text:
    Joseph William Bradshaw et al., Resp’ts, v. The Agricultural Ins. Co., App’lt.

      (Supreme Court, General Term, Third Department,

      Filed December 8, 1891.)

    Insurance (Fire)—Appraisal—Fraud.
    Where an insurance company upon the happening of a loss induces the assured to consent to an appraisal on the representation that the appraiser named by it is a disinterested person, when in fact he is an agent or advocate of the interests of the insurer, the award made by the appraisers should be set aside as obtained by fraud,-and the assured allowed to recover the amount of his loss.
    Appeal from judgment in favor of the plaintiff, entered upon verdict and decision of the court thereon.
    This action was brought to set aside the award of appraisers under a policy of insurance against loss and damage by fire, issued by the defendant to one James J. Bradshaw, now deceased, and to recover damages caused by the fire to the property insured.

      A. H. Sawyer, for app’lt; S. W. Jackson, for resp’ts.
   Mayham, J.

On the 3d day of October, 1887, the defendant issued its policy to James J. Bradshaw insuring his dwelling house in the sum of $3,000 against loss and damage by fire, and on the 1st of March, 1890, the building insured was partially destroyed by fire. Proofs of loss were duly made and served on the defendants, and on the 24th of March, 1890, defendant’s agent and adjuster attended at the place of loss and asked that two disinterested appraisers be appointed according to the provisions of the policy to ascertain and appraise the loss of the assured, and presented the name of an individual on behalf of the company to act as one of the appraisers, stating at the time that the person named was a builder of large experience, a neighbor of the agent and a disinterested and proper person to act as an appraiser under the conditions of the policy. Upon that statement the agent of the plaintiff named a person to act as another appraiser and an agreement in writing was entered into between the parties appointing the persons so named to estimate and appraise the loss, and make their award in writing upon such appraisal of the plaintiff’s loss.

These appraisers took the usual oath of appraisers or arbitrators in such cases and proceeded to investigate the loss and made their report in writing, wherein they fixed the amount of the loss at $1,760.31. The defendant thereupon tendered the plaintiff that sum and offered to pay the same, but the plaintiff refused to accept the same and brought this action to set aside the award on the ground of fraud and to recover of the defendant the amount, of the actual loss suffered by the plaintiff by the injury to the building by fire.

The ground alleged by the plaintiff for setting aside the report was that the representations of the defendant’s adjuster, that the appraiser named by him was disinterested and impartial, were false and fraudulent, and that the person so named as appraiser by the defendant’s adjuster was an employe of the defendant in the business of estimating losses in the interest of the defendant, and that the amount of the award was grossly inadequate to the loss actually sustained by the plaintiff. On the trial of the action a jury was impannelled and the court submitted to them two questions for their answer, as follows:

First. What is the amount of the loss caused to the house of the late James J. Bradshaw by fire?

Second. Was Mr. Lacy a disinterested appraiser at the time of his appointment ?

In answer to the first question the jury found that the loss was $2,750. They also found in answer to the second question that Mr. Lacy was not a disinterested appraiser. The trial judge concurred in and approved of both of the findings of the jury. And found that the agreement of the parties appointing appraisers to ascertain and appraise the amount of the loss was an arbitration; that said agreement was void on account of false representations made by the defendant to induce the plaintiff to enter into the same, and that the agreement and award be set aside, and that the plaintiffs recover of the defendant in the action the sum of $2,846.25, with costs.

The defendant on this appeal attacks these findings of the jury and trial judge upon the question of fraud, chiefly upon the ground that they are unsupported by or against the weight of evidence. The question of fraud and misrepresentations of the defendant in this case is clearly one of fact, and was properly treated as such by the learned trial judge, and we think the verdict of the jury, which was advisory to the court, supplemented by the finding of the court that the appraiser Lacy was not disinterested, is supported by the evidence.

It is quite apparent from the evidence that he regarded himself, to some extent at least, as employed by the defendant and charged with the duty of looking after its interests in making his award. He had been employed as an expert by the defendant in estimating losses on other fires, and in some expressions in his testimony given on this trial clearly identifies himself in feeling, if not in interest, with the defendant.

There is at least too much evidence in support of the findings of the jury and judge who saw the witness as the testimony was given, to justify the appellate court reversing their findings-upon this question. Having found that this appraiser furnished by the defendant was not disinterested and impartial and that bis-appointment was consented to on the part of the plaintiffs by reason of fraud practiced upon them by the defendant, it was the plain duty of the court to set aside the submission and award.

We see no reason for holding that this submission was not an arbitration, and as such governed by the provisions of § 2374 of the Code of Civil Procedure. There was no other controverted, question between the parties, except the amount of loss; the giving of the policy, the loss under it by fire, and the plaintiff’s right-to be paid the amount of the loss, all seem to have been conceded on the trial.

But whether this was an arbitration under the provisions of the Code or not, it is clear that if this submission was procured by fraud, and the arbitrator was not a disinterested person, but on the contrary was the agent or advocate of the interests of the defenddant, so that he did not occupy the position of strict impartiality between the parties, he was not such an appraiser as was called for by the contract; his appointment, and the award made by him was properly set aside by the court. Perkins v. Giles, 53 Barb., 346; Herrick v. Blair, 1 Johns Ch., 101; Todd v. Barlow, 2 id., 551; Story’s Equity, § 1452. If, therefore, the submission and award were properly set aside by the 'court, the only remaining question is, was the amount recovered sustained by the evidence. Upon this subject there seems little or no doubt.

The proof fully sustains the verdict of the jury and finding of the judge as to the amount of the loss.

On the whole case we see no error for which the judgment in this case should be reversed.

Judgment affirmed, with costs.

Learned, P. J., and Kellogg, J., concur.


source: Caselaw Access Project

author: Learned, P. J.

license: Public Domain

text:
    The People ex rel. Patrick J. McTigue v. James H. Manning et al., Police Commissioners.

      (Supreme Court, General Term, Third Department,

      Filed December 8, 1891.)

    Municipal corporations—Police—Removal.
    The police commissioners of the city of Albany may take notice of the conviction of a police officer for crime, and treat him thereafter as not a member of the force.
    Certiorari to review the action of the defendants in striking relator from the roll of membership of the police force of the city of Albany.
    On or about the 10th day of February, 1891, relator was charged with making an assault upon one William Grimes, and brought to trial before the defendants upon that charge. After hearing the evidence in relation thereto, he was sentenced to be ■fined five days pay for not arresting the said William Grimes as the aggressor in the ease. = During the progress of the trial before the police commissioners it appeared that in August, of the year 1881, the r.elator was convicted of an assault upon a police officer in the court of special sessions of the city of Albany, and sentenced to pay a fine of twenty-five dollars, or to stand committed three months in the Albany penitentiary. Section 9 of chapter 77 of the Laws of 1870, said statute being the one under which the police force of the city of Albany is organized, reads as follows : “ But no person shall ever be appointed to membership in the police force of the city of Albany, or shall continue to hold membership therein, who is not a citizen of the United States, or ■who has ever been convicted of crime."

    Section 28 of the same chapter provides as follows: “It shall be a misdemeanor, punishable by imprisonment in the county jail, or in the Albany penitentiary, for not less than one year, and not exceeding two years, or by a fine of not exceeding $250, for any person, without justifiable and excusable cause, to. use -or incite any other person to use personal violence upon any member of the police force at any time when in the discharge of his duty.”
    The fact of the relator’s having been so convicted being brought to the attention of the board, the defendant, James H. Manning, •called upon the corporation counsel for advice in the matter, who advised him that the said McTigue was not legally a member of the-police force, and not entitled to pay as such. That the orderly way to dispose of the matter was for the police commissioners to adopt a resolution reciting the fact that he was no longer a member of the police force, and cease to transmit his name on the payroll to the chamberlain of the city, the chamberlain of the city being the financial and disbursing officer thereof.
    In accordance with such opinion and advice of the corporation •counsel, the defendants did, after the charge of assault against the relator had been disposed of by fining him five days pay, adopt the following :

      “ Whereas, In view of the facts presented to the board and the ■opinion of the corporation counsel,
    “ Resolved, That Patrick J. McTigue be no longer recognized as •a member of the Albany police force, and that the chief of police be directed to drop his name from the pay-roll.”
    And it is to review such action of the defendants that these proceedings are brought.

      Daniel Adler {George H.Stevens, of counsel), for relator; D. Cady Herrick, for def’ts.
   Learned, P. J.

Although the case of People ex rel Kopp v. Police Commissioners, 102 N. Y, 583; 2 St. Rep., 533, is not exactly similar to this, yet the principle there decided apples here. There was really no trial of any fact before the" board. The board did not convict the relator of any breach of duty. It only acted upon the fact of his conviction of a crime. This fact, by the charter, prevented him from being after his conviction a member of the police force. It was only for the board to take notice of such conviction and to treat him thereafter as not a member of such force.

If the relator is injured, that is, if he was not convicted of a crime, then it seems plain that he might have a mandamus to compel the board to recognize him as still one of the police force.

The proceedings should be confirmed, with fifty dollars costs and disbursements.

.Mayham and Kellogg, JJ., concur.


author: O’Brien, J. Earl, J.

text:
    John J. Mulligan, Resp’t, v. The New York & Rockaway Beach Railway Co., App’lt.

      (Court of Appeals,

      Filed January 20, 1892.)

    False imprisonment—Common carrier—Principal and agent.
    Defendant’s ticket agent, having been warned against certain counterfeits, received a five dollar bill from plaintiff in payment of excursion tickets on defendant’s railroad, and ten minutes afterward caused the arrest of the latter while waiting on defendant’s platform for the arrival of his train. The bill proved genuine and plaintiff was discharged after being taken through the street and imprisoned for an hour. Held, that the defendant was not liable, as the agent was not acting within the scope and. in the line of his duty as defendant’s agent.
    (Earl and Finch, JJ., dissent.)
    Appeal from judgment of the supreme court, general term, second department, affirming judgment in favor of plaintiff. •
    The material facts of this case are substantially as follows: On the afternoon of the 1 Oth of July, 1888, the plaintiff, accompanied by a friend, went to defendant’s station at East New York and purchased tickets for passage to Rockaway Beach and back. He gave the station agent a five dollar bill and received back the tickets and his change, with which he passed out to the platform and he waited there for the train. In about ten minutes the ticket agent, accompanied by two policemen, came out on the platform and pointed out to the policemen the plaintiff and his friend, and said, in substance, that they had passed a counterfeit five dollar bill upon him, and he directed the police officer to arrest the two men. The policeman told the ticket agent that he believed that there must be some mistake, as he knew the plaintiff and his friend to be reputable business men, and could not believe that they had committed the crime. The' agent, however, said that they had passed the counterfeit bill upon him, and that he could not be mistaken, and he ended by insisting that the policeman should arrest the plaintiff and his friend, which was accordingly done. The plaintiff and his friend were taken through the street to the police station in custody, a distance of a mile. On arriving at the police station the five dollar bill which the plaintiff had given to the ticket agent was sent to a neighboring bank and was there pronounced good. The police sergeant sent for the ticket agent, and after he came the facts were explained to him and he said he was sorry for what he had done and wanted plaintiff and his friend to excuse him, after which plaintiff and his friend were discharged. They had been detained an hour or so at the police station. Subsequently he commenced this action to recover damages for the assault upon him, and his arrest, and he recovered a verdict.
    • JE. B. Hinsdale, for app’lt; Olías. J. Patterson, for resp’t.

       Reversing 39 St. Rep., 20.

   O’Brien, J.

The plaintiff recovered damages in this case upon :an allegation that he was unlawfully arrested and imprisoned by the defendant. The legal question involved relates to the respon-. .sibility of the defendant for the conduct of a ticket agent under the following circumstances. On the 10th of July, 1888, the plaintiff and a companion went to the defendant’s station,- at the corner of Atlantic avenue and Yesta street, Brooklyn, and procured from the ticket agent there two excursion tickets to Bock-away Beach. The plaintiff handed to the agent a new five dollar bill in payment for the tickets, and received from him the tickets and the change. A very short time before the plaintiff -and his friend appeared at the station and purchased the ticket, a detective connected with the Brooklyn police force came to the station and left with the agent the following paper: “ Look out for three men passing $5.00 counterfeit bills, Garfield’s picture. One 35 years, blue coat, black slouch hat, small dark mustache. One 40 years, dark alpaca coat, black pants, slouch hat, the other 35 years, blue suit, black slouch hat, full red whiskers; looks like Italian.” When the plaintiff and his companion came to the station, the ticket agent supposed they were two of the persons described in the notice left with him by the detective. The agent’s .statement as to what took place between himself and the detective before the plaintiff appeared at the station, and his action in consequence down to the time of the arrest, is hot contradicted. The .agent was told by the detective that if any of these men referred to in the paper put in an appearance to have the officers arrest them. He says that the two men walked up to the window of the ticket office, and the plaintiff took a brand new five dollar bill from his pocket and asked for two tickets for Boclcaway Beach and return. What the agent then did is, perhaps, best expressed in his own language. He says: I took the money from him, and gave him the two tickets; didn’t let on anything at the time; took the bill and left it one side, because it looked ‘ queer.’ After the two went outside a messenger boy came in; I took the bill up before the messenger came; took a pin and pulled to find the two parallel silk threads that run through the bill; it appears in all these kind of bills that are made with the distributor fibre through; it is like a pencil mark, red and blue, and when I picked at it I could not see anything in it, and as I have no instructions to arrest anybody, I tools; the bill, and when the messenger boy came in I told him to take the bill, go up to the Howard House and see if he could find Detective McNeany. If he did, to give him the bill and tell him that the men who had the bill were here at the station. I told him that if he didn’t find him to give it to the ticket agent at the Howard House, the detective said something about giving him the bill and to ask him if that was the bill. I sent the bill away by this boy, the same bill that I received. Afterward Officer Kenney and the messenger boy came in. The bill was not returned to me. I never had the bill after I gave it to the messenger boy.” It seems that in consequence of the action of the agent that the police arrived in a short time after the tickets had been purchased and while the plaintiff and his companion were sitting on a bench outside, and as the plaintiff claims the agent pointed him out to the police and directed them to arrest him. He was arrested and brought to the police court, when, it appearing that the bill was good, be was discharged. The transaction immediately preceding the arrest is thus described by the plaintiff:

“ I went in and handed him in a five dollar bill to the ticket agent, asked him for two return tickets for Eockaway; he took the bill and looked at me; I thought it was some young man that might have known me, he was going so slow, going to make the change and give me the tickets; and walked back in the rear of the office; there was an operator, a lady, sitting there; he had some conversation with her, and in another corner was a boy; in another corner of the room; he came back to me and looked at me again; I says, you ought to be in a little more hurry than that; he didn’t say a word, but handed me out the change and my return tickets; the change of the five dollar bill, which I think was four thirty, or whatever it was. Then we walked out on the platform, down on the Atlantic avenue side and sat on the bench of the station platform for ten or fifteen minutes, waiting for the train to come up. It is a regular platform ; I think there is a porch over it. I did not have to pass through a gate to go to it.” After the plaintiff was pointed out to the police by the agent he was brought into the ticket office and the agent then charged him with having passed to him a five dollar counterfeit bill, which the plaintiff denied but gave to the agent another bill in its place. The agent denied that he gave any direction to the police to make the arrest and there was some question on the trial as to whether the bill that was actually passed by the plaintiff was the bill produced before the police magistrate and found by him to be good, but these questions must be regarded as settled in the plaintiff’s favor by the verdict of the jury.

Assuming, as we must, that the agent directed the arrest and that the plaintiff had committed no offense that justified it, the question still remains whether the agent was acting in the line of his duty so as to make the defendant responsible for his acts. It is quite clear from the evidence that the agent was first put upon his guard, and in fact set in motion, not by any direction from the defendant, but by the police. When he took the bill he knew or at least believed it to be a counterfeit, but notwithstanding this he gave the plaintiff defendant’s property for it, whereas it was his duty, considering him merely as the agent of the defendant, to refuse it He did not take the bill in the course of his business as agent, but for the purpose.of entrapping persons that he believed to be engaged in the commission of crimes. This may have been laudable enough on his part as a citizen or as a person aiding the police, but he was not acting in the line of his duty' as-defendant’s agent. If he had been cheated or imposed upon by the plaintiff, or if he honestly believed he had been, and then attempted to recover what he had, or supposed he had, lost by the arrest of the plaintiff, it might then be said that he w as engaged in the protection of the property and interests of the defendant, and, therefore, acting within the line of his duty. But where a ticket agent of a railroad deliberately takes from a person applying to purchase a ticket what he believes to be a counterfeit five dollar bill, not, of course, in good faith or in the regular and ordinary course of his business, but for the purpose of aiding the police in the detection of criminals, and then immediately directs the arrest of the person from whom he took the bill, such an act on his part is not binding on his principal. If he was, in fact, acting within the scope and in the line of his duty he would have refused to receive what he believed to be counterfeit money for the property of his principal, and would have refused to part with such property except upon receipt of what at least he believed to be good money. The defendant, as a citizen, might with perfect propriety render to the police such services as he could in procuring the detection and arrest of persons engaged in passing counterfeit money, but it does not follow that all his acts in that respect are binding on the defendant.

■ The charge, therefore, that the defendant procured the plaintiff to be arrested without cause was not made out, as the act of the ticket agent in this respect cannot be attributed to it. The remaining question is whether it was shown that the defendant is liable for a breach of its contract with the plaintiff as a passenger, or for neglect of any duty it owed to him growing out of the relation of passenger and carrier. The law is settled that a common carrier, by its contract of transportation, undertakes to protect the passenger against any injury arising from the negligence or willful misconduct of its servants while engaged in performing a duty which the carrier owes to him. Stewart v. B. & C. R. R. Co., 90 N. Y., 588.

Upon the facts disclosed by the record it is very difficult to bring this Case within that principle. All we know with respect to the duties of the agent is that he sold tickets at the station from a place behind a window in the waiting room. It does not appear that he had any charge of the place where the plaintiff was when arrested, or that the plaintiff was, within the meaning of the decisions, in his custody or under his protection, or that the ticket agent was entrusted by the defendant with any powers or duties with respect to the execution of contracts for the transportation of passengers. .Upon the facts disclosed at the trial it would be quite difficult, if not impossible, to classify the act of the agent in pointing out the plaintiff to the police and directing his arrest as negligence or willful misconduct. There can be no doubt that a conductor-or like agent of a carrier of passengers, who has them in his charge and under his care, may violate the duty which he owes to them by directing an arrest without cause for which his principal may be held liable, but sufficient was not shown in this case to bring it within that rule.

The judgment should be reversed and a new trial granted^ costs to abide the event.

Earl, J.

(dissenting).—The plaintiff purchased of the defendant’s agent at East Rew York two tickets for himself and friend to Eockaway Beach and back over its railway, and immediately passed out of the depot building onto the platform outside, where he took a seat under an awning upon a bench provided for passengers who were awaiting trains. By the purchase of these tickets the relation of carrier and passenger was created between him and it, its agreement implied from the facts being that it would, upon its first train stopping at that station, carry him to his destination. The train was soon expected, and while he was there waiting for it'he was entitled to a safe place to stand or sit,* and it was under obligation to him that he should not be injured by the careless or willful misconduct of any of its employees or agents. Carpenter v. Boston & Albany R. R. Co., 97 N. Y., 494. In that case after the plaintiff had purchased his ticket for a passage on the defendant’s road, and while he was standing on the platform at the depot, a postal clerk threw a mail bag from the train, which struck and injured him; and Danforth, J., writing the opinion, said : “ The plaintiff was injured before the actual commencement of his journey, but he was lawfully on the platform because he was a passenger.” And it was held that it is the duty of a railroad corporation to provide for a passenger a safe passage to the train he desires to take, and to take reasonable care that he shall not, while on its premises, be exposed to any unnecessary danger, or to one of which it is aware; that it is bound to exercise the utmost vigilance not only in guarding its passengers against careless interference by others, but even against violence, and if in consequence of neglecting this duty, a passenger receives injury, which, in view of all the circumstances, might have been reasonably anticipated, it is liable.

Ro one will question, that if the plaintiff while sitting upon the bench waiting for the train had been injured by the carelessness of one of the defendant’s employees, it would have been liable ; and it is now well settled that where a railroad company would be liable for the careless act of its employee, it would also be liable for his willful or malicious act, causing injury to a passenger whom it was bound to keep and carry safely. In White v. Twenty-third St. R. R. Co., 20 W. Dig., 510, it was held that if a passenger on a street railway is ejected from the car and assaulted by the driver, when the fare has been put in the box, the company is liable, and also for causing the arrest of the passenger.

In Hamel v The B. & N.Y. Ferry Co., 25 St. Rep. 153; affirmed in this court, 125 N. Y., 707; 34 St. Rep., 1013, the action was for assault and battery and false imprisonment, and it was held that ¡the court correctly charged that if the defendant’s employee unjustifiably assaulted the plaintiff while and because plaintiff attempted to pass through a gate which the employee was in charge of, and as part of the same transaction, and assuming to act under the defendant’s authority called in a police officer and had the plaintiff arrested, defendant was liable, and that it was immaterial whether it authorized the arrestor nob In Stewart v. Brooklyn Crosstown R. R. Co., 90 N. Y., 588, where the plaintiff was a passenger on one of the defendant’s street cars, and was unjustifiably assaulted and beaten by the driver, it was held in an action to recover damages therefor that it was liable; that the rule relieving a master from liability for a malicious injury inflicted by his servant when not acting within the scope of his employment does not apply as between a common carrier of passengers and a passenger; that such a carrier undertakes to protect the passenger against any injury arising from the negligence or willful misconduct of its servants while engaged in performing a duty which the carrier owes to the passenger. In that case Judge Tracy writing the opinion of the court cited many authorities ; and among other things said: “ In the present case the defendant had entrusted the execution of the contract to the driver of the car, and the plaintiff was under his protection. Any breach of the contract committed by the driver, was a breach committed by the defendant It is conceded that any injury arising from the mere negligence of the servant constitutes a breach of the contract Had the driver while executing the contract carelessly and negligently injured the plaintiff, the defendant’s liability would not have been doubted. Can it be less a breach of the contract that the injury was intentionally inflicted? An act which would amount to a breach of the carrier’s contract, if negligently done, would be equally a breach if done willfully and maliciously. It is immaterial whether a breach of contract results from the negligence or willfulness of the defendant’s agent. It is the injury that was suffered by the plaintiff while in the defendant’s car, and not the motive which induced it, that constitutes the gist of the action.

“No reason exists for holding a master liable for the negligence of servants in his employment which does not with equal force preclude him from alleging intentional default of the servant as an excuse for not performing a duty which he has undertaken. In the former case the negligence of the servant is that of the master, and that is the ground of the master’s liability; in the latter the act of the servant is the act of the master, the motive of the servant making no difference in regard to the legal character of the master’s default in doing his duty. * * * A rule which should make the carrier liable when the act resulting in the injury was carelessly, but unintentionally done, and exonerate him when the injury was the result of the intentional act of the servant, would lead to most absurd results.”

In Dwinelle v. N. Y. C., etc., R. R. Co., 120 N. Y., 122; 30 St. Rep., 578, it was held that a railroad company by the sale of a ticket for passage on its road assumes the obligation, and undertakes absolutely to protect the passenger against any injury from negligence or willful misconduct of its servants while performing its contract; and that whatever may be the motive which incites the servant to commit an unlawful or improper act towards the passenger during the existence of the relation of carrier and passenger, the carrier is liable for the act and its natural and legitimate consequences. In such a ease, too, it has been held that it is wholly immaterial upon the question of the defendant’s liability that the servants acted in good faith. Hamilton v. R. R. Co., 53 N. Y., 25. In this case the relation of carrier and passenger having been created by the purchase of the tickets, the plaintiff was just as much entitled to protection against the wrongful acts of the defendant’s servants as if at the time of the assault upon him and his arrest he had been in one of its cars. He was in a place where he had a right to be, and where under the rules of law announced in the cases cited he was entitled to protection against injury from the negligent or willful acts of its servants. It is immaterial what the ticket agent’s motive may have been. He may have been prompted by the desire to do a jrablic service by the arrest of criminals, or by a malicious motive, simply to do the plaintiff an inj ury, and still, under the authorities cited, the defendant was liable for his acts.

Suppose, instead of directing the police officer to arrest the plaintiff, he himself had seized and confined him in the depot; would any one then contend that the defendant would not be liable? And can it be said that that case would have been any different in principle from this? Suppose, instead of directing the police officer to arrest him, he himself had made the arrest and dragged the plaintiff through the streets to the police station; can it be doubted that the defendant would have been liable ? The law makes it liable in such cases simply because of the unlawful interference with the person of the plaintiff, a passenger, by one of its employees, and the motive of the employee is entirely immaterial upon the question of its liability. The motive may operate upon the question of damages, but cannot wholly shield the defendant against liability. The agent not only caused the arrest, but in violation of the duty which the defendant owed the plaintiff, growing out of the sale of tickets, and the contract thus made to carry him to his destination, he broke the contract by rendering it impossible that the plaintiff could be carried. Instead of going upon the train, as he had the right to do under his contract, by the act of its agent he was taken to a police station and kept under arrest for an hour or more. Can a ticket agent sell tickets to a passenger and then arrest him, or cause him to be arrested, so that he cannot take passage upon the train for which he has purchased a ticket, and the railroad company escape all responsibility for his acts ?

If the plaintiff had been a mere lounger in or about the defendant’s depot, having no relations with it, not a passenger, different rules of law would apply, and it may well be that upon the facts as they appear it would not have been liable for the assault upon him and his arrest. Its liability to him grows out of the fact that he was a passenger entitled to its protection.

No question was made upon the trial as to the extent of the ticket agent’s authority. It was there assumed that he was the-agent having the charge of the depot at Bast New York. It does-not appear that there was any other agent at that point. He is spoken of in the evidence as the agent. The general- superintendent of the defendant’s road testified that he was “ the agent ” of the defendant at Bast New York; and in the motion by the defendant’s counsel for a nonsuit he was spoken of as “ the agent of the defendant. The judge, in his charge to the jury, spoke of him as “ the ticket agent in charge of this station,” and no exception whatever was taken to this- remark, and no claim whatever was there made by the defendant that he was not its agent in charge of that depot.

We, therefore, see no reason to doubt that the judgment in favor of the plaintiff is right and should be affirmed, with costs.

Judgment reversed and new trial granted, costs to abide the-event.

Andrews, Peckham and Gray, JJ., concur; Earl, J., reads-for affirmance, and Finch, J., concurs.


author: Andrews, J.

text:
    The People, Resp’ts, v. The N. Y., Chicago & St. Louis R. R. Co., App’lt. The People, Resp’ts, v. The Fitchburg Railroad Co., App’lt.

      (Court of Appeals,

      Filed January 20, 1892.)

    Taxes—Railboad coepobations—Laws 1886, chap. 148.
    The H. Y., Chicago & St. Louis Railroad Co. was organized in 1887’ with a capital stock of $4,500,000, and paid an incorporation tax of one-eighth oí one per cent, upon its capital stock. Afterwards it consolidated, with a Pennsylvania company, owning a railroad crossing that state, and! again with companies owning railroads which extended its line to Chicago, the original name being retained and the capital increased to thirty millions. Held, that the new corporation was not “incorporated by oi-under any general or special law of this state," within chapter 143 of the Laws of 1886, as the added railroads were not domestic corporations but were subject to the laws of their domicil, and concurrent legislation was, essential to the consolidation, and the resulting corporation was not subject to the provisions as to paying a corporation tax upon its capital.
    The case was submitted to the general term, third department, upon an agreed statement of facts, substantially as follows:
    The New York, Chicago & St. Louis Railroad Company was-organized under the general railroad laws of New York, June 16, 1887, with a capital stock of $4,500,000. The railroad extended from Buffalo to the state line between New York and Pennsylvania. Before filing the certificate of incorporation with the secretary of state, $4,625, being one-eighth of one per centum upon the amount of capital stock, was paid to the state treasurer, as required by § 1 of chap. 148 of the Laws of 1886.
    On- the 15th day of August, 1887, an agreement for the consolidation of the above named company with a company organized. under the laws of Pennsylvania, owning a railroad extending from the westerly terminus of the above named company’s railroad to the westerly line of Pennsylvania, and having a capital stock of $3,000,000, was filed with the secretary of state. No tax was required to be paid before the agreement for consolidation was filed, and none was in fact paid. The agreement provided that the consolidated corporation should be called the New York, Chicago & St. Louis Eailroad Company.
    On the 27th day of September, 1887, an agreement for the consolidation of the last named company with companies organized under «.the laws of Ohio and Indiana, owning railroads extending from the westerly line of the New York, Chicago & St. Louis Eailroad Company’s railroad to the westerly line of Indiana, and having together a capital stock of $22,500,000, was filed with the secretary of state. No tax was required to be paid before the agreement for consolidation was filed, and none was in fact paid. The agreement provided that the consolidated corporation should be called the New York, Chicago & St. Louis Eailroad Company.
    The capital stock of the first consolidated corporation was declared to be $7,500,000, which was the same as the aggregate capital of the New York and Pennsylvania corporations, and the capital stock of the second consolidated corporation, the defendant, was declared to be $30,000,000, which was the same as the aggregate capital of the New York, Pennsylvania, Ohio and Indiana companies.
    The consolidation was effected, as far as the state of New York was concerned, under the provisions of chapter 917 of the Laws of 1869.
    The question now presented is whether the defendant must pay a tax of one-eighth of one per centum upon the amounts mentioned in the agreements of consolidation as the capital stock of the consolidated companies; or, what is the same thing, upon the aggregate capital stock of the New York and Pennsylvania companies which entered into the first agreement- and of the New York, Pennsylvania, Ohio and Indiana companies which entered into the second agreement.
    Upon these facts, judgment was rendered against the defendant for $57,856.25, which is one-eighth of one per centum upon the aggregate capital stock above mentioned; and it was also adjudged that defendant should be restrained from exercising any corporate powers until that amount should be paid.

      Samuel E. Williamson, for app’lt; Chas. F. Tabor, att’y-gen’l, for resp’ts.

       Reversing 39 St. Rep., 725.

       Reversing 39 St. Rep., 737.

   Andrews, J.

This case depends upon the question whether the defendant is, within the meaning of chapter 143, of the Laws of 1886, a corporation incorporated by or under any general or special law of this state.” The act of 1886 is entitled “An act to tax stock corporations for the privilege of organization.” The material part of the first section is as follows: “ Section .1. Every corporation, joint-stock company or association incorporated by or under any general or special law of this state, having capital stock divided into shares, shall pay to the state treasurer, for the use of the state, a tax of one-eighth of one per centum upon the amount of capital stock which said corporation, joint-stock company or association is authorized to have, and a like tax upon any subsequent increase thereof.

“ The said tax shall be due and payable upon the incorporation of said corporation, joint-stock company or association, or upon the increase of the capital thereof, and no such corporation, joint-stock company or association shall have or exercise any corporate powers until the said tax shall have been paid. And. the secretary of state and any county clerk shall not file any certificate of incorporation or articles of association, or certify or give any certificable to any such corporation, joint-stock company or association until he is satisfied that the said tax has been paid to the state treasurer.”

The original corporation in this state known as the New York, Chicago & St. Louis Railroad Company, organized in 1887, was a purely domestic corporation. It became a corporation by taking-the proceedings and filing its articles of association prescribed by the general railroad act of 1850. It paid the organization tax on its capital of $4,500,000, and constructed its road from Buffalo to-the Pennsylvania state line as authorized by its charter. In the same year it consolidated with the Erie & State Line Railroad-Company, a Pennsylvania corporation having a capital of $3,000,000. The consolidated company took the name of the New York corporation, and its capital stock was the aggregate of the capital stock of the two constituent corporations, viz : $7,500, 000. Later in the same year (1887) the first consolidated company consolidated with certain railroad corporations then existing-in Ohio and Indiana, having an aggregate capital of $22,500,000. The company resulting from the second consolidation also took the name of the “New York, Chicago & St. Louis Railroad Company,” the aggregate capital of which was $30,000,000, which was-the sum of the combined capital of all the constituent companies. The several roads thus consolidated formed a continuous line of railroad extending from Buffalo in this state to Chicago in the-state of Illinois.

The claim on the part of the People is that these consolidations having been effected under the authority of chapter 917, of the-Laws of 1869, entitled “ An act authorizing the consolidation of certain railroad companies,” there was by force of said act a new incorporation created on each consolidation, and that the resulting-company was a corporation “incorporated under a general or special law of this state ” within chapter 143, of the Laws of 1886, and therefore bound to pay the organization tax imposed by that act. The state, therefore, demands and has recovered the sum of $57,856. 25, which is one-eighth of one per centum on $7,500.000, the capital of the first consolidated company, and one-eighth of' one per centum on $30,000,000, the capital of the second consolidated company, with interest added. By the judgment below, the state of New York exacts a tax on the portion of the capital stock of the consolidated company contributed by the Pennsylvania, Ohio and Indiana corporations, of about $50,000, for the privileges of consolidation with the New York corporation. If this is required by the true construction of the act of 1886, the judgment must be affirmed, however unjust or impolitic the exaction may seem to be.

■ As a tax on property it would be clearly invalid, for as said by Judge Cooley in the case of State Treasurer v. The Auditor General, 46 Mich., 224, referring to a consolidated railroad from Buffalo to Chicago, which included a Michigan corporation, “the state can no more tax the whole capital which represents the track from Chicago to Buffalo, the rolling stock and other equipments, than it can tax the whole track and equipments.” But the tax imposed by the act of 1886 being a tax on the privilege of consolidation, and not a property tax, the power of the state to subject corporations availing themselves of the act to any conditions the legislature may see fit to impose cannot be questioned.

We come then directly to the question whether the defendant is a corporation “ incorporated by or under any general or special law of this state,” within the meaning of the act of 1886. The-only incorporating act of this state to which the incorporation of the defendant can be referred is the consolidation act of 1869.. That act provides in great detail for the consolidation of railroad corporations “ organized under the Laws of this state, or of this state and any other state,” operating a railroad either wholly within, or partly within and partly without the state and forming-a continuous or connected line of railway. The first section authorizes roads so situated to merge and consolidate their “capital stock, franchises and property.”

The second section prescribes that the consolidation shall be effected by means of an agreemeut between the constituent companies, which shall prescribe the means and conditions of the consolidation, the name of 'the “ new ” corporation, the names of the first directors and officers, the number of shares of the capital stock and the amount and par value thereof, and the manner of converting the capital stock of the constitutent companies into-that of the new corporation, with a proviso that in no case shall the capital stock of the company formed by the consolidation exceed the aggregate sum of the capital stock of the companies so consolidated, and the section provides that the agreement of consolidation, when made and certified, shall be filed, in the office of the secretary of state. The third section declares that on perfecting and filing the agreement the “parties hereto shall be deemed and taken to be one corporation by the name provided in said agreement, but that such act of consolidation shall not release such new corporation from any of the restrictions, disabilities or duties of the several corporations so consolidated.”

The fourth section purports to vest in the “new corporation” the rights, privileges and franchises, and all property, real and personal, debts, and stock subscriptions of the corporations so-consolidated. The fifth section continues the constitutent companies in existence to preserve the rights and liens of creditors, and authorizes suits to be maintained against the new corporation in the courts of the state. The sixth section prescribes that taxes oil the capital stock of the new corporation ” shall he apportioned in the ratio that the number of miles of the railroad in this state bears to the number of miles without the state.

The act plainly regards a railroad formed by the consolidation of several roads as a new corporation. In the case of The People ex rel. Phonograph Co. v. Rice, 33 St. Rep., 34, affirmed in this court in 1891, 38 St. Rep., 1011, it appeared that there had been a consolidation of two domestic manufacturing companies organized under the laws of this state, under the consolidation act, chap. 960 of the Laws of 1867, applicable to such corporations, and it was held that a new corporation was created by the consolidation, and that it was liable to the organization tax under chapter 143 of the Laws of 1886.

This decision accords with the general current of authority to, the- effect that statutes for the consolidation of domestic corporations are to be treated as acts of incorporation, and that on consolidation being effected under their provisions the constituent companies, unless such an intention is excluded by the language of the statute, are deemed to be dissolved, and their powers and faculties, to the extent authorized, become vested in the consolidated company as a new corporation created by the act of consolidation. State v. Maine Central R. R. Co., 66 Me., 488; S. C., 96 U. S., 499; Bishop v. Brainerd, 28 Conn., 289; McMahan v. Morrison, 16 Ind., 172; Clearwater v. Meredith, 1 Wall., U. S., 25; Central Railroad & Banking Co. v. Georgia, 92 U. S., 665; Railroad Co. v. Georgia, 98 id., 359.

These decisions are consistent with principle. The state has plenary power in the creation of domestic corporations, subject only to constitutional restraints. It may endow them- with such power and faculties as it deems proper. It may control and regulate them, and they are, under powers now almost uniformly reserved, liable to have their charters altered, amended or repealed. It is perfectly competent for the legislature in consolidation acts to declare what shall be the status of the domestic corporations which shall avail themselves of their provisions and also of the consolidated company. Whether the new consolidation shall create a mere business union between the constituent companies, leaving them in existence as corporations, or whether it shall operate as a surrender of their corporate franchises and an extinguishment of their corporate existence, and as creating a new corporation combining, to the extent permitted by the act, the powers of the corporations out of which it was formed, and vesting in it the property of the constituent companies, depends upon the legislative intention. Where under the act the result of the consolidation is a new corporation in place of two or more domestic corporations, the resulting entity may properly be said to be a corporation “ incorporated by or under a general or special law of this state,” and therefore subject to the organization tax prescribed by chapter 143 of the Laws of 1886.

But the constituent companies which were united to form “The New York, Chicago & St. Louis Railroad Company,” with the exception of the New York company of the same name, were not domestic corporations. Their corporate powers and life were derived from the legislatures, of other states. They were and are in no respect subject to the-laws of this state, but wholly and exclusively to the laws of their domicil. It was under these laws that the respective roads were-constructed and operated. The laws of their jurisdictions fixed, their capital, conferred and defined their franchises and powers, and their power to enter into any consolidation with other roads, either within or without the states which incorporated them, depended upon the affirmative grant of such power by the state creating them. The Consolidation Act of 1869, it is true, assumes on the consolidation not only of domestic corporations, but of corporations of different states, to transfer to and vest in the-consolidated company formed under its provisions all the “ rights, privileges, exemptions and franchises and property ” of each of the constituent companies. But the legislature of this state was impotent alone to accomplish this result. It could not vest the franchises, rights and property of the Pennsylvania, Ohio and Indiana companies in the consolidated company, nor authorize any change or conversion of the stock of the constituent corporations into the stock of the consolidated company, nor confer any exclusive authority for their consolidation. All it had the power to do, and all that the act of 1869 in effect did do, was to authorize the Hew York corporation, upon like consent being given by Pennsylvania, Ohio and Indiana, to merge the franchises, property and interests of the several constituents into what would practically be one corporation. When this was sanctioned by the-legislatures of the respective states, and the proper formal proceedings were taken, then, and not till then, could a new body be created.

Whether the result would be a new corporation de jure is a mooted question. See Muller v. Dows, 94 U. S., 444; Shields v. Ohio, 95 id., 319; St. L., Iron M. & So. Railway v. Berry, 113 id., 465; Nashua & L. R. R. Cor., v. Boston & L. R. R. Cor., 136 id., 356.

But assuming that result to follow, the new corporation would owe its existence, not to the state of Hew York alone, but to the states of Hew York, Pennsylvania, Ohio and Indiana. It would not be in any strict or even just sense a corporation “ incorporated by or under any general or special law of this state,” within chap. 143 of the Laws of 1886. The Consolidation Act does indeed confer new corporate powers upon the Hew York corporation. Except for that act it could not have entered into the agreement of consolidation. So also it purports to grant corporate powers to-the consolidated company. But it remains true, nevertheless, that concurrent legislation of the other states was essential to the completion of the consolidation, and it is to be inferred from the agreed statement that similar legislation to the act of 1869 was enacted in the several states.

We are of opinion that the proper and equitable construction of the act of 1886, imposing an organization tax on railroads “ incorporated under the Laws of Hew York,” does not bring the defendant within its provisions. This conclusion has support in the case of State Treasurer v. Auditor General, 46 Mich., 224; C. & N. W. Railway Co. v. Auditor General, 53 id., 79, and O. & M. Railway Co. v. People, 123 Ill., 467.

We desire to refer also to the dissenting opinion of Landon, J., in the court below.

The judgment of the general term should be reversed, and judgment ordered for the defendant on the case presented.

All concur.


author: Earl, J.

text:
    Henry Messenger, Resp’t, v. The Manhattan Railway Co. et al., App’lts.

      (Court of Appeals,

      Filed January 20, 1892.)

    1. Railroad—Elevated—Rental value of abutting premises—Evidence.
    Evidence of annoyance to the owner of abutting premises by the erection of an elevated railroad arising from interference with his privacy in the occupancy of the premises, from noise and from interception of the view thereof from the other side of the street, is competent as to rental value but not as to the fee damage.
    3. Same—Trial—Requests to find.
    ■ A refusal to find that plaintiff had no such easements which could be impaired by the operation of the railroad will not be considered a fatal error where it does not appear that the court took such matters into consideration in assessing the fee damage.
    Appeal from judgment of the New York superior court, general term, affiirming judgment in favor of plaintiff.

      Samuel B lythe Rogers, for app’lts; Lewis L. JDelafield, for resp’t.

       Affirming 36 St. Rep., 1034.

   Earl, J.

The plaintiff, an abutting owner of property on Second avenue in the city of Hew York, brought this action to recover a judgment against the defendants to restrain them from maintaining and operating their road in the avenue in front of his premises, and also for damages. The action was brought to trial and the plaintiff recovered a judgment assessing his fee damages at $2,000, and staying the operation of their road until that sum should be paid, providing, however, that they should pay only $1,500 if they removed their station, stairs and approaches, leaving the railway structure to stand and be operated ; and also awarding the plaintiff judgment for the rental damages sustained by him to the day of the trial.

Upon the trial the plaintiff, besides evidence as to the interference by the railroad with his easements of light, air and access, gave evidence, without objection to its competency or materiality, of the annoyance which he suffered from interference with his privacy in the occupancy of his premises, and from noise occasioned by the operation of the railroad, and also showing that the railroad and the structures connected therewith intercepted the view of his premises by persons passing on the other side of the avenue. This evidence was competent as bearing upon the rental value. The structure being an illegal one, the plaintiff was entitled to recover for all the damages of every kind caused to him while it was illegally maintained and operated; and such is the effect of our decisions in Kane v. The Elevated Railway Co., 125 N. Y., 164; 34 St. Rep., 876, and The American Bank Note Co. v. The Same, 41 St. Rep., 531, recently decided in this court. It does not appear that this evidence was received as bearing upon the fee damage, and the trial judge was not asked to restrict its bearing to the rental damage. It appears to have been received generally without objection. According to our decision in the case last cited, it was not competent in relation to the fee damage. In estimating that, evidence must be confined to what the railroad company is authorized to take, or interfere with, to wit; the easements of light, air and access.

At the close of the trial the defendant’s counsel asked the trial judge to find the following matters, to wit:

“ There is no easement or other interest appurtenant to the plaintiff’s premises entitling him to be protected against loss of privacy due to the use of the street by passengers or other persons, if such use be authorized by the mayor, aldermen and commonalty of the city of Mew York, and the People of the State of Mew York.
“ There is no easement or other interest in or over said Second avenue appurtenant to the premises of the plaintiff which would entitle him to the use of said Second avenue for the purpose of having the exterior of his premises conspicuously visible from the other side of the said Second avenue.
“ There are no easements or other interests in or over said Second avenue appurtenant to said premises which would be impaired or infringed by the use of the elevated railway station and the approaches thereto by idlers or loafers, even though such might render the use and occupation of the said premises disagreeable, or result in money damages to the plaintiff.
“ There is no easement or other interest in said street appurtenant to said premises which authorizes the owner thereof to control the amount of noise made in said street by the permission of the mayor, aldermen and commonalty of the city of Mew York •and the People of the State of Mew York.”

And the court refused so to find. It does not appear that the plaintiff’s counsel claimed that his client owned such easements as were therein specified, nor did the trial judge find that he had •such easements. The scope of them is uncertain. If it was meant by them that the judge should find that these matters should not be considered upon the subject of the rental damage, then it would have been erroneous to find them. If he had been asked to find that these matters could not be considered upon the question of the fee damage and he had refused, he would have committed an error. As it does not appear with any certainty in the record that he took these matters into consideration in assessing the fee damage, we are unable to perceive that he committed error in these refusals.

The counsel for the appellant makes one more point, and that is that it was error as matter of law for the court to find that the easements taken by the railway proper as distinguished from the station and other structures were worth $1,500. It is quite true that no witness was produced upon the trial who divided the-damages precisely as the judge did, to wit: $1,500 as the fee damage on account of the main structure, and $500 on account' of the station and other structures connected therewith. But the estimates of witnesses, and all the facts and circumstances of the case were before the judge, and we think there was sufficient evidence to enable him to apportion the gross amount of the fee damages-in the manner he did.

Our attention is called to no other alleged errors affecting the-judgment, and it should therefore be affirmed, with costs.

All concur; Gray, J., in result.


text:
    Elise Kohler et al., Resp’ts, v. John Lindenmeyr, Impl’d, App’lt.

      (Court of Appeals,

      Filed January 20, 1892.)

    Pabtnebship—-Special pabtneb—Evidence—Entbies. in pabtnebship1 BOOKS.
    In an action to hold L., a special partner, liable for the debts of L. & Co., on the ground that the amount claimed to have been contributed by L. in cash had been made by crediting him with the same amount loaned by him to the pre-existing firm of L. & Co., plaintiffs were allowed to show entries on the books of the prior firm of L. <& Co. crediting L. with two loans and a subsequent credit of the amount in question to his capital account of the new Arm. Held, error, that the entries made prior to the time when the new partnership was to commence, which were not shown to he known to L., were inadmissible against him.
    Appeal from judgment of the supreme court, general term,, first department, overruling defendant’s exceptions and ordering, judgment for plaintiffs on the verdict.

      Luden Birdseye, for app’lt; Samson Lachman, for resp’ts.

       Reversing 35 St. Rep., 633.

   Andrews, J.

The certificate of the formation of the limited partnership of P. Lenk & Co., in which the defendant, John Lindenmeyr, was named as one of the special partners, stated that Lindenmeyr had contributed $20,000 of the capital, and that the partnership was to commence on the 16th of November, 1885. The Certificate was dated November 6, 1885, but -was not acknowledged until November 11, 1885, on which latter day Peter Lenk, one of the general partners, made and filed with the certificate an affidavit that the sums specified in the certificate to have been contributed by the special partners had been actually and in good faith paid in cash.

The plaintiffs sold goods to the firm of P. Lenk & Co. after the formation of the special partnership, and the debt not having been paid they brought an action against the general partners and recovered judgment therein for their debt. They subsequently brought this action against the defendant Lindenmeyr and Otto Huber, the special partners, to charge them as general partners, on. the ground that the contribution of capital made by them to the firm was not made in cash. It is claimed as to Lindenmeyr (the only appellant here) that his contribution of $20,000 was made by crediting him with $20,000 loaned by him to the pre-existing firm of P. Lenk & Go. in August and September, 1885, which firm was composed of the same persons who' were members of the succeeding firm, with the exception of Lindenmeyr.

The complaint alleges that when the former action was brought the plaintiffs were ignorant of the connection of Lindenmeyr and Huber with the firm of P. Lenk & Go. The plaintiffs, for the purpose of establishing the falsity of the affidavit that Lindenmeyr paid in in cash his capital in the new firm, were permitted to show" entries on the books of the prior firm of P. Lenk & Go., crediting him with two loans made to that firm in August and September, 1885, aggregating $20,000, and a subsequent entry made on or about November 6,1885, in the same books, crediting .a similar sum to his capital account of the new firm.

Without going into details it is sufficient to say that the entries admitted, if competent against Lindenmeyr, permit an inference that Lindenmevr’s contribution to the new firm was not tirade in actual cash, but by a satisfaction of his debt against the prior firm, and a credit of an equal amount to his capital account in the new firm. If this was the fact, the transaction was not a payment in easli and did not satisfy the requirements of the limited partnership act. Van Ingen v. Whitman, 62 N. Y., 513.

We are of opinion that the entries in the books of the old firm, made prior to the time when the new partnership was to commence, and which, so far as appears, were not known to Lindenmeyr, were inadmissible against him. It is the general rule that ■entries in partnership books, made in the ordinary course of business, are admissible in actions between the partners, and that they are also competent in favor of third persons in actions against the partners, as in the nature of admissions by the partners of the facts stated. Lindley on Part., 404; Bates on Part., § 978; 1 Phillips on Ev., 449; 2 Wharton on Ev., § 1132. But the books of the prior firm were, as to Lindenmeyr, res inter alios acta. They were not competent against him on the principle of agency, or on the ground that he is presumed to have known their contents. The circumstances afford no ground for such a presumption. He had no'right to examine the books, and there is no evidence that he had actual knowledge of their contents. There seepis to have been an interval of a few days between the expiration of the prior partnership agreement and the commencement of the new partnership. The old firm doubtless continued by consent until the new one took its place. But the entries in the old books, whether made by the old firm or by those who acted during this interval, were inadmissible to charge Lindenmeyr. Assuming that the accounts of the new firm were kept in the same books as the accounts of the old firm (a matter which does not distinctly appear), this would not affect the question. Lindenmeyr could at most only be charged (in the absence of proof of actual knowledge of prior entries) with entries made in the boons after the new firm commenced business. The plaintiffs are not entitled to any strained construction of the evidence to support their action. They did not sell their goods on the credit of Lindenmeyr. They had no knowledge until long afterwards that he was connected with the firm. It is not claimed that there was any fraud upon the statute intended in the organization of the limited partnership, or that the old firm were not able or willing to have paid their loans of Lindenmeyr in cash, if he had required it.

For the error in admitting the entries in the books of the old firm, the judgment should be reversed and a new trial ordered.

All concur.


text:
    Cleveland D. Fisher et al., App’lts, v. Mary C. D. Fisher et al., Resp’ts.

      (Court of Appeals,

      Filed January 20, 1892.)

    1. Evidence—Medical experts.
    A physician who has attended a patient professionally but has also seen her at various times when not in attendance upon her for the purpose of treating her professionally, is competent to testify as to her mental condition providing he confines his answers to such knowledge and information as he had obtained her by seeing her when she was not his-patient.
    2. Same—Code Civ. Pro. § 834.
    The prohibition of Code Civ. Pro., § 834, applies only to information the physician acquired in attending the patient in a professional capacity and does not apply to information obtained by him in any other way.
    Appeal from judgment of the supreme court, general term,, second department, affirming judgment adjudging a deed to be fraudulent and void.

      Martin J. Keogh, for app’lts; Isaac K. Mills, for resp’ts.

       Affirming 30 St. Rep., 363.

   Earl, J.

This is an action of partition brought by the plaintiffs to partition lands alleged in the complaint to belong to the parties to the action as tenants in common. The main controversy upon the trial was over a deed executed by Eliza Fisher on the 11th day of April, 1888. The title of the plaintiffs and of some-of the defendants to a portion of the lands sought to be partitioned depended upon the validity of that deed. Some of the defendants claimed that it was procured by fraud and undue influence, and that therefore it was void and inoperative. Upon that question considerable evidence was given upon both sides; and the trial judge found that the deed was procured by improper influence and that therefore it was void and inoperative.

We have carefully scrutinized the evidence and see no reason to doubt that the conclusion of the trial judge was abundantly supported and that his judgment thereon should not be disturbed.

There were no facts or circumstances in the case which estopped the parties assailing that deed from claiming its invalidity.

Upon the trial Doctor Curtis was called to give evidence as to the mental condition of Eliza Fisher at or about the time-when she executed the deed. It appeared that he had attended and prescribed for her professionally, and that he had also seen her at various times when he was not in attendance upon her for the purpose of treating her professionally. He was asked various questions as to her mental condition, excluding from his mind in answering the questions any knowledge or information which he had obtained as to her condition while acting as her medical attendant, and confining his answers to such knowledge and information as he had obtained of her by seeing her when she was not his patient. Counsel for the plaintiffs objected to the competency of the witness under § 834 of the Code. The court overruled the objection, and the witness was permitted to answer, and he gave material evidence as to the mental condition of Eliza Fisher. In this there was clearly no error. Edington v. Ætna Ins. Co., 77 N. Y., 564; People v. Schuyler, 106 id., 304; 8 St. Rep., 860; Hoyt v. Hoyt, 112 N. Y., 515; 21 St. Rep., 593. The prohibition of that section applies only to information the physician acquired in attending the patient in a professional capacity, and it does not apply to information obtained by him in any other way.

The judgment should be affirmed, with costs.

All concur.


author: Gray, J.

text:
    Silas L. Griffeth, App’lt, v. Andrew H. Green et al., Resp’ts.

      (Court of Appeals,

      Filed January 20, 1892.)

    1. Manufacturing companies—Liability of stockholder as to increased stock—Omission to file certificate.
    An omission to file a certificate as to the payment of the increase of capital stock subjects only the holders of the new issue of capital stock to liability for corporate debts, and does not affect the holders of the capital stock which has been fully paid up.
    2. Same—Evidence—Burden of proof.
    In an action to enforce the liability of a stockholder of a manufacturing corporation on the ground of failure to file the certificate of increased stock having been paid up, the burden is on the plaintiff to show that defendants’ stock was issued upon the increase.
    Appeal from judgment of the supreme court, general term, second department, affirming judgment dismissing complaint on the merits.

      Walter Farrington, for app’lt; Mornay Williams, for resp’ts.

       Affirming 37 St. Rep., 705.

   Gray, J.

The plaintiff was a judgment creditor of the Miller-ton Iron Company, a domestic corporation organized under the General Manufacturing Act of 1848, and, failing to obtain satisfaction by execution upon his judgment, commenced this action to enforce against the defendants as stockholders the liability imposed by the statute upon such for the failure to file the proper certificate of payment upon an increase of the capital stock. The defendants were executors of William B. Ogden, deceased, who, in his life-time, had been the holder of 223£ shares of the com-pony’s capital stock. It is not disputed that the original stock and a first increase of the capital were fully paid up and the required certificates of the fact duly filed; nor that upon subsequent issues of increased capital stock such certificates were either defective or wanting. It also did appear that the whole capital, as increased, had, as matter of fact, been paid in. The question is whether the plaintiff made out a case sufficient to charge the defendants with any statutory liability for such subsequent defaults to comply with the statute, and is purely technical.

Looking at the allegations of the complaint, in the first place, • we find that it sets out the several promissory notes made by the company and delivered to the plaintiff; their non-payment at maturity ; the recovery of judgment thereupon and the return of execution unsatisfied; the several increases of capital stock and the failure to make and record certificates of the payment of the capital stock, as prescribed by §§ 10' and 11 of the act, except as to the first increase of stock. The allegations as to the testator's holding of stock are that he was the owner of some of the original stock of said company and continued to sell and purchase shares of stock up to the time of his death, * * * at which time he was the owner of 223J shares, etc.; ” and it is alleged that such shares are a part of his estate, and that at the time the debt was contracted and of the commencement of the action the defendants were stockholders holding the said 223-J shares.

It is nowhere alleged that the testator, or his executors, these defendants, held any of the issues of increased stock, and the plaintiff did not prove upon the trial, as a part of his case, that any part of these 223£ shares was of those later issues, the legal regularity of which was affected by the failure to comply with the statute.. In order to make out a good cause of action the plaintiff should have alleged in his complaint that the shares held by defendants were, in whole or in part, as the case might be, of the increased stock. The mere averment as to their holding so many shares of the capital stock, or of the trading by testator in the stock, through sales and purchases, up to his death, .was not sufficient. It would not necessarily follow as a legal conclusion that any of the increased stock was held by the defendants, and the statutory liability inheres only by such a holding. But no objection seems to have been taken to the sufficiency of the complaint and we are concerned only with the sufficiency of the proof in the case as made. Upon the trial, the plaintiff made no attempt at any proof with respect to the shares of stock held, except through a stipulation of the defendants admitting their testator was a stockholder and owned shares of stock in the yeár the company was incorporated “ and continued to own shares of stock in said company down to the time of his death, and that his estate has ever since his death and now owns 223^-shares of stock.” But plaintiff argues that this admission, coupled with the fact that the testator was a trustee of the company and signed various notices to increase the capital stock, constituted a sufficient foundation for holding the defendants liable, or, at least, sufficient until they overthrew a resulting presumption of liability. The point of his argument seems to be that there is a general liability upon all stockholders for the occurrence of such acts of omission by trustees as are here depended upon, because the increase is a corporate act. There is nothing in the argument and the statute never intended that the consequences of a failure to file the required certificate of payment upon an increase of the capital stock should be visited upon any but those who held it. In the case of Veeder v. Mudgett, 95 N. Y., 295, the question of the liability which the statute imposes for the failure to file a proper certificate upon an increase of the capital stock was fully considered.

It was held that such a liability attached only to those who held the increased capital and that it has no reference to and no effect upon the original capital and its holders. Judge Finch, who delivered the opinion there, summarized by saying that “ it is the increase which is subjected to the liabilities of the act, and, as a consequence, only the holders of that increase to the par value of that stock who are liable for debts. The innocent holder of full paid stock, once discharged by law because his duty was done, goes free, as he should.” It is not possible to see why the decision in that ease should not control here. It, obviously, is authority for the proposition that the burden is upon him who seeks to enforce this statutory liability to allege and to prove that the conditions of the statute are exactly met by the case. The principle is unquestionably right, and it is one which underlies all cases where a liability is sought to be imposed which is in derogation of the common law and arises solely by reason of some legislative enactment. The statute here must be read with some respect to the object in view and it is then apparent that strictness harmonizes with reasonableness of construction. The provisions with which we are now concerned were intended as protection to those who have dealings with the corporation. They j ustify them in relying upon the fact that the whole authorized capital has been, paid in, in time and manner as prescribed by the statute, and if that fact is not certified to in the way there pointed out, then the holders of stock, as to which a certificate of full payment has not been filed, are made severally liable to the creditors of the company. The requirements of the law as to the payment in of the company’s capital and as to the filing of a certain certificate are reasonable and strictness in compliance is demanded in the interests of creditors and of stockholders. Whenever there is the failure to comply with' such statutory conditions, the creditor’s attack is confined to enforcing the precise consequences which are attached to the failure. Applying the principle here, the consequences of the omission to file a certificate as to the payment of the increase of capital were to subject, not the holders of the capital stock which had been fully paid up and as to which there was no statutory default, but the holders of the new issue of capital stock to liability for corporate debts.

As was suggested in Veeder v. Mudgett. the statute does not operate to revive any liability as against the holders of stock in the issue of which the demands of the statute have been properly complied with; it only subjects the increase of stock to the same liabilities as the original stock and its holders were under. In our judgment, therefore, unless the stockholder proceeded against is proved to hold some of the increased stock, he is not brought within the statute. In this record it does not appear of what kind was the stock held by the testator and which passed to his personal representatives, and it is not a case for the indulgence of presumptions, or for the basing of inferences. Under the statute there must be precise proof that the statutory default affected the shares held by the defendants. The shares left by testator were, of course, part of the whole capital; but not necessarily, nor presumptively even, of the several issues increasing its amount.

For the reasons here assigned, the judgment should be affirmed, with costs.

All concur.


author: O’Brien, J.

text:
    Rebecca M. E. Quackenbush, Pl’ff, v. Marie O’Hare et al., Def’ts.

      (Court of Appeals,

      Filed January 20, 1892.)

    Foreclosure—Surplus moneys—Inverse order of alienation.
    Respondent Cannon is the assignee of a mortgage which covered three pieces of real estate. One of the pieces was sold on foreclosure of a junior mortgage, the sale producing a surplus. Held, that the equitable rule as to the sale of the property in the inverse order of alienation where a mortgage covers several pieces had no application, and that respondent was entitled to the surplus.
    Appeal from judgment of the supreme court, general term, first department, affirming order distributing surplus money.

      Earley & Prendergast, for app’lts; Henry C. Atwater, Samuel Untermyer and Moses Weinman, for resp’ts.

       Affirming 40 St. Rep., 797.

   O’Brien, J.

The order appealed from disposed of surplus moneys amounting to the sum of $2,737.75, arising upon the foreclosure of a mortgage made by the defendant to one Elizabeth Hillenbrand, February 28, 1884, and recorded the following day. It was subsequently assigned to the plaintiff, and covers certain premises on Second avenue, in the city of New York. The controversy in regard to the surplus was between the defendant Cannon on the one hand and the defendants Washburn and Barnes on the other. The referee reported that Cannon was entitled to have his claim paid out of the fund first, and this report was confirmed at the special term, and the order of that court affirmed at general term. Washburn and Barnes are the only parties who appeal to this court.

It appears from the findings that the defendant Cannon is the owner of a mortgage of $>2,000, dated January 9, 1885, and recorded July 22, 1885, which covers the premises sold under the decree of foreclosure in the action, and it is, beyond all dispute, a lien next to that of the mortgage foreclosed by the judgment upon which the surplus arose. But this mortgage is a lien on three separate pieces of real estate. (1) The house on Second avenue, which was sold under the judgment in this case, and from which the surplus came. (2) Certain premises on Seventy-fourth street. (3) Certain premises on West Third street. Washburn and Barnes hold a junior mortgage for over §3,000, dated January 28, 1887, and recorded February 11, 1887, covering the Second avenue property only. The Murray Hill bank holds a mortgage of $2,500, dated November 11, 1886, which covers the Seventy-fourth street property only. One Steers holds a mortgage of about $11,000, dated February 2, 1887, covering the West Third street property only. One Suydam is the owner of a mortgage of $2,000, dated July 9, 1885, which covers the three pieces of property, and the same has been assigned to Cannon as trustee for the owner.

Washburn and Barnes insist that they should have the surplus to pay their mortgage, which is a lien next to that of Cannon, and that he should be driven to a sale of the other two pieces of property covered by his mortgage, which they claim is abundant security for the payment of his debt. But the Murray Hill Bank, "holding a mortgage on the Seventy-fourth street property, objects to this, as its security will thereby be endangered. Steers also objects, as this will endanger his security, which is confined to the West Third street propeipy only, while Cannon, holding a mortgage on the three pieces, also objects. The lien of Cannon upon 'the land next to that of the mortgage foreclosed, was transferred from the land to the surplus fund. Mo one claims that he has not the first lien, and the only question is whether he can be prevented from enforcing his prior lien to enough of the surplus money to satisfy his mortgage. The owners of the Seventy-fourth street and West Third street property are not parties to this action. Had all the parties interested in these two pieces of property been made parties to this action, and all the property sold and the proceeds in court, it is possible that a court of equity could apply the doctrine of sale in the inverse order of alienation or would so marshal the securities as to accomplish the purpose which Washburn and Barnes seek to attain in these proceedings. Burchell v. Osborne, 119 N. Y., 486; 29 St. Rep., 788. But that must be done in an action for that purpose where the whole fund resulting from the sale of all the pieces of property is under the control of the court and all the parties interested are before it. There is no room for the application in a proceeding like this and upon such facts as exist here, of the equitable rule that where a creditor has a double fund to which he may resort for satisfaction of his debt, and another creditor has only one of these funds, the first creditor will be required primarily to resort to that fund for the satisfaction of his debt over which he has the exclusive control. That rule, of course, implies the right of the creditor with the double fund or security to appropriate both funds if necessary. The attempt is made in this proceeding to displace the prior lien of Cannon, not bv payment, but by proof which, it is claimed, shows that the remaining two pieces of property are sufficient to pay his debt But the owner of a mortgage cannot be deprived of his lien on the application, in a proceeding like this, of a junior mortgagee, upon proof however strong or apparently conclusive that he still has sufficient property to pay his debt. The court cannot release a lien without actual payment merely because witnesses testify and the referee finds that the holder of the lien has other property of his debtor to which he can resort for the satisfaction of his debt Had Washburn and Barnes offered to pay the prior mortgage held by Gannon and demanded an assignment of it, it is possible thejr might be subrogated to all the rights and to the position of Cannon and after receiving the surplus money here be entitled to call upon the owners of the Seventy-fourth street and West Third street property to contribute towards the payment of the mortgage. But whatever equitable rights they might have in an appropriate proceeding, it is quite clear that they cannot in an application for surplus money displace the prior lien by proof or finding that the other property is sufficient in value to pay and discharge the debt secured by the lien. Their remedy, if any, is by means of some other proceeding.

The order should therefore be affirmed, with costs.

All concur; Andrews and Gray, JJ., in result.


author: McCarthy, J.

text:
    Simon E. Zimmern, Resp’t, v. Edmund Heinecke, App’lt.

      (City Court of New York,

      General Term,

      Filed December 17, 1891.)

    Sale—Trial—Direction op verdict.
    In an action for goods sold the defendant admitted the sale and value of the goods, but alleged that the sale was made on credit which had not expired. Defendant had the affirmative, and his witnesses testified that plaintiff, in order to make a sale, told defendant that he might have all the time he wanted; that what was not paid in four months he would wait a year for; that he had a year's time. At the close of the defendant’s evidence the court directed a verdict for plaintiff. Held, error; that from this uncontradicted testimony it was clear that the goods were sold on a credit, and what that credit was was a question for the jury.
    AppeAl from judgment in favor of plaintiff, entered on a verdict directed by the court

      Q. 0. GomstocJc, for app’lt; S. & B. Oppenheimer, for resp’t.
   McCarthy, J.

This action is for goods sold and delivered, and is to recover the sum of $923.87, the value and price of goods. It was begun on the 13th day of March, 1891, and the complaint alleges that the goods were sold between November 7 and November 11, 1890, and that at the time of the commencement of the action the price was due and owing plaintiff by defendant.

The answer admits that the goods were bought and admits also the value, but denies the allegation that at the time of the commencement of the action the money was due and owing, and as an affirmative defense alleges that the goods were sold and delivered upon a credit, and at the time of the commencement of the action the credit had not expired. Upon the trial the court decided that the defendant had the affirmative. The defendant opened the case, and put on his witnesses. After hearing these witnesses the court directed a verdict in favor of the plaintiff, to which direction the defendant duly excepted.

The whole point in the case is whether, under the evidence of the defendant’s witnesses as presented, the court had the right to say that the defendant had made out no case, that the facts presented were not such as to allow of any construction by the jury other than in the plaintiff’s favor.

At fol. 24 of the case, Mr. Heinecke, the defendant, swears that on ¡November 11 the plaintiff called in and asked him to buy some goods of him, when Heinecke told him “I buy only of one house so as not to be pushed. ” And the plaintiff answered “ Oh, you can buy goods of me and I will give you just as long as you want; I will give you a year’s credit.”

At fol. 26. of the case, Mr. Heinecke swears that three weeks later he told Mr. Zimmern to take his goods back; that he did not want them; that they were too high-priced. Mr. Zimmern then told him “You have plenty of time. I will give you a year’s time to pay if you have not got money; you are good enough.” “He said, he would give me a year’s time.”

At fol. 27 the defendant testified that after Christmas the plaintiff approached him for money and when he asked him why he should pay, the plaintiff said “ I don’t bother you. I am only in a little squeeze now. You have a year’s time. You will pay just as you have it.”

At fols. 28, 29 and 30, the defendant testified that in March the plaintiff called upon him and asked him for all of the money, when defendant reminded him that he, the defendant, had a year's time to pay ; the plaintiff answered him “that he wanted $150, because he was pressed then.” ■

On cross-examination the defendant testified at fol. 32 that he had been in the habit of buying goods on ten days credit, but that was only small parcels of one article, and that the reason he wanted a long time on this stock which was sold him by plaintiff was because he had just opened a new store and needed new stock, and that he would need a year’s time to pay for them.

One Sittner, another witness, testified that he was present when Zimmern, the plaintiff, came in to sell Mr. Heinecke his' goods, and they all told him, Zimmern, that Heinecke did not want to buy them on account of the payment; when Zimmern, the plaintiff, answered him that “ payment was all right, Heinecke could have the time as long as he wanted; he was perfectly good to him,” and said, “ What is not paid for in four months he could have a year to pay. ” This is found at fol. 44 of the case. Then on his cross-examination at fol. 53 of the case he says, “ that the terms on the bills given for the goods were one year.”

Stephen Sarbol, another witness of defendant, states he was also present when the terms were made between Zimmern and Heinecke. And at fol. 57 he states that he heard the plaintiff say that Mr. Heinecke was good; that he would wait for a year and not trouble him for the payment. And at fol. 59 that Ziramera said he would wait for a whole year.

Plaintiff did not call any witnesses.

It is clear from this evidence, uncontradicted as it is, that the goods were sold on a credit. What was the extent or time of that credit was a question for the jury, and should have been submitted to them.

Andrews, J., in Bagley v. Bowe,, 105 N. Y., 179; 6 St. Rep., 842, says: “ The question whether the j udge was authorized to take from the jury the question of fraudulent intent arising upon the extrinsic facts is to be. determined in view of the settled rule that to justify the court in directing a verdict in any case upon the facts, the evidence must be undisputed, or so certain and- convincing that no reasonable mind could come to any but one conclusion.

If there is ground for opposite inferences and a conclusion either way would not shock the sense of a reasonable man, then the case is for the jury, although the judge may entertain a clear and decided conviction that the truth is on this or that side of the controversy. The trial court or the general term is authorized to set aside a verdict and direct the issue to be retried before another jury, if, in its judgment, the verdict is against the weight or preponderance of evidence; but in a case which of right is triable by jury the court cannot take from that tribunal the ultimate decision of the'fact, unless the fact is either uncontradicted or the contradiction is illusory or where, to use a current word, the answering evidence is a ‘ scintilla ’ merely.”

The case at bar certainly comes within this authority.

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

Yan Wyok and Fitzsimons, JJ., concur.


author: Fitzsimons, J.

text:
    Sigmund Hirschfelder, Resp’t, v. The Locey Mining & Manufacturing Co., Impl’d, App’lt.

      (City Court of New York,

      General Term,

      Filed December 17, 1891.)

    Bills and notes—Pleading.
    The complaint herein alleged the making of a draft by the defendant corporation and its acceptance by the other defendant; that it was transferred to plaintiff before maturity, and that it was presented to both defendants and payment refused. Held, that it stated a sufficient cause of action; that the presentation of the draft to the drawer was sufficient notice to it that the drawee had failed to pay.
    Appeal from judgment entered on order overruling demurrer to the complaint.

      H. Aplingion, for app’lt; S. A. Emanuel, for resp’t.
   Fitzsimons, J.

This is an action upon a thirty-day draft, dated 5th September, 1891, for $150, drawn by the defendant, Locey Mining & Mfg. Co., to the order of E. Gf. Oppenheim, and duly accepted by the defendant Locey. That before maturity it was delivered to Oppenheim,' and also, before maturity, endorsed and delivered to plaintiff That it was presented for payment to both defendants on October 8, 1891, and payment refused.

The defendant, The Locey Mining & Mfg. Co., demurred to the complaint upon the ground that it failed to state facts sufficient to constitute a cause of action,” which was overruled as frivolous.

The demurrer admits all the allegations of the complaint; therefore admits that the draft was presented to both defendants, and payment thereof refused by each of them.

The presentation to the demurring defendant of the draft for payment, I think, was sufficient notice to it that the defendant Locey had failed to pay the sum. The law only requires that speedy notice of non-payment by the drawer of a draft shall be given to its accept or, sothat his rights may suffer no detriment by unnecessary delay. Such notice the demurrer admits was given in this case.

I think that the complaint was sufficient and the demurrer properly overruled. The defendant’s plea is purely technical, and should not be encouraged.

Judgment affirmed, with costs.

Van Wyck and McCarthy, JJ., concur.