatees to whom respectively $100 had been bequeathed was entitled to one seventh of such surplus, or about $555 to each. John Emerson, the annuitant, died in the lifetime of the testatrix, so that at her death the charge upon the land in the hands of Mrs. Emerson disappeared.

The general term on appeal reversed this decision and held that Mrs. Emerson was one of “ the above persons ” to whom “ the above bequests ” had been given, and so was entitled to share pro rata in the surplus, with the result that in addition to the house and lot she would be entitled to have twenty twenty-sevenths of the surplus, or about $2,900, the remaining seven twenty-sevenths only going to the other seven legatees in equal proportions, giving to each about $144 in addition to the $100 bequeathed.

It is obvious that the will is very in artificially expressed and indicates an inexperienced hand. A devise of land is not only described as a bequest, but a conveyance to the. devisee is contemplated where none was needed or possible and a bond to secure an annuity, even when in effect charged on the land. We must, therefore, not rely too much upon forms of expression, but seek to extract their meaning from the entire scope and purport of the will.

While there is very little outside of its language to aid us in determining the actual intent of the testatrix, we are all impressed with a- conviction that she meant to distribute the residue among the seven legatees to whom fixed amounts of money were explicitly bequeathed; and did not mean to .include the devisee of the land in the final gift While she uses the word “ bequeath ” in devising the house and lot, so that it is possible to say that she may have regarded it as among her “ above bequests ” and directs an excess to be divided among or a deficiency to be charged against “the above persons” in proportion to the amounts of their bequests, and, therefore, the literal language seems broad-enough to cover the conclusion of the general term, yet a careful examination of that language will show that its use by the testatrix bad a narrower and more limited application.

The test expressions are “ the above bequests ” and “ the above persons,” and the decisive inquiry is to what and to whom the testatrix referred. The language literally construed might include Mrs. Emerson, but the will shows that such literal construction was not the necessary sense of the words as used by the testatrix, This becomes apparefit when we discover that just before the final clause of distribution, in which appears the phrase “ the above bequests,” that identical expression was used as applicable only to-the seven legatees, and not at all and by no possibility including Mrs. Emerson. Clause second of the will gives to David Hoover $100 ; clause third, to Mrs. Mead, $100, and then clause fourth reads thus: “ I give and bequeath to Mrs. E. M. White, wife of C. J. White, and to William Emerson, my brother, and to Mary Fenno, wife of Stephen Fenno, and to Stephen A. Fenno and to Calvin J. White, each $100 apiece, and if, before my decease, I pay any of the above bequests, or all of them, then a receipt from any or all of them will be a satisfaction for this bequest.” In this-clause the phrase “ above bequests ” was plainly used in a limited and not in a literal sense. It did not cover or refer to Mrs. Emerson or the devise and substituted bequest to her, for it contemplated a payment in testatrix’ lifetime of a specific sum absolutely and certainly bequeathed; and by the words “the-above bequests ” was certainly meant some or all of the seven legacies of $100 each, and not at all the devise to Mrs. Emerson or the contingent substituted bequest to her. ■ With that use and meaning of the phrase in her mind the testatrix repeats it in the next or fifth clause, and having just departed from its literal sense and given it a limited application, we ought to presume a continuance of the same meaning in the use of the same words,, unless some forcible reason can be given why she should have-used the same phrase in two different ways and to convey two-different meanings.

On the contrary, we think there are many indications in the scope and purport of the will that the meaning was not changed in the use of the phrase in the fifth clause, and that the testatrix did not, with a studied or careless ambiguity, at once revert from her own limited meaning to the literal and broader sense of the phrase.

It must be conceded that the gift of the house and lot, if it had stopped there, without the alternative and contingent provision, would have been a specific devise, not sharing in a residuary surplus, and not made liable to abatement if the personal estate should prove to be insufficient to pay the legacies. The misnomer involved in the word “ bequeath ’ would not have changed its character or indicated that the testatrix failed to understand that character. As a devise of a specific parcel of land, irrespective of what might or might not prove to be its value, and charged with the payment of a fixed annuity, the testatrix could not and certainly did not look upon it as liable to abatement in case of a deficiency for the payment of the legacies. I think we may be reasonably sure that in giving the house and lot simply, the testatrix did not regard it as the amount ” of a bequest, or as, in some unexplained way, liable to an abatement which the ordinary rules of law do not recognize.

It follows, therefore, that a different construction must rest upon the alternative and contingent clause which never took effect; and that must dictate and control the construction instead of the character of the primary and principal gift. It seems probable that the testatrix did not seriously contemplate the sale of her house and lot, but knowing that she might wish to sell, or have an offer so favorable as to make it wise to accept it, and desiring that Mrs. Emerson and the annuitant, her half-brother, should be put in no worse condition if she should have no house and lot at the date of her death, the testatrix substituted for it, in that contingency, the value which she fixed upon it. The clause, therefore, was purely one of substitution, meant to preserve unchanged the situation of both devisee and annuitant, notwithstanding some possible sale of the land, and ought not to control our judgment, as it certainly did not her intention. Its purpose was to fix and perpetuate and establish against a contingency one substantial result, and not to alter and modify it beyond the mere substitution of an equivalent in money for the land sold. How is it possible for us to believe that the testatrix really intended to make her retention or sale of the land the determining factor for an increase or diminution of her specific and principal gift? Did she in truth mean that in case of a surplus, Mrs. Emerson taking the land as devisee should have only that, as would be the legal effect of the principal gift, but taking the substituted gift should thereby become entitled also to most of the surplus ; and that in case of a deficiency the devisee should hold the land unaffected by it, but if that should happen to have been sold, so that the substituted gift should take effect, that then that gift should bear its share of the deficiency ? It seems to us that the testatrix meant none of those things, but contemplated merely in the possible contingency the substitution of an exact equivalent, which should leave the substantial result unchanged. Observe how oddly the other construction bears upon the annuity and the annuitant. Suppose that the house and lot had been sold, so that Mrs. Emerson could only take the money gift, and then that there was a deficiency, so that all legacies necessarily abated, and Mrs. Emerson was called on to execute the bond to secure the annuity. She was only to do that “ at the time of payment of the two thousand dollars to her,” not at the time of payment of any less sum. And the annuitant himself was a legatee to whom a bequest was given, and one of “ the above persons ” in the unlimited sense of that phrase. Was his annuity also to abate, and a bond to be given for a less sum than the will fixed? It is reasonably certain that the testatrix contemplated no reduction of that annuity, nor of what she had given to the person charged with its payment. For that payment she was to give a bond, but only when and upon condition that she received either the house and lot or “ the two thousand dollars ” to be substituted for it One or the other of those gifts she contemplated as a certainty upon which she founded the annuity, and assuredly she did not contemplate a possible reduction which should not.only increase the burden upon Mrs. Emerson, but thereby put the annuity itself in peril.

It is further not unworthy of consideration that the seven bequests to the seven legatees were of fixed, certain and definite amounts as described on the face of the will, while the gift to Mrs. Emerson was not of such a specified amount, whether in land or money. The actual value of the land as such was not declared, for the substituted money might or might not be that value, and while the present value of the $2,000 charged with the annuity could not be ascertained, its “ amount ” was not stated in the will; and when the testatrix speaks of “ the amounts of the above bequests to each individual,” she evidently refers to bequests the “ amounts ” of which she, herself, had specified and fixed.

And so it seems to us that the limited meaning which the testatrix herself gave to the phrase “ the above bequests ” was not immediately after abandoned for the broad and literal one, but remained fixed in her mind and governed her use of the same words in the fifth clause.

The judgment of the general term should be reversed and that of the surrogate affirmed, with costs in all courts to the executor.

All concur.


author: Follett, Ch. J.

text:
    Frederick P. Allen, Assignee, App’lt, v. Isaac McConihe, Resp’t.

      (Court of Appeals, Second Division,

      Filed February 24, 1891.)

    Stocks—Measure op pamageb Fo:q disregard op orders to sell.
    O. 0. & Co., stock brokers in Troy, purchased certain stock through their N. Y. agents for defendant upon a margin. Defendant gave the brokers orders to sell at a price fixed, which they disregarded, although the shares could have been sold for that price at any time between August 15th and 20th. Subsequently O. 0. & Co. failed, and their N. Y. agents, to whom they were indebted, and who did not know the defendant in the transaction, closed out the stocks at a lower price than that fixed. Held, that defendant’s measure of damages was the difference between the price he fixed and that at which the N. Y. agents sold.
    Appeal from a judgment of the general term of the third judicial department, which affirmed the judgment entered on the report of a referee.

      From. May 1, 1883, to October 7, 1887, Ó. Parish Ogden, John F. Calder and Grouverneur Ogden were partners under the name of Ogden, Calder & Co„ doing business as stock brokers at Troy, ISf. Y. During this period the firm had been accustomed to accept the orders of the defendant for the purchase and sale on the Mew York Exchange of stocks and bonds. The purchases were always made and carried on margins usually equal to ten per cent of their market value. The firm had no connection with the stock exchange, but made its purchases and sales through Work, Strong & Co., brokers in the city of Mew York, who bought and paid for the stocks ordered and carried them on margins for Ogden, Calder & Co. The Mew York brokers did not know the defendant or that he was interested in any of the transactions, and he was not informed that the stocks ordered purchased by him were not paid for by Ogden, Calder & Co., but were carried by the Mew York brokers on margins and held as security for whatever might be due them on general account from the Troy firm. About May 31, 1887, Ogden, Calder & Co. delivered to the defendant a statement of the account between them made up to that date, which showed the amount due from him to them and that they held for him, among other securities, 600 shares of Manhattan Consolidated stock. On the loth of August, 1887, the defendant directed Ogden. "Calder & Co. to sell 300 of the Manhattan shares for $111 per share. The shares could have been sold for that price at any time between August 15th and 20th, when they fell in the market and did not again sell for as much until after October 11th of that year. Ogden, Calder & Co. neglected to sell as directed and did not notify the defendant of their neglect until August 29, 1887. On the 31st of that month Ogden, Calder & Co. rendered a statement to the defendant showing the securities purchased by them for him, the amount due them on account, and that they had sold on the 29th of the same month (pursuant to his direction given on that date) 100 Manhattan shares for $109.75 each, and had on hand 500 shares.
    The referee found that the defendant never assented to, waived or acquiesced in the failure of the firm to sell as directed.
    October 7th Ogden, Calder & Co. made a general assignment for the benefit of creditors to the plaintiff, and on the 10th, 11th and 13th of that month Work, Strong & Co. sold the 5Ó0 Manhattan shares at ninety-seven dollars 'each and credited the avails to Ogden, Calder & Co., whose assignee in turn credited them to defendant.
    This sale was made without the knowledge of defendant, and he was not at that time in default with the Troy firm. January 31, 1888, the plaintiff rendered an account to the defendant, showing that $8,841.86 was due from him, which the referee found to be correct, less $4,200, the difference between the price of 300 Manhattan shares at $111 and $97, with interest from August 16, 1887, which was allowed the defendant, and judgment ordered for plaintiff for the remainder. .
    (7. B. Wellington, for app’lt; J. K. Long, for resp’t.

       Affirming 34 N. Y. State Rep., 994.

   Follett, Ch. J.

Ogden, Oalder & Oo. undertook upon a sufficonsideration, by way of commissions paid and margins furnished, and to be furnished, by the defendant, to carry the shares and sell them as directed, or deliver to him certificates for them on payment of their purchase price. This promise the plaintiff admits that his assignors broke by refusing to sell 300 shares for $111 each on the 15th of August, 1887, as directed, and in permitting Work, Strong & Co. to sell them in October following for $97 each on account of an indebtedness owing them by Ogden, Oalder & Oo.

The referee allowed the defendant as damages for the breach of this promise $14 per share, the difference between the price at which they should have been sold August 15th and the price at which they were sold in October.

The general rule for determining the amount of damages recoverable for the violation of a contract or the breach of a duty, is that-the injured party is entitled to such as are the natural (or to be apprehended) direct and immediate results of the breach. Griffin v. Colver, 16 N. Y., 489; Hamilton v. McPherson, 28 id., 72; Hadley v. Baxendale, 9 Exch., 341; May on Dam., 10.

This rule is subject to the qualification that if the person injured thereafter negligently suffers his loss to be enhanced, the increase so occasioned cannot be recovered from the person who first violated his contract or duty, and in some cases it is incumbent on the person damnified to take such active measures as he reasonably may to minimize the damages naturally flowing from the breach. Hamilton v. McPherson, 28 N. Y., 72; Johnson v. Meeker, 96 id., 93-97; Suth. Dam., 148; 1 Sedg. Dam. (7th ed.), 56; May on Dam., 86.

These rules are not questioned by the learned counsel for the plaintiff, nor does he deny that the damages recovered were the natural direct and immediate result of the failure of Ogden, Calder & Co. to sell the shares on the 15th of August as directed, and of their assignee’s permitting them to be sold in October following, but he contends that the defendant was not entitled to this measure of damages, because when he learned on the 28th day of August that his instructions to sell had not been executed, he did not notify Ogden, Oalder & Co. that he abandoned all claim to the shares and held them responsible for their value, and cites as authority for his position Whelan v. Lynch, 65 Barb., 326; reversed 60 N. Y., 469.

In the case cited the plaintiff consigned wool to the defendant for sale, and on the 26th of October, 1864, directed its sale at the market rate, which instruction the defendant disregarded, and on the 24th of April following the plaintiff gave the defendant this notice: “ In as much as you failed to sell my wool when you received orders to do so, you can do with it as you please; I withdraw from the matter and look to you.”

In April, 1867, an action was begun to recover the value of the wool (it not having then been sold) and it was held that its market price when the order to sell was given or in a reasonable time thereafter 'for effecting a sale was the measure of damages. In that case the plaintiff sought to recover the full value of the wool, the title to which was originally in him, and not the difference between the price on different dates.

In the case at bar the defendant never held the legal title to this stock, and there was no way in which he could sell it, except through his broker's, without paying its purchase-price, taking the certificates and then selling them, which he was under no obligation to do for the protection of his defaulting agents. The shares were held by Work, Strong & Go. as security for any indebtedness of Ogden, Oalder & Co. to them, and the latter firm had the legal right to sell the shares at any time after August fifteenth and before the former firm exercised their right to sell them for their own security. Had the defendant’s • agents exercised their right they would have avoided the loss occasioned by the further decline. This is not a case of the failure of an agent to obey a direction to sell shares or chattels, the .legal title to which is then, and after notice of the agent’s neglect to sell remains in the principal, in which case the latter should either sell the property within a reasonable time or permit his agent to sell, so as to render the loss as slight as possible.

The learned referee adopted the correct rule of damages. It appears from the plaintiff’s bill of particulars and from the evidence that October 1, 1887, the defendant was credited by Ogden, Oalder & Co. with $750 dividends received on 500 Manhattan shares, three-fifths of which, $450, it is said by counsel, arose from the shares in dispute, and it is urged that if the plaintiff is chargeable with the shares at $111 each, as of August 16,1887, he is entitled to all dividends thereafter declared. This is quite apparent, but the difficulty of correcting the supposed error in this court is in the rule which forbids it to look into the evidence for errors or reasons for modifying or reversing a judgment, and the referee not having found that this credit arose in part from a dividend on the disputed shares, and not having been asked so to find, the alleged error, if any there be, cannot be here corrected. For the same reason we cannot modify the judgment by allowing the plaintiff $56.25, which he asserts should be allowed him as the usual commissions for selling the shares if he is to be charged with their value.

The judgment should be affirmed, with costs.

All concur.


text:
    Josephine Simmons, Adm’rx, et al., Resp’ts, v. Giles Everson et al., App’lts.

      (Court of Appeals, Second Division,

      Filed February 24, 1891.)

    1. Nuisance—Liability op joint ownebs.
    Persons who by their several acts or omissions maintain a public or common nuisance are jointly and severally liable for such damages as are the direct, immediate and probable consequence of it.

      2. Same.
    Where certain hrick walls in front of adjoining houses, which had heen left standing after a fire fell into thé street and killed plaintiff's intestate, and such fall was the direct and immediate consequence of the several acts of such adjoining owners in suffering the portions standing on their own lots to remain unsupported after they had visibly begun to incline toward the street, and it was obvious before the fall, as it was after, that if any portion of. the wall fell a large part of it must go into the street, Held, that such owners were jointly liable.
    Appeal from a judgment of the general term of the fourth judicial department, affirming a judgment entered on the decision of the circuit court. *
    The trial court found that for many years prior to October 18, 1887, the appellants owned in severalty three lots, each being twenty-two feet wide, and bounded on the east by the center line of South Salina street, in the city of Syracuse. The south lot was owned by the defendant Lynch; the middle one by the defendant Pierce, and the north one by the defendant Everson On these lots stood three brick stores, separated from each other by brick partition walls, extending from the foundations to the roofs. A continuous brick wall, of uniform height (about sixty feet) and thickness, stood adjacent to the west line of the street, and formed the front of the buildings. The partition walls and the front wall were interlocked or built together.
    On the date mentioned the three stores were substantially destroyed by fire, nothing being left standing except the front wall, a part of the partition walls and a small part of the wood work in the front of Everson’s building. Shortly after this event the front wall began to lean towards the street, and continued to incline more and more in that direction until November 17, 1887, when it gave way near the point where it was united with the partition wall between the buildings of Lynch and Pierce, carrying down the entire front, and part of both partition walls. Material from the part of the front wall standing on the lots of Everson and Pierce, and from their partition wall, fell on and killed the plaintiff’s intestate, who was lawfully on the sidewalk near the boundary between their properties. No part of the walls on Lynch’s lot fell on decedent It was found that immediately after the fire the front and part of the partition walls became weak, unsafe, dangerous and liable to fall into the street, and that each of the defendants was careless and negligent in not removing or supporting the walls on his own lot, and that the several neglects of the defendants united and directly caused the walls to fall. It was further found that these walls were so unsafe that they were a public nuisance, and also that the decedent did not negligently contribute to.the accident, or to his own death. The damages were assessed at $5,000. •

      M. M. Waters, for Giles Everson, app’lt; Hiscoch, Doheny & Hiscoch, for Patrick Lynch, app’lt; Smith, Kellogg & Wells, for Sylvester P. Pierce, app’lt.; Wm. Nottingham, for resp’t.

       Affirming 32 N. Y. State Rep., 1134.

   Follett, Ch. J.

It is urged in behalf of the defendants that at most this is but a case of several independent acts of negligence committed by each, the joint effect of which caused the accident, and for which they are not jointly liable within the rule laid down in Chipman v. Palmer, 77 N. Y., 51.

The case at bar does not belong to the class of actions arising out of acts or omissions which are simply negligent, and while the defendants did not intend by then’ several acts to commit the injury, their conduct created a public nuisance, which is an indictable misdemeanor under the statutes of this state, Penal Code, §§ 385,387; Vincett v. Cook, 4 Hun, 378, and at common law. Regina v. Watts, 1 Salk., 357, S. C. 2 Ld.Raym., 856; 1 Russ. Cr. (5th ed.) 423; 2 Whar. Cr. Law, § 1410; Big. Torts, 237; Pol. Torts (2d ed.), 345; Stephen Dig. Cr. Law, art. 176; Indian P. C., § 268.

Persons who by their several acts or omissions maintain a public or common nuisance are jointly and severally liable for such damages as are the direct, immediate and probable consequence of it. Irvine v. Wood, 51 N. Y., 224, 230; Slater v. Mersereau, 64 id., 138; Timlin v. Standard Oil Co., 54 Hun, 44; 26 N. Y. State Rep., 42; Klauder v. McGrath, 35 Pa. St., 128; 1 Shear & R. Neg. (4th ed.), § 122; Pol. Tort (2d ed.), 356.

The fall of these four story brick walls into the street was the direct and immediate consequence of the several acts of the defendants in suffering the portions standing on their own lots to remain unsupported after they had visibly begun to incline towards the street, and it was as obvious before as it was after the accident that if any part of the front wall fell, a large part of it must, and that it would go into the street.

The judgment should be affirmed, with costs.

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