text:
    The First National Bank of Penn Yan, Resp’t, v. Eli McConnell, Impl’d, App’lt.

      (Supreme Court, General Term, Fifth Department,

      Filed January 22, 1892.)

    1. Trial—Direction of verdict—Waiver of jury trial.
    A party by requesting the direction of a verdict in his favor does not waive his right to have the case submitted to the jury.
    3 Bills and notes—Bona fide holder.
    One who purchases a promissory note from the maker after it has been endorsed by the payee, has the burden of showing that he is a Iona fide holder.
    3. Same.
    Defendant T. gave to defendant M. a promissory note, payable on or before a specified date. Before that date he paid the note, which was returned with the endorsement of M. T. then procured its discount by plaintiff for himself without M.’s knowledge, the bank refusing to discount for M. In an action on the note, plaintiff’s president testified that the note was not endorsed when first presented, but that it was endorsed at his suggestion. Held, that a direction of a verdict for plaintiff and a refusal to submit the case to the jury was error.
    (Macomber, J., dissents.)
    Appeal by the defendant, McConnell, from a judgment of the supreme court in favor of the plaintiff, entered in the clerk’s office of the county of Yates, .on the 15th day of June, 1891, for the sum of $1,167.29 upon the direction of a verdict at circuit, and also from an order of the court made on the 3d day of June, 1891, denying defendant’s motion for a new trial on the court’s minutes.

      Iluson & Dwelle, for app’lt; Briggs & Sunderlin, for resp’t.
   Lewis, J.

The court having directed a verdict for the plaintiff, we must, in considering this appeal, give that construction to the -evidence which is most favorable to the appellant Guided by this rule, the following is a statement of the facts ;

The defendant Tuth.il!, on the 14th day of November, 1889, purchased of the appellant McConnell the stock of the Penn Yan Democrat Printing Company, and in part payment therefor gave to McConnell his promissory note bearing date on that day for the sum of $1,000, payable to the order of McConnell on or before January 1, 1891, with interest.

McConnell endorsed his name in blank upon the note, and continued to hold and own it from the time of the execution and. delivery thereof to him' until the 28th day of October, 1890, when it was paid by Tuthill, and McConnell surrendered the note toTuthill, and when thus surrendered his name was still on it.

Tuthill thereafter, and on the same day, took the note to the-plaintiff’s banking house and requested plaintiff’s president,. George H. Lapham, to discount-the note.

Plaintiff asked Tuthill whose note it was. Tuthill replied that, it was a note he had given McConnell in payment for his printing-house stock; that it belonged to McConnell, and he had requested him (Tuthill) to see if plaintiff would discount the note for him.1 (McConnell).

Lapham declined to discount the note for McConnell, but. offered to discount it for Tuthill, and thereupon Tuthill delivered the note to Lapham, Lapham paying him therefor the sum of. $1,000, which sum he placed to the credit of Tuthill upon the books of the bank. Tuthill had not, theretofore, had an individual account with plaintiff.

The proceeds of the note were checked out by the individual checks of Tuthill. Three of the checks, amounting in all to the-sum of $260, and dated, one upon the 28th of October, 1890, and the other two upon the 31st day of October, were made payable; to McConnell, and were used by him. The next check was for the sum of $100, payable to one John Young; and on the 17th-of November, 1890, the balance of the credit, $640, was drawn upon the check of Tuthill, payable to the firm of H. Tuthill &. Son, of which firm Tuthill was a partner.

McConnell was at the time of discounting of the note a resident of the village of Penn Yan.

Lapham had known him a good many years and had frequently seen him about the streets of the village.

At the close of the evidence, both plaintiff and defendant asked! for a direction of a verdict in their favor respectively.

The defendant’s request was denied, and he thereupon requested to have the questions of fact submitted to the jury. His motion was denied and he duly excepted.

The court, thereupon, directed a verdict in favor of the plaintiff, to which direction the defendant excepted.

The defendant did not waive his right to have the case submitted to the jury by asking the direction of a verdict in his favor. Koehler v. Adler, 78 N. Y., 287.

The burthen of showing that it was a bona fide holder of the note was upon the plaintiff, it having taken the note from one who was not its apparent owner.

“An individual negotiating for the purchase of a bill or note-from one having it in his posseesion and whose name appears upon it, must assume that the title of the holder, as well as the- ' liability of all the parties, is precisely that indicated _ by the instrument; that is, he cannot assume that the person in possession has any other or different rights, or that the liability of the parties is other or different from that which the law would imply from the form and character of the instrument.” Central Bank of Brooklyn v. Hammett, 50 N. Y., 160.

Lapham knew when he bought the note that it was given by the maker to the payee m part payment for property purchased.

He was informed that the' maker was there at the endorser’s request to obtain a discount of the note for his benefit.

He declined to discount it for the endorser, but did discount it for the maker. Having refused to deal with Tuthill as McConnell’s agent, McConnell should not be held liable for Tuthill’s representations to Lapham, and if not, applying the law as stated in Central Bank of Brooklyn v. Hammett, supra, plaintiff failed to make out a case.

The only principle upon which the declarations- of Tuthill to Lapham can be claimed to have been admissible against McConnell arises from the fact that McConnell delivered the note to TutMll with his name endorsed upon it. The respondent’s contention is, that as between McConnell and the bank McConnell should •suffer, as he put it m the power of Tuthill to deceive the plaintiff.

Whether this position can be sustained or not, it is not necessary to decide, for the only testimony as to the statements of Tuthili was given by Gfeorge H Lapham, the plaintiff’s president. He was, by virtue of his office, a financial officer of the bank. He acted for the plaintiff in the transaction through which plaintiff claims to own the note.

His credibility was, therefore, a question for the jury to determine. Canajoharie National Bank v. Diefendorf, 123 N. Y., 191; 33 St. Rep., 389.

The fact that McConnell received from the checks of Tuthill a portion of the proceeds of the note is not significant, as there was no evidence that McConnell knew of the discount of the note by plaintiff when he accepted the checks. .

It did appear that the property sold by McConnell to Tut-hill was only partially paid for by the note in suit. And there is -no evidence showing that the checks were not given to pay the unpaid purchase price of the stock.

But if any inference was to be drawn from the circumstances mentioned, it should have been left for the jury to decide.

It will be observed that the note was, at the maker’s option, payable at any time on or before the 1st day of January,-1891.

This is important, bearing u-pan the question of the good faith of the plaintiff in buying the note.

The note was, when discounted, due at the option of the maker.

Lapham testified that when the note was presented to him for -discount, McConnell’s name was not upon it; and at his suggestion Tuthill left the bank with the note, and in a few moments returned with McConnell’s name endorsed upon it.

This was important evidence, if true. The defendant testified that his name was upon the note before it was paid by Tuthill, and before Tuthill ever had the note in his possession.

it was, therefore, a question for the jury to decide and not thee court, there being conflicting evidence.

Giving to the' evidence the most favorable construction for the plaintiff, we think the case should have been submitted to the-jury, and therefore the direction of a verdict was error.

The judgment and order appealed from should be reversed, ancL a new trial granted, with costs to abide the event.

So ordered.

Dwight, P. J., concurs, Macomber, J., dissents.


source: Caselaw Access Project

author: Lewis, J.

license: Public Domain

text:
    Bronson C. Rumsey et al., App’lts, v. George D. Briggs and Charles D. Marshall, Resp’ts.

      (Supreme Court, General Term, Fifth Department,

      Filed January 22, 1892.)

    1. Partnership—Unauthorized contract by partner.
    During the absence from this country of one member of a non-commercial partnership, the other member made a contract for the purchase of' timber land on his own account, and for the purpose of raising money to-pay therefor induced plaintiffs to endorse his note by stating that the purchase was for the firm and that his partner had authorized him to make, the purchase. Held, that the untruthful statements made by such member were not binding on the firm; that the purchase of land and the making of notes for that purposfe were not within the scope of the business of’ the firm, and hence the firm was not liable thereon.
    2. Same—Ratification.
    The subsequent assent of the other partner to take an interest in the purchase, given without knowledge of the note in question or that his partner had undertaken to bind the firm, was not a ratification of his partner’s-act.
    Appeal from a judgment of the supreme court, entered in Brie county March 2, 1891, upon the report of a referee dismissing the plaintiff’s complaint upon the merits. The appeal is upon, the judgment; no case was made.

      Ansley Wilcox, for app’lts; George Glinton, for deft, Marshall..
   Lewis, J.

The defendants, on the 17th day of April, 1882,. formed a copartnership under written articles of copartnership. The part thereof material to this case is as follows:

“ The parties agree to become copartners in business under the firm name of George D. Briggs & Company, for the purpose of manufacturing and selling lumber, bark, railroad ties, and do all necessary work and business relating thereto, upon a certain tract of land in McKean county, in the state of Pennsylvania, recently contracted to be purchased for the benefit of said firm by said George-D. Briggs, and known as Fair Rim Hollow; and also upon any other tract of land which shall be purchased by said copartnersas hereinafter provided. The said George D. Briggs to be business manager of said copartnership, and to give his personal attention to the business in all its details.”

Their business was carried on under the firm nameof G. D. Briggs & Co., and also under the name of G. D. Briggs. Their business continued down to November, 1888, when Briggs became-insolvent and made an assignment for the benefit of his creditors, and the copartnership was thereupon terminated. Marshall was-a practicing lawyer in Buffalo and took no active part in the? business. The firm, for the prosecution of its business, became-the owner of a saw mill located near this lot of land. ■ The funds-of the firm were deposited in the name of Briggs, and from time to time, as the demands of the business required it, he made, notes, which were discounted for the use and benefit of the firm. The bark and timber upon the tract of land upon which the company operated had been substantially removed prior to January, 1888.

Immediately preceding the last named date, the copartners had a consultation relative to the purchase of other timber land located in the vicinity of their saw-mill, for the purpose of taking' the timber and bark therefrom and manufacturing and selling the-same; and among the tracts of land which they had in view, was-one consisting of about two thousand acres, known as the “ Bock Bun tract,” but no understanding or conclusion was reached on the subject. Afterwards and while the defendant Marshall was absent in Europe, Briggs entered into negotiations with one J. W. Bouton, looking to the purchase of the said Bock Bun tract for himself. The negotiations resulted in Bouton purchasing the-tract, which he afterwards conveyed to Briggs. Briggs did not have express authority or consent of his partner to purchase the-land for the firm.

Briggs’ agreement with Bouton was in his individual name, for himself, and not in the name of the copartnership. But he made-the purchase- believing and expecting that .Marshall, on being-informed of the purchase, would consent and agree that the firm would take the title to the land upon the same terms on which Briggs purchased it

About the month of January, 1888, Briggs applied to Bronson C. Bumsey, one of the plaintiffs, for assistance in connection with his business operations, and stated to him that he came to see him with regard to advances of money, and also in reference to making a large contract for bark with the firm of which Bumsey was a partner.

He informed Bumsey that he had a refusal for quite a number of acres of hemlock land in Pennsylvania, which he proposed to buy for himself and Marshall as partners, that he was authorized by Marshall to make the purchase, but that Marshall was in Europe and he could not get word to him in time, and wanted to close up the purchase, and if he made the purchase, he would make a large contract with Bumsey for bark; that he wanted ■some money to pay on the lands and to build tramways on the land, if he purchased it, so as to be ready to get out bark in the spring; that he was buying the lands for Marshall and himself, .and he requested the plaintiffs to endorse his note or advance money to enable him to make the purchase. Bumsey was aware of the fact that Marshall was a partner of Briggs in the lumber and bark business. He also knew that for many years prior thereto Briggs had been engaged individually on his own account in buying lands in Pennsylvania, getting off the timber therefrom, manufacturing it into lumber and selling it and marketing the hemlock bark. During that time Briggs had dealt upon, his own account with the plaintiffs.

Thereafter, on the 5th day of March, 1888, at the request of Briggs, the plaintiffs endorsed a note of $5,000 made by Briggs in his individual name, and he procured it to be discounted by the Manufacturers & Traders’ Bank of Buffalo ; it was several times renewed and rediscounted by said bank; the last time it was renewed and rediscounted on the 22nd day of October, 1888, and is the note sued in this action; when it fell due it was protested for non-payment, the plaintiffs paid and took it up.

. On the 7th of March, 1888, Briggs addressed a letter to Marshall in Paris informing him of the purchase of the Rock Run tract and the price to be paid therefor. Marshall received the letter but made, no reply thereto. Briggs paid to Bouton on and towards the purchase of the land the sum of about $22,000, using the proceeds of the first mentioned note endorsed by the plaintiffs for that purpose. The title to the land was thereupon conveyed by the owners thereof to Bouton. There remaining unpaid upon the •contract between Bouton and Briggs the sum of seven or eight thousand dollars, while the title to the land was in Bouton and the balance due on the contract remained unpaid as stated, and about the first of May, 1888, Marshall returned from Europe and Briggs informed him of the conditions of the contract of purchase and that the lands had not been paid for in full, that the title remained an B.outon, and he then requested Marshall to take a half interest in the property at the price he had agreed to pay therefor, and proposed that they become the owners of the land as partners and operate the same under their articles of copartnership, and Marshall consented so to do. For the purpose of carrying into •effect the agreement, and procuring the means of paying the balance of the purchase price, it was arranged between Briggs •and Marshall that the sum of $20,000 should be borrowed of one Mrs. Myers, to be secured by a mortgage on the lands ; and that Bouton should convey the lands to Briggs and that he should ■execute the mortgage to Mrs. Myers.

The land was thereupon conveyed to Briggs, and he executed a mortgage to Mrs. Myers for $20,000, and conveyed an undivided one-half part thereof to Marshall. Out of the money borrowed of Mrs. Myers, $7,000 or $8,000 were used to pay the balance due on the Bouton contract. About $9,000 were used by the consent of both partners to pay up and procure the discharge of a mortgage on the Fair Run tract, owned by the defendants as ■co-partners. The remainder of the $20,000 was credited to Briggs on the books of the company, and the company thereafter, and until the failure of Briggs, operated the said land as co-partners by taking timber therefrom. Otherwise than as above stated,' Marshall never paid or- advanced anything individually towards the payment for the land either to Bouton or to Briggs. Of the moneys paid. by Briggs on the Rock Run tract, the sum of $10,000 was raised by him on a note for that amount made by him in the name of the firm of G-. D. Briggs & Co., dated March ' 16, 1888, and endorsed by Briggs personally, and discounted at the Manufacturers & Traders’ Bank of Buffalo; this note was several times renewed by the makers; it was renewed and re-discounted the last time on the 8th day of July, 1888; it was them endorsed by Marshall individually.

In making the loan of the credit of his firm by the endorsements-upon the note, Bronson C. Bumsey relied upon the statements made by Briggs, and upon the joint credit and responsibility of Briggs and Marshall as co-partners. The defendant Marshall had no knowledge of the giving of the original note, or of any of the-renewals thereof, until some time after the failure of the defendant. Briggs in November, 1888. He never consented to the giving of either of the notes, he never authorized Briggs to purchase the lands known as the Rock Run tract, and did not know of. such purchase until several weeks after its purchase by Briggs,, and after the original note had been endorsed by the plaintiffs. He did not know how or in what way Briggs had paid Bouton, for the land.

The business of the defendants’ firm was simply and only removing the timber from the tract of land owned by them, taking, the bark and timber therefrom and marketing the same. The learned referee found as conclusions of law from these facts:

That the purchase of the ■“ Rock Run Tract ” was not within the actual or apparent scope of the business of the firm, neither was the making of the notes within the actual or apparent scope-of the firm’s business, and was not the act of the firm. The plaintiffs knew the limits and nature of defendants’ business. When they consented to endorse the note, they were informed that the proceeds therefrom were to be‘used in the purchase of land and in procuring appliances for removing and marketing the timber and bark thereon. They endorsed the note, relying upon the untruthful statement of Briggs that Marshall had agreed and consented to the firm purchasing the land. To find the firm bound upon a contract thus made by a single member thereof,, either express authority must be shown to make the contract, or that such, is the custom and usage of the particular branch of business in which, the firm was engaged, or such facts as will warrant the conclusion that the single member had been invested by the firm with authority to make the note. The plaintiffs failed to establish either of these requisites. It cannot be claimed that Briggs had any express authority to make the note, or that the facts tended to establish any such authority.

The business of the firm was confined to removing the bark and timber from a single lot owned by the firm, and converting the same into money. Their business was not, in any sense, of a commercial nature. It was what is known as a non-trading or non-commercial firm. Briggs had no authority, without express consent of Marshall, to purchase other lands for the firm to operate upon.

It was incumbent upon the plaintiffs to show either express authority in Briggs to bind the firm, or such facts as would warrant the conclusion that he had been invested by his copartner with the requisite authority. The power of one partner to bind his -copartners rests alone upon the usage of merchants, and does not amount to a rule of law in any other than commercial partnerships. Story on Partnership, § 126.

The case of Judge v. Braswell, reported in 13 Bush, Ky., 67, is in its facts very similar to the case at bar. The defendants there were -engaged as a firm in the business of mining upon lands owned -by the firm. They were sued upon a contract made by a part of the members for the purchase of other lands to mine upon. In the opinion of the court, delivered by Judge Gofer,.it was held that a copartnership engaged 'in the business of mining upon lands was a non-commercial partnership, and that such a copartnership is not bound by the contract of a single member in purchasing lands for the firm to operate upon.. The articles of co-partnership in that case provided for operating" upon lands then -owned by the firm, or upon any other lands which they might procure for that purpose, and the contract sued upon was one for the purchase of such other lands.

The same doctrine is laid down by the supreme court of errors of Connecticut in the case of Pease v. Cole, reported in the Albany Law Journal, vol. 44, p. 413. See North Pennsylvania Coal Company's Appeal, 45 Pa., 181; Holmes v. Burton, 9 Vermont, 252.

The untruthful statements of Briggs to Rumsey as to his authority to bind Marshall were not-binding upon the firm. Bindley on Partnership, 165-169; Ostrom v. Jacobs, 9 Metcalf, 454; Thorn v. Smith, 21 Wend., 365.

If it cannot be held that Marshall affirmed the act of Briggs in giving the note by his acts after he returned from Europe, it is ■quite clear, we think, that he cannot be held liable upon the note. As we have seen, the purchase of the “Rock Run tract ” was in fact an individual transaction of Briggs, and'was not within the .actual or apparent scope of the defendant’s partnership. Marshall ■did not, by any act of his, knowingly ratify the act of Briggs in .giving the note.

There cannot be gleaned from the referee’s findings any evidence that Marshall at any time before Briggs’ failure knew that •such a note had been given or that the proceeds of the note had been applied towards the payment of the Rock Run tract. Pre-cisely how the cost of the Rock Run tract was adjusted between the copartners does not appear. It was incumbent upon the plaintiffs if they sought to hold Marshall liable upon the note to .show that Marshall in some way received benefit from the proceeds of the note.

The ratification of an act previously unauthorized, in order to be binding, must be made with a full knowledge of all the material facts; the acceptance, without knowledge of the material facts, of the fruits of the unauthorized act of another, does not and cannot amount to a ratification. The transaction between plaintiff and Briggs had nothing to do directly with the contract for the purchase of the land from Bouton. Briggs having no actual or ostensible authority to bind the partnership by such contract, and Marshall not knowing at the time he consented to take an interest in the land that Briggs had assumed to bind the firm, his taking an interest in the property cannot be held to be a ratification of the net of Briggs in procuring the endorsement. Baldwin v. Burrows, 47 N. Y., 199; Central City Savings Bank v. Walker, 66 id., 424; Smith v. Kidd, 68 id., 130; King v. Mackellar, 109 id., 215; 14 St. Rep., 838.

Some reliance is placed by the appellants upon the clause in the articles of copartnership reading: “ And also upon any other tracts of land which shall hereafter be purchased by said copartners, as hereinafter provided.”

As it does not appear from the findings of the referee that any ■other provision was incorporated in the articles of copartnership than the one quoted as to purchasing other lands, it must be held that the clause mentioned contemplated that if any other land were to be purchased, it should be purchased pursuant to some agreement thereafter to be made by the copartners; and the referee has found that no such agreement was made. A like provision was incorporated in the articles of copartnership in the case of Judge v. Braswell, supra, and that court held that it did not authorize the purchase of mining land by an i individual partner without the consentkof the other members of the firm.

The referee, we think, made a correct disposition of the case, and the judgment appealed from, as to the respondent Marshall, should be affirmed, with costs. »

Judgment appealed from, dismissing the complaint as to the defendant Marshall, affirmed, with costs.

Dwight, P. J., and Macohber, J., concur.


author: Macomber, J.

text:
    Eugene C. Denton, App’lt, v. The Ontario County National Bank, Impl’d, Resp’t.

      (Supreme Court, General Term, Fifth Department,

      Filed January 22, 1892.)

    1. Foreclosure—Redemption.
    An action to foreclose a junior mortgage after foreclosure of a prior mortgage to which the junior mortgagee was not a party, may be turned into one for redemption where the rights of the plaintiff may be worked out and secured in that manner.
    :2. Same.
    Two concurrent mortgages were given covering two parcels of land, on one of which there was a prior mortgage, the lien of which was postponed to that of said mortgages, and which was subsequently foreclosed and the premises sold to defendant. Prior to that time the other parcel was conveyed and the grantee mortgaged it to plaintiff. Thereafter one of the concurrent mortgages was foreclosed and both parcels sold thereunder to defendant. Plaintiff was not a party to that action. Held, that as plaintiff if a party to that action would have been entitled to demand that the parcel not covered by his mortgage should be sold first, he was entitled to redeem on that basis.
    Appeal by the plaintiff from a judgment entered in Ontario county, March 21, 1891, on the decision of the court at special term, and upon the report of a referee appointed by a preceding interlocutory judgment.

      M. H. Field, for app’lt; L. H. Hall, for resp’t
   Macomber, J.

This action is the ordinary one for the foreclosure of a mortgage and for the sale of the mortgaged premises. The mortgage was executed by Letitia ■ Gr. Durand to the plaintiff to secure the payment of the sum of $1,060, with interest, on the 12th day of April, 1888. The land consists of thirty-three acres situated in the town of Canandaigua, R. Y.

The execution of the mortgage and the nonpayment of the same being undisputed, the plaintiff clearly made a ¡prima facie case for a judgment of foreclosure and sale of the mortgaged premises, in pursuance of § 1626 of the Code of Civil Procedure. But the defendant, the Ontario County Rational Bank, which is the only party defending, sets forth in its answer certain allegations, which have been supplemented by evidence, from which the learned trial justice has denied to the plaintiff the right to foreclose the mortgage, and to have a sale of the mortgaged premises, but has granted to him the privilege of redeeming the land covered by the mortgage upon terms which hereinafter appear.

The defendant’s rights depend upon the ownership of. these thirty-three acres, and of another tract of 175 acres, and upon the rights growing out of the incumbrances thereon under the title of one Luman M. Durand, as it existed on the 1st day of May, 1886.

On the last named day Durand and his wife executed to-H. L. Lansing, as trustee, two mortgages, covering the entire lands, consisting of 208 acres; one in the sum of $6,000, and the other in the sum of $2,000, and these mortgages were madé equal liens upon the lands. A previous mortgage of $5,000 had been given upon the 175 acres alone, which bore date the 11th day of April, 1878, and which was subsequently assigned to the defendant, The Ontario County Rational Bank. The lien of this mortgage, however, was postponed to that of the $6,000 and $2,000 mortgages by agreement executed by the bank after the assignment. The $5,000 mortgage was subsequently foreclosed by this bank, and the land covered by it, namely, the 175 acres, was conveyed to it March 3d, 1888, by the referee appointed to make the sale in the foreclosure.

Luman M. Durand conveyed the thirty-three acres of land to his wife, Letitia Gr. Durand, by deed bearing date January 24, 1888, and recorded January 25, 1888. On the 12th day of April, 1888, Letitia Gr. Durand, then the owner of the thirty-three acres, executed to the plaintiff the mortgage in question. The Lansing mortgage of $2,000 was foreclosed in January, 1889, and the mortgaged premises, namely, the whole 208 acres, were, by the deed of the referee in that suit, conveyed to the defendant, The Ontario County Rational Bank, by deed dated the 2d day of March, 1889, and recorded two days thereafter. Thereupon the bank went into possession of the whole of the premises.

But the plaintiff in this action was not made a party to the foreclosure of the $2,000 Lansing mortgage. He subsequently, in the month of June, 1889, brought this action for the purpose of foreclosing his mortgage of $1,060 upon the thirty-three acre tract

It was.claimed upon the trial by the plaintiff’s counsel, that the two thousand dollar Lansing mortgage became merged in the referee’s deed, and that consequently the bank acquired title to the premises subject to the payment of the plaintiff’s mortgage. This view was not adopted by the learned trial justice, but, on the contrary, while holding that the plaintiff’s mortgage was unaffected by that foreclosure, yet under the circumstances disclosed he held that the plaintiff did not have the right to a judgment of foreclosure and sale of the mortgaged premises. The learned justice, with ample authority to support him, also decided that the plaintiff’s right to redeem- was in no way affected by the foreclosure of the two thousand dollar Lansing mortgage. But he further held, and, as we think properly, that by the foreclosure and sale of the last named mortgage, the plaintiff acquired no greater rights or equities than he possessed before that foreclosure. The court thereupon proceeded to adjudge, inasmuch as all the necessary parties were before the court in this action, and the pleadings sufficient for that purpose, that the plaintiff might redeem the premises, within a time named, from the lien of the two thousand dollar Lansing mortgage; that in default of such redemption his rights and of all persons claiming under him in the mortgaged premises, should be extinguished.

On the whole, after considering the reasons stated by the learned justice, and the authorities discussed by him, namely: Gage v. Brewster, 31 N. Y., 218; Peabody v. Roberts, 47 Barb., 91; Salmon v. Allen, 11 Hun, 29, we are inclined to think, that the action may thus be turned into one of redemption of the mortgaged premises, notwithstanding the recent decision in the case of Bigelow v. Davol, 41 St. Rep., 788.

The terms, however, upon which such redemption may be made, must be such as would have been, mutatis mutandis, available to the plaintiff, had he actually been made a party to the foreclosure of the §2,000 Lansing mortgage. While the plaintiff’s rights were not. enhanced by the omission to make him a party to that suit, they cannot in any sense be deemed to have been impaired thereby. Sor the purposes of this action they must be deemed to be wholly unaffected by the former action.

The relief, therefore, actually to be administered in this case must be adapted to the changed situation of affairs caused without the fault of the plaintiff. The referee reported, that the whole of the principal sum of the §2,000 Lansing mortgage, together with the $391 interest, amounting in all to §2,391, should be paid by the plaintiff upon such redemption, less $158.50, deducted for the value of the use of the land by the defendant since its purchase at the foreclosure sale. He further finds, that the thirty-three acres are worth only thirty-five dollars per acre, aggregating in all $1,155. So that the privilege of redeeming in this case is not one which the plaintiff will be swift to avail himself of, if the principle upon which the judgment proceeds can be maintained.

We should, as it seems to us, administer the relief as nearly as we can, so as to secure the plaintiff in the rights which he might Lave asserted in the Lansing foreclosure had he been made a party defendant therein. The deed to Letitia GL Durand of the thirty-three acres was made and recorded prior to the purchase by the defendant, The Ontario County National Bank, of the one hundred and seventy-five acres, at the foreclosure sale of the $5,000' mortgage but not before thé assignment to it of that mortgage. The right, therefore, of Letitia Gr. Durand, the owner of the thirty-three acres, to have the 175 acres in the foreclosure of the $2,000 mortgage sold first, under the well-established principle that land so circumstanced must be sold in foreclosure in the inverse order of alienation, is undoubted. Whether such right was asserted by her in such foreclosure does not appear. Indeed the judgment therein, which probably indicated in what manner the land should be sold, is not laid before us on this appeal.

It does not appear that any rights of Letitia Gr. Durand were thus asserted. Though we cannot in this case adjudicate upon her rights, yet it appears to us that, for the purpose of determining the equities between the respective parties to these parcels of land, subjected as they were to the incumbrance upon all of them of the two Lansing mortgages, the mortgage given to the plaintiff, and now sought to be foreclosed, should be regarded as an alienation of the land, pro tanto, as of the time of its- date. Hart v. Wandle, 50 N. Y., 386, and the cases there cited. Had the-plaintiff been made a party to the foreclosure of the $2,000 mortgage, he doubtless would have asserted, by proper appearance or answer, his right to have the one hundred and seventy-five acres sold first, and that resort should be had to the thirty-three acres covered by his mortgage only in the event that the sale of the one hundred and seventy-five acres did not produce sufficient-funds to pay the lien.

The rights of the holders of the $6,000- mortgage do not seem to be affected by any action heretofore brought. The value of the one hundred and seventy-five acres is found to be fifty dollars per acre, amounting in all to $8,750, which appears to be ample security for both mortgages.

If upon the new trial, which we have concluded to order, a different state of facts is not made to appear, we are of the opinion that the plaintiff would have a right to redeem on the basis above indicated, leaving out of consideration for the moment the rights of the defendant under the $5,000 mortgage; for had the one hundred and seventy-five acres of land been ordered by the judgment to be sold first, and had the $6,000 mortgage been adjudged to have been paid off by the’same decree, if the amount of the-sale was sufficient for that purpose, a fund would have been realized that would have discharged the lien of those two mortgages upon the thirty-three acres. The right, therefore, of the plaintiff, as thus indicated, may be worked out and secured by treating this as one for redemption alone. This view renders a new trial necessary. Whether, on such new trial, it shall be made to appear that the existence, at one time, of the $5,000 mortgage and the purchase of the defendant at the sale under foreclosure thereof affect the application of the above principle, and, if so, to what extent, are matters which have not, either directly or indirectly, been passed upon by the trial court, and, consequently, we do not express any opinion thereon.

It follows, therefore, that the judgment appealed from should be reversed and a new trial ordered.

Judgment reversed and a new trial ordered, with costs to abide the final award of costs.

Dwight, P. J., and Lewis, J., concur,


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    Allen J. Hastings, Resp’t, v. The Brooklyn Life Insurance Company, App’lt.

      (Supreme Court, General Term, Fifth Department,

      Filed January 22, 1892.)

    1. Insurance (life)—Forfeiture for non-payment of premium— Waiver.
    A policy of life insurance provided that the condition of forfeiture for non-payment of premiums could only he waived by an agreement in writing signed by the president or secretary. The assured gave a note for a premium which fell due, but did not pay the same. The secretary of the company while on a visit to the agency urged the assured to keep his insurance, and said they would carry him for a year if necessary. Thereafter the company wrote informing him of the forfeiture and asking if he wished to restore the policy, to which no reply was made. ^Held, that by the non-payment of the premium the policy was forfeited and that there was no waiver thereof on the part of the company.
    2. Same.
    A letter or other paper duly directed and mailed will be presumed to have been received in the regular course of the mail.
    Appeal by the defendant from an order made at the Cattaraugus special term, dated September 2, 1890, on a case and exceptions, and entered February 7, 1891, granting the plaintiff’s motion for a new trial, after verdict of a jury for the defendant, rendered under the direction of "the court, at the Cattaraugus circuit, held in the month of May, 1890.

      W. F. Cogswell, for app’lt; Frank Rumsey, for resp’t.
   Macomber, J.

This action was brought to recover upon a policy of life insurance issued by the defendant to Edwin A. Walter, of Kendall Creek, Penn., on the 5th day of June, 1882. The assured died on the 6th day of October, 1886. By the terina of the policy the amount of the insurance, viz., $2,500, was made payable in case of death to the personal representatives of the assured, conditioned, however, upon the prepayment by the assured, semi-annually, of a premium of $25.87 on the 5th day of December, and the 5th day of June in each year. Letters of administration were issued in the state of Pennsylvania upon the goods and chattels of the deceased, and the administrator, there appointed, assigned to this plaintiff all rights or claims arising under the policy, and this action was brought by the latter as such assignee.

There was an omission to pay the premium falling due on the 5th day of December, 1885, but the assured gave his note to the company for that premium, by the terms of which he promised to pay to the company, ninety days thereafter, the amount thereof. At the expiration of the ninety days, the note not having been paid, another note for a like amount was given by him, payable n sixty days, which contained the condition that, if it was not paid at maturity, the policy which had been issued to the assured should become null and void. This note was never paid. A like sum for the semi-annual premium falling due the 5th day of June, 1886, also remained unpaid at the time of the death of the assured.

The payment of the semi-annual premiums above mentioned was a condition precedent to the continuance of the policy; so that, upon a failure of the assured to pay the premiums therein provided for at the times named, the policy lapsed, and the payments made thereon were forfeited to the company. By the fourth provision of the policy this condition of the contract could not be waived, except by an agreement in writing, signed either by the secretary or president of the defendant. The defense of forfeiture and lapse of the policy having been set up in the answer, and proofs made of the non-payment of the renewal note given for the premium due December 5, 1885, and the non-payment of the premium due. June 5, 1886, the plaintiff, to overcome such defense, gave evidence from which it is claimed that the forfeiture clause in the policy was waived by the company, and that consequently the non-payment of such premiums was not a defense to the action. Such evidence consists of the testimony of Harvey B. Bartholomew, who was the agent for procuring insurance at Kendall Creek, in the county of McKean, Pennsylvania, where the assured resided at the time of procuring the insurance, and where he died. This witness, after giving evidence to the effect that the assured had, at different times, given him promissory-notes for the payment of premiums and had subsequently paid the same, gave a conversation which he had with William Butcher, the secretary of the defendant.

The testimony of this witness, after stating that Butcher urged the assured not to throw up the policy, nor take a paid up policy, and after Butcher was told by Walter that he did not wish to carry the policy any longer, is as follows : “ Butcher told him, as far as time was concerned, he would give him time. If it was necessary, he would carry him a year or so, if not convenient for him to pay sooner. Walter said, in substance, to this, that under such an agreement he couldn’t object to keeping it.

“ Q. Was there anything said on that occasion as to premiums not due? A. Ho,'sir, there was no specific premium mentioned; Dr. Waltér spoke in general, and said he couldn’t afford to pay the premiums as they matured.

“Q.. In reply to that statement in particular, what did Mr. Butcher say, that he couldn’t afford to pay the premiums? A. He told him he couldn’t afford to lose the policy, and that if he was not prepared to pay it now, he would give him time, or extension of time; give him such time as was necessary to accommodate him.

“ Q. What about the premiums that were to become due ? A. Hothing was said about them. * * Mr. Butcher told him that he couldn.’t lose him as a policyholder, as he was the examining physician of the company; it didn’t look well for him to drop out of the company, while the company was being represented there, and therefore was anxious to retain him as a policyholder.”

Being further asked to state the substance of what was said, the witness answered: “ The substance, as near as I remember it, was simply this: that the company would carry him. The payment of the premium or premiums, such as were due or coming due, as I understood it.” * * * “ That was the conversation, as near as I recollect it I have a recollection ; I can’t give the identical words, but am stating the substance of what was said. Walter said, in reply, that he thought that was fair; that he couldn’t think of rejecting the proposition, and the matter rested at that.” The foregoing conversation was had on the 5th day of May, 1886.

Mr. Butcher was called as witness for the defendant, and gave a version of the conversation had with Br. Walter, the assured, which was materially different from that of the witness Barthomew, and from which no reasonable claim could be made that the company, by his word or act, had done, or had attempted to do, aught to vary, in the slightest degree, the terms of the written contract between the parties. Nevertheless,' the evidence of Mr. Bartholomew, except for two reasons hereinafter named, would, .doubtless, have been sufficient to require the court to submit the question to the jury, whether the provision in the written contract had not, in fact, been waived by the defendant.

The first and paramount reason for disregarding this testimony of Bartholomew is, that in any view which may be taken of its effect, the defendant had the right to bring to an end any such arrangement- so attempted to be established, and upon a reasonable notice to the assured to reinstate the parties squarely upon their written contract. The fact that such oral modification of the agreement, if made at all, was actually cancelled, is fully shown by the evidence. On the 27th day of May, 1886, twenty-one days after the alleged conversation with the secretary of the company, the defendant wrote to the assured a letter, in which it stated that his note for the premium of $25.87 on this policy was due on the 4th day of May of that year and had not been paid. The letter concluded as follows: “This nonpayment you are aware lapsed your policy, and we are thereby obliged to cancel it on our books. If you have any desire to restore it to full force, please be good enough to inform us at once.”

The evidence respecting the actual mailing of this letter to the assured is much stronger in the case as now presented than it was upon the former appeal. Hastings v. Brooklyn Life Ins. Co., 24 St. Rep., 854. We hold now, as we held then, in accordance with the rules stated by Greenleaf on Evidence, § 40, that there is a presumption of law, that a letter or other paper, duly directed and mailed, was received in regular course of the mail. There is in the case, under its present presentation, nothing to weaken the force of this presumption. That reasonable presumption established by the court, as it may be said, through the absolute necessities of business, was sufficient to throw upon the plaintiff the duty of proving that the communication was not absolutely received by the assured, a burden which was not succcessfully undertaken by him on the trial.

Under this letter, whatever view may be taken of the case in its other branches, and whatever may have been the oral arrangement between the secretary of the company and the assured existing prior thereto, it was the duty of the assured to pay the past due premiums under the direct invitation extended to him to inform the company if he desired to restore the policy in force. Had the assured taken any steps, either to pay up the past due premiums or otherwise to restore the policy, the company, under the invitation contained in this letter, would have waived the forfeiture, and, by accepting the payment of the past due premiums, continued in force the contract between the parties. But no attention was paid to the defendant’s communication. This fact shows that it was undoubtedly the deliberate purpose of the assured to throw up the policy, as he had often threatened theretofore to do.

The second ground upon which the order granting to the plaintiff a new trial should be reversed, and th.e verdict upheld, is that the conversation testified to by Bartholomew as taking place between the secretary of the defendant and the assured did not constitute a waiver of the condition of the policy requiring prepayment of premiums. The interview in question was had in the state of Pennsylvania, where the secretary had gone from the home office, which was in the city of New York, for the purpose of making a periodical visit to the company’s agents, and of looking generally after the affairs of the company. Not only was there not any agreement in writing, varying the terms of the policy, but no notification of such arrangement, as testified to by Bartholomew, was made by any person to any general agent or officer of the defendant. As was said upon the former appeal, in this respect the case differs from that of Dilleber v. Knickerbocker Life Insurance Co., 76 N. Y., 567, where the court held substantially to the rule as enunciated by Bliss on Life Insurance (§ 275), as follows: “ The company will be bound by the acts of its president and secretary, performed in its office, whether such acts are in writing or verbal, whether they make a contract, waive a forfeiture or give a consent.”

The exercise of corporate powers by an individual officer or agent of the company, when done at other places than at the business office of the company, ought not to be deemed of the binding force and effect as when performed at a place where the company is conclusively presumed to be present, and necessarily charged with knowledge of the acts of all of its general officers. If the acts of such an officer are deemed to be valid while traveling abroad on a visit to the agencies of the company, and, without actual power or instruction to vary the terms of written contracts, are to be deemed valid, would they not be equally valid if done while he was visiting such localities for the purpose of pleasure only ? If the arrangement is made by the president or secretary, whose chief occupation is presumably at the general office of the company, the direction to the bookkeeper or clerks to enter such modification of the contract may be readily given, entered and preserved. I think that judicial complaisance to the violation of written contracts went.to its full limit in the rule stated by Bliss, and adopted by the court of appeals in the case cited, and should not be extended further.

If either of the foregoing propositions is correct, the order granting the plaintiff a new trial was erroneous and should be reversed.

But the learned counsel for the plaintiff made, upon the oral argument, a point not contained in his brief, to the effect that, in any event, the plaintiff was entitled to some relief upon the ground that the payments already made would, under the reserve provisions of the policy, have procured a paid-up policy in the sum of $210. But no such question as this arose upon the trial, or is contained in the case beyond the fact, that a witness did say, apparently incidentally, that from the experience tables used in this state by life insurance companies generally the value of the policy at the time stated was actually $64.10, and that that amount would have procured a paid-up policy of about the sum of $210. The case, however, is devoid of any evidence to show that the payments already made, instead of being forfeited to the company, were to be applied in this manner by an agreement of the parties, or that the assured did any act necessary to effect that result, and hence the point does not seem to us to be well taken.

Order granting a new trial reversed, with costs, and judgment ordered for the defendant on the verdict.

Dwight, P. J., and Lewis, J., concur..


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    Matilda Adams, App’lt, v. Sarah Jane Green et al., Resp’ts.

      (Supreme Court, General Term, Fifth Department,

      Filed January 22, 1892.)

    Fraud—Assignment oe mortgage.
    Ia an action by a widow over 70 years of age against her daughter to set aside an assignment of a mortgage on the ground of fraud in procuring the same, plaintiff testified that she was induced to sign the instrument on the representation of the attorney that it only conveyed an interest in the morfgage. On the other hand it appeared that the daughter had not received as much assistance as the sons; that the provision for her in her father’s will was likely to prove inoperative ; that plaintiff had expressed a wish to assign the mortgage to her, and that the assignment was read over and explained to her, and was put on record. The consideration therefor was natural love and an agreement on the part of defendant to move to another city and allow her mother to live with her, and defendant also executed an agreement that the mortgage should be reassigned to plaintiff if she survived her. Held, not sufficient to show fraud in the procurement of the assignment.
    Appeal from a judgment of this court entered in Monroe county, dismissing the plaintiff’s complaint upon the decision of the court at special term.
    On the 28th day of August, 1890, the plaintiff executed and delivered to the defendant, Sarah Jane Green, an instrument which, upon its face, purported to be an absolute assignment of a mortgage given by Herbert H. Adams and wife to William W. Adams, the husband of the plaintiff, to secure the' payment of the sum of $2,250, and at the same time defendant executed and delivered to the plaintiff, who is her mother, another instrument in writing, by the terms of which she agreed, that in case her mother survived her, such mortgage should be reassigned to plaintiff by defendant’s legal representatives.
    This action is brought to set aside such assignment, upon the ground that it was not the instrument which plaintiff intended to execute that it was her design and intention to assign an interest of $1,000 only in such .mortgage, but that by reason of the false representations and fraudulent concealment of the defendant and her attorney she was induced to execute an assignment of the entire mortgage instead of the portion thereof which she supposed she was transferring.
    The only consideration, for the transfer was natural love and affection and the request that the defendant should move from Buffalo to Rochester and allow her mother to live with her, which she did.
    The following is the opinion of the trial justice:
    Adams, J.—There are some features of this case which unexplained would naturally incline a court of equity to look.with favor upon the plaintiff’s contention
    The fact that she, a woman, upwards of seventy years of age, has parted with a valuable security which constituted pretty much all her personal estate, without receiving any pecuniary consideration therefor, and that she has thereby deprived herself of a considerable portion of the.means of support for her declining years provided by .her deceased husband, "is of itself one which requires that the court should carefully scrutinize the transaction with a view to ascertaining if any improper advantage has been taken of the plaintiff.
    With one’s sympathies thus aroused it would, perhaps, be an easy matter to infer that the defendant had taken advantage of the relation existing between her and her mother, as well as of the opportunity afforded by their living together to exert an undue influence over her, and by means thereof to obtain from the old lady a larger and more generous provision than was actually intended.
    But this is an action ex delicto. It is founded upon fraud plain and simple, and fraud which not only involved the defendant but likewise an honorable and reputable officer of this court. It will not do, therefore, to dispose of the case upon inferences merely, unless those inferences have some tangible evidence to support them. What, then, is the evidence upon which the plaintiff bases her contention ? It is simply that which she furnishes herself, and which is in brief that, with the design of assigning to her daughter an interest in the mortgage in question, she accompanied her to the office of Pierson B. Hulett, a lawyer in the city of Rochester, and a former judge of Monroe county, where she was induced to execute the assignment upon the false and fraudulent representation of Hulett that she was assigning an interest in the mortgage instead of the entire sum secured thereby. There is no direct, and but little, if any, collateral evidence in the case which tends in any degree to corroborate this statement of the plaintiff; but on the other hand, the presumption as well as the positive evidence in the case all tend to show that the plaintiff’s memory is either seriously at fault or else, and this seems most probable, from certain intimations wliich are furnished by the testimony, that other and stronger wills have so operated upon her mind as to compel her to state that which is not true, however much she may believe it true while living within the range of such influences.
    It appears from the undisputed evidence that the plaintiff's husband, subsequent to the transfer to her of the mortgage in question, departed this life leaving a last will and testament, in which he made certain bequests to each of his four sons and likewise to the defendant, his daughter; that at the time of her father’s death the defendant was living in Buffalo, and that thereafter, at the request of the plaintiff, she moved to Rochester, where the plaintiff took up her residence with her. The defendant was without means of support, and earned her living by keeping-boarders. She testifies that m August, 1890, her mother informed her early one morning that she had lain awake all night thinking that she ought to make over this mortgage to her, so that she, the defendant, would not have "to work so hard. There, is also some evidence tending to show that the boys had received more or less assistance from their father. and mother, while the defendant had received scarcely any; and that for some reason, which does not clearly appear, the provision made for the latter in her father’s will was ■ likely to prove inoperative. But whatever may "have been the moving cause, we find the parties at Judge Hulett’s office on the 28th day of August, where the assignment in question, as well as the agreement hereinbefore referred to, were drawn and executed.
    It appears by the evidence of Judge Hulett, that the plaintiff came to his office first alone, and told him that she wished to assign this mortgage to “ Jennie; ” that she thereupon went out and soon returned with her daughter, when he drew the assignment, “ read it over carefully to Mrs. Adams, told her what it was, and told her to sign it,” which she did, and thereupon acknowledged it. This statement, in all its essential features, is corroborated by defendant and a Miss Kendall, who was a clerk in the office. The agreement was then drawn up, and when executed was delivered to the plaintiff and the assignment to the defendant, and the parties thereupon left the office.
    Shortly thereafter, some question having arisen in the mind of the plaintiff as to the sufficiency of the assignment, it was submitted to Mr. Maurer, another lawyer residing in Rochester, who, as he tells us, advised the parties that the assignment had better be placed upon record. Both there and at Judge Hulett’s office the plaintiff had expressed some fear that the boys would make trouble when they heard of what she had done, and the propriety of putting the assignment upon record was discussed in that con-section. On the 3d of September the assignment was recorded, and shortly thereafter the fact did come to the knowledge of the boys, whereupon the plaintiff made an effort to procure a reassignment of the mortgage, but failing in that, brought this action.
    Thus it will be seen that the direct proof, if it is-to be credited, is so overwhelming in its contradiction of the plaintiff as to leave the court scarcely any opportunity to deliberate upon it.
    And what is there in the case which tends to weaken this evidence in any material respect? It seems to me there is .little or nothing; but that, on the contrary, there are several corroborating facts, circumstances and presumptions. In the first place, it is not a violent inference from the evidence in the case, that the plaintiff desired to assist her daughter to the full extent of this mortgage, in view of the fact that she believed she had never received as much as her brothers, and wás to be deprived of the legacy in her father’s will. Nor is it difficult to imagine to what extent the sons may be responsible for their mother’s action when it became known to them that she had transferred the mortgage, while, upon the other hand, it is very difficult for me to believe that an officer of this court, concerning whose character the case is utterly destitute of a shadow of reproach, would not only combine with the defendant to defraud and deceive her mother, but would also come upon the witness stand and commit deliberate perjury in order to uphold the fraud. '
    There is another circumstan.ee in the case which is hard to reconcile with .the plaintiff’s theory, and that is, that after perpetrating the alleged fraud upon the old lady, the defendant published the fact to the world and invited trouble, by placing her assignment upon record, whereas, had she kept it secret for a short time, it is quite probable her opportunity to become benefited thereby would have been greatly enhanced.
    It may be that the plaintiff was too generous towards her daughter, and too regardless of her own interests; but I find it impossible, upon all the evidence in the case, to resist the conclusion that the assignment correctly represents her real intention at the time she executed it.
    I am asked by the plaintiff’s counsel to regard the assignmént which the defendant executed and delivered to her mother as a defeasance, and to treat the two instruments as constituting a testamentary disposition of the mortgage, revocable at plaintiff’s pleasure.
    It is a sufficient answer to this contention that no such claim is set up in the complaint. As has already been suggested, this is an action based upon the alleged fraud of the defendantand there is no other element in it. Indeed, as is conceded by plaintiff’s counsel, in his brief, the existence of the “ defeasance ” was not known to him until after the trial had been commenced.
    As is already sufficiently indicated, the complaint must be dismissed ; but in view of the relation existing between these parties, and the fact that the defendant has been most generously dealt with by her mother, I think it is a case where the court is justified in exercising its discretionary power in regard to the matter of costs, and consequently none are allowed to either party.

      J. M. B. Stephens, for app’lt; Arthur E. Sutherland, for resp’ts.
   Lewis, J.

A proper disposition of this case was made by the

trial court.

Judgment should be affirmed upon the opinion of the trial j ustice.

Dwight, P. J., and Macomber, J., concur.


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    Theresa Wannamaker, Adm’rx, Resp’t, v. The City of Rochester, App’lt.

      (Supreme Court, General Term, Fifth Department,

      Filed January 22, 1892.)

    Municipal corporations—Negligence—Liability to employee..
    Plaintiff’s intestate, who was in the employ of the water works repair department of the city, was sent with a gang of men under the charge of a foreman to lay pipes in a trench which the city had had made. While at work in the trench he was crushed by the caving in of the earth. The usual custom of inspecting trenches before sending men to place water pipes therein had not been observed. Held, that the question of defendant’s negligence was properly submitted to the jury; that defendant owed the deceased the duty to afford him a reasonably safe trench to work in, and that he had a right to rely upon the implied assurance that the trench in question was of that character.
    Appeal by the defendant from judgment entered in Monroe county on the 12th day of June, 1891, on a verdict of the jury at the circuit; and also from an order denying the defendant's motion for a new trial made upon the minutes of the court

      C. JD. Kiehel, for app’lt; Eugene Van Voorhis, for resp’t.
   Macomber, J.

The plaintiff, as the administratrix of the estate of Joseph Wannamaker, deceased, recovered at the circuit the sum •of $5,000 damages against the defendant by reason of its negligence, whereby, through the caving in of a trench in which the deceased was working, the latter lost his life.

The decedent was in the employment of the water works repair department of the city -of Rochester, and was engaged in the occupation of connecting and laying water pipes and doing general repairs. Under the direction of a foreman of a. gang of men in the employment of the city, he was, on the 2d day of June, 1890, sent to do certain work on an extension of a water pipe in a trench on ¡North Union street, in that city. This trench had been dug by a firm of contractors known as Thomas Oliver & Sons under a contract with the city.. The trench was upwards of three hundred feet in length, about four and one-half feet deep and two and one-half feet in width. The plaintiff’s intestate, while engaged in knocking out the dead end of a pipe already in the trench (a process which is described as removing the temporary filling of the end of a pipe so that an extension may be made), was crushed by the caving in of the earth upon him.

It is argued by the learned counsel for the defendant that there was no liability upon the city because the deceased assumed the risks and perils attending the work in which he was employed. The statement of the general principle applicable to the employment of persons engaged in work of this description by municipal corporations is not to be disputed. But the facts disclosed in, this appeal do, as it seems to us, remove the case from the category of those falling within that rule.

When the deceased approached this place and got into the-trench, he had not, by previous working in the place or otherwise, obtained any information which would lead him to suspect that the earth was likely to cave in, or to charge him with notice of any danger. He came there with a gang of men under the direction of a foreman, in the employ of the authorities of the water works department of^ the city of Eochester, not to prepare--a trench for the pipes, but to place in the trench, which the city had already undertaken to have prepared for their work, conduit pipes for the flow of water.

Under these circumstances, it was the duty of the city to afford to its workmen a trench which should be proper and safe for the work which the employee was required to do. The circumstance that Thomas Oliver & Sons, who may, in a certain sense, be-deemed independent contractors, made this ditch, is unimportant, because the deceased was not in the employ of these independent, contractors, but of the city itself.

Nor can the point be sustained, that the city may escape liability because Smith, the foremen of the gang of men, may have been, guilty of negligence in sending the deceased into the ditch to make these connections. It is true, as is urged by counsel for the city, that the deceased and Smith were co-employees; but they were co-employees only in respect to preparing the end of the pipe already in the trench for connection with other lengths of pipe. Neither of them had any connection with the digging of the trench, nor was either of them charged with any special duty to support the walls of the trench so as to prevent caving in. The city, in substance, by its employment and directions, said to the deceased and the other men:”we have prepared a trench for the laying of more pipe in North Union street, and you proceed there and make the necessary connections. The decedent had a -right to assume, under all the circumstances of the case, that the city had caused to be prepared a suitable and proper trench for this purpose.

It is further argued by counsel that the contractors, Thomas Oliver & Sons, if anybody, were solely liable for the death of the intestate. There is evidence to show that Smith, the foreman, said he would go and see Thomas Oliver & Sons for the purpose of cleaning out the ditch and fixing it up so that it could be worked in. But, before Oliver & Sons, or their men, had time to come to assist in preparing the ditch for receiving the pipe, the intestate had met his fatal injuries. In entering the trench while Smith was gone for Oliver’s men, Wannamaker did no more than he had seen Smith already do; for the latter had gone down into-the trench for the purpose of examining the pipe and seeing what was necessary to be done. No one, so far as the case shows, had discovered any evidence of danger from the walls of the trench; but on the contrary, their attention and effort was directed solely to baling out the water which had accumulated there from one source and another, so as to enable the laying of the pipes to proceed. The usual custom of the repair section of the.water works department, to inspect trenches before sending men to place water pipes in them, was not observed in this instance.

We think the question of the defendant’s negligence was properly submitted to the jury, and that the defendant owed a duty to Wannamaker, under the circumstances, to afford to him, for the work required, a reasonably safe trench; and that the deceased had a right to rely updn the implied assurance that the open trench, which had been made under the direction of the city, was of that character.

Nor are we without apposite and guiding authority for these propositions. In Kranz v. Long Island Railway Co., 123 N. Y., 1; 33 St. Rep., 46, a trench had been opened for the purpose of furnishing an employee of the company a proper place and opportunity to do- the work of cleaning out certain underground water pipes. This was done under the direction of the defendant’s section “man and laborers under his immediate control and direction. While engaged in disconnecting the pipes, the earth caved in upon the employee and he was killed. It was there held, in an action by the administrator to recover damages for the death of the intestate, that the railway company owed to the decedent the duty of providing a place reasonably safe for the work he was directed to do; and, consequently, reversed the decisions made at the circuit and at the general term, and granted a new trial.

The court there declared: “ The deceased had nothing to do with the preparation of the trench. It was.prepared not by him, but for him, and reasonable care in its preparation, we think, was the master’s duty to the servant.”

With this authoiity before us, it is not needful to look for others tending in the same direction; for the case cited and the one before us are not merely analogous; they are homologous.

It follows, therefore, that the judgment and order appealed from should be affirmed.

Dwight, P. J., and'Lewis, J., concur.


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    The Rochester Printing Co., Resp’t, v. Augustus B. Kellogg et al., App’lts.

      (Supreme Court, General Term, Fifth Department,

      Filed January 22, 1892.)

    Contract—Receipts.
    In an action upon a contract by which defendants were to pay plaintiff’s , assignor a certain percentage of their receipts from subscriptions until it reached a specified sum, which contract had been repudiated without just cause by defendants, their answer admitted the amount of their receipts prior to such repudiation, and it wns shown that they had asserted, by advertisement and otherwise, that their subscription lists had constantly increased to the time the action was commenced. Held, that from these admissions and assertions the referee was authorized to find that the receipts for the latter period were equal to those of the corresponding period admitted by the answer.

      Appeal by the defendants from a judgment entered in Monroe county June 10, 1891, on the report of a referee, finding an indebtedness of $2,512.76 due from the defendants to the plaintiff under a written contract made between the defendants and one Alexander M. Purdy, who assigned his interest in such contract to the plaintiff.

      George W. Cothran, for app’lts; Q. Van Voorhis, for resp’t.
   Macomber, J.

The plaintiff brings this action, as the assignee of Alexander M. Purdy, to recover upon a contract between Purdy and the defendants bearing date the 2d day of August, 1886.

At the time of entering into such contract Purdy was the owner and proprietor of a periodical called the Fruit Recorder and Cottage Gardener, and the defendants were the owners and proprietors of a publication called Popular Gardening. By the contract Purdy conveyed to the defendants all his interest in the Fruit Recorder and Cottage Gardener, including all files, electrotypes, subscription lists, records, property and good will, and agreed that he would supply to the Popular Gardening in due season for publication two pages of practical, valuable and original editorial matter every month during the continuance of the agreement, for which due credit should be given to him in the columns of the last named periodical; that he would exert his influence exclusively to the interests of the Popular Gardening, and that lie would not directly or indirectly connect himself with any other periodical devoted to horticulture or kindred subjects during the same period. The defendants agreed to pay to Purdy, in monthly instalments, fifty per centum of all moneys received by them from subscriptions or renewals to the Popular Gardening after the date of the agreement until such sum should amount to $3,500 ; to advance to him $600 at the time of making the agreement, and a further sum of seventy-five dollars as a “ gratuitous bonus ” for the August issue; to give to him without charge one column of advertising matter during the continuance of the agreement; to give to him also the use of all name-lists for circulation of his catalogues in exchange for one-half page of advertising of the Popular Gardening.

Upon competent and sufficient evidence the learned referee has found as a fact that Purdy delivered all of the property belonging to his newspaper to the defendants, except a list of three hundred thousand names of seedsmen and florists, and the cards on which these names appeared, commonly spoken of as “ Perry correspondencehis refusal in this instance was placed upon the ground that the duty of turning over such names to the defendants was not included in the agreement. The referee has' found, that the value of the list of such names was two hundred dollars, and deducts that sum from the amount unpaid upon the contract.

It was contended upon the trial and is now argued upon this appeal, that the defendants were not liable upon any portion of the contract until the same had been fulfilled in its entirety by Purdy. Whether this contention be true or not, the evidence es~ tablishes the fact, and the referee has so found, that the defendants waived the condition that the whole property owned by Purdy should be delivered before any liability should attach to pay any part of the purchase price. Purdy continued to furnish original and valuable -editorial matter to the defendants until December-12, 1887, when the defendants wrote to him to the effect that they could not accept his services and longer without compensating him for the same, and that they were to credit to him what he earned, and that the same should be subject to his draft on proper notice.

This conclusion seems to have been reached by the defendants-after their determination, on or before September 27, 1887, to re- ■ pudiate the making of any further payments upon the contract, and to refuse to render statements of the receipts of their publication. But, under the evidence, such refusal was wholly unwarranted, and it cannot now be justified upon any legal principle under the facts disclosed. The evidence, coupled with the-admissions made in the answer, shows that before this action was begun the subscription receipts of the defendants made to the 'Popular Gardening were sufficient to pay all of the unpaid balance-due to Purdy upon the contract. After deducting the commercial value of the list of three hundred thousand names above mentioned, and the payment which had been made under the terms of the contract, judgment was ordered for the balance..

After considering, and, as we think, properly weighing, the argument of the learned counsel for the appellant, we have come to the conclusion, that under the admissions made in the answer, and on account of the advertisements, statements and admissions made by the defendants, as disclosed in the evidence, the referee-was justified in all of his conclusions of fact. The answer admitted that from August 1,- 1886, to December 1, 1887, the recepts from subscriptions and renewals aggregated the sum of $3,865.95, a detailed statement of the items of which was produced upon the trial. The other admissions consist largely of assertions, by advertisemen tond otherwise, that their subscription lists up to March 1, 1888, when this action was begun, had not fallen off, but had constantly increased. From this evidence, it was competent for the referee to adduce the conclusion, that the receipts for the last named period were equal to those during the time covered by the admissions in the answer; particularly, as the defendants withheld from the case any explanation or contradiction of their circulars, except in one particular where the witness, a woman, testified that she had taken charge of all of the moneys received by the defendants from the subscription list to the Popular Gardening since September, 1888, and that she knew the amounts that had been received on subscriptions. She then produced a memorandum, which she had made out, containing’ the amounts received. That memorandum begins with August, 1886, and ends with November, 1887, and foots up $3,865.95. On cross-examination this witness says she made no figures of the-receipts after the last day of November, 1887.

We think upon the principal question of fact, that in the absence of any evidence given by the defendants directly bearing upon the amount of the receipts subsequent to December 1, 1887, the evidence upon which the referee has reached his conclusion,though in some respects slight, was sufficient to show that the defendants had received, in the manner pointed out in the written agreement between them and Purdy, a sum of money, fifty per cent of which amounted at least to the sum of $3,500.

It follows, therefore, that the judgment appealed from should be affirmed.

Judgment affirmed.

Dwight, P. J., and Lewis, J., concur.


author: Dwight, P. J.

text:
    John A. Smith, Resp’t, v. Frederick J. Zeigler, App’lt.

      (Supreme Court, General Term, Fifth Department,

      Filed January 22, 1892.)

    1. Payment—Composition agreement.
    A voluntary payment under a secret arrangement made to induce the creditor to sign a composition agreement, cannot he recovered hack or' counterclaimed against other indebtedness not included in the composition.
    :2. Trial—Evidence.
    The facts in relation to the secret agreement were brought out by defendant’s counsel on cross examination of the plaintiff. Held, that plaintiff was entitled to the benefit of such evidence, and that defendant’s motion to strike it out was properly denied.
    Appeal from a judgment entered' in Monroe county on the report of a referee.
    6r. D. Reed, for app’lt ;■ 3. M. Hill, for resp’t.
   Dwight, P. J.

The action was to recover a balance of account ior work and materials, in the form of builders’ supplies, and for rent of shop and money loaned, claimed to be due to the plaintiff irom the defendant. The plaintiff was a manufacturer of sash, blinds and doors, and the defendant and one Workman, under ■the firm name of Workman & Zeigler, were partners in the business of contractors and builders, and as such were engaged in building the Hotel Ontario, at Charlotte, and the Sage block, in the city of Rochester, and also did Work for the- plaintiff. „ The mutual account accrued during the years 1884 and 1885. On the 1st of January, 1886, the firm of Workman & Zeigler was ■dissolved, Zeigler taking the assets and assuming and agreeing to pay all the debts of the firm. This action was brought against .Zeigler alone. His answer alleged the compromise and settlement of a portion of the plaintiff’s account, payment in full of all •other portions, and a counterclaim for a balance due the defendant.

The matters declared upon were embraced in three accounts known as the “ Charlotte job,” the “ Sage job” and the “ Shop statement : ” the two first being for builders’ materials furnished by plaintiff to Workman & Zeigler for use in those jobs, respectively, and the last for rent of shop, money loaned and work done not Telating to either of the jobs mentioned.

There is substantially no controversy here as to the amounts-found by the referee as chargeable to the defendant upon either of the accounts mentioned. All those charges are admitted by the defendant or established by satisfactory evidence and, with an inconsiderable variation in the sum total of the last two accounts,, the findings of the referee in respect thereto are in accordance with the special requests to find of the defendant. The actual controversy is in respect to the credits to be allowed to the defendant upon the last two accounts, and relates especially to a payment of $359 made by the defendant and Workman to the plaintiff on the 31st day of December, 1884. The finding upon this-item of credit claimed by the defendant is the only one which involves any question of law. The others involve only questions-of fact which have been decided by the referee either upon uncontroverted evidence, or upon conflicting evidence, and ought, not to be disturbed.

The controversy mentioned arises upon the following undisputed facts found «by the referee. Before the 12th day of September,. 1884, the firm of Workman & Zeigler was indebted to the plaintiff for a balance on the Charlotte account of $1,745, for which-the plaintiff filed a mechanics’ lien, which was the first lien, on the-premises on which the hotel was being erected, and on the day mentioned he commenced proceedings for its foreclosure. Thereupon Workman & Zeigler, being unable to pay their debts in full, set about effecting a compromise with all their creditors who were interested in the Charlotte job; which was not intended to include, and the compromise actually effected did not include any other-indebtedness of the firm to the plaintiff or any other of their creditors. On the 27th day of December, 1884, a composition agreement was signed by Workman & Zeigler and all their creditors • interested in the Charlotte job, including the plaintiff,, whereby each creditor agreed to take in full for his debt the sum of fifty cents on a dollar.

At the time the plaintiff signed the agreement, and as an inducement to procure his signature, an oral agreement was made-between him and Workman & Zeigler, whereby the latter secretly and without the knowledge of the other creditors promised and agreed to pay the plaintiff thirty per cent of the Charlotte indebtedness due to him, in addition to the fifty per cent fixed by the-composition agreement. On the 30th day of the same month Workman & Zeigler paid all the creditors mentioned, including the plaintiff, fifty cents on a dollar of their respective claims, and the plaintiff thereupon", in writing, acknowledged such payment as a settlement in full of the indebtedness due to him on the Charlotte account. On the next day, and after the composition agreement had been thus fully carried out according to its terms, Workman & Zeigler paid to the plaintiff the sum of $359, which, payment was made, received and applied upon the additional thirty per cent agreed to be paid to the plaintiff .under the secret agreement above mentioned, and the referee finds, as a conclusion of law, that such payment of $359 was voluntarily made upon an illegal contract and cannot be recovered back, and is not properly applicable to any other indebtedness of Workman & Zeigler to the plaintiff.

We can have no doubt of the correctness of this conclusion The question is elaborately, and, we think, conclusively, argueo. in the opihion of the learned referee, but, as it seems to us, the argument is contained in the statement of the proposition. The secret agreement was, no doubt, an illegal one, and one which not only could not be enforced by the plaintiff, but which, as to all the creditors except the plaintiff, vitiated the agreement of composition and entitled them, one and all, to maintain actions to recover the balance of their several claims while retaining the fifty per cent already received, White v. Kuntz, 107 N. Y., 518; 12 St. Rep., 297; but it is equally clear that the payment once voluntarily made under the void agreement cannot be recovered back. Burt v. Place, 6 Cow., 431; Knowlton v. Congress & Empire Spring Co., 57 N. Y., 518; Solinger v. Earle, 82 id., 393. The payment in this case was entirely voluntary. The composition agreement was fully executed, the plaintiff was paid his fifty per cent, and had given his acquittance of the debt, and he had no claim, legal or equitable, against the defendant and his partner for another dollar on the Charlotte contract; and yet the latter saw fit to perform the unlawful promise they had made, and paid the money. They can no more recover it back than the plaintiff could have collected it had it not been voluntarily paid.

The claim of the defendant to have the payment so made applied on his other indebtedness to the plaintiff is precisely equivalent to an attempt to recover it in an action brought for that purpose ; indeed, to the extent of the counterclaim pleaded, it is a direct attempt to recover back the money paid on the illegal contract. The position of the defendant in the controversy, as to the $359, is that of plaintiff, and the position of the plaintiff is that of defendant, and in all such controversies potior est conditio defendentis.

An exception of the defendant to the admission and retention of evidence of the illegal contract occupies a large space in the argument of his counsel, but may be briefly disposed of. Thr plaintiff,, as the first witness in his own behalf, gave evidence oí the work' done, and charges made by him on all three of the jobs mentioned. On his cross-examination counsel for the defendant entered upon the subject of the compromise and settlement of the claim in- respect to the Charlotte job, and drew out from the plaintiff a brief statement of the oral agreement outside the composition deed. This he moved to strike" out on the ground that it “ was all merged in the written agreement,” and when that motion was denied, he proceeded to elicit a more full and particular account of the oral agreement and of the circumstances under which it was made. On the re-direct examination counsel for the plaintiff recurred to the same subject, under objection of the defendant, but did not pursue it, and the evidence stood substantially as drawn out by defendant’s counsel when, at the close of the plaintiff’s case, the latter renewed his motion to strike out all -evidence' of the oral agreement on the same ground as before. There were several obvious answers to the motion, as that the evidence was brought into the case by the defendant, and could not be stricken out at his instance; that it did not tend to vary the terms of the composition deed, but to prove a distinct and separate agreement between two only of the parties to the deed; that it related only to the consideration of the plaintiff’s agreement to compromise, and that the consideration expressed in a written agreement is always open to question. McCrea v. Purmort, 16 Wend., 460; Ham v. Van Orden, 84 N. Y., 260, 269.

But the most satisfactory answer to the defendant’s contention in this respect is that neither the validity nor the effect of the composition deed was in question; that both parties agreed as to what were its terms; that it had been carried out in accordance with these terms, and that it had been in all respects effectual to accomplish the purpose for which it was made. The plaintiff was entitled to the evidence sought to be stricken out, independently of the terms of the composition deed. The oral agreement was the contract upon which the payment in question was made and received, and because it was made and received upon that contract, whether legal or illegal, consistent with or contradictory of the terms of the composition deed, such payment could not be applied to any other contract or indebtedness between the parties.

. The ruling of the referee upon the motion to strike out was undoubtedly correct. There is no other exception in the case which seems to require discussion.

The judgment must be affirmed.

Macomber and Lewis, JJ.’, concur.


text:
    Felix D. Clossey, Resp’t, v. Marshall J. Ayers, Adm’r, App’lt.

      (Supreme Court, General Term, Fifth Department,

      Filed January 22, 1892,)

    1. Decedents estates—Clams against—Discontinuance.
    A proceeding under the statute in relation to disputed claims against an estate cannot he discontinued except upon payment of costs.
    2. Same.
    Where the decision of the referee in favor of the claimant has been set aside by the court, findings of the referee are not available for the purposes of a motion to discontinue without costs, as they must be deemed to have gone for naught by reason of the action of the court.
    Appeal by the defendant from an order made at the Monroe ■special term, May 25, 1891, and entered in Steuben county, June 1, 1891, allowing the plaintiff to discontinue this action or proceeding on payment only of the defendant’s taxable disbursements, together with ten dollars costs of opposing the plaintiff’s motion for such discontinuance.

      Eli Soule, for app’lt; F. S. Robinson, for resp’t.
   Macomber, J.

This action began as a special proceeding instituted under the statute for the prosecution of claims against the • estates of deceased persons. An order óf reference therein was made, and the referee reported in the plaintiff’s favor in the sum of $57.42. Amotion was made in behalf of the plaintiff for a confirmation of such report, and at the same time a counter application was made by the defendant, on a case and exceptions, to set aside the same; thereupon the court refused to confirm the report and directed a new trial before another referee, holding, in substance, that under the facts established the plaintiff could not recover. The question of costs, however, was reserved for future consideration, and until the final disposition of the case.

A new trial was not had in pursuance of the decision of the special term. The plaintiff, however, made a motion for leave to discontinue the action, and on the hearing of such motion the order appealed from was made.

The question mainly involved in this appeal was recently considered by this court in the case of Agar v. Tibbels, 30 St. Bep., 456, where it was held that on a reference .of this kind the plaintiff or claimant could not properly be permitted to discontinue the action or proceeding, except upon payment of costs to the defendant. It is, therefore, unnecessary to review the grounds upon which the' judgment was there stated to rest, for, so far as the power of this court extends, it is a decisive authority in favor of the appellant.

But it is claimed by the learned counsel for the respondent that there are certain equitable considerations which ought to prevail, through which the plaintiff should be permitted, as a matter of favor, to withdraw his action upon less onerous terms than those of the absolute payment of the defendant’s costs taxable according to the statute.

It appears that the plaintiff, in the lifetime of Thomas Hallett, the defendant’s intestate, agreed to furnish to the latiera certain amount of grass seed. There was no contract in writing, and the amount which was subsequently delivered by the plaintiff exceeded in value the sum of fifty dollars, and none of it was delivered in the lifetime of Thomas Hallett. It was, however, delivered after the death of Thomas Hallett to one Benj. J. Hallett. Under these facts the special term held, reversing the decision of the referee, that no recovery could be had against the estate of Thomas Hallett. The plaintiff has certainly, to the extent of desiring to discontinue the action, acquiesced in such decision.

His counsel now urges upon our attention the finding made by the referee that this grass seed, except a small portion thereof, was taken and sown upon the farm 'which Thomas'Hallett died seized of, and that the defendant, as the administrator of the estate of Thomas Hallett, actually cut the hay raised from the sowing of such seed. From these circumstances it is urged that certain equitable considerations exist which should induce the court to permit a discontinuance of the action without payment of the statutory costs. In this contention, however, we cannot concur.

The finding of the referee above mentioned must, for the purposes of the motion for discontinuance and the appeal entered thereon, be deemed to have gone for naught, because the judgment which was directed by the referee, which was certainly in part based on such finding, was wholly disapproved of by the special term.

Furthermore, this is not a ground for the exercise of the exceptional power possessed by the court to discontinue an action without the payment of costs where costs are fixed by statute. The exceptions to this rule are recognized and stated in the case already cited, as follows: “ As, for example, where the defendant has obtained a bankrupt’s discharge after the commencement, of the action, Hart v. Storey, 1 Johns., 143; or had fraudulently concealed the fact of his infancy from the plaintiff, Van Buren v. Fort, 4 Wend., 209; or where, in an action for a penalty, the law imposing the penalty was repealed after the action was brought, Cole v. Rose, 65 How. Pr., 520; or where one named as defendant by mistake and not served with process has intruded himself into a litigation, the result of which could in no manner affect his interest. Waterbury Co. v. Krause, 9 Abb., 175, note.”

The case at bar does not come within any of the above exceptions. The fact, now mainly relied upon for invoking the discretionary action of the court, existed in the case from the beginning, and the plaintiff must be conclusively charged with knowledge .thereof. Under these circumstances, the plaintiff took the ordinary hazards of the litigation, and having failed to recover upon the merits of his case, must, as .a consideration of discontinuance, pay the costs of the action.

Order appealed from reversed, with ten dollars costs and disbursements of appeal, and the motion denied, with ten dollars costs, or, at the option of the plaintiff, order modified by substituting for the terms imposed thereby the condition of the payment of the defendant’s costs of the proceeding, as in an action.

Dwight, P. J., and Lewis, J., concur.