text:
    Yellow Pine Company, Pl’ff, v. Board of Education of City of Brooklyn et al., Def’ts.

      (Supreme Court, Kings Special Term,

      Filed December, 1895.)

    School districts—Boards of education—Mechanic’s lien.
    Under § 3, chapter 687 of 1893, the board of education of the city of Brooklyn is a separate corporation from the city itself, and service of notice of mechanic’s lien against the district should be made on the city treasurer» as the financial officer of the board.
    Action by the Yellow Pine Company against the board of education of the city of Brooklyn to foreclose a mechanic’s lien for material used in erecting school houses against funds in the hands of the defendant board. Other creditprs claiming liens were also made defendants. The notices of lien-required by law were served by the plaintiff on the president of the defendant board and on the pity treasurer as its financial officer, while they were served by the [defendant creditors on the secretary of- the board and the city ¡comptroller, as financial officer of the city; the question . at issue being whether the board of education or the city was the corporation to be sued.
    Burr & Coombs, for pl’ff; Hirsh & Rasquin, for def't Gardner; John F. Nelson, for def’ts Willis; Michael Furst, for def't board of education,
   CULLEN, J.

—I am of opinion that the notices of lien filed by the defendants Gardner and Willis are defective and insufficient, in failing to state various matters required by the statute. 'This would render their liens invalid, apart from the question what office is the financial officer upon whom, a notice of lien should be served. But this would not entitle the plaintiff to recover unless it has acquired a valid lien. No criticism is made on the form of the notice of its lien. This notice the plaintiff sérved upon the city treasurer of the city of Brooklyn. It is contended thatHhe notice should have been served upon the comptroller, who, by the charter, is made the financial officer of the city. I am inclined to hold that the board of education is now a separate municipal corporation, though doubtless, a department of' the city government. It possesses the powers and is subject to the duties of trustees of common schools. For the purpose of taxation and the erection and repair of schoolhouses and the support of the schools, the city is a school district. The title to all school property is vested in the board of education. Charter, tit. 17, §§ 56, 59. Formerly trustees of an ordinary school district were only a quasi corporation of very limited powers.. Bassett v. Fish, 75 N. Y. 303. But, by the general revision act of 1892 (Laws 1892, c. 687, § 8), school districts are constituted municipal corporations. Since that act, whatever may have been the case before, the board of education would seem to be a corporation. This, in fact, seems to be the view of all the parties to this action, for the city of Brooklyn is not a party to this action, and none of the defendants has raised any question to its absence. If the municipal corporation with whom the contract was made was the board of education, then the only financial officer of that corporation is the city treasurer, not the comptroller, for the latter officer has- no supervision or control of the funds of the board. In this respect the case is to be distinguished from that of Bell v. Mayor, etc., 105 N. Y. 136 ; 6 St. Rep. 847.

Judgment for plaintiff, with costs out of "fund.


source: Caselaw Access Project

author: BEEKMAN, J.

license: Public Domain

text:
    In the Matter of Christie Manufacturing Company.

      (Supreme Court, New York Special Term,

      Filed January, 1896.)

    Mechanic’s lien—Receiver—Subcontractors.
    Under section 1, chapter 343 of 1885,'‘■as amended by chapter 316 of 1888, the right to obtain and to enforce mechanics’ liens against the property for work done thereon or materials furnished is not affected by the appointment of a receiver for an insolvent principal contractor before completion of the subcontractors, and the receiver will be required to pay in full the claims of the subcontractors who have acquired liens to the extent of the amount receivable by him on the contract from the owner of the , property.
    Petition of Nicholas F. Palmer as a building subcontractor under the Christie Manufacturing Company for an order on the receiver of that company requiring him to pay the amount due the petitioner on his subcontract in full.

      Theall & Beam, for petitioner ; Everett V. Abbot, for receiver.
   BEEKMAN, J.

—The Christie Manufacturing Company is a domestic corporation, and has instituted the above-entitled proceeding for its dissolution on the ground of insolvency. A temporary receiver was appointed on the 12th day of November, 1895, and a petition is now presented to the court on behalf of a creditor to compel the payment of the amount of his debt, which has accrued under the following circumstances: Some time prior to the institution of this proceeding, the corporation above named entered into an agreement with the New York Produce Exchange for the performance of certain work and the furnishing of the necessary materials therefor upon the building owned by said exchange. In ■the course of the performance of its contract the Christie Manufacting Company made an agreement with Nicholas F. • Palmer, the petitioner, for doing a certain portion of the work, which was accordingly entered upon by him, and completed on the 13th day of November, 1895, the day after the appointment of the receiver and thereupon the sum .of $262.78, the value of the work, became due and owing to him from the company. On November 15th,—-.three days after the appointment of the receiver,— Mr. Palmer, ¡filed in the office of the clerk of the city and county of New York a notice of lien under the mechanic’s lien law, for the purpose of charging the property of the produce exchange, upon which the work was done, with the payment of his claim. It further appears from the papers that the insolvent corporation had so far performed its contract with the exchange that on said 15th day of November, 1895, it became entitled to receive from the exchange a sum in excess of - the amount of the Palmer claim. None of the facts above stated are disputed by the receiver, nor is any question raised by him in respect to the merit of the petitioner’s claim. The sole question which is submitted to me on this motion for my determination is whether, in view of the fact that the petitioner’s claim matured and his lien was filed after the appointment of the receiver, he has acquired any preference for the payment of the same over the other creditors of the corporation. Nor is any question made in respect to the form of the application, both parties expressing their desire upon the argument of the motion to have the-court decide the question of law involved. The property against which the mechanic’s lien has been filed did not belong to the insolvent corporation, but to the produce exchange, with whom it had contracted for the performance of certain work. The lien which was filed by Mr. Palmer consequently; attached to the property in question: and we must look to the ' statute which authorized the lien in order to ascertain the extent of the owner’s liability under such circumstances. This we find in section 1, c. 342. Laws 1885, as amended by ch'apter 316, Laws 1888. It is there declared that:

“Any person * * * who shall hereafter perform any labor or services or furnish ’ any materials which have been used or which are to be used in * * * altering or repairing any * - - building with the consent of the owner, as hereinafter defined, or his agent, or any contractor or subcontractor, or any other person contracting with such owner to alter, repair, * * * as aforesaid, within any of the cities or counties of this state, may upon filing the notice of lien prescribed in the fourth section of this act, have alien for the principal and interest of the price and value of such labor and material upon such * * * building, and upon the lot, premises, parcel or farm of land upon which thei same may stand, * * * to the extent of the right, title and interest at that time existing of such owner. * * * But in no case shall such owner be liable to pay, by reason of all the liens-filed pursuant to this act, a greater sum than the price stipulated, and agreed to be paid in such contract, and remaining upaid at the time of filing such lien, or, in case there is no contract, then the amount of the value of such labor and material then remaining nnp'aid, except as hereinafter provided.”

It will- thus be noticed that under this statute the owner of the property, upon the filing of a lien by a subcontractor, becomes responsible for the payment of the claim, although there is no privity of contract betwéen him and the claimant, with the single limitation that such liability shall not extend beyond the amount1 then due from him to the person with whom he has directly contracted. Of course, this necessarily involves the right of the-owner, upon paying any such lien, to charge his contractor with the amount thereof, and to deduct it from the contract price, as a-payment made on account thereof. It is also plain that the right of the owner to such a credit cannot be defeated by any transfer, of the debt either made by the principál contractor or effected by operation of law in proceedings instituted against him. If a foreclosure of the lien should be instituted,, on what theory could the owner successfully defend on the ground that the corporation, which contracted with him for the performance of the work hadi passed into the hands of a receiver i Does he not still owe the same amount of money on the same contract, and has not thej statute thereupon subjected his property to the lien of the subcontractor pro tanto? He could, of course, show, if it were the fact, that the subcontractor had been paid, or that he had no claim, against the principal contractor; but no such case as this is presented here. The debt is still due to the subcontractor. It is the, means of payment on the part of the principal contractor which ¡ is wanting, and this certainly is no defense.

The strength of the petitioner’s case rests upon the fact that he, has a claim for the payment of his lien upon the owner of the! property, whose right in turn it is to reimburse himself by charg-1 ing the amount of the same against the sum due from him to thej insolvent corporation. The conflict of interest, therefore, in re- j spect to the other creditors of the insolvent corporation is between' them and the owner, not between them and the petitioning creditor; and it is plain that in this conflict the right of the owner' to-credit himself with the full amount paid in discharging the lien is, absolute, and superior to the equities of the general creditors. A clear conception of this 'fact, it seems to me, frees the question from all doubt, and makes it one easy of solution. ■ The distinction between this case and one in which a similar lien might be asserted in' respect to property which belonged to the insolvent ■corporation, but which had passed as such into the hands of a receiver before the lieu was filed, is apparent. There the rule which requires an equal distribution of the assets among all the creditors has a necessary and equitable application, to which there is no apparent exception other than the case of general "assignment specified in section 5 of the mechanic’s lien law (Laws 1885, c. 342). But the case under consideration is entirely different. The lien here is being asserted, not against the property of an insolvent in the hands of a receiver, but against the property of another with whom the insolvent had contracted. The liability to be enforced by the petitioner is that of the owner, and, while the enforcement of the lien as against it, in fits effect, will be equivalent to a payment by the receiver to the petitioning creditor of the full amount of his claim, it is indirectly the result of a right which the owner has and is entitled to enforce as against the insolvent corporation ■and the receiver of its assets. There is no justice or equity in subjecting the claimant to loss because of the consequences flowing from the operation of the statute by reason of the enforcement of his right. Nor will the court be astute to work out an equity in favor of the receiver which shall defeat the beneficien* intent of an act which (section 25) is declared to be a remedial statute, to be construed liberally, in order to secure the beneficial intent and purpose thereof.

Having thus come to the conclusion that the petitioning creditor will be entitled in a preceding to foreclose his lien to full payment, it becomes a question as to theHorin of order which may be taken upon this motion. I am not willing to make a simple order directing the receiver to pay the petitioner’s claim. I am willing, however, to grant an order which shall provide that upon the receipt by the receiver from, the produce- exchange of a sum of money which shall be sufficient to discharge the lien, and upon a satisfaction of the lien, duly executed, being tendered to the produce exchange, the amount due and payable upon the lien shall be forthwith paid by the receiver to the petitiohero To .that extent the motion is granted.

Notice the order for settlement.


author: PER CURIAM.

text:
    Artemus H. Earle, App’lt, v. Helen M. Beeman et al., Resp’ts.

      (Supreme Court, Appellate Division, Third Department,

      Filed January 20, 1896.)

    Deposition—Discovery and inspection.
    A defendant is not entitled to an order for inspection of notes sued on before answer, unless it is necessary to the preparation of the answer.
    Appeal from an order allowing defendants an inspection of notes.
    The complaint alleges that the notes were made by Nathan Bee-man, the husband of the defendant, pursuant to the defendant’s direction, and indorsed by the plaintiff as an accommodation indorser, and that the defendant, and her husband, as her agent, negotiated them for her benefit; and that siie had and used the proceeds, or her husband used them for her benefit; which notes the plaintiff subsequently had to pay. The plaintiff, pursuant to the defendant’s demand, served a bill of particulars upon the defendant, giving the dates and principal of each note, and the respective sums which the p,Qintiff claims to have paid upon each one of them. The defendant then moved to inspect the notes, to enable her to frame her answer, and the motion was granted.
    John P. Kellas, for app’lt ; Gordon H. Main (William P. Cant-well, of counsel), for resp’ts.
   PER CURIAM.

—We do not think the defendant’s petition shows that she cannot properly frame her answer ur h so she is allowed to inspect the notes mentioned in the plaintiff's bill of particulars. She states in the petition, in substanc’e, that her defense is that she neither made or authorized the making of the notes sued upon ; that she never had their proceeds, or any benefit from them, as charged in the complaint; and that the plaintiff has been paid in real estate and money a large sum upon them. She thus has a clear idea of what her answer ought to contain. We need not consider whether she will, after answer, need an inspection in order to prepare for trial, since her motion is not based upon that ground.

The order is reversed, with $10 costs and disbursements, and the motion below is denied, with $10 costs.


author: GAYNOR, J.

text:
    In the Matter of the Petition of John Varderhoof for a Writ of Mandamus.

      (Supreme Court, Kings Special Term,

      Filed January 17, 1896.)

    1. Mandamus—Laches.
    A delay oí more than four months bars an application for a mandamus to compel reinstatement of one removed from office in violation of chapter 577 of 1892, though the conduct of the comptroller was willful and wrongful.
    2. Officer—Removal—Misdemeanor.
    The removal of a veteran from public office in violation of chapter 877 of 1892 is a misdemeanor.
    Petition for a writ of mandamus to compel the comptroller of the city of Brooklyn to reinstate petitioner in a clerical office.
    James D. Sell, for petitioner; A. G. McDonald, Corp. Counsel, opposed.
   GAYNOR, J.

—The petitioner was a clerk in the tax and assessment bureau of the department of finance of the city of Brooklyn. The comptroller was expressly prohibited by statute from removing him except for cause shown after a hearing, he being entitled to that protection under the veteran statute (Laws 1892, c. 577). On January 26, 1895, the comptroller informed him that he would not be retained after January 30th. On the latter day the petitioner informed the comptroller by letter that he was a veteran, and therefore entitled to hold his position. The comptroller on the same day answered him by letter, acknowledging the receipt of his notice of “ intention to insist ” on his rights under the veteran statute, and concluding as follows : “ I now notify you that on and after this date your position will be abolished.” It is shown that whereas only seven, or at most eight, clerks were employed in the said bureau prior to and at the time of the petitioner’s discharge, the comptroller now employs ten clerks there, and it is insisted that the veteran law may not be nullified or defied by a mere pretense of abolishing places. This is undoubtedly so, but the question of whether the comptroller’s act in nominally abolishing the petitioner’s position was really to make way for another, and therefore only a sham, cannot be tried herein, because of the delay of the comptroller in instituting this proceeding. It has been decided that a delay of more than four months bars an application for mandamus for reinstatement (People ex rel. Miller v, Justices of Court of General Sessions, 78 Hun, 334 ; 60 St. Rep. 729),. and this patitioner delayed more than eleven months. It is insisted that the conduct of the comptroller was willful and wrongful. I do not see how that affects the case. The only remedy provided for that is by indictment. The said veteran statute expressly prohibits the removal of a veteran except for cause shown after a hearing, but imposes no punishment for a violation thereof. But section 155 of the Penal Code provides 'that, “ where the performance of any act is prohibited by a statute, and no penalty for the violation of such state is imposed by any statute," the doing such act is a misdemeanor.” This general provision covers the unlawful removal of veterans by a public officer, and makes it a general misdemeanor, which is made punishable by imprisonment not exceeding one year, or fine not exceeding $500, or both. Pen. Code, § 15. While no such criminal prosecution has yet been had for violation of the veteran statute, like criminal prosecutions-have been sustained in similar cases. Gardner v. People, 62 N. Y. 299; People v. Norton, 7 Barb. 477. So many veterans have had to apply to .this court for reinstatement daring the last two years that it is deemed timely not to pass unnoticed the plaintiff’s claim of a wrongful removal. Motion denied.


author: PATTERSON, J.

text:
    Nicolas Chapuis, App’lt, v. May A. Mathot et al., Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed December 18, 1895.)

    1. Pleading—Usury.
    Where the allegation in a complaint is that there was “ an agreement to pay the mortgagee interest at a greater rate than 6 per cent, per annum for money loaned,,” it states no more than a mere conclusion and is insufficient.

      2. Same.
    The complaint should show all the facts constituting an actual corrupt agreement, or from which that corrupt agreement may be inferred. It is not necessary to use the word “ corrupt,” or even the word “usury!” if : the facts establishing these incidents of the transaction are set forth; hut merely applying epithets or pleading a definition of usury does not constitute that “ plain statement of facts” necessary to a sufficient pleading.
    3. Usury—Defense.
    The right to set up usury is altogether personal to the borrower and those in privity with or claiming under him, and the usury is voidable at the election of the borrower or those in privity with him.
    4. Same.
    A judgment creditor stands in legal privity with a party who gave a usurious security.
    5. Same—Judgment creditor.
    Where the mortgagee, after default in a usurious chattel mortgage, takes possession under it, without objection of the mortgagor, the usury is waived, and, therefore, a subsequent judgment creditor of such mortgagor cannot attack the mortgage on the ground of usury.
    Appeal from an interlocutory judgment, sustaining a demurrer to the complaint interposed by a defendant.
    Arthur Furber, for app’lt; Wm. L. Mathot, for resp’t
   PATTERSON, J.

—The several matters discussed in the argument of this cause arise on appeal from an order sustaining a demurrer of the defendant May A. Mathot to the complaint herein, and from an interlocutory judgment entered upon such order. The plaintiff sued as a judgment creditor of the defendant Victor Francez. The complaint alleges the recovery of judgment, the issuance of an execution, and its return unsatisfied, and then states that the defendant Francez, in 1893, was the owner of and had in possession certain personal property upon which he made a chattel mortgage (dated October 20, 1893) to the defendant May A. Mathot, whose name was inserted as mortgagee merely “as a cloak and cover” for her husband, Louis Mathot, he being the real party to the transaction in which the mortgage was given; that “said mortgage was given to secure a usurious contract theretofore made between said Louis Mathot and said Victor Francez, to wit, an agreement to pay to Louis Mathot interest at. a greater rate than six per cent, per annum," for the use of money. loaned and advanced by said Mathot to said Francez, and that said Louis Mathot has received large sums of money, in pursuance of said agreement, in excess of interest thereon at the rateof! six per cent, per>annum.” It is further alleged in the complaint, that Francez remained in possession of the property until January. 9, 1895, when Louis Mathot took it, and retained it until January SO, 1895, on which day he sold it through May A. Mathot to the defendant Tripault, who gave back, as part consideration, a chattel mortgage on the same property for $3,350: and that Tripault had full knowledge that neither Mr. nor Mrs. Mathot had any title to the property (presumably by reason of the alleged usury) as against the plaintiff; and judgment is demanded that the mortgage from Francez to Mrs. Mathot be adjudged void, and be set aside so far as may be necessary to satisfy the plaintiff’s judgment, and that it may be adjudged that Tripault holds the property for the plantiff’s benefit to the same extent; that a sale be directed, and the proceeds first applied to the payment of the plaintiff’s judgment; and for further relief.

The case now before the court is between the demurrant and the plaintiff only. The learned judge at special term, in sustaining the demurrer, assigned two reasons for so doing. First, that the allegations of the complaint respecting the usury (the existence of which is the only claimed foundation of any right of the plaintiff to relief) are altogether insufficient; and, second, that, even had usury been properly pleaded, the action could not be maintained. We concur in the view taken at the special term concerning the insufficiency of the averments of the complaint as to usury. All that is set forth is a naked statement that the original contract, pursuant to which the Francez mortgage was given to Mi’s. Mathot, was, as to the rate of interest, usurious. The allegation is that there was “ an agreement to pay Louis Mathot interest at a greater rate than six per cent, per annum .for money loaned,” which is nothing more than a mere conclusion, omitting, as it does, the very substantial element that there was a corrupt agreement to pay more than six per cent. All the facts thought to constitute the alleged usurious character of the agreement should have been stated, so that the court might determine from the pleading whether the contract comes under the condemnation of the law. The mere taking of or contracting for a sum which happens to be more than six per cent, for the loan or forbearance of money is not necessarily conclusive on the subject.'

Oases are frequent in which the excess over the legal rate of money paid as interest is the result of a mistaken calculation. It is the intent to exact, on the one hand, and to pay, on the other, more than1 the allowed rate, that taints the contract; and the pleading should show all the facts constituting an actual corrupt agreement, or from which that corrupt agreement may be inferred. Manning v. Tyler, 21 N. Y. 567. It is not necessary to use the word “ corrupt,” or even the word “usury,” if the facts establishing those incidents of the transaction are set forth (Miller v. Schuyler, 20 N. Y. 524); but. merely applying epithets or pleading a definition of usury, does not constitute that “ plain statement of facts ” necessary to a sufficient pleading. The foregoing considerations would1 dispose of of this appeal, were it not that leave to amend the complaint on terms was granted in the order under review, notwithstanding the ruling of the learned judge that, even under an amended complaint, the plaintiff could not maintain the suit If that ruling is correct, it would be futile to change the structure of-the pleading. That ruling has the full support of authority in: the adjudications of the courts of this state. The right to set up usury is altogether personal to the borrower and those in privity with or claiming under him, and the usurious contract is voidable at the election of the borrower or those in privity with him.

The state of the law on the subject is summed up in Williams V. Tilt, 36 N. Y. 319. After referring to Dix v. Van Wyck, 2 Hill, 522, and Post v. Part, 8 Paige, 640, in which it was held ¡that a mere stranger cannot attack the validity of a usurious secure iity, but that it can be availed of by any one who claims under 'the security and privity with the person who gave it, the court proceeds to say:

“This is the extent to which the cases have carried the right, and even the right of privies may be cut off by the waiver of the original party. Sands v. Church, 6 N. Y. 347. The contract is not absolutely void, but only voidable, at the election of the borrower or those who are privies in interest or in contract with him, 'Hence no other can make the objection.’’

This statement is fortified by a long list of authorities cited in the opinion.

But there is another line of cases invoked by counsel for the' appellant in his general contention that the decision below wasj erroneous, and to which it is necessary to advert. It is agreed that the judge at special term overlooked the fact that, in contemplation of law, the plaintiff is in privity with the mortgagor.

In Dix v. Van Wyck, supra, it was held that a judgment cred-" itor stood in legal previty with a party who gave a usurious security, and that where goods had been sold under execution, and a mortgage thereof brought replevion for them, the defendant might-set up usury as a defense, but it also held that the usurious security might be ratified. In Mason v. Lord, 40 N. Y. 476, at the suit of a judgment creditor, an assignment of a lease absolute on its face, but given as security for a usurious loan, and in effect a mortgage, was set aside in the hands of an innocent purchaser' from the assignee with notice. But it distinctly appeared in that case that a judgment creditor of one Lord had a lien on the property, and the court recognized the fact that Lord, the borrower, could have waived the invalidity of the security had he chosen to do so, and thus have defeated the judgment creditor’s suit. It is said-in the opinion:

“It is claimed that Lord could waive the invalidity of the mortgage. That is true as to his own rights and the rights of all i acquired from him subsequent to such waiver. But the lien of the judgment had attached before anything done by Lord that' could possibly constitute a waiver.”

In the present case it does not appear at what date the plain-: tiff’s execution was delivered to the sheriff, sons to bind the goods of Francez, but it does not apper that Mathot took possession of, the mortgaged chattels under the mortgage some seventeen days before the plaintiff’s judgment was recovered, and Francez’s acquiescence in that proceeding was a clear waiver of any defense he had to the instrument. The mortgage, as is recited in the complaint, was payable on demand. On default it operated as a bill of sale, and possession was taken. The rights of the Mathots, husband or wife, were complete. Francez had relinquished his right to contest the instrument, and none in favor of the plaintiff liad intervened.

It is claimed by the plaintiff that some recent decisions of the court of appeals have an influence on the subject adverse to the •views above expressed, and we are referred with confidence to Stephens v. Perrine, 143 N. Y. 476; 62 St. Rep. 843, where it was held that a receiver in supplementary proceedings might maintain an action against a mortgagee of chattels who had taken .possession and sold under a mortgage void for failure to file it as required by statute. That mortgage was absolutely void, as the court held, and it could not be reinstated. No question of usury at all was in the case, but the action arose under another special statute, and it has no analogy with this.

The order and judgment appealed from should be affirmed, with costs.

All concur.


author: O’BRIEN, J.

text:
    Hecla Powder Company, App’lt, v. Sigua Iron Company, Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed December 18, 1895.)

    Damages—Proximate OAtrsE.
    • Where, if an event happens, it must inevitably cause loss and damage to one or the other contracting parties, the party who has contracted that such an event shall not happen, although he cannot specifically perform that contract because the event may happen through the act of God, or inevitable necessity, yet he shall stand to that risk, and make good all the loss which shall occur in consequence of the happening of the event contemplated. So held, where one who, knowing that gunpowder is an interdicted article in a foreign country, agrees to deliver it to the buyer there, and, for that purpose, to obtain permission of the government of such country to land it, which he neglects to do.
    Appeal from a judgment entered on a verdict in favor of defendant, and from an order denying a motion for a new trial, made on the minutes.
    William P. Quinn (Alex T. Goodwin, of counsel), for app’lt; Frederic J. Swift, for resp’t.
   O’BRIEN, J.

—The action was brought to recover $950 and interest upon an accepted draft which defendant gave for Hecla powder bought from plaintiff, to be delivered in Santiago de Cuba. Defendant denied that the powder had been delivered, and set up a counterclaim based upon the plaintiff’s attempt and failure to make the delivery; alleging that it neglected to procure the proper ánd necessary permit from the Spanish government to enter and land the power in Santiago, and failed to give defendant the agreed notice, by reason of which the powder was declared contraband and seized by the Spanish .government, and a fine of $3,472.49 imposed upon the defendant by such government, which it was obliged to pay, and did pay under protest. The plaintiff made a contract with the defendant to deliver 5,000 pounds of Necia powder to defendant’s agents, Brooks & Co., in Santiago de Cuba. The parties understood that this powder was an interdicted article in Cuba, and that, unless permission to enter it was obtained, a fine and seizure might result. The plaintiff had made previous shipments to Cuba, and, in addition to the knowledge thus obtained as to the laws and. regulations in regard to entering the powder, its attention was specifically called to the difficulty of delivery by the agent of the defendant at the time the contract was made, by the latter’s expressing a doubt as to plaintiff’s ability to land the powder, and by entering into a contract which required plaintiff to obtain the necessaary permits of the Spanish consul in New York, and to take such other measures as might be necessary-to get the powder into Cuba. To this end the defendant’s witnesses testified that plaintiff agreed to send it and its agents previous notice of the shipment of the powder, and to forward the-permit to enter it, together with the bill of lading, so that defendant’s agents might have them at the time of the arrival of the vessel. These conditions were disputed, the plaintiff claiming that there was no agreement to send previous notice, or to forward the documents mentioned. The fact, however, is that plaintiff obtained a permit from the Spanish consul, and a bill of lading; but these were not mailed, but were handed to the captain of the vessel carrying the powder, for his own use, and for transmission to defendant’s agents, but whether, as a matter of fact, they were ever delivered to the latter, is left in doubt. After considerable delay the powder was shipped, and, upon arrival of the vessel in the harbor of Santiago, it was seized by the Spanish authorities; but whether such seizure was on board the vessel, and the powder then placed upon the customhouse lighters, or whether it was seized after it was placed on lighters that had been brought there by the defendant’s agents, was a disputed question of fact, upon which there was slight, if any, evidence; the plaintiff claiming that it was seized after delivery to defendant’s agents, and the defendant as strenuously contending that the evidence shows it was seized on the vessel. Such seizure occurred nothwithstanding that the bills of lading, invoice, and the consular permit were handed to the customhouse officials; and whether their act was a mere arbitrary and wanton one,-or was pursuant to any law of Cuba, is not made clear. This same remark is applicable to nearly all the testimony appearing upon the disputed questions of fact, which has been presented on both sides in such a misty and . shadowy way as to leave in doubt everything but two salient facts,f —one, that the plaintiff entered into a contract to deliver the powder in Santiago de Cuba; and the other, that it was seized when it arrived there, by the Spanish authorities, and the defendant’s agents fined the amount which is the basis of the counterclaim. It was not seriously disputed or brought in question as to the amount of the fine paid by the defendant and found by the jury, and, the parties not having litigated that below, it is too late to urge it upon the appeal. With such facts conceded, and with the unsatisfactory light shed by the rest of the testimony, we are to dispose of the two question presented: First, as to whether the plaintiff made oat a cause of action upon the draft j and the-second, as to whether, by way of counterclaim, the defendant was-entitled to recover the amount of the fine paid by its agents at. Santiago. Respecting the former, little need be said. It is beyond dispute that plaintiff’s contract was to deliver the powder to the defendant’s agents at Santiago; and that there was a failure to prove such delivery, the jury has found.

The more serious question is as to the liability of the plaintiff to reimburse the defendant for the fine which was imposed by and paid to the Spanish authorities. At first blush it might seem difficult to predicate a liability on the plaintiff’s part to reimburse the defendant for what, so far as appears, might have been the unlawful and unwarranted act of the Spanish government, in seizing the powder and imposing the fine. The law only recognizes damages which are natural and probable, and not those which are extraordinary and unlikely to be foreseen. Remote, consequential losses cannot be recovered. Putnam v. Railroad Co., 55 N. Y. 108, 119 ; Sedg. Dam. (8th ed.) §§ 122, 124. And it is urged by appellant that the payment of such a fine would not be the direct or natural consequence of any act by it, and the possibility of a fine’s being imposed upon the defendant or its' agents was exceedingly remote. Without quarreling with this argument, we think that when consideration is taken of the contract between the parties, and wliafc is included, and the duty that devolved on each, we can reach a conclusion as to who should bear a loss which in the first instance was suffered by the defendant. It was within the knowledge of both the contracting parties that the introduction of powfier into Cuba was a matter of difficulty, requiring the taking of certain precautions, including the obtaining of a consular permit, and, with knowledge of such difficulties and of the risk assumed, the plaintiff, for a consideration, agreed, not only to sell the powder, but to assume the risk of delivering it to defendant’s agents in Santiago deCuba. The jury having found that they did not perform their contract, and did not deliver the powder to the defendant’s agents,—from which the inference naturally flows that it was seized while still in the possession of the plaintiff, — we are brought to point where, upon well-settled principles of law, we must hold that the loss resulting from the breach of such contract by the plaintiff should be suffered by it. If, as claimed by defendant, the testimony shows that the usual precautions which the plaintiff agreed to take were not taken,-—such as giving the defendant’s agents previous notice of the shipments and the name of the vessel, and forwarding to them the necessary documents for the entry of the powder,—then is added another ground, that of negligence, upon which plaintiff’s liability might be predicated. Such conduct was not only negligent, but a breach of the express contract which, according to the defendant, was-entered into. If, however, we eliminate the disputed ‘terms of the agreement as to the notice, and the transmission to defendant’s agents of the permit and other documents, and consider the ad.mitted terms of the agreement, which placed upon the plaintiff the obligation of delivery to defendant’s agents at Santiago, which, as the jury found, was never performed, then the failure and neglect to discharge the duty and obligation in this respect which the plaintiff owed to defendant established a cause of action in favor of the defendant; and where, as here, the damages resulting are certain in their nature and amount, and flowed actually from the breach, they are recoverable. In support of the proposition that a cause of action arises, we would refer to the cases of Harmony v. Bingham, 12 N. Y. 107 ; Pollett v. Long, 56 id. 200 ; Tompkins v. Dudley, 25 id. 273 ; Phillips v. Taylor, 49 N. Y. Supr. Ct. 318 ; Bigler v. Hall, 54 N. Y. 167 ; and Milldam Foundry v. Hovey, 21 Pick. 441. In the latter case the court ■said:

“ The good sense of the rule seems to be this: That in a case where, if an event happens, it must inevitably cause loss or damage to one or the other of the contracting parties, the party who has contracted that such an event shall not happen, although he •cannot specifically perform that contract,’ because the event may happen through the act of God, or inevitably necessity, yet he shall stand to that risk, and make good all the loss which shall occur in consequence of the happening of the event contemplated. The party thus contracting takes the consequences. Parties who enter into a contract in reference to the carrying out of any branch! of business are presumed to know and understand how that business is usually carried on, how it must necessarily be conducted, and to have reference to such known circumstances in their contracts.”

Upon the proposition that such damages as defendant here suffered from the breach of the contract to deliver, and which flowed naturally from such breach, and being certain in their nature, are recoverable, authority is to be found in the cases of Griffin v. Colver, 16 N. Y. 489 ; Dodds v. Hakes, 114 id. 260 ; 23 St. Rep. 192 ; Allen v. McConihe, 124 N. Y. 342; 36 St. Rep. 262. In .addition to these, we have the leading case of Hadley v. Baxendale, 9 Exch. 341, wherein Alderson, B., thus states the rule:

“ Now, we think the proper rule in such a case as the present is this: Where two parties have made a contract, which one of them has broken, the damages which the other party ought to receive in respect to such breach of contract should be such as may fairly and reasonably be considered either arising naturally—i. e., according to the usually course of things—from such breach of contract itself, or such as may be reasonably be supposed to have been in the contemplation of both parties at the time they made the contract as the probable result of the breach of it. Now, if the special circumstances under which the contract was actually made were communicated by the plaintiffs to the defendants, and known to both parties, the damage resulting from the breach of ■such contract which they would reasonably contemplate would be the amount of injury which would ordinarily follow from a breach of contract under the special circumstances so known and -communicated; but, on the other hand, if these special circumstances were wholly unknown to the party breaking the contracts he, at the most, could only be supposed to have had in his contemplation the amount of injury which would arise generally, and in the great multitude of cases not affected by any special circumstances from such a breach of contract. For, had the special circumstances been known, the parties might have especially provided for the breach of contract by special terms as to the damages in that case, and of this advantage it would be very unjust to deprive them.”

Our conclusion, therefore, is that as the plaintiff agreed to deliver, and in the attempt, which was abortive, but which plaintiff agreed would be successful, the defendant was placed in a position where it suffered loss flowing naturally from a cause covered by the contract, such loss should be borne by the one guilty of the breach.

In addition to these questions, we have the subsidiary ones based upon certain exceptions taken to rulings upon evidence, and one exception to the charge of the learned trial judge. Ait' examination of such has not shown that any error was committed! sufficient to disturb the yerdict which, upon conflicting evidence, and under what might be designated as a fair preponderance or evidence, was reached by the jury.

We think that the judgment and order were right, and should be affirmed, with costs, ' 1 '

All concur.


text:
    The People ex rel. General Electric Company, Resp’t, v. Edward P. Barker et al., as Commissioners, App’lts.

      (Supreme Court, General Term, First Department,

      Filed December 18, 1895.)

    Taxes—Corporations—Where assessible.
    Where, under section 6, of 1 Revised Statute 389, a corporation has its ; principal place of, business at Schenectady and its general executive and . financial business, which had been carried on at New York has been removed out of the city, leaving only a selling agency at New York, its Í. capital is taxable at Schenectady and not at New York.
    Appeal from an order vacating the asssssmenfl
    James M. Ward, for app'lt; William B. Putney, for resp\
   PER CURIAM.

—Affirmed, on opinion of the special term, with costs.

The opinion of Mr: Justice RUSSELL at special term is as follows :

The commissioners assessed the relator for the year 1894 for the sum of $9,776,934. A warrant is out for the collection of the taxes on this assessment to the amount of about $163,000. The relator procured a certiorari to review the assessment. A return was made, some evidence taken upon hearing at special term, and the inquiry presents these two questions for solution: First. Had the tax commissioners the right to embrace the relator within their jurisdiction and assess the value of its capital? Second. If they had this right, was their assessment plainly and clearly excessive? In the view taken by this court, the solution of the first question renders inquiry into the second unnecessary.

The relator was created by special act of the legislature of this state, and organized in April, 1892. The by-laws provide that principal place of business shall be in the city of Schenectady, in the county of Schenectady and state of New York, but there should be an office or place of business in the city of New York and in such places the state of New York as the board of directors might determine. The tax commissioner for New York City assessed the stock of the company in the assessment upon which the taxes for 1893 were to be collected, the relator protesting against liability to taxation and the amount assessed, but finally remaining quiescent under an assessment in New York City of the same amount as the assessment to review which this certiorari was taken.' The commissioners, in making the assessment for 1894, have the undoubted right to consider the inquiries made by them in making the assessment for 1893, although it was their duty to still more further inquire, in view of the greatly changed conditions of the financial world from the spring of 1893 to the spring of 1894, and in view, also, of a possibility of a changed situation of the financial place of business or the place of operations of the company. For the year 1894, upon the assessment made between the first Monday of September, 1893, and the second Monday in January, 1894, the tax commissioners assessed the personal property of the relator in the sutn of $50,000,000. The relator appeared and contested the legality of such assessment upon the grounds referred to, viz. want of jurisdiction to assess at all in New York county, and secondly, excessive valuation, and furnished some proof which is substantially uncontradicted, except it may be by the knowledge or information acquired by the tax commissioners in the proceedings for the assessment of 1893, and this possible contradiction applies to the issue of excessive valuation mainly. By the affidavit of Yice President Ord, of the Electric Company, it appears that the principal place of business at Schenectady, as provided by the by-laws, has never been officially changed by action of the directors, except that, prior, to the 1st of October, 1893, the general, executive, and financially business theretofore being done at New York City was transferred to Boston, the accounting department being transferred in June, 1892 and the treasurer’s and secretary’s departments for a few months1 later, and that all the securities, including the stocks and bonds of' the company, were, before the first part of November, 1893, taken to the city of Boston and there put in the custody of the vice-president, Ord. The meeting of the board of directors was held in Boston, and none of the principal officers of the company, after October 1st were resident in the state of New York. The manufacturing business of the company was carried on in Schenectady, and the branch office, formerly in New York, was removéd to Schenectady, leaving in the city of New York only a selling agent doing business under the designation of the Eastern District.” "The stockholders’ meetings have always been held in Schenetady.

Upon these facts the question of law arises as to which of the two counties of the state of New York the right of the assessment of the personal property of the company should be given. The state of New York does not seek to impose a double taxation upon the same property, nor does it deprive one county of the state of the means to be afforded by taxation of the assessable property within that county because another important financial center may have, at an earlier date in the year, made an assessment upon the personal property rightfully assessable in the former county. The general provisions of the Revised Statutes conform to this theory: “All of the personal estate of any incorporated company liable to taxation on its capital shall be assessed m the town or ward where the principal office or place for transacting the financial concerns of the company shall be, or if such company have no principal office or place for transacting its financial concerns, then in the town or ward where the operations of such company shall be carried on.” 1 Rev. St. p. 389, § 6. Assuming that the general financial operations of the company may be now carried on in the city of Boston,- still the principal office or place of business, and the place where the principal financial transactions of the company are carried on, is in county of Schenectady; and this view is further confirmed by the general corporation acts (Laws 1892, c. 687, § 3); which provides: “The term, ‘office of a corporation,’ means its principal office within the state, or principal place of business within the state, if it has no principal office therein. The office of a stock corporation shall be in the county, town, or state in which its business is principally carried on.” It seems clear to me that the taxing authorities of the county of Schenectady have the right of assess the value of the personsal property of the relaror, and that those of the county of New York have not.

. The assessment, therefore, made by the commissioners of New York county should be vacated.


text:
    The People ex rel. Edison Electric Light Company, Resp’t, v. Edward P. Barker et al., as Commissioners, App’lts. The People ex rel. Edison General Electric Company, Resp’t, v. Same, App’lts.

      (Supreme Court, General Term, First Department,

      Filed December 18, 1895.)

    1. Taxes—Corporations—Place op business.
    _ A corporation, organized under chapter 40 of 1848, as amended by section 2, chapter 691 of 1892, cannot, by [providing in its certificate of incorporation that its principal business office shall he at New York, or at such other place as its stockholders may determine, change its place of business so as to relieve itself from, taxation at New York on its personal property. ,

      2. Same.
    ■ There is no statute which gives the right to a corporation, in filing its certificate, to qualify the statement which the law requires as to its designating its principal place of business.
    Appeal from an order in each case vacating the assessment.
    James M. Ward, for app’lts; William B. Putney, for resp’ts.
   O’BRIEN, J.

— As the questions involved in both the above entitled proceedings are the same, except as to the amounts, they may be considered together. It is conceded that, in the case of the Edison General Electric Company, the assessment should be reduced to the valuation shown by the statement presented to the tax commissioners, viz. $240,275; and that, in the" case of Edison Electric Light Company, the assessment must be reduced to the valuation shown by a similar statement, to $7,820. This leaves the only question in these proceedings one of residence.

The relators claimed below that on the second Monday of January, 1894, they were and still are nonresidents of the city of New York, and, therefore that the tax commissioners haue no jurisdiction over them, and that the assessment was illegal and void. In disposing of this contention favorably to the relators, the learned judge at special term held that this principle was controlled by his opinion in the Case of General Electric Co. (which, as affirmed, is herewith handed down) 36 N. Y. Supp. 842. We think, however, there is a distinction between the General Electric Case and that of these relators, growing out of the difference connected with their incorporation. The General Electric Company was incorporated by a special act of the legislature, and was empowered by such act to fix its residence by its by-laws, which was done, its principal place of business being thereby placed in the city and county of Schenectady, where the business of the company on the second Monday of January, 1894, was, and continuously ever since has been, principally carried on. These relators here, however, are manufacturing corporations, created under the general act of 1848 as amended; the last of these amendments being embodied in the corporation law of 1892, the provisions of which, so far as they relate to the incorporation of the relators, are found in chapter 691 of the Laws of that year.

In the original act of 1848 (chap. 40) the provision was that the certificate of incorporation should state “ the names of the-town and county in which the operations of the said company are to be carried on.” By Laws 1892, c. 691, § 2, it is provided that the certificate, among other things, shall contain “the location of its principal business office.” These relators, in accordance with what they regarded as, and what was, the law, fixed their status in their certificate, and, as shown-by the return of the tax commissioners, which is not disputed, “the town and county so recited in the said certificate was the city of New York, and no other place whatever, save only that the said certificate of the relator attempted to qualify the rectial as to its principal office contained in said certificate by reciting that the principal office of the company would be in the city of Few York or at such other place as the stockholders of the company might determine.” Were it not for the last sentence, which recited that the principal office might not only be in the city of Few York, but also at such other place as the stockholders of the company might determine, there would be no room for argument as to the conclusion to be reached by t'his court, in view of its decision in - the case of People ex rel. Knickerbocker Press Co. v. Barker, 87 Hun, 341 ; 68 St. Rep. 149; affirmed, 148 N. Y. 42 ; which is authority for the proposition that, in case a statute under which a corporation is organized requires that its principal place of business or its principal office shall be designated in its certificate of organization, the statement in the certificate in respect thereto is, as against the corporation,, conclusive evidence of its residence, unless its residence has been changed pursuant to some statute. It is not claimed that a change was affected by any statute, nor have wé been referred to any statute which gives the right to a corporation, in filing its certificate, to qualify the statement which the law requires as to its designating its principal place of business, and we think, therefore, that this must be treated as surplusage, and that the corporations must be held by their certificates to have designated their residences as Few York City,

It has been urged that the position of the relators is to be distinguished from the Knickerbocker Press Co. Case, in that the latter corporation filed its certificate and designated its place of ■business pursuant to an express requirement of the statute, which, with regard to business corporations such as the relators, it is claimed, is wanting. We think, however, that an examination of the original act of 1848 and the amendments shows a clear intent on the part of the'legislature to require in the certificate of incorporation a statement of the “ principal office or place for transacting the financial concerns of the company.!’

As upon this question of residence we think the Knickerbocker Press Co. Case is in principle controlling, the assessments should be modified as to the amounts indicated in this opinion, and, as so modified, the orders should be affirmed, without costs to either party upon this appeal.

All concur.


author: VAN BBUNT, P. J.

text:
    Harry B. Hollins et al., Resp’ts, v. Samuel T. Hubbard, Jr., et al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed December 18, 1895.)

      1. Contracts—Considebation.
    A consideration cannot be imported into a contract without the' knowledge of the contracting party, who is to be bound because of the existence •of such consideration. • So held, where a bank, which received a draft against cotton held by the drawer’s consignee, who had made advances thereon, and an order of the consignee for a bill of lading for the cotton, sent the order to the consignee, who, not knowing of the draft, wrote the bank that he would send the bill of lading at a future day, and the bank then paid the draft.

      3. Estoppel—Representation .
    In order to create an estoppel, there must he a representation of an existing fact, and not a promise in respect to some future act.
    Motion for a new trial on exceptions, ordered to be heard at general term in the first instance.
    Wm. D. Guthrie, for motion; 0 ulien T. Davies, opposed.
   VAN BBUNT, P. J.

—On the 27th of June, 1891, the defendants, commission merchants in the city of New York, had in their possession upward of 300 bales of cotton which had been con-„ signed to them by Charles Green’s Son & Co., of Savannah, Ga., and which were held by them subject to a lien for advances made •to Green’s Son & Co. The plaintiffs were at this time engaged in businesss as bankers in the city of New York. On the day above mentioned there was presented to the plaintiffs a bill of exchange for $10,000, drawn by Green’s Son & Co. against 200 bales of cotton. The plaintiffs on the same day received from Green’s Son & Co. a letter, dated June 25th, 1891, advising of the draft, as follows:

“ Savannah, 25 June, 1891.
“Messrs. H. B. Hollins & Co., New York—Dear Sirs: We beg to advise our draft on you, favor the National Bank of Savannah, $10,000, against 200 B | C for Liverpool as per documents enclose, viz.: 50 B | C herewith, and B'¡ L & certificate of insurance for 150 B | C, to be delivered to you by Messrs. Hubbard, Price & Co., as per order herewith. “ Yours, truly,
[Signed] Charles Green’s Son & Co.”

The accompanying order was as follows:

“ Savannah, 25 June, 1891.
“ Messrs. Hubbard, Price & Co., New York — Dear Sirs: Confirming our telegram of to-dav, you will kindly take out B | L by steam to Liverpool for 3 A M 25, J A L 25, A M G 25, T O M 25, H O X 25, H O N 25,-150 B [ Cotton,—and deliver same to Messrs. H. B. Hollins & Co., N. Y. Please have the B | L taken out in our name to order of some clerk and indorsed in blank. Also, please get insurance certificate from United States Lloyds {50 Wall street), and deliver same to Messrs. Hollins. The remaing cotton you have of ours, we shall keep in N. Y.
“Yours, truly,
[Signed] Charles Green’s Son & Co.”

Upon receipt of these papers the plaintiffs sent the order to the defendants by a messenger boy, but did not send, or disclose the purport of, the letter above referred to. They subsequently received from the defendants an acknowledgment as follows:

•“Cotton Exchange Building, New York, June 27, 1891.
“ Messrs. H. B. Hollins & Co., Present—Dear Sirs: 150 B | C referred to for account of Messrs. Charles Green’s Son & Co., cannot be shipped till next week, when we will deliver to you B | L and certf. of ins. as requested. “Yours, truly,
[Signed] Hubbard, Price & Co., D. A. W.

Upon the receipt of this letter from the defendants, the plaintiffs paid the draft for $10,000, and immediately thereafter Green’s Son & Co. failed. At the time of the writing of the letter above mentioned from the defendants to the plaintiffs, the defendants had no knowledge or information that the plaintiffs intended paying any draft of Green’s Son & Co. upon them. It appears from the evidence that the letter from Green’s Son & Go. to the defendants is not the usual form of delivery order in use among merchants. The defendants, having refused to deliver the 150 bales of cotton without being reimbursed for the advances made by them to Green’s Son & Go. thereon, the plaintiffs commenced this action for damages for a-breach of the contract to deliver the same. Upon the trial of the action, these facts being established, the court directed a verdict for the plaintiffs, and ordered the exceptions to be heard in the first instanee at the general term.

The plaintiffs claim to recover in this action upon three grounds: First, that there was established an agreement upon the part of the •defendant to deliver, founded upon a valuable consideration; second, that, even if the defendants had a lien upon the cotton, it was waived; and, third, because the defendants are estopped from, questioning the plaintiffs’ right to the cotton in question.

It is difficult to understand how a consideration can be imported into a contract without the knowledge of the" contracting party who is to be bound because of the existence of such consideration. It seems to be essential to the existence of a valid contract that each party should be cognizant of all its terms and features, and that where one party is ignorant of that which is a necessary constituent of the alleged contract, there is no basis upon which an agreement can be founded, because a party cannot agree in respect to a thing of which he is absolutely ignorant. It would seem, therefore, that the defendants, being ignorant of the fact that the plaintiffs intended to make advances upon the strength of the defendants’ promise to ship the cotton in question, such intention, ■upon the part of the plaintiffs cannot be read into the agreement between the parties to this action to furbish a consideration.

As to the second ground, namely, the waiver of lien, it seems ■sufficient to say that if the defendants had contracted to deliver, or had estopped themselves from setting up their lien, of course the existence of such lien would be no defense.

The only other question which it is necessary to consider is, were the defendants estopped from questioning the plaintiffs’ right to the cotton in question ? If they had known of the action that the plaintiffs were about to take upon the strength of their communication, there can be no doubt but that they could not be heard now to question the right of the plaintiffs to claim'damages for the nonfulfillment of the promise contained in the letter. But it is_ urged upon the part of the plaintiffs that their ignorance is no justification; that the promise to deliver was absolute and the plaintiffs had a right to act thereon. In support of this proposition the plaintiffs cite the cases of Woodley v. Coventry, 2 Hurl. & C. 164, and Knights v. Wiffen, L. R. 5 Q. B. 660.

The case of Woodley v. Coventry was as follows : The defendant was a dealer in corn and flour, and sold to one Clarke certain barrels of flour, but payment was not made for the same. Clarke then applied to the plaintiffs - for a loan upon the security of its flour, and gave them the following order:

“ Jack’s Coffee House, Mark Lane, August 25, 1862.
“Mr. M. Coventry: Deliver to Messrs. Woodley & Meadows 130 brls. flour, Columbia Mills; 218 "brls. flour, Diamond Mills.
Joseph Clarke.”

The plaintiffs, before making the loan sent the order to the defendant's warehouse by a clerk, who made a full inquiry there whether it was or not in order, and received an oral answer,, “Yes,” and he thereupon left the order at the warehouse, where, it was accepted. The plaintiff then made the loan to Clarke requested by the latter. t Thereafter Clarke became insolvent, ana the defendants refused to deliver the flour, upon the ground1 that plaintiffs stood in no better position than Clarke, and must first pay the purchase moneys owing by the latter. The court held that the defendant’s position was untenable, and that the plaintiffs were entitled to recover. Pollock, 0. B., in his opinion says:

“ The real question was whether the defendants had so conducted themselves that the plaintiffs had a right to say, 1 We call upon you to deliver to us the flour which you say you hold in our behalf.’ The question whether the property passed, as between vendor and vendee, never arose. The only question was whether the defendants had acknowledged that they held the flour in behalf of the plaintiffs; for, if so, according to law and justice they were bound to deliver it, or pay the damages.”

The case of Knights v. Wiffen was as follows : The defendant Wiffen was a produce merchant, and had a large quantity of barley in sacks in his granary, adjoining Stanstead station.' He sold eighty quarters of this barley to one Maris, without specifying any particular portion. Maris did not pay for the barley, however. While the barley remained in defendant’s granary, Máris sold to the plaintiff sixty of the eighty quarters purchased by him, and the plaintiff paid Maris for the same, receiving from him the following delivery order:

“ The Station Master, Stanstead—Sir: Deliver to Mr. T. Knights sixty quarters of barley to my order.
“June 27, 1868. R W. MARIS, JR.”

This order was sent by the plaintiff to the station master, who showed it to the defendant, and the latter said :

“All right. When you get the forwarding note I will put the barley on the line.”

Subsequently Maris became insolvent, and the defendant refused to deliver the barley, on the ground that he had a lien thereon as unpaid vendor. The court held that the plaintiff was-entitled to judgment, and Mellor, J., in his opinion, said:

“ Lord Ellenborough states, in Stonard v. Dunkin, 2 Camp. 344: ‘ Whatever the rule may be between buyer and seller, it is clear the defendants cannot say to the plaintiff, ‘The malt is not yours,' after acknowledging to hold it to his account.’ By so doing they attorned to him, and I should entirely overset the security of mercantile dealings were I now to suffer them to contest the title.”

Lush, J., concurring in the decision, said:

“The defendant, by what he said to the station master, assented to the transfer, and induced the plaintiff to believe that he would hold the barley to his order. By so doing he altered the position of the plaintiff towards Maris. The plaintiff might, on a refusal by the defendant to hold for him, have applied to Maris, and he was deprived of the information which would have caused him to have done so. The defendant is therefore precluded from denying what he said.”

It will be seen that in thqse cases a delivery order was given and accepted, and the acceptor thereby acknowledged that he had the goods in question, and that an appropriation had been made of the proper amount, and placed in the possession or under the control of the purchaser; and this was a statement of existing facts upon which the plaintiff relied and acted. The case at bar is entirely barren of these features. The letter from Green’s Son & Co. to the defendants was not a delivery order in the usual form in use among merchants, and the reply of the defendants to th'e plaintiffs upon the receipt of that order was not a representation that any appropriation had been made of the proper amount and placed under the control of the plaintiffs; but it was a mere statement that they would at some future time give the plaintiffs the evidence that such appropriation had been made and the property placed under the control of the purchaser.

An examination of the case of Anderson v. Read, 106 N. Y. 333; 11 St. Rep. 123, shows that it is necessary that this element should exist in order that an estoppel should arise. The distinction between that case and the case of Knights v. Wiffen, supra, has been pointed out, and it consisted in the fact that in Knights v. Wiffen by the acceptance of the delivery order, acknowledgement of possession, and appropriation and change of ownership were represented. In the case of Anderson v. Read the facts seem to be substantially as follows: The defendants’ firm had entered into a written contract with the .firm of Basin & Co. for the purchase and sale of 1,000 tons of ammouiated super-phosphates. The contract signed by the defendants recited, among other things, “We have to-day sold to Messrs. B. W. L. Basin & Co., of Baltimore, Maryland, 1,000 tons,” etc. Basin & Co. had previously contracted to sell to one De Leon a larger amount of the same general kind of fertilizer, and he agreed to accept the goods purchased of defendants to apply upon his contract. The defendants, with knowledge that Basin & Co. had made such a contract with De Leon, and desired the goods to make delivery under that contract, accepted an order drawn on and presented to them by Basin & Co., requiring them to deliver the goods to De Leon, and agreed to so deliver them. De Leon paid Basin & Co. for the 1,000 tons, partly in his own notes, which were not paid, and partly by acceptances of third parties, which were paid. Basin & Co. gave their notes to the defendants, and soon after stopped payment, and failed without paying the notes. The defendants refused to deliver the goods to De Leon unless they were paid, offering to surrender the notes received by ^them. The action was brought by De Leon’s assignee to recover damages for this refusal. The court of appeals sustained the right of the defendants to refuse delivery on the ground that the acceptance of the order of Basin & Co. in favor of De Leon did not vest any right of property in him, but simply amounted to an assignment to him of the rights of Basin & Co., under the contract, and that, as they had the right to refuse to deliver to Basin & Co., without payment, after that firm became insolvent, they had the same right as against De Leon, and were not estopped from asserting their vendor’s lien. The following language in the opinion of the court in that case seems to be applicable to the case at bar:

“If the latter [De Leon] desired accurate information from the vendors, in order to bind them as to the meaning, in this instance, of language which is susceptible of different meanings, he should have asked them, and if the defendants then made any false representation or were guilty of acts which were equivalent thereto, they might thereafter be estopped from showing the truth as against one who, on the faith of such representations or acts, had altered his position to his detriment, if the truth should be proved. Here is no such case. When the order is produced by Basin and accepted by defendants, the implication that accompanies it on these facts is that defendants will deliver to De Leon under the same circumstances which they would deliver to Basin & Co., and if circumstances should arise prior to the delivery which would absolve the defendants from their obligation to deliver to Basin & Go., by reason of their insolvency, the same right would i;emain with defendants when a delivery should be demanded by De Leon. * * * This case is quite as strong for the defendant as that of Farmelee v. Bain, 1 C. P. Div. 445. In that case defendants sold 100 tons of zinc to B. & Co., and gave them an order, in which defendants undertook to deliver to their order, indorsed thereon, 25 tons, etc., ‘off your contract of this date,’ and signed it. Upon the faith of this document the plaintiffs bought of B. & Co., and paid for, 50 tons of zinc, and B. & Co. having failed without having paid- the defendants, they refused to deliver the zinc to the plaintiffs. The jury found that the defendants, in signing the order, intended the same as a representation to all persons to whom it should be shown that the goods therein mentioned were the property of B. & Co. The court, however, held that this document, thus signed by defendants, was not a known document among merchants, and was to be looked at as any other instrument in writing,-and as thus looked at it contained no representation of any fact, and the plaintiffs had no right to rely upon it as such a representation, and consequently could not claim an estoppel. In the documents before the court in this case, there are no represen-' tations of any fact which the defendants now seek to deny. They simply claim the right to refuse to deliver to an insolvent vendee or his assignee goods which they had contracted to sell and deliver to one whom they supposed solvent when the contract was made. They deny no fact stated in their writings, and they take no new or different position, and claim no other or further right than they have at all times had."

Applying the principles enunciated in this case and the cases therein cited, it would seem that, in order to create an estoppel, there must be a representation of an existing fact, and not a promise in respect to some future act. It follows, therefore, that, there being no contract and no estoppel, no right to recover exists in the plaintiffs.

The exceptions should be sustained, and a new trial granted, with costs of this application to the defendants to abide the event.

All concur.


text:
    The People ex rel. John R. Krushinsky, App’lt, v. James J. Martin et al., as Police Commissioners, etc., Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed December 18, 1895.)

    1. Municipal corporation—Police—Dismissal.
    The provisions of the law, requiring the formulation of written charges and service of the same, can only apply to one who has been legally constituted a member of the police force.
    3. Same.
    A person, who obtains possession of a certificate of appointment as a policeman by fraud, or who never had a valid title to such certificate, acquires no status as a member of the force, and has no rights such as are possessed by a legally appointed member.
    Certiorari to review the decision of the police commiss;onors of the city of New York in dismissing relator from the police force.
    Louis J. Grant, for app’lt; Theo. Connoly, for resp’ts.
   O’BRIEN, J.

—On the 30th of March, 1888, the relator applied to the police commissioners for appointment as a patrolman.in the police department of the city of New York. Thereafter he was notified by the secretary of the civil service board to attend competitive physical and mental examinations. The physical examination appears by a statment annexed to the return, and the answers made to the questions upon the mental examination are also to be found in the record. Such examinations having been found satisfactory, the police commissioners, on or about the 20th of February, 1890, issued a certificate of appointment to the relator, and thereafter he performed the duties of the office up to the 5th day of February, 1895. On October 12, 1894, the mayor of the city addressed a communication to the board of police, calling attention to certain papers used upon the examination of applicants for appointment on the police force before the civil service board, together with a report of an expert in handwriting, upon which the claim was advanced that fraud and deoite was by some person practiced on the civil service board. Attention was thus called, among others, to-the application and the examinations of the relator, and testimony was adduced tending to show that the original signature to the application, which wasconcededly in the handwriting of the relator, was entirely different from the handwriting in the answers to' questions put upon the examination, and from which the conclusion was deducible that the latter we're written by another and distinct person than the one who signed the name of the relator to the application for appointment. As a result, the board of police, on November 9, 1894, adopted a resolution directing the relator, among others, to appear before said board on a day and hour named, the resolution stating that it was the intention of the board “to investigate the question as to whether they have passed a civil service examination, as required by statute.” A copy of this resolution was served on relator, and subsequently, on November 22, 1894, the board made an investigation into the legality of his appointment, informing him that the principal question was as to whether he wrote the answers to the mental examination questions put to him by the civil service board. An opportunity was accorded the relator to demonstrate the fact that he did write them, the proposition being that he should write from dictation certain questions to be put to him. He was advised by his counsel, however, not to. answer questions or make response, and this advice he followed. It is unnecessary to review the testimony, it being sufficient to say that it establishes the fact that the relator procured a substitute to pass the mental and physical examinations for him, and that the certificates given him were procured by fraud and misrepresentation. Thereupon the board adopted a resolution striking the relator’s name from the roll of officers of the force. The position taken by the relator here is that the proceedings against him were illegal, upon the ground that he could not be dismissed from the force until written charges had been made or preferred against him pursuant to section 250 of chapter 410 of the Laws 1882, as amended by chapter 180 of the Laws of 1884. Upon the merits, therefore, it will be seen that no serious question is presented, the claim being that the procedure adopted, and particularly the failure to make written charges and serve them on the relator, was irregular, and that the action of the police board in dismissing him cannot be upheld.

The provisions of the law requiring the formulation of written charges and service of the same could only apply to one who had been legally constituted a member of the force. As against the relator, such a course was unnecessary, for the reason that the proceedings of the board of police were in the nature of an investigation to ascertain whether or not he was legally a member of tire force. When the fact was established that the relator was ineligible for appointment, the board had the right summarily to vacate his appointment, discharge him froni the force, and refuse longer to recognize him as a member thereof; and this follows as a sequence from the fact that the relator never was legally a member of the force, because, being appointed in violation of the.civil service laws, his appointment was void ab initio, and conferred no rights upon the appointee. Where one has been legally appointed on the police force, he obtains a status and rights, of which he can only be deprived in the manner prescribed by law. One, however, who obtains possession of a certificate of appointment by fraud, or who never had a valid title to such certificate, acquires no status as a member of the force, and has no rights such as are possessed by a legally appointed member. Authorities are abundant to support these views, but, as conclusive upon the direct question presented as to the legality of the proceedings taken by the commissioners, we need only refer to the cases of People v. French, 102 N. Y. 586; and People v. Board of Fire Commissioners, 47 Hun, 528 ; 15 St. Rep. 119 ; affirmed, 114 N. Y. 67 ; 22 St. Rep. 322.

We think that the writ in this case should be auashed, and the proceedings dismissed, with costs.

All concur.