text:
    Philip Dumes, Resp’t, v. William S. Sizer, App’lt.

      (Supreme Court, Appellate Division, Fourth Department,

      Filed March 14, 1896.)

    1. Master and servant—Save place—Appliance.
    The relation of master and servant imposes upon the master the duty of exercising a proper degree of care, in order that the servant shall be furnished a reasonably safe place in which, and reasonably safe machinery with which, to render the service required of him.
    2. Same—Cause.
    Where two or more causes operate to produce the injury complained of, for one or more of which the master is not responsible, the servant must establish, by affirmative proof, that his injury was wholly or partially the result of a cause for which the master was responsible.
    3. Same—Questions op pact.
    In this case, it was held that the question of the master’s negligence should have been submitted to the jury.
    Motion for a new trial on exceptions, ordered to be heard by the appellate division in the first instance.
    Upon the 24th day of January, 1894, the plaintiff, while in the service of the defendant at his steam forge, in the city of Buffalo, met with an accident in consequence of which the larger portion of his right hand was crushed to such an extent that amputation of the injured part was rendered necessary, and this action is brought to recover damages for such injury. The plaintiff, who was thirty-five years of age, had been in the defendant’s employ about eighteen months, at the time of the accident, and his principal occupation was that of a “ beater.” The defendant had in operation, in his business, six hammers, of great force and weight, which were worked by steam power, and each of which was managed by a separate gang of men. Upon the forenoon of the day in question, the plaintiff, who, it seems, was a member of gang Fo. 1, was called upon to assist in taking out the upper die of his hammer, in order that it might be replaced with another. The. die to be thus replaced weighed about 600 pounds and had to be lifted from an iron buggy on to the lower die. Before this was done the iron ram was raised about two feet from the die by the working of a lever, and was retained in this position by means of set screw, and, while thus suspended, the work of changing the die proceeded. In order to adjust the new die to the ram, it was turned, 'around, and then the plaintiff attempted to insert, in its proper place, a"n iron toggle, which was designed to fasten the upper die to the ram. While this attempt was being made, it was discovered that the die was not in a proper position to connect with the ram, and the hammersman thereupon endeavored to sledge it into position, and in doing so jarred the toggle so that it fell down upon the plate. The plaintiff started to pick it up, but, finding it hot, he took off his hat, made a holder of it, and then picked up the toggle; and, while attempting to replace it, the ram fell, and crushed his hand in the manner stated. During the entire time occupied in changing the dies, one McDougall, the defendant’s superintendent, was standing by, apparently directing or overseeing the work. Such additional facts as are deemed material will be stated in connection with what follows.
    C. S. Grosser, for app’lt; Adolph Rebadow, for resp’t,
   ADAMS, J.

In moving for a nonsuit at the close of the plaintiff’s evidence, the defendant’s' counsel insisted, as he does now, that there was a total failure upon the part of the plaintiff to prove the absence of contributory negligence, and that this, of itself, afforded sufficient reason for granting the motion. It is apparent, however, that this contention very properly received little or no consideration from the trial court; for it seems quite clear that the question of the plaintiff's own negligence was one for the jury to consider, whatever view may be taken respecting the real ground upon which the decision of the motion was made to rest. In reviewing this decision, therefore, the controversy is confined to the single inquiry of whether or not, upon the undisputed facts furnished by the record, it can fairly be said that the case is so barren of any evidence of negligence upon the part of the defendant as to justify the court in withholding that question from the consideration of the jury. .

In entering upon a brief consideration of these facts, it will be well, perhaps, to bear in mind certain principles of law, .which may be regarded as fundamental in this as well as in all similar cases. The relation of master and servant existed between these parties, and this relationship imposed upon the defendant the duty of exercising a proper degree of care, in order that the plaintiff should be furnished a reasonably safe place in which, and reasonably safe machinery with which, to render the service required of him; and, unless the evidence is such that a jury might properly draw therefrom the inference that the defendant had, in one or the other of these particulars, been remiss in the duty which he owed to the plaintiff, the latter can, of course, have no standing in court. And in this connection it may also be advisable to advert to another well settled rule which is applicable to this case, and that is that where two or more causes operate to produce the injury complained of, for one or more of which the defendant was not responsible, the plaintiff must establish, by affirmative proof, that his injury was wholly or partially the result of a cause for which the defendant was responsible. Searles v. Railway Co., 101 N. Y. 661; Grant v. Canal Co., 133 id. 657; 45 St. Rep. 305.

How, it may be safely assumed that the accident which deprived the plaintiff of the use of his hand was either an unavoidable one, or else it was caused by a defect in the appliances and machinery furnished by the defendant, or by some negligent act of a co-employe; and to ascertain to which of these three causes it is justly attributable, is the first duty imposed by this review. The only person occupying the relation of a co-employe, whose opportunity or occupation can by any possibility furnish an adequate explanation of the accident, is the young man, Eeeves, who adjusted the lever in such manner as to raise the dam above the, die, and keep it suspended in that position. It appears that his duty required him. to occupy a position near the lever at the time of the accident, and that, if he had moved the motion lever ever so slightly, the effect would have been to shut off the steam, and allow the ram to fall; but he swears in the most positive manner that he did not touch the lever, and there is no evidence, other than the falling of the ram, which tends in any way to contradict him, and therefore it was very properly conceded upon the argument that, for the purpose of this review, it must be assumed that he told the truth. This being so, the theory that the plaintiff’s •. injury was in any sense the result of negligence upon the part of a coemploye is pretty effectually eliminated from the case ; and in like manner the evidence of the plaintiff’s witnesses would seem to exclude the idea that the dropping of the ram was the result of an unavoidable accident, for the witness Eeeves testifies that he raised it in the usual manner, and that, when it stopped, he fastened the set screw so that the lever could not be moved, and that, after the accident, he raised the ram, in order that the plaintiff’s hat might be removed, and that he then “found the set screw screwed tight.” This evidence is supplemented by that of the witnesses Herschler and Hire, two expert machinists,—the former having been in the defendant’s employ for eleven years,,—who testify that, if the machine had been in proper condition, the valve would not have moved with the lever set, and that, if the valve could not move, the ram could not come down. This process of exclusion, therefore, fairly justifies the inference that the dropping of this ram was attributable to the second of the three- causes mentioned1—in fine, to some defective condition of the machinery itself; and this inference finds additional support in the facts testified to by the various witnesses who were called by the plaintiff.

The witness Sullivan, who was at work for the defendant at the time of the accident, tells us that he saw this hammer when it was new and in good condition, and that it then worked constantly and evenly, but that, at the time of the accident, it leaked steam and made a squeaking noise when he raised it, so that it could be heard all over the shop; that the ram would occasionally stick at the bottom and also at the top of the machine, so that steam pressure would not move it, and it had to be started by a blow from a sledgehammer; that this condition of things existed for two or three months prior to the accident; and that he saw McDougall, the superintendent,.present at different times when the hammer was not working properly. The witness Eobinson testified that he heai-d the peculiar noise' that Sullivan speaks of, and saw the ram stick; that, when it was started by a blow, it would fly up suddenly; and that he also discovered there was a little lost motion to the hammer. Several of the witnesses say that the space in the side block had been considerably worn by constant use, and that this afforded more play to the slide than was the case when the hammer was first set up, which was some three years prior to the accident. And it is likewise made to appear that this fact was brought to the superintendent’s notice;- that he directed, the ■men to keep the side block well oiled, and remarked that he would have to put in a new one soon; and that, upon one occasion, in December, 1893, when asked if that was not a good -time to repair this hammer, he replied, in substance,' that he was going out in the oil country to look up work, and that, as they were going to move the hammer soon, it was not worth while to make any re-pairs at that time. The witness Beeves also testified that, within T.en minutes after the accident, the-ram kept bouncing up and down, and he could not keep it still. With these and other similar facts, which it is unnecessary to particularize, upon which to -establish a hypothesis, two expert witnesses, whose experience appears to have qualified them to speak upon the subject, expressed the opinion that, if the ram had been hung up and secured in its position, as described by the witness Beeves, the jarring oecasioned by the other hammers in the building, would move the valve and let it drop; or, in other words, that the wearing away of the different parts occasioned a loss of motion, and this loss of motion permitted the ram to fall, although steam was on and the levers fastened.

It is insisted, however, that, giving to these various facts all that can possibly be claimed for them, the precise cause of the accident still remains unexplained, and that the only effect of sending the case to the jury would have been to permit them to render a verdict with no more substantial foundation upon which to rest it than the merest conjecture; but this, we think, is a con- - ■elusion which the circumstances of the case will hardly warrant.And, in saying this, it may be conceded that there is an element -of uncertainty in these circumstances which would quite possibly -deprive any conclusion reached by finite minds of that absolute verity which the veidict of a jury is supposed to represent; but, -nevertheless, we have here presented certain effects, and, with certain causes therefor excluded from our consideration, and all the material facts pointing in one direction it does not become altogether a mere matter of speculation to determine of what such -effects are the probable resultant. At all events, this case, with its attendant circumstances, can very properly be classified as one -of those in which the presumption of negligence arises from the fact, that the accident would-not, in the ordinary course of affairs, have happened, but for the omission of reasonable care upon the part of the person charged with its exercise; and, consequently, in the absence of any explanation by the defendant, it is one in which the jury would have been warranted in reaching the conclusion that the defendant had been negligent, in that he had failed in his duty to furnish the plaintiff with machinery and appliances which were reasonably safe, and that the latter’s injury was wholly or partially the result of such failure. Breen v. N. Y. C. & H. R. Railroad Co., 109 N. Y. 297; 14 St. Rep. 835; Mullen v. St. John, 57 N. Y. 567; Caldwell v. Steamboat Co., 47 N. Y. 282; Lyons v. Rosenthal, 11 Hun, 46; Hillis v. Hine, 11 St. Rep. 656; Moran v. Wagon Co., 57 St. Rep. 198. We therefore conclude that it was error to withdraw the case from the consideration of the jury, and that, because of such error, a new trial should be granted.

Motion for a new trial granted, with costs to abide the event.

All concur.


source: Caselaw Access Project

author: ADAMS, J.

license: Public Domain

text:
    William C. Will et al., Resp’t, v. Postal Telegraph Cable Company, App’lt.

      (Supreme Court, Appellate Division, Fourth Department,

      Filed March 14, 1896.)

    1. Corporations—Liability—Exemption.
    The rule that corporations may restrict their common law liability' by 1 express stipulation does not exempt a corporation from the consequences of conduct which amounts to gross negligence.
    2. Telegraph companies—Regulation.
    A regulation that the messenger of a telegraph company sent to receive-a telegram shall be the agent of the sender, is invalid.
    3. Same—Waiver.
    But such regulation, if valid, is waived by the company where, on receipt of a telegram requesting a reply, it directs the messenger boy delivering the telegram to obtain an answer.
    Appeal from a judgment in favor of plaintiff.
    H. 0. Day, for app’lt; D. R. McHaughton, for resp’ts.
   ADAMS, J.

It is now a well-settled rule of law that corporations may restrict their common-law liability by express stipulalation. This rule has its limitations, however; and such advantage-has been taken of the opportunity which it affords to certain classes of corporations to escape all liability upon their contracts, that the tendency of the courts has very properly been in the direction of its restriction rather than expansion. Breese v. Telegraph Co., 48 N. Y. 141; Nicholas v. Railroad Co., 89 N. Y. 370; Kenney v. N. Y. C. & H. R. Railroad Co., 125 N. Y. 422, 35 St. Rep. 447; Mowry v. W. U. Telegraph Co., 51 Hun, 126; 20 St. Rep. 626; Pearsall v. W.U. Telegraph Co., 124 N. Y. 256; 35 St. Rep. 307. It has never, so far as we are aware, been held to exempt a corporation from the consequences of conduct which amounts to gross-negligence, but precisely where to draw the line between acts of ordinary negligence and those to which a harsher term may be applied is sometimes attended with considerable difficulty. Fortunately, however, this case is relieved of this embarrassment, for, if ever there was an act which could be characterized as flagrantly careless, it was the omission of this defendant to forward the dispatch in question. A telegram had been received from one of th©plaintiffs, who was in the city of Rew York, addressed to his firm, in the city of Buffalo, which not only bore upon its face evidence-that it related to important business affairs which required prompt attention, but it also in express terms demanded an immediate reply; and with a full appreciation of its importance, as well of its requirements, the defendant’s manager, McLean, sent it to the plaintiffs, with directions to the messenger boy by whom it was sent to the plaintiffs, to wait for an answer. The answer was. securely placed in his pocket, where it remained until accidentally discovered some time on the following day; and, although he returned to the defendant’s office soon after leaving the plaintiff’s place of business, it does not appear that either the operator or the manager bestowed sufficient thought upon the subject to inquire if the plaintiffs had furnished him with an answer. These-facts are uncontroverted, and it seems that the defendant seeks immunity from the negligence which they establish, gross as it is-shown to be, by a provision which it has incorporated into the “terms” or “conditions” upon which it consents to transact business with the public, and which is, in effect, that whenever a message is sent to its office by one of its messengers, the latter is to-be deemed the agent of. the sender. This is certainly a most remarkable “regulation,” and it is one of which, we have no hesitation in saying, the defendant should not be permitted to avail itself. It is a well-known fact, that, as competitive agencies, the-various telegraph companies in this country have wires and appliances placed in the stores and offices of their patrons in the larger cities by means of which a messenger can be summoned from the-central office at any time to take a dispatch to that office. These-messengers are in the employ of the companies, and they are sent-in response to calls for their services in order to obtain business for the companies which they represent; and it appears that the-defendant was at this very time making use of this agency to increase its patronage in the city of Buffalo. Now, it would be singular condition of affairs if a patron of one of these companies,, through an instrumentality which the latter had furnished, should summon a messenger who was in its employ for this very purpose,, deliver to him a message to be transmitted by the company for a money consideration, and then, when it became necessary to call the company to account for some omission of duty upon the part of the messenger, discover that, in order to avail himself of the-means thus provided, he had been obliged to stipulate that the-messenger was his, and not the company’s agent, and that he had thereby released the company from all responsibility, so far as the acts or omissions of the messenger were concered. It is undoubtedly within the power of a telegraph company, as it is of any other corporation, to make rules and regulations for the proper conduct, of its business, but such rules should be reasonable in their character, and in accord with good, sound public policy. The one under consideration was neither. On the contrary, it was an imposition upon the public and upon every patron of the defendant who had not the time or the disposition to go in person to its. transmitting office for the purpose of sending a message. Telegraph companies are creatures of the state. They are organized ■and transact business because of the pecuniary gain which they expect to reap from the public, and they are certainly under some •obligation to serve the public; but if they are to be permitted to establish a regulation like the one in question, there is no reason why they should not impose upon their patrons, as a condition of transacting their business and receiving their money, the requirement that the operator, and the messenger at the other end of the line, shall be regarded as their agents; and it consequently becomes merely a question of time when, in this manner, the companies shall escape what little liability they still assume.

We have chosen thus far to consider this case upon the lines indicated, for the reason that we believe it to be the duty of the courts to place some wholesome limitations upon the rule under which corporations are attempting, by shrewd and ingenious devices, to escape all responsibility for their negligent acts; but we do not regard this case as necessarily resting upon the principle thus enunciated, for the evidence shows quite conclusively that the defendants messenger boy was directed to obtain an answer to the message in question, and that he did in fact solicit and receive one. ‘This being the case, he was unquestionably the defendant’s agent, even if the “ regulation ’’ were to be given the full effect claimed for it. In other words, by asking, waiting for, and receiving the plaintiff’s message, the defendant ignored and waived the rule which it is now seeking to avail itself of. Cross v. Nat. F. Insurance Co., 132 N. Y. 133; 43 St. Rep. 482; Forward v. Continental Insurance Co., 142 N. Y. 382; 59 St. Rep. 777.

Our attention has not been directed to any exception in the case which appears to furnish sufficient ground for reversal, and we are therefore of the opinion that the judgment appealed from should be affirmed.

Judgment affirmed, with costs.

All concur.


author: VAN BRUNT, P. J.

text:
    William Robertson et al., Resp’ts, v. Alfred Sully, App’lt.

      (Supreme Court, Appellate Division, First Department,

      Filed March 6, 1896.)

    " L Judgment—Horii— Guaranty.
    In an action at law to recover a contract debt, no provision for the return of the securities upon payment, can be inserted in the judgment. So> held where, in an action against a stockholder of a corporation on a guaranty of an indebtedness due plaintiffs in the company, and secured by the; deposit in a bank of certain debentures issued to defendant by the company.
    S. COUATERARS—-TENDER.
    Where, in such case, it appears that the contract provides that such security should be deposited with the bank so long as any part of the debt due plaintiffs remains unpaid, or until it shall be necessary to enforce the charge, by sale or otherwise, no tender of such securities to defendant is necessary to enable the plaintiffs to maintain the action.

      3. Guaranty—Same.
    Where, it appears that the indebtedness to plaintiffs was represented by debentures of the corporation, and that the contract of guaranty was that defendans would pay in case the company defaulted, on notice of default, and that, on such payment being made, the debentures should be transferred and delivered to the defendant, no demand of payment or tender of such debenture to defendant is necessary to entitle plaintiffs to maintain the action.
    4. Same—Release.
    Any alteration in the obligation of contract in respect of which a person has become surety, without the consent of the latter, extinguishes his obligation and discharges him.
    5. Same.
    The creditor can agree with the principal for additional security in case of the surety’s failure to fulfill his guaranty.
    <8. Corporations—Stock—Transfer.
    The supplemental agreement, in this case, was construed not to deprive the principal of the right given it by its articles of association to insist on a lien on the creditor’s stock for any indebtédness due it from him, or to require the payment by him of such indebtedness and any overdue calls on his stock before registering a transfer of such stock.
    Appeal from a judgment entered on the report of a referee in Savor of plaintiffs.
    Elihu Root, for app’lt; S. Hanford, for resp’ts. ’
   VAN BRUNT, P. J.

The Clarendon Land Investment & Agency Company, Limited, was formed and organized in or about the year 1883, at London, in England, the plaintiff Robertson being then and thereafter one of the directors thereof, and at certain times holding the office of chairman of the board of directors. Ón the 22d of December, 1887, the association adopted certain revised articles of association, which were' confirmed on the 17th of January, 1888. The only parts of those revised articles of association which bear on any question involed in this action are as follows: The directors were authorized from 4 me to time to make such calls upon the members in respect 4) all moneys unpaid on their shares as they might see fit, there being certain regulations governing notice of and the amount of such calls. Provision was then made for the addition of interest upon calls which were not paid upon the day appointed, and also for a forfeiture of stock because of failure to pay any call. The articles further provided that the instrument of transfer of any share in the company should be executed both by the tranferror and transferee; and that the transferror was to be deemed to remain the holder of such share until the name of the transferee was. entered in the registry book in respect thereof; and that the directors might decline to register any transfer of shares unaccompanied by sufficient evidence to prove the title of the transferror, or any transfer made by a member who is indebted to the company or -under any liability to the company, or on the ground of such shares not being transferrable consistently with any agreement made with the allottees or holders in respect thereof, or in the case of shares not fully paid up to a transferee of whom they do not approve, without being compelled to state their reasons for such disapproval. The articles further provided that the company should have a first and paramount lien on all the shares of stock of which any person was the holder, or one of the several j oint holders, for all moneys due to the company from him either alone or jointly with any other person, whether a member or not; and, where a share of stock is held by more persons than one, the company should have a lien thereon in respect of all money so due to them from all or any of the holders thereof, and the directors might refuse to register the transfers on any shares, whether fully paid up or not, or of stock by any holder or joint holders who is or are, or any one of whom is, then indebted to the company, whether solely or jointly with any other person, on any account whatever.

On the 29th of July, 1886, the defendant and the plaintiff, entered into an agreement by which, after reciting that the plaintiff, at the request of the defendant, had agreed to lend to the Clarendon Land Investment & Agency Company the sum of £7,000, upon the security of a mortgage debenture of the said company for £7,000, payable on the 12th of August, 1889, with coupons attached, which debenture formed part of an issue secured by an indenture dated August 8, 1894, and made between the said company, of the one part, and Sir Charles Clifford and John Eldon Gforst, of the other part, and reciting that, at the time of said advance, it was agreed between the company and the plaintiff that if at any time previous to August 12, 1889, the company should issue debentures to the amount of £140,000, then, upon seven days’ notice to the company in writing, the £7,000 should become due; and reciting that the defendant was the largest shareholder of the company, and was entitled to have issued to him, in part payment of moneys owing to him by the company, debentures of said issue to the amount of upward of £39,000; and also that the plaintiff had asked the defendant to secure to him the repayment of said sum of £7,000, with interest, which the defendant had agreed to do in the manner in said agreement thereinafter appearing,—the defendant covenanted with the plaintiff that in case the company should make default in payment of said sum on the 12th of August, 1889, the defendant would on said day pay to the plaintiff the said sum of £7,000; and also that in case of default in the payment of the interest, or any part thereof, the defendant covenanted on demand to pay to the plaintiff such interest. And it was by said agreement further agreed that the debentures to be issued to the defendant to the amount of £140,000 should stand charged by way of collateral security with the payment to the plaintiff of said principal sum of £7,000 and interest thereon. And it was further agreed that said £140,-000 of debentures should be deposited with Messrs. Lloyd, Barnett & Bosanquet, Limited, of the city of London, to be held by them so long as any part of said sum of £7,000, or any interest thereon, should remain unpaid; but on the repayment thereof, with interest, as aforesaid, they should be assigned by the plaintiff to the defendant, and be returned to him. The agreement also provided that, so long as any part of said sum should remain owing to the plaintiff, the defendant would at all times exercise his voice and influence in and towards keeping the plaintiff in his then present position as chairman of said company. The plaintiff also agreed to accept repayment at any time prior to August 12, 1889, of said sum of £7,000 and interest. And it was further agreed that in case the company should at any time before the said 12th of August, 1889, issue debentures to the total amount <of £140,000, the plaintiff would be entitled to call for the repayment by the company of said loan of £7,000, upon giving seven days5 notice to the company ; and, in case said company should fail to comply with said call, that the plaintiff, upon giving one calendar month’s notice to the defendant, would be entitled to require the payment by the defendant of said sum of £7,000 and interest ; and that, upon payment by said defendant of said sum, .he would be entitled to receive his securities. And it was also provided that the plaintiff would be entitle to require the proceeds of all debentures sold prior to the 12th of August, 1889, to be applied to the payment of said £7,000.

The said sum not having been paid upon the 12th of August, 1889, as provided by the above agreement, on the 29th of October, 1889, an agreemet was entered into between the company, of the first part, the defendant, of the second part, and the plaintiffs, of the third part. This agreement recites the indebtedness upon the debenture for £7,000, which fell due on the 12th of August, 1889; and that the defendant was the holder of £45,703.-11s. lid. of mortgage debentures of the company, and was also a large shareholder. It also recites the execution of the agreement of July 29, 1886, by which the defendant guarantied the payment by the company of said £7,000 and interest, and which declared that £14,000 of certain mortgage debentures of the company then about to be issued should stand charged by way of collateral security for the payment of said principal sum of £7,000 and interest ; and that the plaintiffs, at the request as well of the company as of the defendant, had agreed that the date for the repayment of said principal sum should be enlarged to the 12th of August, 1892, upon the terms and conditions thereinafter in said agreement more particularly appearing. In consideration of the premises, the defendant agreed in case the company should make default in payment of said principal sum of £7,000 on the 12th of August, 1892, that he would on said day pay to the plaintiffs the said sum of £7,000 ; and also that in case the company should make default in the payment of the interest on said sum of £7,000, or any part thereof, the defendant would, on demand, pay to the plaintiffs the interest in respect of which the company should have made default. The defendant also, in and by said agreement, covenanted that he would forthwith transfer or procure to be transferred to the plaintiffs £14,000 nominal value of the mortgage debentures of the company, so held by him as aforesaid, and all payable on the 12th of August, 1892, and by said agreement declared-' that said debentures should thenceforth stand charged as collateral security with the payment to the plaintiffs of said principal sum and interest. The agreement further provided that if, at any time prior to the 12th of August, 1892, the total debenture issue of the company should amount to £140,000 in nominal value, the company would, upon receiving seven days’ notice in writing, repay to the plaintiffs the said principal sum of £7,000 and interest; and if the said company made default in the payment, upon the defendant receiving one calendar month’s notice in writing, he would pay said sum and interest, upon which payment the. mortgage debentures securing said sum and all uncashed coupons attached or belonging to the same should be transferred and delivered to the defendant or as he should direct, and the mortgage debentures thereby charged should be transferred and delivered to the defendant or his nominees. It was further provided, that said debentures thereby charged, amounting to £14,000. should be deposited with the Lloyds Bank, Limited, at No. 70* Lombard street, London, so long as any part of said sum or any interest thereon should remain unpaid, or until it shonld be necessary to enfore said charge by sale or otherwise; and, upon repayment of said sum and interest, it was provided that said debentures should be transferred and delivered to said defendant or his nominees. The agreement further provided that, upon receiving one month’s notice of intention to pay, the plaintiffs should accept payment of said loan. The fifth clause of said agreement was as. follows:

“So long as any part of the said sum of seven thousand pounds shall remain owing to the said William Robertson, Joseph Jupp, and William Dallas Ochterlony Greig [the plaintiffs], the said Alfred Sully [the defendant] will at all times exercise his votes, and influence in and towards keeping the said William Robertson in his present position as a director of - the company. If the said William Robertson shall, from any cause whatever, cease to-be a director of the company before the said principal sum and interest shall have been wholly paid and discharged, the said Alfred Sully will immediately thereupon purchase at their par value-all the shares in the company’s capital for the time being belonging to the said William Robertson.”

The agreement further provided that the plaintiffs should be-entitled to require that the proceeds of any of the company’s debentures sold by the defendant before the 12th of August, 1892, should be applied in and towards the payment of said sum of £7,000.

On the 31st of December, 1889, the Clarendon Company indorsed upon the back of the contract or agreement above mentioned the following memorandum:

“Memorandum supplemental to the within indenture: Whereas, it was part of the arrangement under which the within-written indenture was entered into that the company should enter into the agreement on its part hereinafter contained, but such provision was inadvertently omitted from the said within written indenture,, and it is accordingly desired to vary the said indenture in man ner hereinafter appearing: Now, it is hereby agreed as follows-(1) There shall be added at the end of clause five of the said indenture the words following, that is to say.: ‘Provided always that if the said Alfred Sully, his executors or administrators, shall make default in purchasing the said shares, and having the same duly transferred to him or them, or if the company shall refuse to register such transfer, then, and in either of such cases, the company will within seven days after such default or refusal, as the-case may be, procure the said shares to be purchased at their par value by, and transferred to, some responsible transferee.’ ”

This supplemental agreement appears to have been executed hy the company, but by none of the other parties to the original agreement. It was, however, in the possession of, and produced by, the plaintiffs. There is no evidence that the defendant had any knowledge of this supplemental agreement, or of the facts-therein recited, prior to the commencement of this action.

The Clarendon Company failed to pay the said loan of £7,000 and interest, and this action was brought to recover the amount thereof from the defendant upon his guaranty contained in said agreement last above mentioned. The defendant claimed as a defense that he was not a party to said supplemental agreement; that it altered the contract to which he was a party; and that he was thereby discharged; and, furthermore, that there was no ten:der made to him of the £14,000 of debentures which had been deposited with the Lloyds Bank as security for the payment of ‘the loan guarantied. These issues were referred to a referee, who reported in favor of the plaintiffs; and, from the judgment thereupon entered, this appeal is taken.

The judgment is claimed to be erroneous, not only for the reasons set up in the answer, but because there was no provision in the judgment for the return of the securities upon payment. In respect to the objection as to the form of the judgment, it is manifest that, this being an action at law to recover a contract debt, no provision such as is suggested could have been inserted in the judgment. It further appears from the agreement that these securities were to be deposited with the Lloyds Company as a stakeholder for the benefit of both parties, and there is no provision in the agreement authorizing the plaintiffs to take possession of the securities and make any application of them whatever. It was provided that the securities should be deposited with the Lloyds Bank so long as any part of said sum of £7,000, or any interest. thereon, should remain unpaid, or until it should be necessary to enforce said charge by sale or otherwise. The plaintiffs could under no circumstances take possession of these securities except-for the purpose of enforcing the charge against the securities by sale or otherwise. These are the terms of the agreement, and the Lloyds Bank would have no authority to deliver the securities to the plaintiffs for any other purpose, even if that would be allowable under the agreement.

The cases which have been cited as to the necessity of the tender of collaterals at the time of demanding the payment of promissory notes, such as Bank v. Faut, 50 N. Y. 474, have no application to the question at bar. In that case it was held that, in order to make such a demand upon the maker of a promissory note who had deposited collaterals for the payment of that note as would enable him to charge an indorser, it was necessary that the collaterals should be tendered to the maker at the time of the demand of payment, for the simple reason that, when he paid the note, he was entitled to receive his collaterals, they, in fact, forming part of of note, and that, when the maker paid his note, the maker could not be compelled to hunt around and gather up his collaterals, and that the holder of the note and collaterals, to charge the indorser, must make such a demand upon the maker at maturity as to call upon him to comply with his'contract to pay upon receipt of his collaterals. In the case at bar, as already ob.served, no such question was presented. The securities were deposited with a stakeholder, to be transferred upon payment, not upon obtaining judgment. The plaintiffs may be very far from getting payment, by getting a judgment. When the defendant tenders judgment then he can ask for his collaterals. But it is urged that, if this is true, such reasoning does not apply at all to the £7,000 debenture. It is difficult to see what tender the plaintiffs are bound to make ffi respect to that security. The provision of the contract is that tne defendant will pay in case the company make default in payment, and upon such payment being made by him, the debenture in question was to be transferred and delivered to him. He has not made payment, and therefore is not in a position to claim such a transfer; the condition preced'6nt of such transfer not only not having been fulfilled, but having been tendered. The plaintiffs were not bound to demand payment. All that they had to do was to give notice of the default. Then it was the duty of the defendant to tender payment, ■and when he tendered payment, he could demand the transfer. That he has not done. A right of action accrued to the plaintiffs without any demand, and hence there was nothing for them to tender.

It is, however, urged that the change in the contract made by the supplemental agreement operated to discharge the defendant from his guaranty. It seems to us „ that the mere attempt to incorporate this supplemental agreement into the original contract, which was executed by all the parties, does not affect the question of the release of the defendant from his guaranty ; and that it is to be contraed by the same rules as would necessarily obtain in the case of an independent agreement subsequently entered i,nto between the parties. If this agreement in any way changed the relations of the parties, and at all injuriously affected the surety, he was undoubtedly discharged, whether the supplemental agreement is to be considered as a part of the original contract or as an independent agreement. Oases are cited in which it has been decided that the law is that any alteration in the obligation or contract in respect of which a person has become surety without the consent of the latter extinguishes his obligation, and discharges him; and this result follows irrespective of the inquiry whether the alteration would work any injury to the surety or not. The reason upon which the rule is founded is that the surety has never made the contract upon which it is sought to charge him. His answer is, if it is sought to charge him upon the altered contract, that he never made any such bargain, and if upon the original contract, that such contract no longer exists, having been legally terminated by the altered or substituted contract made by the parties; in either contingency the answer furnishes a complete defense. People v. Vilas, 36 N. Y. 459, 460. This rule, however, has no application to the situation disclosed by the record. There was no alteration whatever in the contract which the defendant had guarantied to perform. There were additional stipulations in respect to what the company would do in case the defendant failed to comply with his contract of guaranty as to the indebtedness mentioned in the agreement. He was to do nothing more. His obligation was not changed. It was only an additional contract upon the part of 4he company in case the defendant failed to comply with his - contract. How, it could not be urgéd for a moment, if this supplemental agreement, entered into, as it was, after the signing of the original contract, had not' been attempted to be ingrafted into that contract, but that the plaintiffs and the company would havó the right to make it. The plaintiffs had a right to take additional security, to become available in case the defendant failed to comply with his contract; and that is what is done by the supplemental and nothing more.

But it is said that the assumption by the company of an obligation in the event of its refusal to register a transfer is more than an assumption by the company of an obligation' in the event of failure on the part of the defendant to comply with the obligation which he had entered into; that it' is a separate and distinct obligation, not dependent upon the failure of the defendant to comply with his contract, but upon the refusal of the company to register a transfer, the company thereby depriving itself of the right to insist upon the lien and require the payment by the plaintiff Robertson of overdue calls upon his stock and all other indebtedness from him to the company before registering a transfer of his stock and thus relieving him from obligation to pay future calls. We do not think that the agreement is susceptible of the construction placed upon it by the counsel in the above proposition. It is to be observed that, by the provisions of the articles of association to which reference has been had, the directors may decline to register any transfer of shares not full paid up to a transferee of whom they do not approve; and they here agree, in case a transfer to the defendant, his executors or administrators, should not be approved, to procure the shares to be purchased at their par value by, and transferred to, some responsible transferee. They do not thereby release any claims that they might have upon the plaintiff Robertson for anything that was due upon those shares. They simply agree that they will procure a responsible .party to purchase them; their rights, as against the shares, for any indebtedness of Robertson not being in any wise released, or attempted to be released. This was an obligation entered into by the company at the foot of the contract,"to become operative only in the event of the failure of the defendant to comply with the-obligations which he had entered into, and which in no way deprived the company of any property which the defendant had a; right to claim they should apply to the payment of its indebtedness to the plaintiffs.

It has recently been urged before us "that the taking of additional security upon a promissory note discharged the indorser; but such a claim has not-yet been recognized. It seems to us that the position of the defendant in respect to this subsequent agreement is that, because he had guarantied this debt, the plaintiffs could not agree with the company for additional security in case of his failure to fulfill his guaranty.

We think, upon the whole case, that the judgment is right, and should be affirmed, with costs.

All concur.


author: McADAM, J.

text:
    Frank McSwegan et al., Pl’ffs, v. Pennsylvania Railroad Company, Def’t.

      (Supreme Court, New York Trial Term,

      Filed February, 1896.)
    1. Cabbiees—Misdelivebt. ""
    A delivery by a carrier to another than the consignee, without the consignee’s permission, constitutes a conversion and renders the carrier liable-to the consignee for the value of the property.
    2. Same.
    The fact that the consignee intends that the property should go-to the party to whom delivery was made, standing alone, gives the carrier-" no-authority to deliver the machinery to such person without the consignee’s-permission. ___ ______„ ... 1

    3. Same—Ratification. -■»*—— - •
    Any act of the consignee, which amounts in law to a ratification Of the unauthorized act as to the mode of delivery, absolves the carrier; Y_^
    4. Same. ^
    The carrier’s act in so delivering the property is ratified by the consignee-treating them as the property of the other party, and rightfully in his" possession, writing to him for the purchase price and agreeing to put them.ii£ proper shape.
    5. Same.
    A ratification once deliberately made, with a full knowledge of all the-material circumstances, cannot be recalled.
    Motion for a new trial of the minutes.
    John S. Davenport, for the motion; Robinson Biddle & Ward» opposed.
   McADAM, J.

About June 7, 1893, the- plaintiffs purchased' from Russell & Go., of Massillon, Ohio, one steam engine and fixtures, which were delivered to the defendant by Russell & Co„ for carriage and delivery to the plaintiffs at Beverly, H. J. After the"shipment Russell & Go. sent the bill of lading to the plaintiffs. The goods were purchased by the plaintiffs to -fill an order front the Beverly & Edgewater Park Light & Power Company (hereinafter referred to as the “ Power Company ”), a corporation having ■its place of business at Beverly, aforesaid. The plaintiffs did business at New York city, and had no office at Beverly. After the arrival of the machinery at Beverly the power company, for whom it was intended, called upon the defendant, paid the freight, and took it to their place of business, where the same was set up ■and put in operation. The delivery to the power company without the plaintiffs’ permission constituted a conversion, and rendered the defendant liable to the plaintiffs for the value of the machinery. McEntee v. Steamboat Co., 45 N. Y. 34; Hutch. Carr. § 344; and collated in 7 Abb. N. Y. Dig, 298. If the case had rested here, the plaintiffs’ right to a verdict would have been clear. The plaintiffs, on discovering the true condition of things, had four courses open to them: (1) Hold the defendant in trover; (2) hold the power company in trover; -(3) pursue their property, and recover its possession; (4) affirm the unauthorized act, and' pursue the power company for the purchase price. The fact that the plaintiffs intended that the property should go to the power company, standing alone, gave the defendant no authority to deliver the machinery to it without the plaintiffs’ permission, for they might have dictated the terms of delivery. Yet it was quite competent for the plaintiffs to assent to the delivery as made, and conclude themselves by such assent. The defendant occupied the position of carriers or transporting agent, and any act of the plaintiffs which amounts in law to a ratification of the unauthorized act as to mode of delivery absolves the defendant; for “to ratify is to give sanction and validity to something done without authority by one individual on behalf of another.” Ewell, Evans, Ag. marg. p. 48. To ratify an unauthorized act performed by an agent, it is sufficient if a principal, with knowledge of what has been done by the agent, consents to be bound by it, and unequivocally manifests such intent to the • other party. Keeler v. Salisbury, 33 N. Y. 648; Markham v. Washburn, 45 St. Rep. 683. And ratification is equivalent to. original authority. Story, Ag. § 239; Bank v. Warren, 15 N.Y. 580; Heermans v. Clarkson; 64 id. 171. Or, as stated in Herman on Estoppel (section 481):

“ The subsequent assent by the principal to his agent’s conduct not only exonerates the agent from a consequence of a departure from his orders, but likewise renders the principal liable on contracts made in violation of such orders, or even when there has been no previous retainer or employment; and this assent may be inferred from the conduct of the principal. The subsequent sanction is considered the same thing in effect as assent at the time.”

In Green v. Clark, 5 Denio, 497, a quantity of salt was received by the defendants as common carriers to be carried from Oswego to Lower Sandusky, there to be delivered in the care of William Neil & Co. The salt was delivered at Sandusky City, a port on Lake Erie, at the mouth of the Sandusky river; and Lower San-dusky, the place where by the receipt it should have been delivered, was a town on the river, about thirty miles from its mouth. The place of business of W. Neil & Co. was at Lower Sandusky^ but William Neil, one of the firm, lived at Sandusky City, andi had a separate establishment there, and he accepted the delivery of the salt there. The salt was left at Sandusky City on account of the difficulty in passing the bar at the mquth of the fiver ándi going up the river to Lower Sandusky. The delivery was made about the 1st of August. The owners of the salt, Richmond, Williams & Crane, were duly informed of this, and on the 3d of the? succeeding October they wrote to Neil, at Sandusky City, stating; that they had been informed that the salt had been left with him instead of being taken to Lower Sandusky, and directing him not to sell any part of it, as it was intended for the Messrs. Hollister, to whom an order for it would be given. The letter also desired Neil to advise the owners without delay of the quantity of salt he had received. An order was shown to have been given to the Hollisters as stated in the letter, but the salt was not received by them, having been disposed of by Neil some time previous to that letter having been written. Beardsley, 0. J., said. '

“ This letter was written with full knowledge that the defendants had violated their contract in leaving the salt at Sandusky City, and were consequently liable to the owners for its value. Everything material between the defendants and the owners was made known to them when the letter was written, although they were not aware that the salt had been sold by Neil. That, however, was his act alone, as it does not appear to h^ye been directed, or in any way sanctioned, by the defendants. Their violation of duty was in omitting to deliver the salt at Lower Sandusky, as they had agreed to do; and, if the owners had thought proper to stand upon their rights, the defendants would have been liable for the full value of the salt. But the owners might ratify the act, unauthorized as it was, of leaving the salt at Sandusky City, and thus waive their right of action against the defendants; and I think this letter to Neil was a complete ratification of what had been done by them. Any act of the owners, with knowledge, indicating an intention to hold on to the salt at Sandusky City as their own, and therefore wholly inconsistent with the supposition that the defendants were to be held liable for their breach of duty, amounts to a positive ratification of what had been done without authority. The subsequent ratification by the principal of an unauthorized act or omission of his agent is equivalent to 'a prior authorization. The maxim is, ‘Omnis ratihabitio retrotrahitur, et mandato priori aequiparatur,’ and the ratification completely exonerates the agent from all the consequences of his misconduct. Story, Ag. (2d ed.) §§ 239, 243; Broom Leg. Max. 380-383. A small matter is sufficient to establish a ratification; and the acts of the principal are to be construed liberally in favor of the agent. If what was done without authority has been adopted in any manner, even for a moment, the principal cannot recede, but is conclusively bound. Codwise v. Hacker, 1 Caines, 526; Paley, Ag. (by Dunlap) 171, 172.”

While the remarks of the learned judge may perhaps he regarded as obiter, they are nevertheless forcible, and entitled to the weight due the opinion of a learned jurist. Iudeed, they apply to this case with much more cogency than to that in which they were written. There the property was never intended to reach 'William Neil, but was to be put in the care of a firm of which he was a member, doing business at a place far distant from Sandusky rCity, where he received the goods. Here the goods were delivered to the people for whom they were intended; so that the ratification is .more easily implied, more effectually proved here than in that case.

In O’Dougherty v. Railroad Co., 1 Thomp. & C. 477, the court, citing Green v. Clark, supra, held that, although the original de Hi very of the goods might have been erroneous, all liability was (discharged by the subsequent acquiescence of the consignee in the (delivery; and upon this ground a judgment rendered in favor of ’the plaintiff for the misdelivery was reversed.

'The ratification by the plaintiffs is not left to be inferred from itheir mere silence or want of disapproval; nor is it based upon one ‘letter written by them, but on a series of letters and affirmative «lets, all indicating approval of the delivery by treating the power company as the legitimate possessor and owner of the machinery, and as the debtors of the plaintiffs for the purchase price. The plaintiffs wrote several letters to the power company demanding payment of their bill, and stating their need of money, in one of them referring to the fact that the time on which they had purchased the machinery from Russell & Co. would soon expire, and •stating that they would like the use of the power company’s money before that time was up. In answer to repeated demands by the power company to repair the machinery, which had gotten out of order, the plaintiffs on one occasion wrote that they would send an expert down to repair it; and when interrogated on the stand as to what was meant by this expression one of the plaintiffs testified that he was the expert, and that he intended to go, but that his main object was to get the money. In reply to one of these requests the plaintiffs promised to sent a competent man down to the power company, and put the machinery in running order at once, and when asked what this meant the only explanation was that they wished to get their money; and that they did not mean to do what they said. When questioned particularly as to whether they had not sent one Baxter to the power company to put the machinery in order, the same witness stated they had not; that Baxter belonged to Philadelphia, and was in the employ of Russell- & Co.; that he had called upon plaintiffs in behalf of that concern to get the money for the machinery, and that the plaintiffs had told him that the power company had not yet paid, and they supposed that Russell & Co., doubting their word, had sent Baxter to the power company to ascertain whether what they had said was true. They said nothing to Baxter about any claim against the defendant, but referred exclusively to the power company as their debtors and paymasters. On August 1, 1893, the plaintiffs sent a postal card to the power company in which they said:

We received tonight a telegram, saying expert will be in Beverly some time tomorrow. He will adjust the engine so that everything will be satisfactory.”

If satisfactory then, ratification was complete, and, according to settled principles, irrevocable. The several demands by the power company, and the repeated promises by the plaintiffs to comply with them, were all made under the contract of purchase, and in recognition of the rights it conferred and the duties it imposed. The power company afterwards went into insolvency, and then for the first time the claim against the defendant for misdelivery was strenuously urged. The plaintiffs, having their choice of several positions, deliberately, with full knowledge of all the facts, chose to treat the delivery to the power company as authorized. This unalterably fixed their legal status. They cannot, particularly after the insolvency, and after all redress which the defendant might otherwise have been able to obtain is gone, turn round, and hold the railroad company on a cause of action in which it might have saved itself from loss if the plaintiffs had acted promptly. Merrick v. Brainard, 38 Barb. 574. It is not "technically a question of election of remedies that is involved, but a choice of rights which, once asserted, disables the party from afterwards maintaining a position inconsistent with the o.ne selected. As is said by Herman in his work on Estoppel (page 462):

“ When it becomes necessary to choose between inconsistent rights and remedies, the election will be final, and cannot be reconsidered, even where no injury has been done by the choice, or would result from setting it aside.”

And Story lays down the rule that:

“If the principal subsequently ratifies the act, he is bound by it, whether it be for his detriment or for his advantage, and whether it be founded upon a tort or upon a contract. And a ratification once deliberatety made, with a full knowledge of all the material circumstances, cannot be recalled.” Story, Ag. 242.

It is upon this ground that plaintiffs are unable to maintain their position in this action.

For these reasons the nonsuit was proper, and the motion for a new trial must be denied.


text:
    Louis Klein, Resp’t, v. Cornell Dunlap, App’lt.

      (Supreme Court, Appellate Term, First Department,

      Filed February 26, 1896.)

      1. Carriers—Shipper—Agent.
    Where the vendee intrusts the shipping of the goods to the vendor, the latter, in so shipping, acts as the former’s agent and as such has power to hind him in contract with the carrier as to the terms and conditions of transportation.
    2. Same—Liability—Loss.
    Where the vendor delivers goods for shipment, by authority of vendee, to a common carrier, with whom he has an agreement that such carriers , shall deliver freight received from him for delivery at points in the city, , find shall forward such as is to be delivered elsewhere, and the carriel) delivers the goods to a connecting carrier, whp tenders them to the vem dee at the place of destination, and, upon the vendee’s refusing to accept them, they are afterwards lost or disposed of'be the connecting carrier, the vendee is bound by such shipping contract made by the vendbr with the first carrier, whose responsibility for the goods is determined on delivery thereof to the connecting carrier.
    Appeal from a judgment in favor of plaintiff.
    W. W. Menzel, for app’lt; Joseph I. Green, for resp’t.
   McADAM, J.

The action was brought to recover the value of certain goods which the plaintiff claims the defendant converted to his own use while in his care as a common carrier. On May 4, 1893, Messrs. Shrimpton & Sons, of New York City, delivered at that place to the defendant, for transportation, a case of goods .addressed to the plaintiff in Brooklyn. The defendant was an •expressman, the proprietor of Dunlap’s Express, with a license for .and doing business, in the city of New York only. He did busi- ' ness with Shrimpton & Sons under an agreement “to receive freight ■from them and deliver it in the city, and to forward other goods that they would give us to other points outside of our territory.” There was no special agreement to deliver in this case, and the defendant proved that, in accordance with the established usage and custom, he delivered the goods the same day he received them, at the end of his route, to the Windsor Express, a connecting carrier doing business in Brooklyn, for delivery to the plaintiff there. That the goods were safely delivered to the Windsor Express, by the defendant is clear, for that concern tendered them to the plaintiff at their place of destination. . The plaintiff refused to accept •delivery for some reason that does not appear. After such tender the goods were lost or disposed of by the Windsor Express. ■ Since the plaintiff intrusted the shipping of the goods to.. Shrimpton & Sons, they, in so shipping, acted as his agents, and as such, had ■power to bind him in contract with the carrier as to the terms and •conditions of transportation. Root v. Railroad Co., 76 Hun, 23, 27 N. Y. Supp. 611; Jennings v. Railway Co., 127 N. Y., at page 447; 28 N. E. 394; Shelton v. Transportation Co., 59 N. Y. 258; Nelson v. Railroad Co., 48 N.Y. 498; Rawson v. Holland, 59 N.Y. at page 617. Under these circumstances Dunlap undertook the responsibility only of carrying the goods as far as his route extended, and there delivering them to and forwarding them according to the established usage of the next connecting carrier; and this he did.

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


author: BISCHOFF, J.

text:
    Lena Morris, App’lt, v. Krakauer Young Men’s Association, No. 1, Resp’t.

      (Supreme Court, Appellate Division, First Department,

      Filed Feb. 26, 1896.)

    Benefit societies—Members and beneficiaries.
    Under the provisions of the constitution of a benefit society, -which provides that “members who fail to pay their dues within two meetings after general meeting shall be excluded from all 'benefits until all their dues are-paid at the next last pay night; before this time such members have no-claim on the society; members in arrears, and their families, entitled only to burial ground, i. e. grave,—no other expenses; members in arrears for six months shall be stricken from the rolls,” the widow as beneficiary, on> the death of a member in arrears for dues, but not in arrears for a period of six months, is not entitled to recover the death funds provided by such, constitution. ■ .........
    .'Appeal from a judgment in favor of defendant.
    A. H. Sarasohn, for app’lt; Maurice B. Blumenthal, for resp’t
   BISCHOFF, J.

The plaintiff is the widow of one Victor Morris, a deceased member of the= defendant benefit society, and seeks to recover as beneficiary under the terms of the society’s-constitution, which are detailed below. ' The case was submitted upon an agreed state of facts, and was decided adversely to the plaintiff. It was agreed that the deceased was in arrears of dues,, and had brought himself within the conditions' of delinquency specified in the constitution, except that he had not been in arrears for a period of six .months at the date of his death. The constitution provided as follows:

“In case of the death of £ member or his wife, three coaches,, hearse, Tachrichim shroud, and other necessities shall be provided by-the society. * * * Members who fail to pay their dues,, within two meetings after general meeting shall be excluded from all benefits until all their dues are paid at the next last pay night.. Before this time such -members have, no claim on the society. * * * After the death of a member, his wife or orphans, or,, if there are none, the nearest relatives; shall receive, within thirty days after such death, from the society, the sum of two hundred dollars. At the death of the wife of a member, he shall receive-the sum of one hundred dollars, from which, however, the society retains fifteen dollars towards a tombstone, if not placed by the husband within one year. The cost of the stone shall not exceed the above amount. The members, however, shall be equally taxed for the above sums of two hundred, respectively, one- hundred dollars. * * * Members in arrears, and their families, are entitled only to burial ground, i. e. grave,—no other expenses. Members in arrears for six months shall be stricken from the rolls.”

While observing the rules of strict adverse construction, which?, must prevail in the interpretation of provisions such as those before us, it seems clear that the defendant assumed a liability towards only two classes of persons: Members proper, and delinquent members and their families. Towards those members who had been dropped from the rolls, no benefit of ex-membership was given, since the words used implied an absolute expulsion from the society after the member’s time during which he might retrieve his position had expired. The plaintiff’s husband was not of this class, but was a delinquent member. As to his class, 'however, the defendant assumed a liability only for "the strict expense of interment of him or his wife, and there is no claim that this-duty was disregarded. Had Morris.been dropped from the rolls it would have been impossible for his widow to sustain a claim for the- death fund in suit, since that fund but inured to the benefit of a member’s widow; but it is claimed that he was a member,, although delinquent, and that the widow should be protected as beneficiary. We cannot take this view, since, while the construction of this constitution should be strict, no unreasonable interpretation is called for, and, unreasonably, the" member in signing the constitution would understand that, while delinquent, the benefits sought to be secured "through membership would be withheld- "from him and his family ; that burial alone would be accorded, should there be no expulsion ; and that, after expulsion-for delinquency, not even burial was to be given by the defendant. . "

Judgment affirmed, with costs.

All concur


text:
    Bernard Marchand, Pl’ff, v. Harry D. Haber, Def't.

      (Supreme Court, New York Trial Term,

      Filed March 9, 1896.)
    1. Summary proceedings—Petition—Jurisdiction.
    Under section 2235 of the Code, a petition defectively verified, in that the notary’s name is by oversight not signed to the jurat, does not give-a justice jurisdiction. , .
    2. Same.
    The fact that the jurat was not signed because of the oversight of the-notary does not aid the applicant for summary proceedings. „ _
    3. Same—Judgment. ~
    In such case judgment of dispossession, rendered without appearance of defendant, is- void, rendering liable, for .execution of the warrant thereunder, the person who instituted the proceedings.
    4. Same.
    The fact that the plaintiff had no existing right of possession, as well as-the defendant’s good faith, may be considered in awarding damages.
    Hal Bell, for pl’ff ; A. Finelite, for deft.
   McADAM, J.

On February 1, 1893, the defendant, $s landlord, commenced a summary proceeding against the plaintiff, & monthly tenant, to remove him from the five rooms on the top-floor, east side, of the tenement known as Ho. 96 East Broadway,” for holding over after the exniration of his term. The defendant signed the petition and the affidavit accompanying it, but by some oversight on the part of the notary the latter omitted to affix his name to the jurat. The clerk of the Fifth district court, upon this unverified petition, issued a precept returnable at three ■o’clock the same day, and on the return thereof, the plaintiff not appearing, the justice signed the final order as by default, and issued his warrant, which was delivered to the marshal, and executed the following day. The process was served in the absence of the tenant by affixing the s.arne on a conspicuous part of the premises; so that the tenant was unaware of the pendency of the proceedings until he found the paper on February 2, 1893, at .about one a. m. He called upon the justice the same day, and understood the justice to say that he need not bother further with the matter; that the justice would attend to it. Some time during that afternoon the marshal /executed the warrant by removing the tenant’s household effects, and putting them upon the sidewalk^ where they remained until about two o’clock of the morning of February 3d, when they were taken away by an expressman employed by the tenant’s wife. The plaintiff claims that when he became'repossessed of his property much of it had been injured, many articles were missing, and that the actual injury in consequence amounts to about $308.10. The theory of the action is that, in consequence of the failure of the notary to sign his name to the jurat, the acts of the justice wrere coram non judice, and void, and the defendant, therefore liable. The summary proceeding sought to- be instituted being in derogation of the common law, and special in its nature, in order to confer authority upon the magistrate the statute should have been strictly complied with, particularly 'in its 'jurisdictional requirements; the first and most important of which is that the applicant must present a written petition, verified in like manner as a verified complaint in an action in the supreme court. Code, § 2235. A judgment of dispossession without such a petition, duly verified, where there is no appearance or waiver by the tenant, is absolutely void. Coatsworth v. Thompson, 5 St. Rep. 809; People v. De Camp, 12 Hun, 378; Williams v. Culhone, 22 St. Rep. 42; Fuchs v. Cohen, 19 N. Y. Supp. 236; Schneider v. Leizman, 57 Hun, 561; 33 St. Rep. 351. This upon the familiar principle that where jurisdiction, particularly of an inferior court, depends upon the existence of some fact of which there is no proof, • all acts -performed on the assumption of such jurisdiction are void. Fischer v. Langbein, 103 N. Y. 84; 2 St. Rep. 768; Staples v. Fairchild, 3 N. Y. 41; Kelly v. Archer, 48 Barb. 68; Homan v. Brinckerhoff, 1 Denio, 184. Ho preliminary proceeding or appeal is necessary to vacate or set aside void process as the condition of the maintenance of an action for damages done under it (Fischer v. Langbein, supra), for such process affords no protection "to the party who instituted the proceeding (Kerr v. Mount, 28 N.Y. 659; Fischer v. Langbein, supra). Where there is proof of a jurisdictional fact, but the justice errs as. to its sufficiency, the judgment voidable merely, and binding until reversed by some direct proceeding, 6 Wait, Act. & Def. 805; Skinnion v. Kelly, 18 N. Y. 355; Hall v. Munger, 5 Lans. 100. But void adjudications, like the one here, are never binding, and can always be impeached directly or collaterally (6 Wait, Act. & Def. 805); for the remedy strikes deep. It goes to the very root of the proceeding, lays bare its defects, .and destroys the verity of the judicial record.

The defendant insists that the want of a jurat was a defect amendable by section 723 of the Code, made applicable to district courts by section 3347, subd. 6. There two answers to this pro.position. In the first place, no such amendment has been allowed or made. In the second place, a justice cannot, by amending a ¡proceeding in a particular which is necessary to give him jurisdiction, .acquire an authority nunc pro tunc. Ackerman v. Finch, 15 Wend. 652. The fact that the jurat was not signed because of .-the oversight of the notary does not aid the defendant. Unintentional -errors furnish the responsible party no defense against one Injured by them. Intent is only material in aggravation or mitigation of damages. 2 Sedg. Dam. 483; Walker v. Wilson, 8 Bosw. 586. The institution of the proceeding by the defendant, ¡his presence at the execution of the warrant, and the acceptance -of the benefits derived therefrom, make him liable for the acts of ■the marshal and his assistants. ■ The real question, therefore, resolves itself into one of damages. The plaintiff was a monthly tenant, and his term had expired when the proceeding was commenced ; but this circumstance gave the defendant no authority to remove him or his property without legal process. Flaherty v. Andrews, 2 E. D. Smith, 529; Shannon v. Burr, 1 Hilt. 39. But the fact that the plaintiff had no existing right to possession, as well as the defendant’s good faith, may be considered in awarding damages. The trespass was unaccompanied by bodily fear or. other circumstances of aggravation, and the general rule of damages is to award full compensation for all injuries done, without adding damages of an exemplary character. Eten v. Luyster, 60 N. Y. 253. The plaintiff’s wife, after proving her qualification to testify, gave it as her opinion that the damages amounted to $308.10. Yet her judgment upon the subject is not that weight which a disinterested and more competent expert would be likely to receive. Upon the entire case the damages will be assessed at $250," which sufficiently compensates for every loss sustained. For this sum the plaintiff is entitled to judgment, with costs.


text:
    Bernard Marchand, Plff, v. Harry D. Harber, Def't.

      (Supreme Court, New York Trial Term,

      Filed March 9, 1896.)

    Damages—Treble—Trespass.’
    Under § 1669 of the Code, a person, who has no estate in the premises but merely bare possession, is not entitled to treble damages merely because ejected on process void solely by á defect in the petition filed in initiating summary proceedings against him.
    Motion for award of treble damages,

      Hal Bell, for plff; A. Finelite, for def’t,
   McADAM, J.

The practice if for the jury to find single damages, and for the court, under the statute, to treble them in a proper case. Newcomb v. Butterfield, 8 Johns. 342; King v. Havens, 25 Wend. 420; Warren v. Doolittle, 5 Cow. 678; Anon., 4 Wend. 216; Du Bois v. Beaver, 25 N. Y. 123. The evident object of the provision as to treble damages (Code, § 1669) was to prevent wanton invasion of rights of property by awarding them in lieu of exemplary damages (Field, Dam. § 848). But the statute is to be interpreted as a penal one, and the facts disclosed do not bring the case within its spirit or intent. The proofs offered neither called for exemplary damages at the trial, nor for treble damages in lieu thereof now. The plaintiff had no estate in the premises. He merely had the bare possession, and, though ejected on void process, such ejectment was unlawful solely by reason of a defect in the petition filed in initiating the summary proceeding to remove him. He was not dispossessed in a forcible manner inhibited by the statute against forcible entry and detainer, and is not, therefore, entitled to the treble damages claimed. Willard v. Warren, 17 Wend. 262; People v. Smith, 24 Barb. 18; Wood v. Phillips, 43 N. Y. 158; People v. Field, 52 Barb. 214; Labro v. Campbell, 17 St. Rep. 749. There was no wanton violation of any right of property. In Compton v. Chelsea, 139 N. Y. 538; 54 St. Rep. 843, the plaintiff claimed title, and the action was in ejectment fot restoration to the possession from which he had been actually disseised vi et armis, without any attempt by the trespasser to resort to legal pro'ceedings. That case bears no analogy to this. See, also, Eten v. Luyster, 60 N. Y. 253.

Motion denied.


author: GAYNOR, J.

text:
    Emma J. O’Connor, Pl’ff, v. Long Island Traction Company et al., Def’ts.

      (Supreme Court, Kings Special Term,

      Filed January, 1896.)

    Corporations—Receivers.
    A receiver cannot be appointed for a corporation which owns all the stock of another corporation, because of mismanagement and waste by the latter corporation.
    Motion for the appointment of a receiver for the corporation. !
    James C. Church and Almet F. Jenks, for pl’ff; Julien T. Davies, William F. Sheehan and W. 0. Trull, for def’ts.
   GAYNOR, J.

The plaintiff brings this action as a stockholder in the Long Island Traction Company. The company and its directors aré the parties defendant. Waste and spoliation by the directors of the corporate property, and insolvency of the com- ■ pany due thereto, are charged. The corporation is a foreign one. The prayer oij the complaint is that a receiver be appointed to Sake possession of and protect the assets of the company. The facts alleged involve the conduct of the directors of the Brooklyn CityIRailroad Company, and of the Brooklyn Heights Railroad Company, as well as of the said traction company; and, as the latter company and its directors are the only parties defendant before" the court, discrimination must be had in respect of what facts are applicable. However grievous may be the charges made or facts shown, redress may be. had herein only against the parties defendant, and only for their own acts. If wrongs have been committed by the directors of the other two companies, they can ¡be redressed only in actions against them.

The facts shown before me are easily stated. The Brooklyn ■City Railroad Company was- a great, prosperous and useful corporation. It had about 176 miles of street railroad track in ¡Brooklyn, Its stockholders were legally entitled to its large net earnings as dividends. Its papers shares of capital stock and its ¡bonded debt had been increased till the former had reached $12,-$00,000, and the latter $6,000,000. In the year 1893 those in conitrol leased this company, and all of its great plant, property, and "earning capacity, for 999 years to the Brooklyn Heights Railroad [Company^ a small corporation, with paper shares of capital stock ¡aggregating only $200,000. This small company, with limited ¡assets and no net earnings, so far as appears, and having a franchise for and owning- only about a mile of track, agreed in this lease to pay all of the operating expenses, cost of repairs, and ¡fixed charges (including interest upon the, said $6,000,000 of bonded indebtedness) of the great system of which it thus became lessee, and, in addition, 10 per -cent, annually upon the said $12,-$00,000 of paper shares of stock of the lessor company. All earnings of the Brooklyn City Company over and above this it ■was to keep. The Brooklyn City Company, instead of continuing So conduct its business, and to operate the public franchises and perform the public duties intrusted to it by the state, thus turned all over to this little lessee company, and made that company the absorber of all of its net earnings above an annual dividend of 10 per cent, upon its said $12,000,000 of paper shares. Practically nothing remained for the directors of the Brooklyn City Company to do except to receive the money for this 10 per cent, dividend and distribute it among the stockholders. About the time that this lease was made, the individuals who were the directors of the said lessee company caused this defendant corporation, viz., the Long Island Traction Company, to be organized. It is not a corporation of this state, nor a railroad corporation, nor engaged in railroad traction, notwithstanding its name to the contrary. It was organized in the state of Virginia, though its directors were . and are all residents of this state. Its corporate life was not given, nor may it be taken away or limited by the sovereign power of this state. Its allegiance, and its principal and paramount responsibilities, are to the laws and government of the state of Virginia, though it has no property in that state, and whatever it has is here, and its directors are residents here. It was organized with papér shares purporting to represent a capital of $30,000,000, That it never had its capital,, and that its paper shares were disposed of for a small fraction of it, or given away, is apparent. The papers before me show no reason or excuse for its existence, at the beginning or now. The plaintiff’s standing in a court of equity as a complaining stockholder in such a company can scarcely be fixed by a high standard.' The succession of evils which have followed it, as well as its present predicament, were all natural consequences. Upon its organization it obtained and became the sole owner of all of the said paper shares of stock of the-said Brooklyn Heights Railroad Company, purporting to represent a capital of only $200,000, as already stated. The object of its creation was thus revealed. It was-to absorb, by means of its ownership of the said paper shares of the Brooklyn Heights Company, all of the net earnings of the Brooklyn City Company, over and above the said 10 per cent, annual dividend " upon the said $12,000,000 of paper shares of stock of that company. If enough could be so absorbed to pay dividends upon its said $30,000,000 of paper shares, they would thus be made valuable. Such is the scheme which the papers before me reveal in detail. Fraud and waste are charged as having attended the main things done under it; but it is not for this court to-condemn the scheme itself as a whole, or in any of the links- or connections which make it up. I must and do fully recognize that the laws of this state allow the like, and leave the-question of the effect of such use of public franchises upon public morality, and upon honest industry and enterprise, to be discussed elsewhere. A court must accept and administer the laws as they are. But, though I may not take this wider view, I am obliged to consider the attendant wrongs which are particularized in the papers before me, and were urged upon the argument as bearing upon the case.

1. When the said lease by the Brooklyn Oity Company of its-property to the Brooklyn Heights Company was about to be executed, an action was brought, and an injunction obtained to prevent it, by one Markey, a stockholder in the former company,. Thereupon one Flynn came into negotiation with the individuals connected with the scheme, and who were to make large individual profits out of its consummation. He professed to be able to-control the said action, and to stop it 'at will; and so the fact proved to be. The result was that he was let into the profit of the scheme or enterprise in consideration of his getting out of the way with his injunction suit, and received therefor (to use thewrords of the uncontradicted affidavit before me) “several hundreds of thousands of dollars ” in railroad bonds and money. It. is urged that, having been thus successful in making several hundred thousand dollars by the abuse of a legal action by a stockholder who merely stood for him, and was subject to his control, he is now trying to do the like again by means of this plaintiff, who is his niece and a member of his household, and of her nominal ownership of 150 of the paper shares of the Traction Company, and that therefore a court of equity will not aid him in such a purpose, disguised under the honest and meritorious forms of. -an action to prevent alleged breaches of trust. I am, of course, impressed by this contention, and ready to deem the facts which support it sufficient to defeat this action. A court cannot knowingly allow itself to be used for such purpose. At the same time, ¡it is .still more impressive that those engaged in making individual profit out of such exploiting and manipulation of public fran-chises, and of companies endowed therewith by the people of the state only to enable them to do a public service, should yield to--such an attack in their eagerness to get through, or their fear of being thwarted; and that their gain was to'be so great that they •could pay out of it such an enormous exaction.

2. Of the $12,000,000 of paper shares of stock and the $6,000,-'000 of bonds of the Brooklyn City Company, which existed, as tabove stated, when that company was leased to the Brooklyn ‘Heights Company, $3,000,000 of each were unissued. In the •lease, the lessep company undertook to change the roads from ffiorse, to electric, motive power, and the proceeds of these $6,-'000,000 in bonds and stock were to be paid to it by the lessor company for that purpose. The said money was paid, and the change was made. The allegation now is that the work was -done by the directors of the said lessee company in an inferior ■manner at excessive prices; that some of the contracts for the doing of the work were made at excessive prices with corporations-.in which the said directors were also directors, so that they actual ly dealt with themselves in this manner for their individual -profit; that the money was recklessly, fraudulently, and wastefully spent; that the material used was so inferior that it actually had to be replaced in a few months ; that not only the said $6,-000,000 were in that way spent, but in addition a large sum of money,about $2,000,000 of which were borrowed; that the earnings of the said company have been used for such repairs, to such an extent that the operating expenses have gone up to 70 per cent of the gross earnings, whereas they should not exceed 55 percent.; and that, owing to these extravagances, the company has-been and is unable to pay the rent upon the said lease, and may lose it by forfeiture. But all this has no legal relation to the-present action, however it might, be considered in a like suit by a stockholder of the Brooklyn Heights Company against its directors ; whereas, this action is against the traction company and its directors only, and their conductoalone is open to examination 'under the present complaint.

3. It is also alleged that, for a period of six weeks or two-months, the business of the said lessee railroad company was suspended because of differences between it and its employes, and that, b.y reason thereof, and the ill will against it of the public engendered thereby, its receipts became much less than they would otherwise have been. Again, the traction company and its directors have no legal responsibility for this. That company is not even a railroad corporation. It is a mere stockholder of the Brooklyn Heights Company. It is true that its. $30,000,000 of paper shares of stock depended for dividends upon any surplus; earnings of the Brooklyn City Company which the Brooklyn. Heights Company might be able to make and keep under its lease as above set forth, and declare as dividends on its paper shares, and which would in that way get into the treasury of the traction company, it being the owner of such shares, and in turn be divided as dividends upon the said paper shares of the traction company; and it may be admitted that the eagerness to get dividends on the said $30,000,000 of paper stock shares might lead to the undue cutting down of expenses, and become the just cause of complaint by employes and of a controversy by them about wages. But that does not shift the legal responsibility of the directors of the Brooklyn Heights Company for the conducting of that corporation to the directors of the traction company, ■even though they may be the same individuals. The law allows the connection which exists between these three corporations, though two of them may be merely feeding on the other and absorbing its earnings; and that has to suffice in a court of law. The evils and wrongs alleged here are inevitable from such a use of public franchises, and it may well be said that it would be better if the Brooklyn City Company was obliged to use and operate its franchises and roads, and be held responsible therefor, and had to keep- all its earnings, and use the same in increasing its service of the public, by furnishing cars enough to give -•every passenger the seat he is entitled to, by putting its wires under ground, and so on; and that if dividends still grew larger than the public should, in good conscience, and under wholesome principles of government, be required to pay, that fares should be reduced as a healthy and just remedy. But there is a time and place to consider views like these. They may pass incidentally before a court, but it may not be swerved by them in the interpretation and administration of the law just as it is.

That the will of the directors of the traction company is paramount in the operation, policy, and conduct of the great system of street railroads leased by the Brooklyn City Company to the Brooklyn Heights Company is plainly enough; but that arises, not out -of any legal power or responsibility vested in or imposed upon them by law, but out of the fact that the traction company owns all of the shares of stock of the Brooklyn Heights Company,- and by that, means elects the directors of that company. If both sets of directors could be held responsible for mismanagement and waste of-the property of the Brooklyn Heights Company, because they joined therein, it could only be in an action brought upon that basis, and to which they were all made parties. It therefore remains only to consider if any waste of the property of the traction company by-its directors be made out. In the said lease by the Brooklyn City Company to the Brooklyn Heights Company the latter company* was required to deposit $4,000,000 with a trust company as a guar-, anty fund for performance of the covenants of the lease, including-the payment of the rent. It was agreed in the. lease that if the lease were broken and forfeited, this fund should become the prop-, erty of the lessor company as damages for the breach. The trac-, tion company, being the owner of the stock of the lessee, put up this fund. AH of the property which the traction company owned was its interest in this fund, the paper shares of the stock of the said lessee company, and also of the Brooklyn, Queens County and Suburban Railroad Company. In order to raise money to be used in the change from horses to electricity, above mentioned, the said $6,000,000, received from the Brooklyn City Company for that purpose, being exhausted, the said lessee company and the defendant traction company jointly made certain so-called trust notes for $1,-900,000, and the traction company executed an agreement to a trustee, in effect mortgaging all of its said property to secure the payment thereof. Default being made upon the said trust notes, the said trustee began a suit in the United States circuit court for the eastern district of Virginia to foreclose the said trust mortgage. The defendants (the said two coppanies) appeared and submitted to a judgment of foreclosure, and a sale under the said judgment of all of said property for $5,500,000 has been had in the city of Hew York by that court’s officer appointed for the purpose. It appears, before me, that the defendant traction company now owns no property, except the surplus of the said purchase price after paying the said notes, and also that it has no other indebtedness. The allegation of the complaint is that the said suit in the United States court was collusive between the said trustee and the defendant directors, in order to give a preference to creditors; but, inasmuch as the said trustee and the holders of the said trust notes were the only creditors, there is nothing therein. The mortgage debt was genuine, and was due, and the trustee had the right to foreclose. There could be no collusion in that. The validity of the said sale is questioned, on the ground that the judgment of the said circuit court had no efféct over property here, and could not be executed here; and it is urged that this court should appoint a receiver to regain the said, property, or take the proceeds of the sale. But, before the said foreclosure suit was commenced, a holder of one of the said defaulting trust notes had begun a creditor’s suit against the said traction company in the said United States circuit court, and a receiver of all the property of the said company was appointed. He took actual possession of the said property (except, of course, the said guaranty fund, which he could not remove), and was also the court’s ■officer, who sold under the foreclosure judgment. He has the proceeds of the sale, and, after paying the said trust notes, and receiver’s certificates to the amount of $420,000 issued by him to raise money to pay rent and prevent the said lease and guaranty fund' from being forfeited, he will hold the surplus for the direction of the said circuit court. The circuit court actually having the fund, I do not see that any question of jurisdiction is available. There being no creditors, the fund will belong to the stockholders if the company be liquidated. The traction company having no property except the money now in the hands of the said. and as no judgment could be made herein extending to any property of the Brooklyn Heights Company, or to the question of its waste or spoliation, the motion for a receiver is denied.

Motion denied.


author: PER CURIAM.

text:
    Terence McMahon, Resp’t, v. New York Elevated Railroad Company et al., App’lts.

      (Supreme Court, Appellate Division, First Department,

      Filed March 6, 1896.)

    Appeal from a judgment for plaintiff entered on the report of a referee.
    J. 0. Nichols, for app’lts; Adam Wiener, for resp’t.
   PER CURIAM.

We are all of opinion that the evidence in? this case is entirely insufficient to sustain the report and judgment A new trial must be awarded, because there is nothing in the record which would justify a modification. The testimony is too-slight to enable the court to reduce the awards to any fixed sum. The case was tried seemingly without appreciation of the necessity for proper and adequate proof such as is required in all these cases. The judgment must be reversed, and a new trial ordered before another referee, to be appointed by the court, with costs to the appellants to abide the event.