author: HERRICK, J.

text:
    The People ex rel. Depew and Southwestern Railroad Company, App’lt, v. Board of Railroad Commissioners of the State of New York et al., Resp’ts.

      (Supreme Court, Appellate Division, Third Department,

      Filed March 14, 1896.)

    1. Railroad commissioners—Duties.
    Railroad commissioners must determine whether public convenience and necessity require the construction of the specific road proposed in the articles of association of the petitioning corporation.
    2. Same.
    In the case of conflicting applicants, the board has jurisdiction to determine whether certificates shall be issued to both or only to one, and if only to one, which one of the corporations.
    3. Certiorari—When lies. ‘
    A writ of certiorari cannot he issued “to review a determination, which does not finally determine the rights of the parties with respect to the-matter to he reviewed,” or “where the determination must be adequately reviewed by an appeal to a court, or some other body or officer.”
    4. Same.
    Under section 2140 of the Code, certiorari will lie to review in the respects named therein, the decision of the railroad commissioners refusing a certificate of convenience and necessity authorized and' required by section 59, chapter 676 of 1893 to relator, and granting one to another applicant for a road between the same points.
    5. Same.
    The burden is upon the relator to show that the decision of the commis- ' sioners was contrary to the clear weight of evidence.
    6. Same.
    To reverse the commissioners decision, the court must find that there was such a preponderance of evidence adverse to the conclusion they arrived at that, if it had been the verdict of a jury, the court would set it aside as against the weight of evidence.

      Certiorari to review the decision of the board, of railroad commissioners of the state of New York.
    Bissell, Si card, Bissell & Carey (W. S. Bissell, of counsel), for relator; John D. McMahon, for def’ts; McMillan, Gluck, & Pooley & Depew (James Frazer Gluck, of counsel), for the Terminal Bail-way of Buffalo.
   HERRICK, J.

This is a proceeding by certiorari to review the action of the board of railroad commissioners in refusing to issue to the relator á certifidate of convenience and necessity, under section 59 of the “Bailroad Law”(Laws 1892, c. 676), and in issuing such a certificate to the Terminal Bail way of Buffalo. The relator the Depew Southwestern Bailroad Company, filed its articles of association on the 15 th of June, 1895. The Terminal Bail way of Buffalo filed its articles of association June 17, 1895. The articles of association of the relator was .acknowledged June 14, 1895, and those of the defendant the Terminal Bailway of Buffalo were acknowledged June 12, 1895. Both companies made application for the certificate required by section 59 of the railroad law by filing applications therefor with the board of railroad commissioners, July 1, 1895. Each of sáid companies proposed to run a railroad between the villages of Depew and Blasdell, in the county of Erie. The routes are practically the same, and are each ten miles in length. It appears-that a number of trunk lines of railroads come into close proximity with each other at the village of Depew; and certain other railroads come into proximity with each other at the village of Blasdell, and that by the construction of a line of railroad between Depew and Blasdell the interchange of traffic between the group of roads coming into proximity to each-other at said villages could be made outside of the city of Buffalo, so as to save a distance of some six miles. The termini of both roads are the same; the amount of capital stock of each- is the same; each is to be operated by steam power, and each is what is called “standard gauge also each company has complied with the conditions and requirements of section, 59 of the railroad law. The relator, npon filing its application for a certificate, asked to be heard upon its application in advance of all other applying for a certificate for any road between the points in question, and also filed notice of a desire to be heard in opposition to the granting of a certificate to any other company. The board of railroad commissioners denied the first request, and resolved to hear both applications on the same day and at the same time. After such hearing, the board of railroad commissioners issued a certificate of public convenience to the defendant the Terminal Bail way of Buffalo, and refused to issue such a certificate to the relator. The board of directors of the relator thereupon took the proceeding provided by section 59 of the railroad law for a review of the action of the railroad commissioners in refusing to grant such certificate, which proceeding for a review was pending in the general term of the supreme court for the Fourth department at the time the writ of certiorari herein was granted. By this proceeding it is sought to review the action of the board of railroad commissioners, and to reverse and vacate their action in refusing to issue a certificate to the relator and issuing one to the defendant the Terminal Railway Company of Buffalo, or at least to reverse their action in issuing such certificate to the latter company.

While the applications were heard together, and although the decision in one might perhaps have its weight in influencing the decision of the other, as appears to have been the fact in this case, yet they were separate and distinct proceedings. The relator's grievance is that no certificate of convenience and necessity was granted to it. It can have no case of grievance because of the granting of a certificate to the defendant the Terminal Railway Company, except as the granting of such certificate interfered with its own application, upon the ground that public necessity and convenience did not require the construction of two lines of railway between the points in question. It has been argued before us that the railroad commissioners had no jurisdiction or authority to adjudicate as between the two companies; that its only function is to determine whether public convenience and necessity require the construction of the a railroad between the points mentioned in the articles of association. I think that is hardly an accurate reading of the section under which the certificate is asked. The portion of the section relating to the granting of the certificate is as follows:

“No railroad corporation hereafter formad under the laws of this state shall exercise the powers conferred by law upon such corporations or begin the construction of its road until the directors shall cause a copy of the articles of association to be published in one or more newspapers in each county in which the. road is proposed to be located, at least once a week for three successive weeks and shall file satisfactory proof thereof with the board of railroad commissioners; nor until the board of railroad commissioners shall certify that the foregoing conditions have been complied with, and also that public convenience and necessity require the, construction of said railroad as proposed in said articles of association."

’ Under that the railroad commissioners have to pass upon the specific application of each company. They are to determine whether “public convenience and necessity require the construction of said railroad as proposed in said articles of association ” of the petitioning company. That is something more than determining whether public necessity and convenience require the construction of a railroad between the points mentioned in the articles of association as the proposed termini of their road. It means something more than merely determining whether public convenience and necessity require the building of any road between the proposed termini. They must determine whether public convenience and necessity require the construction of the specific road proposed in the articles of association of the petitioning corporation. And in determining that question various things are to be taken into consideration by the commissioners, as suggested in the case of In re Amsterdam, J. & G. R. Co., 86 Hun, 578; 67 St. Rep. 878. Among other things to be taken into consideration is the route that the proposed road is to take between the named termini. It is evident that the act contemplates the filing of maps of the proposed route, for it speaks of their certifying copies of all maps filed with them, in order that the same may be presented to the supreme court; indicating that the route or line of road as shown upon the map is a proper subject for consideration in reaching their decision ; thus further indicating that the question for them to decide is whether public convenience and necessity require the construction of the proposed road, not any road. If they were only to determine whether a road was required between any given termini, there would be no occasion for maps or profiles, or any consideration of its character, steam or electric, its route or gauge. I may sometimes happen, as in this case, that two companies apply for a certificate to construct a road between the same points, and it may be that such railroad commissioners can properly certify as to each that public convenience and necessity require the construction of its road, or it may be that they cannot conscientiously certify that public convenience and necessity require the construction of more than one road. It is a question that must be determined by some one, and the board of railroad commissioners is the only body or tribunal vested with authority to issue the certificate in question, and from necessity therefore, it has jurisdiction to determine, in the case of conflicting applicants, whether certificates shall be issued to both or only one, and, if only to one, which one. While, as I have before stated, the applicants for the certificates in question made by the relator and by the Terminal Railway-Company were heard together, yet each was a separate and distinct proceeding, and they must be so considered by ns.

For the redress of the relator’s grievance a remedy is provided by section 59 of the railroad law by a review of the proceedings before the railroad commissioners, formerly by the general term, now by the appellate division of the department within which it is proposed to build the road in question. The relator has availed itself of that remedy, and it appears by the return of the railroad commissioners that since the issuance of the writ herein the general term of the supreme court for the Fourth department has reviewed the proceedings of the railroad commissioners in refusing to grant the relator the certificate applied for, and the prevailing opinion of the court is embodied in such return. Whatever my views ipay be as to the propriety of the decision of' the railroad commissioners, or of the general term in affirming it, it would be unbecoming for me to assert that opinion, because this court cannot sit in review of the decision of the general term of the Fourth department, nor can it indirectly reverse that decision in passing upon the writ of certiorari now before it. °A writ of certiorari cannot be issued “to review a determination, which does not finally determine the rights óf the parties with respect to the matter to be reviewed,” or “ where the determination can be adequately reviewed by an appeal to a court, or some other body or officer.” Code Civ. Proc. § 2122, subds. 1, 2. It has been held that it is not a final determination where a resort -may be. had to some other body, tribunal, or officer for a revision, rehearing, or review. People v. Dennison, 28 Hun, 328; People ex rel. Hill v. Board of Sup’rs of Wayne Co., 49 Hun, 476; 18 St. Rep. 898; People v. Nichols, 79 N. Y. 582. And in a proceeding to procure a certificate of public convenience and necessity, a review of a refusal by the railroad commissioners to grant such certificate may be had in the supreme court, as I have heretofore stated1., The action, then, of the railroad commissioners in refusing to grant such cer- ' tificate cannot be said to finally determine the rights of the parties, and therefore the writ of certiorari, will not lie. Adequate provision has been made for the review of a refusal to issue a certificate, and for that reason the. writ of certiorari will not lie. The application to the general term to review the proceedings of the railroad commissioners is a proceeding in the nature of an appeal from their decision, and it has been held that a writ of certiorari will not be entertained while an appeal is pending in the same matter. People v. Wallace, 4 Thomp. & C. 438; People v. Dennison, 28 Hun, 328. When the writ of certiorari was issued in this case, a review of the refusal of the railroad commissioners to issue a certificate to the relator was pending before the general -term of the supreme court, and undecided. For these reasons I think that this court cannot review in these proceedings the action of .the railroad commissioners in refusing to grant a certificate to the relator.

There is no provision made in the law for an appeal from or a review of the proceedings of the railroad commissioners in granting a certificate of public convenience and necessity, and, no other proceeding being authorized by law to review their proceeding in that respect, a proper case is presented to do so by certiorari. At common law the office of the certiorari was to bring up the record of inferior tribunals to enable the court to determine whether such tribunals has proceeded within their jurisdiction. People v. Betts, 55 N. Y. 600. The common law in that respect has been extended in practice and by statute, and now, in addition to jurisdictional questions, the court is empowered to determine upon certiorari whether “ in making the .determination, any rule of law, affecting the rights of the parties thereto, has been violated, to the prejudice of the relator”; “ whether there was-any complete proof of all the facts, necessary to be proved, in order to authorize the making of the determination ;” “ if there was such proof, whether there was, upon all the evidence, such a preponderance of proof, against the existence of any of those facts, that the verdict of a jury, affirming the existence thereof, rendered in any action in the supreme court, triable by jury, would be set aside by the court, as against the weight of evidence.” Code Oiv. Proc. § 2140. That the railroad commissioners had jurisdiction in the proceedings is conceded. Did they, in granting the certificate to the Terminal Railway, violate any, rule of law afiecting the rights of the parties, to the prejudice of the relator? As I understand it, the relator contends that.'there was such a violation of law to its prejudice, in this: that it,having completed its organization first, acquired a right to have its • application for a certificate heard and -passed upon before that of the Terminal Railway; and that, the application of the latter being heard at the same time and passed ¡upon before that of the relator, the decision upon its application granting to it a certificate operated to the disadvantage of the relator, because the railroad commissioners having decided that only •one road was necessary, the issuing of a certificate to the Terminal Railway Company operated to exclude the relator,—the assumption being that, if the application of the relator had been heard and decided first, it would have received the certificate, and the Terminal Railway Company would have been excluded. I «cannot see that that result would necessarily follow. It might not have received the certificate if there had been no other applicant. The relator, however, contends that it has a vested right to such certificate as against the Terminal Railway Company. This contention proceeds upon the theory, as stated by the counsel for the relator, that;

“On June 15, 1895, it (the relator) became vested under the law with the right to construct iss railroad from Depew to Blas•dell, whenever it should appear to the satisfaction of the railroad -commissioners that public convenience and necessity required the -construction of a-railroad between these points.”

JSTo authority was cited to us to sustain this claim; neither have I been able to find any, and I do not think it can be sustained, either upon principle or authority. ■ I have before called attention to the fact that the certificate is not to be to the effect that public convenience and necessity require the construction of ¡a railroad, but of the railroad proposed in the articles of association of the petitioning company, and as proposed in such articles of association. To say that when it appears that public convenience and necessity require the construction of some road between given termini, then the persons first associated together to build a road between such termini are entitled as of right to have the railroad commissioners issue a certificate to them that public •convenience and necessity require the construction of the particular railroad proposed in their articles of association, regardless of the route proposed, the kind of a railroad, whether steam or electric, or whether broad or narrow gauge, is to deprive the railroad commissioners of a large part, if not all, of the discretion supposed to have been conferred upon them. But, without further discussion of that portion of the statement of relator’s claim', it does not seem to me that the relator acquired any vested right by filing its articles of association. The association of a number of persons together does not constitute them a corporation until all the laws necessary to give them corporate powers have been complied with. °

The construction of a railroad is not a matter of right; it is a privilege granted by the state, and can only be obtained by com-plying with the laws of the state regulating the granting of such privileges. In re Amsterdam, J. & G. R. Co., 86 Hun, 578; 67 St. Rep. 878. One of those laws is that, before any railroad corporation can exercise any of the powers conferred by law upon $uch corporations, or begin the construction of its road, it must secure from the railroad commissioners a certificate of the kind hereinbefore described. Chapter 676, § 59, Laws 1892. The statute does not recognize that prior to the granting of the certificate the corporation has any powers. It does not say it shall not-exercise its powers, but the “ powers conferred by law upon such corporations." If it can exercise no corporate powers, what rights- or privileges has it? Corporate powers and rights go together; one cannot exist without the other. The only right a corporation has is the ability to exercise certain powers. I cannot conceive of a corporation with no corporate powers. Powers which cannot be exercised are not powers. The ability to exercise corporate power constitutes the breath of 'life to a corporation: Without it, it cannot exist. Practically, a corporation that has no-"powers that it can exercise has no power at all, and is not in fact a corporation. It is not a case of suspended animation, but a case where there has been, as yet, no life. It seems to me that it is not complete as a corporation until the certificate mentioned has. been granted. Until that time, it is an inchoate thing and until that time it has no vested rights. Both applications for certificates having been made, at the same time, I think the 'railroad, commissioners had the legal right to consider them together, without regard to who had filed their articles of association first, and that consequently no “rule of law affecting the rights of the parties thereto has been violated to the prejudice of the relator.”

It is conceded that public convenience and necessity require the construction of some railroad between Depew and Blasdell,' and the railroad commissioners decided that only one railroad was required. While, as an original proposition, I might be inclined to differ with them m that respect, yet I do not see that we can review their determination in that regard here. That- was a proper subject for consideration upon the review of their refusal to grant the relator a certificate by the supreme court of the Fourth department. Having deciding that only one certificate should be issued, it is a matter of no practical importance which case was in form decided first, both being considered together. Having come to the conclusion that a railroad was required, the next thing for them was whether the particular road as proposed by either applicant in its articles of association was required. In determining that question-they had a right, among .other things, to take into consideration the routes to be taken in connecting the two termini, and the manner of construction of the proposed roads; and, if there was any practical differences in these respects between the parties applying, to consider them in determing to. which of them the certificate-should b"e granted. It seems to me, by the findings, or opinion of the commission, that in considering the application of the relator elements were taken into consideration that should have no-effect or weight in determining a question of this kind,—as, for instance, “the parties in interest,” it being conceded that both were acting in good faith, and of sufficient ability to build the road; “and -the lines that are to furnish the same” (i. e. business) whether the corporations were organized in this or other states, or whether the capital thereof was owned by residents of' this or an adjoining state. These elements do not appear to have been considered by the general term in its review of the refusal to grant the relator a certificate, and, presumably, were not called to its attention; and I am not clear as to whether we have a right to consider them here upon the question as to whether the certificate was properly awarded to the* Terminal Railroad Company, for it is that certificate we are now considering. But, assuming that we have a right to take such, alleged errors into consideration, and claiming them from the case, still I cannot say that the action was erroneous in refusing to award -a certificate to the relatór and granting one to the Terminal Railway Company, The burden is upon the relator to, show error, and, with the improperly considered elements eliminated from the case, I cannot say that the decision of the commissioners would not or should not have been the same. There would be still enough left in the case to call for the exercise of their discretion as to which of the two applications should receive a certificate.

We cannot consider the evidence as if we were determining the matter in the first instance. Some weight and importance must be attached to the decision of the commissioners, and the burden is upon the relator to show to us that the ■ decision of the commissioners was contrary to the clear weight of evidence. In re New Hamburgh & P. C. R. Co., 76 Hun, 76; 59 St. Rep. 150; In re Amsterdam J. & G. R. Co., 86 Hun, 578; 67 St. Rep. 878. To reverse their decision upon certiorari, we must find that there was such a preponderance of evidence adverse to the conclusion they arrived at that, if it had been the verdict of a jury, we would set it aside as against the weight of evidence. Code Civ. Proc. § 2140, subd. 5. I can find no such preponderance of evidence.

My conclusion therefore is that the action of the board of rail-railroad commissioners in refusing to issue to the relator the certificate provided for in section 59 of the railroad law cannot be reviewed by us in these proceedings, because their action did not finally determine the rights of the relator, and because another means is provided by law whereby their decision could be adequately reviewed, and also because, at the time of issuing the writ herein, a proceeding to review the 'action of the railroad commissioners, in the manner prescribed by law, was then pending and undecided; that in the proceedings on the application for a certificate by the Terminal Railway Company the said commissioners, had jurisdiction of the proceedings, and jurisdiction to determine whether it would issue certificates to both applicants or to only one, and, if to one only, which one; that in making their determination they violated no rule of law affecting the rights of the relator to its prejudice; that there was competent proof of the facts necessary to be proved in order to authorize'them to make a determination, and that there was not such a preponderance of evidence against their determination as would justify us in setting it aside. The decision of the railroad commissioners is therefore affirmed, and the writ of certiorari quashed, with $50 costs and disbursements to the defendant the Terminal Railway Company •of Buffalo.

MERWIN, PUTNAM, and LANDON, JJ., concur: PARKER, P. J., dissents.


source: Caselaw Access Project

author: PUTNAM, J.

license: Public Domain

text:
    Lula Anthony, by Guardian, etc., Resp’t, v. Village of Glens Falls, App’lt.

      (Supreme Court, Appellate Division, Third Department,

      Filed Feb’ry 14, 1896.)

    Municipal Cobpoeations—Negligence.
    A municipal corporation is not liable for an injury resulting from a smooth coating of ice on its sidewalks during the winter season, where there is no ridge, unevenness, or unusual condition of the walk, and where no fact is shown indicating negligence on the part of the municipal authorities, except a mere'slippery walk, caused by a low temperature, in consequence of which all the streets within the municipality have become coated with ice.
    Appal from a judgment in favor of plaintiff.
    James H. Bain, for app’lt; Potter & Kellogg (J. A. Kellogg, of •counsel), for resp’t.
   PUTNAM, J.

The plaintiffrecovered a judgment in the court below for injuries sustained by her in consequence of falling on a .sidewalk in" one of the streets of the village of Glens Falls. The negligence attributed to the defendant was in allowing a strip of ice on such street to remain in a dangerous condition for several weeks before and up to the time of the accident. The sidewalk, ■at the place where the plaintiff fell, was about eight feet wide, paved with stone and brick, and in good condition. The ■snow had been kept shoveled from it during the winter, and the stone portion, at the time of the accident, was free from ice and snow. But on the brick or outer part of the walk there was a thin, smooth coating of ice. At the place of the accident there was no ridge, unevenness,' accumulation of ice or snow, or obstruction. There was simply a thin.coat of ice, about- two feet wide and several feet long. At the time many of the streets of the village were more or less in the same condition. We think the trial court properly submitted to the jury the questions raised as to the •contributory negligence of the plaintiff, and whether the condition of the walk at the place in question had continued for a long enough period to charge the defendant with notice thereof. Hence the only question requiring consideration is whether negligence could be attributed to the corporation for failing to remove the strip of ice in question. In Kinney v. City of Troy, 108 N. Y. 567; 14 St. Rep. 15, the action was brought to recover damages resulting from a fall on one of the defendant’s streets, on which ice had formed. The court held (we quote from the syllabus):

“A city is not bound to keep it sidewalks absolutely free from see, and while it may be liable to a traveler for injuries caused by an accumulation of ice rendering a sidewalk unsafe, where the circumstances are such as to charge defendant with neglect of duty, to impose such liability something more must be shown than the simple fact that there was ice upon the sidewalk, rendering it slippery.”

In the case under consideration no fact was shown indicating negligence on the part of the corporation, except that there was ice on the sidewalk; and, under the doctrine thus laid down by the court of appeals, the plaintiff failed to show any omission of duty on the part of the defendant. In Kaveny v. City of Troy, 108 N. Y. 571; 14 St. Rep. 15, it was shown that the sidewalk, at the place where the accident occurred, was made slippery by water dripping from the eaves of a building and freezing. The court o£ appeals held that the city was not compelled to remove the ice so formed, nor to exercise unreasonable, persistent, or extraordinary diligence, daring freezing weather, to remove ice formed from natural causes. In the opinion of Judge Finch the following language is used: “ Something more than the presence of ice, due to the results of a low winter temperature, must be shown, to make the city chargeable with negligence.” In Gram v. Village of Greenbush, 20 St. Rep. 370, the general term of the third department made a similar decision. In Harrington v. City of Buffalo, 121 N. Y. 147; 30 St. Rep. 719, the action was brought to recover damages for an injury occasioned by ice which was allowed to remain on one of the sidewalks of the defendant. There was evidence showing that the walk, at the place where the accident occurred, was covered with ice. The court held that the city was not liable; that the proof did not show that there was an unusual or dangerous obstruction to travel, arising from snow or ice on the sidewalk. And for this reason, as well as upon the ground of want of notice to the city of the condition of the street, the judgment was reversed. See, also, Taylor v. City of Yonkers, 105 N. Y. 202; 7 St. Rep. 332. We think the principle may be deemed established by the authorities, that a municipal corporation is not liable for an injury resulting from a smooth coating of ice on its sidewalks during the winter season, where there is no ridge, unevenness or unusual .condition of the walk, and where, as in this case, no fact is shown indicating negligence on the part of the •municipal authorities, except a mere slippery walk, caused by a low temperature, in consequence of which all the streets within the municipality have become coated with ice. In this climate it is not within the power of a municipal corporation to prevent such ■a condition of its streets. In Fox v. Village of Ft. Edward, 48 Hun, 363; 16 St. Rep. 303, the same general term which shortly afterwards .passed upon the case of Gramm v. Village of Greenbush, supra, sustained a recovery for the plaintiff, but it was shown that there was an unusual condition and accumulation of ice. In each of the cases of Todd v. City of Troy, 61 N. Y. 506; Pomfrey v. Village of Saratoga Springs, 104 id. 459; 5 St. Rep. 802; Keane v. Village of Waterford, 130 N. Y. 188; 41 St. Rep. 291; and Weston v. City of Troy, 139 N. Y. 281; 54 St. Rep. 493,—where a municipal corporation has been held liable for injuries received by an individual in consequence of ice being allowed to remain on its sidewalks, it was shown that there was a ridge or accumulation of snow or ice forming an obstruction in the street.

We conclude that the trial court should have granted the motion of the defendant, made at the close of the evidence, to dismiss the complaint. The judgment should be reversed, and a new trial granted, costs to abide the event.

PARKER, P. J., and LANDON, J., concur; HERRICK and MERWIN, Jj., concur in result. ■


text:
    Alfred C. Drury, Resp’t, v. L. Howard Wilson, Late Sheriff, etc., App’lt.

      (Supreme Court, Appellate Division, Third Department,

      Filed April 14, 1896.)

    1. Fbaudui-ent conveyance—Chance of possession.
    Where, immediately after the purchase, the purchaser takes the keys of the store, locks' the door, and the next morning, at an early hour, opens, the store, makes a temporary arrangement with the seller to act as his clerk, and goes away, there is an immediate change of possession, effective' as against attaching creditors of the vendor.
    2. Same—Pbefebbing cbeditob.
    A failing debtor may prefer a bona fide creditor of a bill of sale.
    Appeal from a judgment in favor of plaintiff.
    Frank N. Cleaveland (Ledyard P. Hale, of counsel), for app’lt;. A. Z. Squires (John C. Keeler, of counsel), for resp’t.
   PUTNAM, J.

The plaintiff claimed title to the property de scribed in the complaint, under a bill of sale from one Murray N. Ralph. The defendant, in his answer, alleged that said Ralph, being at the time insolvent, executed said instrument for the purpose of hindering, delaying, and defrauding his creditors. The-question as to his intent was one of fact, and the learned and experienced referee before whom the case was tried has found in favor of the plaintiff. After a careful examination of the testimony, we are of the opinion that it sustains his conclusions. It is not denied that the transfer of Ralph to the plaintiff was made to pay honest debts of the former, amounting to $3,800 besides the interest thereon. The bill of sale, was executed late in the-afternoon of December 25, 1894. Immediately after the purchase plaintiff took the keys of the store, locked the door, and the next, morning, at an early hour, opened the store, making a temporary arrangement with Ralph to act as his clerk. Shortly afterwards, while plaintiff was absent from the store, the defendant levied upon and took possession of the property in question. _ The evidence clearly justified the finding that there was an immediate: change of possession under the bill of sale.

The defendant failed to show that the plaintiff paid such an inadequate price for the property as to indicate a fraudulent intent. The debts assumed by him amounted to $3,700, besides interest. The referee found the value of the goods to be $3,463.50; $200 was collected from the accounts assigned at the same time,—in all $3,663.50. It was not shown that the real estate which Ealph at the same time conveyed to the plaintiff was of any value. The ■evidence tended to show that it was not worth any sum over the incumbrances thereon. The value of the claim against Eldredge and Seymour, which was then in litigation, does not appear. The plaintiff and Ealph might naturally and properly bear in mind that, though the goods were thought to be worth $3,600, yet the amount that the former would receive therefrom after paying rent •of store and other expenses would be far less than that sum. It is certainly doubtful whether the plaintiff, if he had been allowed to dispose of the goods, and realize all that he was able to from property conveyed' to him by Ealph at .the time in question, • would have collected more than the amount of the debts he assumed.

There was a conflict in the evidence as to the value of the property converted by the defendant. We are not authorized to overrule the finding of the referee on the question of fact submitted to him as to such value.

It being now settled that a failing debtor may prefer a creditor by a bill of sale (London v. Martin, 79 Hun, 229; 61 St. Rep. 24, and cases cited), we see no reason to doubt that a correct conclusion was reached by the referee, and that the plaintiff, under the bill óf sale in question, obtained a valid titlé to the property for the value of which he recovered judgment. Neither the ruling of the referee nor the trial requires a reversal of the judgment,

Judgmerit affirmed, with costs.

All concur. .


text:
    Benjamin M. Tasker, App’lt, v. Thomas Ryan, Resp’t.

      (Supreme Court, Appellate Division, Third Department,

      Filed April 14, 1896.)

    1. Replevin—Demand.
    Before bringing replevin against a person who receives property, without knowing that the party from whom he receives it is not the owner, a demand is necessary.

      % Same—Demand of agent.
    ' An action of replevin will not lie against an agent for refusal to deliver, on demand, goods in the actual possession of his principal.
    Appeal from an judgment in favor of defendant
    M. H. O’Brien, for app’lt; Potter & Kellogg (Y. A. Kellogg of counsel), for resp’t ___
   PUTNAM, J.

The plaintiff, to sustain his action in the county court, was required to establish his title to the chattels described in the complaint, and that they were, or had been, wrongfully possessed, taken or detained by the defendant. I think he failed to show title. Both parties claim under De Forrest, who made a. conditional contract for the sale of the property in question, with the plaintiff’s vendor, Saunders, by which he retained the title to-the furniture until the whole purchase price was paidl Neither Saunders nor plaintiff ever paid, or tendered payment of, the balance due for such purchase price, and hence neither acquired title. The title to the furniture so remaining in De Forrest,. Brewer (under whom Newton and Hill and the order mortgagees claim) paid the balance due on the contract, and received the bill of sale, which transferred to him De Forrest’s interest in said furniture. It did not appear that Brewer made the payment toDe Forrest with money belonging to Saunders; nor was there any evidence, sufficient to submit to-a jury, that there was any breach of contract or fraud on the part of Brewer in taking the bill of sale. The evidence of the witnesses Armstrong and Hicks-tending to show that, under the contract between Saunders and? Brewer, the latter was to pay certain bills of the former, is not in conflict with the uncontradicted testimony of Brewer that he was-to pay those bills from Saunders’ share of the profits of running the hotel, and that there were, in fact, no profits. The evidence established the fact that Brewer was compelled to advance money to pay for the furniture in question. I think, therefore, he Had the right (advancing his own money to retain the furniture in the-hotel) to take an assignment of De Forrest’s interest therein; and Saunders, or the plaintiff, as his vendee, could only obtain title thereto by paying or tendering the balance due on the purchase price thereof.

I am also of the opinion that plaintiff failed to show such a wrongful interference with or detention of the property in question by the defendant as was necessary to be proved, to maintain the action against him. Brewer obtained the legal title to the furniture through the bill of sale from De Forrest, the legal owner thereof. That title Brewer transferred to the mortgagees, for whom, at the time the action was commenced, the defendant was acting as agent. If it is conceded that the act of Brewer in taking the bill of sale was a fraud on Saunders, yet there was no evidence-that the mortgagees or Ryan knew of Brewer’s breach of faith. Therefore, before the plaintiff could maintain the action, it was necessary to make a proper demand for the possession of the goods. Hovey v. Bromley, 85 Hun, 540; 67 St. Rep. 147; Goodwin v. Wertheimer, 99 N. Y. 149. It was shown that the property was, moved from the Eldridge House by the mortgagees to the warehouse of one of them, and hence, when the demand was made of Ryan, was in the actual possession of the mortgagees. It does-not appear that the furniture was at that time even in the custody of Ryan. In Goodwin v. Wertheimer, supra,— also an action of replevin,—the goods were demanded of an agent in charge of them. Andrews, J., in his opinion, says:

“ The refusal of a servant to deliver goods intrusted to him by his master, on a demand by a stranger, is not sufficient evidence to maintain replevin against the servant, nor against the master, when a demand and refusal is necessary to make the possession of the defendant tortious.”

It will be observed that in the case cited the servant or agent had the actual custody of the property sought to be recovered, while in the case under consideration, as far as the evidence discloses, the property remained in the warehouse, and in the actual possession and custody of the mortgagees. Hence, there was no-sufficient demand of the goods to show an unlawful detention thereof by Eyan or the mortgagees, or to entitle the plaintiff to maintain the action. It was not shown that the defendant was ever in the possession of the furniture in question. As we have seen, it was moved by the mortgagees to their warehouse, and, at the time of the demand and sale, was at that place, presumably in the actual possession and custody of the mortgagees. It is true one of the witnesses (Converse) testified that the defendant, at the time he replevied the property, was in possession of the goods in question; but on cross-examination he said;

“I meant, when I said I found the goods in the possession of Thomas Eyan when I served the second papers on him, that they had not been disturbed,—they were in the same place.”

Such testimony did not show any legal possession by Eyan of the property. There was also evidence of a demand on Eyan on behalf of the plaintiff, and failure to deliver the goods; but such evidence was unimportant, unless Eyan was shown to be in possession of them, unless he could deliver them. The property was bid in by one of the mortgagees. The defendant testified that he-delivered -it to the purchaser, but the notice of sale under which he assumed to act, and the evidence, showed that he was acting as a mere agent and auctioneer for the mortgagees; -and, when he thus testified, he must be understood to have meant that he made such delivery as .such agent. When the plaintiff made the demand of Eyan, the latter could not surrender property not in his possession or custody, but in the actual possession and custody of the mortgagees. Hence an action based upon his unlawful detention thereof could not be maintained. See Mount v. Derick, 5 Hill, 455; McDougall v. Travis, 24 Hun, 590; Mires v. Solebay, 2 Mod. 242; Alexander v. Southey, 5 Barn. & Ald. 247; Welton v. Holmes, 26 Wkly. Dig. 24; McClellan v. Wyatt, 26 Abb. N. C. 144; 34 St. Rep. 55. The cases cited do not conflict with principles established in Spraights v. Hawley, 39 N. Y. 441; Boyce v. Brockway, 31 N.Y. 490; Knapp v. Smith, 27 N.Y. 277; Allen v. Crary. 10 Wend, 349; and like cases. An auctioneer may become liable to an action of replevin, if he is at the same time a bailee, as in the case of Spraights v. Hawley, supra; or if he assume to exercise an unlawful direction or control of the property of another, as in Allen v. Crary, Knapp v. Smith, and Boyce v. Brockway, supra. But in this case the defendant never exercised, or assumed to exercise, any dominion or control over- the property in question. It remained in the actual possession of his principals,, and the only connection defendant had with it was as their agent.. Ryan did not advertise the property for sale. The mortgagees did that, Ryan being merely their agent or servant.

I think, therefore, the trial court made the proper disposition of the case, and that thé judgment should be affirmed, with costs.


text:
    Defrees Critten et al., Resp’ts, v. Charles W. Vredenburgh, Def't; Manufacturers’ Bank of Cohoes, an Attaching Creditor, App’lt.

      (Supreme Court, Appellate Division, Third Department,

      Filed April 14, 1896.)

    Judgment—Confession—Statement.
    A statement made by defendant upon confession of judgment that plaintiff performed services for and loaned money to him, that thereafter, at a certain time, there was an adjustment of accounts between them concerning said matters, and a certain sum was found due plaintiff, which defendant promised to pay, sufficiently shows the account stated, so as to sustain the entry of a confessed judgment, under section 1274 of the Code.
    Appeal from a judgment entered by confession in favor of plaintiffs and from an order.
    Charles F. Doyle, for app’lt; Simpson & Werner (S. W. Rosendale, Zeb. A. Dyer, and A. J. Simpson, of counsel), for resp’ts.
   PUTNAM, J.

The statement of the defendant upon which th'e judgment in this case was entered (after alleging that between the 1st day of March, 1893, and the 1st day of October, 1895, the plaintiffs, as co-partners in the city of New York, “ loaned and advanced to me divers and sundry sums of money, which I agreed to repay them with interest, and also did and performed work, labor, and services for mein selling merchandise upon commission, and guarantying the accounts for the same”) set forth on the 1st day of October, 1895, there was an adjustment of the accounts between said plaintiffs and defendant concerning the said matters, and the sum of $19,879.02 was found due the former, which the latter agreed to pay, with interest. The statement, therefore, besides the general averment above quoted, as to money loaned and labor and services performed by the plaintiffs for the defendant, alleged facts showing an account stated. 1 Rum. Prac. 312, 313; 1 Abb. Forms, 262. An account stated is conclusive between the parties, unless impeached by fraud or mistake. Lockwood v. Thorne, 11 N. Y. 170, and cases there cited. The statement, therefore, had as much force as if it had averred an adjustment of accounts on October 1,1895, and,the giving of the note by the defendant to the plaintiffs. A note would have been no more binding and conclusive than an account stated. In this view of the case, the statement was sufficient, as held in Freligh v. Brink, 22 N. Y. 418; Ely v. Cooke, 28 N. Y. 365. These cases were cited with approval by Andrews J., in Harrison v. Gibbons, 71 N. Y. 58-62.

Counsel for the appellant calls our attention to Wood v. Mitchell, 117 N. Y. 439; 27 St. Rep. 704. We do not regard that case as a parallel one. The statement there considered and condemned by the court of appeals contained no averment of an account stated between the parties It alleged no adjustment or settlement. It,was similar to the above-quoted preliminary portion of the statement under consideration, omitting the most important allegation of fact as an account stated. It cannot be held, therefore, that the court of appeals, in Wood v. Mitchell, overruled the doctrine in Freligh v. Brink and Ely v. Cooke, supra, and kindred cases. In Broisted v. Breslin, 5 St. Rep. 67; affirmed, 105 N. Y. 682, a statement averring an account stated, and similar to the one under consideration, was held sufficient; under the provisions of •section 1274 of the Code of Civil Procedure.. The affirmance in the court of appeals was without opinion, and without formally adopting the opinion of the court below. But it has been held in such a case that “it is not to be understood that the affirmance is on grounds substantially different from those taken below.” Higgins v. Crichton, 98 N. Y. 626. The case of Wood v. Mitchell, supra, on which a statement quite unlike that considered in Broisted v. Breslin was condemned, does not overrule the principle established in the latter case, nor compel us to hold that the statement under consideration is insufficient, under the provisions of section 1274 of the Code of Civil Procedure.

We think the other objection to the judgment suggested by the learned counsel for the appellant were properly disposed of by the court below, and do not require discussion.

The order should be affirmed, with costs.

All concur.


author: ARNOLD, S.

text:
    In the Matter of Accounting by Administrators of Patrick M. Doran, Deceased.

      (Surrogate’s Court, New York County,

      Filed June 12, 1895.)

      1. Executors—Claims against the estate.
    The failure of an administrator to reject within a reasonable time a a claim against an estate is not an approval thereof.
    2. Same—Accounting.
    Where, on a motion by a creditor for an accounting, the account is filed, in which the claim of the applicant is stated as rejected, the court will not determine whether or not the creditor’s claim was rejected.
    Application to compel an accounting by the administrators.
   ARNOLD, S.

This is an application by an alleged creditor of the estate to compel an accounting by the administrators thereof. It is claimed by the latter that the claim is barred by the short statute of limitations, having been rejected by them in March, 1894, and anterior to that time, and no suit was brought thereon within six months after the rejection. The affidavits and petition " " submitted by the alleged creditor contradict this,. and he insists; that there was no rejection; but, oh the contrary, that the claim was retained without objection, and must therefore be deemed to have-been admitted. The administrators have, since the argument on this application, filed an account, in which they state that the-plaintiff’s claim was rejected. In view of the decision of the court-of appeals in Schutz v. Morette (decided at its May term of this, year) many decisions to the effect that where a claim has-been presented to and not rejected within a reasonable time by, the legal representatives of the estate against which it is alleged tq.be held, it must be taken to be admitted, "and the statute of limitations is not set running, must be considered to be overruled, and some distinct admission must be proved. I could not find such admission upon the papers- submitted. On the other hand, I do-not feel called upon to decide upon these papers that the claim was rejected in any due form. This involves a question of fact,, which, if hot absolutely necessary to be decided on this motion,, ought not to be. I do not think it is necessary to be so decided. What the petitioner asks for had been accomplished without any order therefor herein. The account has been filed. The petititioner may come in and ask to be allowed to appear on the return of citation in the accounting proceedings, and the question of his; right to participate in the distribution of the estate can then be-passed upon. If the claim has not been rejected nor admitted within the purview of the decision of the Schütz Case, it may well be that the petitioner may still have, the right to present or sue-upon his claim.

The present application is denied, upou the ground that the account has been filed, and without prejudice to any rights of the petitioner, or to any further or other proceedings he may take. ,


author: GIEGERICH, J.

text:
    Morris H. Beall, Pl'ff, v. General Electric Company of Yucatan et al., Def’ts.

      (Supreme Court, New York Trial Term,

      Filed April 24, 1896.)

    1. Bills and notes—Indorsement in blank.
    Where a note is indorsed in blank, without restriction by the payee-thereof, it is transferrable by delivery and confers upon the holder the-' title thereto, and the right to sue thereon, to fill the blank and to make theindorsement special.
    8. Same—Accommodation indorser.
    Where such note is received by the plaintiffs assignor before maturity and for value, and no diversion of fraud is pleaded or proved, • his mere-knowledge of the accommodation cannot impair plaintiff’s right to enforce it.
    3. Same.
    In such case, the plaintiff succeeds to his assignor’s right of action,, though the note was assigned to him after maturity.
    Action on a note.

      D. Solis Bitterband, for app’lt; Arthur C. Bounds and Carter, Hughes & Dwight, for resp’t.
   GIEGERICH, J.

This action is brought against the General Electric Company of Yucatan, Marcus Nathan, Horace H. Thayer, and August H. Schumacher, upon the following promissory note: u$2,400. New York, August 24th, 1893.

“ One hundred and twenty days after date, we promise to pay to the order of Marcus Nathan twenty-four hundred dollars, with interest for sixty days at 6 per cent, per annum, at N. Y. Produce Exchange Bank

“ The General Electric Co. of Yucatan.

“H. H. Thayer, Treas.

“ A Schumacher, President.

“"Value received.

“No. 8. Due Dec. 22-26, 1893.”

Indorsements: “ Marcus Nathan. A, Schumacher. H. H. Thayer. Claflin & Kimball, Treas.”

All defendants defaulted except the defendant Nathan, who set up in his answer that his indorsement of the note was for the accommodation of the Mather Electric Company, and that the plaintiff was not the real party in interest. The latter defense was withdrawn at the trial; and, by consent of counsel, the jury was discharged, and the case submitted to the court. The note in suit, bearing the indorsements of the defendants Nathan, Schumacher, and Thayer, was delivered in August, 1893, by the defendant Nathan, to the said Mather Electric Company, in payment for certain electric lighting apparatus furnished by that company to the defendant the General Electric Company of Yucatan. It was subsequently, and prior to its maturity, transferred by said Mather Electric Company to Clafln & Kimball, Incorporated, in partial repayment of money advanced by the latter to the former company. Subsequently, and before the maturity of said note, it was discounted at the International Trust Company of Boston, by whom it was presented for payment, and returned protested to said Claflin & Kimball, and notice of protest was given to all defendants. Thereafter, and after the maturity of the note, it was assigned by said Claflin & Kimball to the plaintiff, who is now the holder and owner thereof.

The note having been indorsed in blank, and without restriction by the payee thereof, it was transferable by delivery just as much as if the same had been payable to bearer, and conferred upon the holder the title thereto, and the right to sue^thereon, to fill the blank, and to make the indorsement special." 2 Am. & Eng. Enc. Law, p. 383; Story, Prom. Notes, § 139; Norton, Bills & N. p. 110.

The defendant Nathan contends that plaintiff’s assignor took the note with notice of its accommodation character, and hence plaintiff cannot recover. The burden of proving this proposition is upon the defendant (Mechanics & Traders’ Bank v. Livingston, 6 Misc. Rep. 81; 55 St. Rep. 394, and citations); and, to my mind, he has failed in such proof. But, assuming that his evidence upon this point is sufficient, still, as the note was received by plaintiff’s assignor before maturity and for value, and as no diversion or fraud was pleaded or proved, his mere knowledge of the accommodation cannot impair plaintiff’s right to enforce it. Bank v. Norton, 1 Hill, 501-507; Grant v. Ellicott, 7 Wend. 227; Bank v. Neass, 3 N. Y. 442; Archer v. Shea, 14 Hun, 493; Arnson v. Abrahamson, 16 Daly, 72; 30 St. Rep. 657. As such right of action was perfect in plaintiff’s assignor, the plaintiff succeeded thereto, although the note was assigned to him after maturity. Britton v. Hall, 1 Hilt. 528; Williams v. Matthews, 3 Cow. 252; Miller v. Talcott, 54 N. Y. 114; Weems v. Shaughnessy, 70 Hun, 175; 54 St. Rep. 101; Norton, Bills & N. pp. 202, 203, and citations.

It follows, therefore, that plaintiff is entitled to judgment against the defendants for the sum of 2,766.47, with costs and an extra allowance of 5 per centum upon the sum recovered. Decision to be settled upon one day’s notice.


author: McADAM, J.

text:
    Adelbert Vincent Koenig, Pl’ff, v. The United Life Insurance Association, Def't.

      (Supreme Court, New York Trial Term,

      Filed April 13, 1896.)

    1. Principal and agent—Knowledge.
    Knowledge, brought home to an insurance company, through one of its high officials, while in the discharge of its corporate functions, is knowledge of the company.
    2. Insurance—Agent.
    Where an agent, having authority to take or procure applications, fills out the blanks, but does so incorrectly or incompletely, the company, not the assured, must be the sufferer,
    3. Same—Forfeiture—Waiver,
    Where, at the time of closing the contract, the company has knowledge of the existence of a cause of forfeiture which would invalidate the policy from the time of its inception, they are held, by accepting a premium or delivering the policy, or, by any other positive act amounting to an acknowledgment of its validity, to waive the forfeiture.
    4. Same.
    Conditions, which enter into the validity of the contract of insurance at - its inception, may be waived and are waived if so intended, though they remain in the policy when delivered.
    5. Same—Parol evidence.
    In such case, it is competent to prove by parol the actual transaction in reply to the company’s claim of breach of warranty and fraud, without reforming-the contract or asking for equitable relief.
    Appeal from a judgment in favor of plaintiff.
    Friend & House (Thos. Darlington and L J. Yorhaus, of counsel), for pl’ff; Harry Wilber, for def’t. _______
   McADAM, J.

The jury find on all the facts for the plaintiff, and the defendant moves for a new tidal on the minutes. The insured, in his application, falsely stated that no proposal to insure his life had ever been postponed or declined, or had ever been made upon which a policy had not been received by him The question is whether this statement, having been incorporated ipto the policy, and thus made a warranty, vitiates the contract. That such result would ordinarily follow there is no doubt. To avoid this, the plaintiff called Harvey W. Hatch, who testified that, at the time the application was made and the policy issued, he was vice president of the defendant; that the application was brought to liim by one Michelis, an insurance solicitor, who told him that the applicant had applied to the National Mutual for insurance; that he had been likewise so informed by Dr. Boyle, the defendant’s and the National Mutual Company’s examining physician; that Dr. Boyle also told him he had examined the applicant for that company, and that he was a good risk, and they would take it from that' company, and give it to the defendant. It is claimed that, in order to transfer the risk, Dr. Boyle had to reject the applicant in the National Mutual Company, and approve his application to the defendant, and that is just what the doctor did. .When urged to answer whether Dr. Boyle had not told the witness about the rejection in the National Mutual Company and its purpose, Mr. Hatch first answered, “ No,” and finally said that he had told all that he remembered. The application to and rejection by the National Mutual Company furnish the chief ground upon' which the defendant relies to establish the breach complained of. The jury found that the defendant knew of such application and rejection, and took the risk notwithstanding its knowledge of the facts. The conduct of Dr. Boyle in rejecting the applicant as to the National Company on April 16, 1892, and recommending him to the defendant eighteen days afterwards, is reconcilable only with the theory that his purpose was to take the risk, which he considered safe, from the company, and place it with the association ; and this fact was undoubtedly made known to Mr. Hatch, the vice-president of the defendant, and through him to the association. This is not a case of knowledge acquired by a solicitor or special agent of limited powers, but knowledge brought home to the corporation itself, through one of its high officials, while in the discharge of its corporate functions. Ang. & A. Corp., § 305; Wade Notice, § 672, 675; Bank v. Davis, 2 Hill, 451.

Notice of the fact that the insured had applied to the National Company put the defendant upon inquiry, and, when Dr. Boyle told Mr. Hatch of such former application, the next inquiry, in order would naturally be as to what had become of it; and the doctor, who knew all about it, doubtless told Mr. Hatch just what had been done. The applications to both insurers were filled up by Michelis, and they were identical. It is evident that the application in question was to take the place of the one to. the National Company, treating the latter as formal merely. The applicant apparently so regarded it, for it does not appear that he had any notice that his application had been rejected, or that he was to get any policy other than the one he received. Dr. Boyle filled up the “Answers by Medical Examiner ” in both applications. He handled both, knew what each contained, and in the application to the National Company he certified that the applicant had asthma, and did not advise the issuing of a policy; while in the application to the defendant he said nothing about asthma, but advised the taking of the risk, and said it was a good one for the age. The doctor was not selected by the applicant to make the examination. He was the regular medical examiner of the defendant, and its agent. Grattan v. Insurance Co., 80 N. Y. 281.

Can the defendant under such circumstances, enforce a forfeiture of the policy? “The decided weight of authority is now in favor of the view that where an agent, having authority to take or procure applications, fills out the blanks, but does so incorrectly oy incompletely, the company, and not the assured, must be the sufferer, either because in so doing the agent is held to be the agent of the company, and the company is presumed to do all that he does, and know all that he does, or because the company is estopped from availing itself of the act or neglect of its agent.” Bliss, Ins., at page 450. However this rule may be questioned where the agency is limited and notice thereof brought home to the assured, it cannot be doubted where the information, as in this case,, was imparted to the vice-president of the defendant in the transaction of the corporate business.

Mr. Richards, in his work on Insurance (section 68), in assigning reasons for waiver and estoppel in certain cases, says:

“The policy is prepared in the interest of insurers. The applicant must take it or nothing. * * * It would not be consonant with fair dealing to permit an insurer, in return for the premium, to deliver a pretended contract of insurance, while knowing all the time, from the very threshold of the transaction, that a forfeiture is already incurred by reason of a violation of some printed condition, and that, therefore, the policy is of no more avail to the insured than a piece of waste paper.”

If, therefore, at the time of closing the contract, the insurers have knowledge of the existence of a cause of forfeiture which would invalidate the policy from the time of its inception, they are held, by accepting a premium or delivering the policy,' or by any other-positive act amounting to an acknowledgment of its validity, to waive the forfeiture. Van Schoick v. Insurance Co., 68 N. Y. 434. Knowledge by or notice to the company of any inaccuracy or misstatement in the application upon which a policy is issued after such notice or knowledge binds the company, and prevents it from availing itself of the inaccuracy in defense; some of the cases regarding the facts as amounting to a waiver, and others as working an estoppel in pais. May, Ins. §§ 143, 263; Herm. Estop. § 549; Bigelow, Estop. 526; Rowley v. Insurance Co., 36 N. Y. 550; Bennett v. Insurance Co., 106 N. Y. 243, 12 N. E. 609; O’Brien v. Home Ben. Society, 117 N. Y. 310; 27 St. Rep. 326. The utmost good faith is the basis of insurance contracts. But the obligation does not rest solely on the assured; it is reciprocal. Forfeitures are not favored, and parties will be, in many instances, estopped from raising questions with that end in view when good faith and fair dealing require, application of the equitable doctrine. When the policy is issued with full knowledge on the part of the underwriter of facts in direct conflict with the statement on -the same subject in the application, it is reasonable to assume that there was no intention to insist upon -the condition or claim a, forfeiture under it McNally v. Phœnix Insurance Co., 137 N.Y., at page 396; 50 St. Rep, 380; Carpenter v. Ger.-Am. Insurance Co., 135 N. Y. 298; 47 St. Rep. 862. Conditions which enter into the validity of a contract of insurance at its inception may be waived, and are waived if so intended, although they remain in the policy when delivered. Berry v. Am. C. Insurance Co., 132 N. Y., at page 58; 43 St. Rep. 400. Indeed, “when the facts are •all known before any contract is made, a condition against a state ■of things known by all parties to exist cannot be deemed within their intention or purpose.” Forward v. Continental Insurance Co., 142 N. Y. 383; 59 St. Rep. 777. To sustain a defense under .such circumstances would be to hold that there was a breach eo instanti of the making of the contract, known to be so by the ■company; and to allow it “ to take the premium without taking the risk would be to encourage a fraud.” Bidwell v. Insurance Co., 24 N. Y. 302, 304. Such a result would not be tolerated. In Thebaud v. Great W. Insurance Co., 84 Hun, at page 8; 65 St. Rep. 24, the court said:

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

In other words, it is competent to prove by parol the actual transaction in reply to defendant's claim of breach of warranty and fraud, and this without reforming the contract or asking for «equitable relief. Grattan v. Insurance Co., 80 N. Y. 281. The idea of taking the application from the Rational Company to the ■defendant originated with the defendant’s agents. The transfer was made in its interest, and the fact that the assured assented ■should not, under the circumstances, be made the groundwork of .a charge of fraud and falsehood.

The motion for a new trial must therefore be denied.


author: ADAMS, J. FOLLETT, J.

text:
    Delaware, Lackawanna and Western Railroad Company, App’lt, v. The City of Buffalo et al., Resp’ts.

      (Supreme Court, Appellate Division, Fourth Department,

      Filed April 18, 1896.)

    1. Railroads—Grossing streets—Nuisances.
    Where a railroad, with the assent of a city, constructs a bridge across-the street, according to "plans agreed on by the railroad and city, which greatly and unnecessarily obstructs the street, it constitutes a nuisance which the city, years afterwards, on notice to the railroad, may remove, under its charter, which provides that the city shall remove obstructions-on its streets and abate all nuisances.
    8. Same.
    The general railroad act of 1850 conferred upon the company no power to cause an unnecessary obstruction to the public use of the street, nor™ could such power be derived from any resolution of the common council, however comprehensive might have been its terms. ,
    3. Same.
    No lapse of time, however gfeat, could destroy the right of the city officials to remove or abate an obstruction thus created, for the reason that. it constitutes a public nuisance.
    4. Same.
    Where it is apparent that an obstruction to a highway actually exists- and that it is of such a character as to constitute a public nuisance, the-power to thus abate it may be constitutionally conferred upon a municipal, corporation, and when thus conferred may be legally employed.
    Appeal from a judgment dismissing the complaint
    In 1881 the New York, Lackawanna & Western Railroad Company, a railway corporation, and the plaintiff’s lessor, filed a map- and profile of its proposed route through the city of Buffalo, in the Erie county clerk’s office, which map showed,.amohg other things, that such route was designed to cross Main street, one of the thoroughfares of that city. Thereafter, and on the 10th of October, 1881, the city, by resolution of its common council, duly granted permission to the railroad company to construct its road along the proposed route, and directed the crossing of Main street, “to be by bridge, leaving a clear roadway underneath, at least, twelve (12) feet in height and twenty-eight (28) feet in the clear, and subject to the approval of the city engineer.” The railroad company, availing itself of the permission thus granted, proceeded at once to construct its crossing, but without first consulting with,, or receiving the approval of, the city engineer, and, in so doing,, located both abutments of the bridge in the street, whereupon it. was notified by the city engineer that its plan of crossing did not. meet his approval. Upon the 14th of December, 1881, the common council, by a resolution duly adopted, directed the company to construct a span of at least sixty-six feet in width, in carrying its bridge over the street. Thereafter, and in the month of January, 1882, a conference was held between the officers of the railroad company," the city engineer, and the defendant’s street committee, which resulted in a modification of the terms and conditions theretofore sought to be imposed by the common council», and in consequence of which the company proceeded with and completed the construction of its bridge Over and across Main street in such manner that a clear roadway was left underneath the structure, twelve feet in height and forty-two and a half feet in the clear; locating its abutments, one on the easterly line of Main street, with a pier about twenty feet westerly therefrom, in the-street, and the other about thirty-four feet easterly of the westerly line of the street, and entirely within the limits of the street. Main street, at this point, is ninety-nine feet in width, upwards of forty feet thereof being occupied by the company’s structure,; and upon the westerly side thereof the sidewalk is completely covered by an embankment, so that it is necessary for all foot passengers, upon that side of the street to walk in the highway a distance of eighty-two feet, in order to pass this obstruction, and the space remaining is insufficient to meet the requirments of the public who have occasion t<J use the highway. It .appears that, this street is constantly used by a large number of people on foot, and by divers kinds of vehicles, and also by surface street cars, and that about 100 feet south of the bridge the street is crossed by the tracks of the New York, Lake Brie & Western Railroad Company at grade, the view of which crossing is very materially obstructed, to travelers approaching from the north, by the pier, abutments, and embankments of the bridge in question. It was entirely feasible to carry the railroad tracks over the street by means of a bridge with a single span, and in such manner as not to obstruct or interfere in any 'appreciable degree with the street itself. The common council did not formally approve of the action of the city engineer and street committee-in assenting to a modification of the requirements embodied in in the resolution of December léth; and upon May 26,1890, that body adopted a further resolution directing its street commissioner (the defendant Quinn) to notify the plaintiff to remove the obstructions above specified within ninety days, and, if they were-not removed within that time, to remove them at the plaintiff’s expense. This resolution was approved by the mayor, whereupon-this action was brought to restrain the defendants from carrying the same into effect.
    John Gr. Milburn, for app’lt; Charles J. Feldman, for resp’ts.
   ADAMS, J.

This case comes into this court with the advantage of a previous adjudication which commands our approval,, and which must be regarded as conclusive, so far as one of the essential features of the case is concerned. Upon the former trial the complaint was dismissed upon the theory. (1) that the common council of the city of Buffalo had no authority, under its-charter, to grant permission to the plaintiff, or its lessor, to erect, or maintain the abutment and pier, or any other permanent structure, in Main street, upon which it might construct a bridge; and (2) that such' permission as was granted to th.e plaintiff’s lessor by the resolution of October 10. 1881, was rescinded by the resolutions of December 14,1881, and- January 16, 1882. This decision was reversed by the general term, Fifth department, for the reason that it apparently rested upon the assumption that the right of the railroad company to cross the streets of the city was one that was conferred by the municipality itself,, whereas in fact it was •one derived from the legislature, which exercises supreme power over the streets of cities, as well as over the highways of the state at large, although, where it- is designed to cross the streets of a •city, the assent of the municipality must first be obtained, as a prerequisite to the exercise of that right. And in this connection it was further held that where, as in the present case, such assent had been given, tbe right of the corporation became, as to the city, •absolute and irrevocable. 65 Hun, 464; 48 St. Rep. 501. We .start out, therefore, in the consideration of this .case, with the following propositions clearly established : (1) That the plaintiff, •or its lessor obtained its right to carry its tracks across the street in question from the power conferred by the general railroad act; {2) that this right, thus obtained, was nevertheless subject to the approval of the municipality; (3) that such approval was given, •and has never been revoked, because it was irrevocable. With the law of the case thus-defined, there still remained for determination by the trial court the question of whether or not the railroad company had complied with provisions of the act from which it derived its authority to 'construct this bridge, which requires that, in carrying its tracks across a public highway, it shall restore .the same “ to such a state as not unnecessarily to have impaired its usefulness”; and this issue, it now appears, was decided in the negative by the court upon the second trial, which, with abundant evidence to sustain the conclusion, found that the pier, the westerly abutment, and the earthen embankment, which constitute the foundation of the bridge, and which, confessedly, are within the boundary lines of Main street, materially delay and inconvenience the public, and are an obstruction ,to travel in the street; that they interfere with the view of trains on the tracks of the New York, Lake Erie '& Western Eailway, just south of the structure; •that the usefulness of Main street as a public thoroughfare is impaired thereby ; that such impairment and obstruction were not necessary in the construction of the overhead crossing; and that it is entirely feasible to carry the plaintiff’s tracks over the highway by means of a single span. It is hardly necessary to add that this condition of affairs constitutes an obstruction to a public street in a populous city, which must, of necessity, prove very •serious in its proportions, and a constant annoyance to a considerable number of people. It is therefore one which seems to demand some action upon the part of the local authorities, and it only remains to determine whether the remedy resorted to in this ■case was an efficient and proper means of accomplishing the object sought.

The primary use of a highway, whether in the country or city, is to permit the passing and repassing of the public thereon, and the public are entitled to an unobstructed and uninterrupted use thereof for its entire width. Cohen v. Mayor, etc., of New York, 113 N. Y. 532; 23 St. Rep. 509. But such use is subject, of course, to legislative abridgment and restriction ; and therefore it is that the railroad companies are permitted to lay their tracks over and upon the highways of the state, with the condition imposed, nevertheless, that in availing themselves of this privilege they shall cause no unnecessary impairment of such highways, and shall not unnecessarily interfere with the use for which they are primarily designed. Laws 1859, c. 140, § 28; Laws 1890, c. 565, § 11. It follows, therefore, that, when the plaintiff’s lessor obtained the assent of the defendant’s common council to carry its tracks across Mam street by means of an overhead bridge, it had .acquired all that was necessary to the exercise of its right to make such a crossing in the manner provided by the legislature. But, as we have seen, the statute conferred upon it no power to cause an unnecessary obstruction to the public use of the street, nor •could such power be derived from any resolution of the common council, however comprehensive might have been its terms; and mo lapse of time, however great, could destroy the right of the-■city officials to remove or abate an obstruction thus created, because it obviously constituted a public nuisance. St. Vincent Female Orphan Asylum v. City of Troy, 76 N. Y. 108; People ex rel. Wooster v. Maher, 141 id. 330; 57 St. Rep. 425; Cohen v. Mayor, etc., of New York, supra; Town of Windsor v. Delaware & H. Canal Co., 92 Hun, 127; Wakeman v. Wilbur, 147 N. Y. 657; 71 St. Rep. 266.

Having reached this conclusion with respect to the situation, it is manifest that the municipality might avail itself of any remedy which the law affords, to accomplish the removal of the illegal obstruction. There were several at its command, which will readily suggest themselves, one of which, and the one actually ■employed, is furnished by section 395 of the city charter, which ■directs that:

“The city shall remove all encroachments, projections over and obstructions upon the public grounds, alleys, streets and thoroughfares, and abate all nuisances; and cause the expense to be assessed upon the lands upon or in front of which such encroachment, projection, obstruction or nuisance was, or upon the parcels of land benefited by removal.”

The present charter was enacted subsequent to the adoption of the resolution of the common council which initiated the proceeding complained of, but this section was simply a substitute for a similar one contained in the former charter, which was in effect at that time. Laws 1870, c. 519, tit. 9, § 5. The employment of this summary method of abating a public nuisance was attended with considerable hazard, it is true; for the mere declaration by some local authority that a nuisance exists is not conclusive upon the party concerned, who may, as the plaintiff is now doing, contest that fact in the courts. Cooley, Const. Lim. (5th Ed.) p. 742. And i't is a method which should be resorted to with great ■caution and hesitation. Woods, Nuis. § 740. But, nevertheless, where it is apparent that an obstruction to a highway actually exists, and that it is of such a character as to constitute a public nuisance, the power to thus abate it may be constitutionally con ferred upon a municipal corporation, and when thus conferred may be legally resorted to. People ex rel. Copcutt v. Board of Health of City of Yonkers, 140 N. Y. 1; 55 St. Rep. 416. We conclude, therefore, that, inasmuch as the facts in this case show the existence of such an obstruction, it cannot be said that the means adopted by the defendant for its removal were unjustifL able, especially in view of the reasonable time which was afforded ■ the plaintiff to avoid any interference upon the part of the defendants, by itself taking the necessary steps to remove the obstruction complained of, and consequently we are of the opinion that the judgment appealed from should be affirmed.

Judgment affirmed, with costs. All concur, except FOLLETT and WARD, JJ., dissenting.

FOLLETT, J.

(dissenting).—I am unable to concur in holding that a bridge which has existed for eight years over a street, constructed pursuant to a mutual agreement between the railroad .and the city, is a “public nuisance,” or an “encroachment,” which may be summarily torn down. The city should have sought redress for its alleged wrongs by an action in which the duties and liabilities of each party could have been determined and declared. If this bridge is summarily torn down, what kind of one may be built in its place, how1 high, with what span, at whose expense, or is the railroad to be cut in two at this point ? The defendants might have set up in their answer in this action any change in the situation which rendered a different structure necessary, prayed for affirmative relief, and had the duties and liabilities of the parties adjudicated; but they chose to rest their case on an alleged legal right to tear down the bridge as a nuisance, which, it seems to me, they failed to establish. I think the judgment should be reversed, and a new trial granted, with costs to abide the event.

WARD, J., coi curs.


text:
    Israel O. Blake, Pl’ff, v. George A. Clausen, Def't.

      (Supreme Court, New York Trial Term,

      Filed March, 1896.)

    1. Limitation—Cobpobations—Tbustees—Liability.
    Where a trustee of a manufacturing corporation has become liable for a debt of the corporation because of failure to make and file annual statements as required by the provision of chapter 510 of 1875, the statute of limitations then begins to run as to that debt, and the right of action is barred in three years thereafter; and, though the default is continued during successive years, the continuance of the default does not revive the liábility or create a new one without consultation with, or the knowledge of the trustee sought to be charged.
    2. Same.
    The fact that the creditor precluded himself from maintaining an action, either against the company or the trustee until the expiration of the several extended credits, does not extend a penal liability created by the state beyond the period prescribed by its law making power.

      Action to enforce the statutory liability of a trustee for failure to make an annual report of the condition of a manufacturing corporation.
    Carpenter & Hassett, for pl’ff; Guggenheitner & Untermyer, for •def’t.
   McADAM, J.

The action is to charge the defendant, as trustee of the Brewers’ Ice Company, a corporation formed under the manufacturing act of 1848, with $5,349.21, a balance due on a debt of $6,000 contracted December 22, 1886, for money loaned to the company by plaintiff. " The liability sought to be enforced is that specified in section 12 of the act (3 Edm. St. at Large, 735, superseded by Laws 1875, c. 510; Manufacturing Co. v. Beecher, 97 N. Y. 651), for failure to make and publish annual reports of the condition of the corporation for the years 1887, 1888, and 1889. The statute provides that, upon the failure to make the report mentioned, “all the trustees of the company shall be jointly and severally liable for all debts of the -company then existing, and for all that shall be" contracted before such report shall be made.” The defense is the statute of limitations, which applies to and bars such claims in three years (Code, § 383, subd. 3) from the time of the accruing of the right to relief by action (Id. § 415).

Where a trustee of a manufacturing corporation haá become liable for a debt of the corporation because of failure to make and file annual statements as required by the provision cited, the statute of limitations then begins to run as to that debt, and the right of action is barred in three years thereafter; and, although the •default is continued during successive years, the continuance of the default does not revive the liability or create a new one. Losee v. Bullard, 79 N.Y. 404. The statute does not provide for ■cumulative penalties or recurring defaults, one being deemed sufficient for the protection of creditors. When the debt was contracted, December 22,1886, the corporation gave its note, payable in six months thereafter; and, as it was given at the time the obligation was created, the remedies upon the debt were for all purposes suspended until June 25, 1887, when the note matured. As the first default occurred January 20, 1887, and the debt became enforceable on June 26, 1887, both events then concurring, the three-years limitation commenced at the latter date; and on June 27, 1890, the right of action against the defendant was by force of the statute forever barred. Losee v. Bullard, supra; Duckworth v. Roach, 81 N. Y. 49. In Losee v. Bullard, as in Knox v. Baldwin, 80 N. Y. 610, the plaintiff’s claim was past due at the time of the trustees’ default, and the statute commenced to run at that time. Here the company’s liability, though existing at the time of the default, was not enforceable until about five months afterwards, ■— a circumstance which distinguishes those cases from this.

The present suit was not commenced until September 19,1891; ■so that, unless the operation of the statute was suspended by the extensions of time, hereafter referred'to, granted to the corporation, the plaintiff must fail in his action. ■ The note which fell due June 25,1887, was renewed by a second, payable October 28,. 1887. An oral extension was then agreed upon until the spring, of 1888, when a third note was given in renewal, which matured April 2, 1889; and this was renewed by a fourth note, which became due April 5, 1890. These renewals were all arranged be-tween the plaintiff and the president of the corporation, without consulting the defendant. That they suspended the operation of the six year statute of limitations, on the contract, as against the-corporation, because founded on its own acts, is without doubt but it does not by any means follow that the running of three-year penal statute was thereby also suspended as against the trustee without his assent. The plaintiff claims that the one result, accompanies the other, and that Jones v. Barlow, 62 N. Y. 202, sustains his contention. The facts of the case require careful consideration in order to intelligently understand it.

That action was brought against the defendants as trustees of the American Steel Lock Company, organized under the manufacturing act, to enforce the liability imposed by reason of the-failure to file an annual report in January, 1871, The plaintiff, during the year 1871, sold and delivered to the corporation goods, for which, on December 26, 1871, it was indebted to him in the sum of $6,292.78, and the company gave its notes, maturing June-6, 1872, for that amount. On that day ten new notes were given,, the first maturing one month from date, and the others at successi ve intervals of one month thereafter. The action was commenced February 7,1873, and at that time three of the notes were not due. At the close of the case the defendant’s counsel moved to dismiss-the complaint. The defendant then requested the court to charge-that, if the amount of the three notes was not due at the commencement of the action, the plaintiff could not recover. The court refused so to charge, and directed a verdict‘for the full amount of' the indebtedness. It was held that the plaintiff was only entitled to recover the amount actually due from the corporation at the-time of suit brought, and that it was error to permit a recovery for three notes which had at that time not matured. The original debt was contracted in December, 1871, and the action was commenced in February, 1873, fourteen months afterwards; so that, the statute of limitations was in no manner involved.

Applying the decision of the court to the facts involved, it is at once apparent that nothing pertinent to the question at issue here was there decided. The extensions given to the corporation-, of course, suspended the right of action against the trustees until the-creditor was in a position to prosecute the corporation. Under a new default by it, the obligation against the trustees was revived, because the debt had not been paid by the broken promise. In-this case, the creditor kept on extending time to the corporation until the statute had discharged all penal consequences of the default complained of; and he now claims that the legal effect of his-voluntary acts suspended the running of the statute against the-trustee, without any act whatever upon the- part of the latter. Even in the case of joint debtors, or of principal and surety, the statute of limitations cannot be extended by the act of one so as to.charge the other. Winchell v. Hicks, 18 N. Y. 558, 560; Harper v. Fairley, 53 N. Y., at page 445; Church v. Howard, 17 Hun, at page 10; McMullen v. Rafferty, 89 N. Y. 456; In re Petrie, 82 Hun, 62; 63 St. Rep. 364. In other words, no one can revive or suspend the running of the statute but the person sought to be charged, or his agent authorized for that purpose. Smith v. Ryan, 66 N. Y., at page 356; Bender v. Blessing, 82 Hun, 320; 64 St. Rep. 79; McMullen v. Rafferty, supra.

The statute of limitations is not dependent on the will of the-creditor. The fact that he precluded himself from maintaining an action, either against the company or the defendant, as trustee, until the expiration of the several extended credits, furnishes no logical reason for extending a penal liability created by the state-beyond the period prescribed by its law-making power. To hold otherwise would permit newly-elected trustees, by their act and that of creditors, to extend for any length of time liabilities against-predecessors in office, without reference to safeguards enacted for their protection. True, an extension of time for the payment of a corporate debt will not discharge a trustee. Jones v. Barlow, supra. The mere extension will not in itself work a discharge, but the statute will effect that result if it becomes operative.

A somewhat similar question arose in an action against a stockholder (not a trustee), wherein it was held that.

“The year within which an action must be begun for the recovery of a debt owing by a manufacturing corporation, so as to lay a foundation for a recovery against the stockholders, begins to run on the day the debt first became due; and if the time of its payment is extended by a promissory note, which is sued within a year from the date of its maturity, but more than a year after-the date when the debt for which it was given- first became due, and judgment is recovered, and an execution returned unsatisfied, it is not in compliance with the statute, and stockholders cannot-be charged with the payment of the debt.” Hardman v. Sage, 124 N. Y., at page 35; 35 St. Rep. 54.

There the court also held that:

“ The object of the statute was for the protection of creditors-for a definite term, and they cannot extend it beyond the statutory limit and retain their right to recover from the shareholders.”

The statute limiting the remedy against trustees has the same-object in view, and by analogy requires the same interpretation. As against the defendant, the statute began to run when the plaintiff had it in his power to make his cause of action complete. 13 Am. & Eng. Enc. Law, 726. Nothing but statutory exceptions-can interrupt its running when once started (Id. 733; Rector, etc., v. Vanderbilt, 98 N. Y. 170); and one disability "cannot be tacked to another to prolong the limitation. Otherwise, its purpose as a statute of repose might be subverted (13 Am. & Eng. Enc. Law, 733, 734).

For these reasons, and without considering the other questions-presented by the record, there must be judgment for the defendant.