text:
    Vincenzo De Fino, App'lt, v. Edwin F. Stern, Resp't.

      (Supreme Court, Appellate Division, First Department,

      Filed May 1,1896.)

    Conversion—Agency—Ratification.
    Where a person assumes to act and to receive money for another as his agent, though in fact not authorized to do so, and refuses to pay it over on demand, he is, hy such refusal, guilty of a conversion thereof.
    Appeal from a judgment in favor of defendant, entered on an order, at the close of the trial, dismissing plaintiff’s complaint.

      The action was brought to recover damages for the conversion of moneys alleged to have been the property of the plaintiff. On the 1st day of December, 1890, one Frank Faiell filed a mechanic’s lien against the property of one Patrick Dempsey for $570. On the 1st day of December, 1891, the lien was continued, by order of the court of common pleas, under section 6, c. 342, Laws 1885; and on the same day Faiell, by writing under seal, assigned and transferred the lien to plaintiff, covenanting that there was $500 then due on the same,- and that he (Faiell) would not collect or receive the same, or any part thereof, or release or discharge .the lien; and at the same time the plaintiff gave Faiell a writing, agreeing, if the plaintiff collected any money upon the lien, he would pay over to Faiell the one-sixth part thereof, after deducting the expense of collecting the money. The assignment of the lien to the plaintiff was filed December 2,1891, and the lien seems to have been redocketed December 1, 1892. In April, 1892, the owner of the property, Patrick Dempsey, made a sale of the same, and the title was closed April 20, 1892. The German Title Insurance Company examined and guarantied the title. '■ This mechanic’s lien was discovered to be on record against the property, and, in order to protect the insurance company against liability for this lien, $618.45 was deposited with the insurance company April 30, 1892. February 2, 1893, the insurance company delivered to the defendant a check for $638.45, in payment of the amount then due upon the lien, adding to his name, as payee in the check, the word, “ Agent,” and at the same time the defendant delivered to the insurance company a paper purporting to be a satisfaction of the lien, executed and acknowledged by the plaintiff, and it was filed February 4, 1893, and the lien was canceled of record. The defendant indorsed the check received by him, signing his name, adding the word “Agent,” and the words, “For deposit in Nassau Bank to the credit of Edwin F. Stern and the amount of the check went to the defendant’s account, and he had the benefit of it. The satisfaction of the lien was never executed by the plaintiff. It was a forgery. He was not in New York City at the time the satisfaction purported to have been executed, and knew nothing about it, and knew nothing about the payment of the money to /the defendant until long afterwards. December 19, 1893, demand, in behalf of plaintiff, was made, that defendant pay over to plaintiff the $638.45 received by him from the insurance company, in payment of the amount of the lien, which was refused, and this action was commenced December 30, 1893. Upon cross-examination of Mr Thornall, a witness for the plaintiff, a conversation between liim and the defendant was drawn out, wherein it appeared that defendant said that the insurance company had sent to him to secure a satisfaction of the lien ; that he thereupon prepared the paper and sent it to Mr. Faiell in Philadelphia, Pa., to be signed; that Faiell signed it and returned it to defendant, but the county ¿lerk would not satisfy the lien, because it had been assigned to the plaintiff; that defendant then sent for Faiell to come to his ¡office; that Faiell came, and the defendant told him that the lien had been assigned to plaintiff, and that they would have to get plaintiff’s signature in order to clear the record and get the money; that Faiell said the plaintiff was sick at his home in Mulberry street, and could not come down, and defendant thereupon prepared a new paper and gave it to Faiell, who went out, and, a little while after, came back with the paper executed; that defendant gave him a check for $400, and indorsed it “Correct” or “Pay to bearer;” that Faiell showed defendant a general release, purporting to be signed by plaintiff, and a receipt. All this was what defendant told this witness. Defendant did not swear to any of these things on the trial. At the close of plaintiff’s evidence, defendant moved for a dismissal of the complaint, on the ground.' that, when the money was demanded, "no tender was made of defendant’s charges. The court granted the motion, saying that the money never belonged to the plaintiff, and that it was not paid to or for him; .that the insurrnce company deposited it with the defendant for the purpose of clearing the title from the lien; that plaintiff had not lost his lien, but could enforce it notwithstanding the forged satisfaction piece; that the only way plaintiff could maintain the action would be by ratifying the act of defendant in receiving the money for him, instead of which he had repudiated' it, and had demanded the money, and brought his action for conversion, and for money had and received. Plaintiff requested to goto the jury, which was refused. Exception was taken to these rulings.
    Franklin Pierce, for app’lt; George W. Galinger, for resp’t.
   WILLIAMS, J.

There seems to be no doubt, upon the evi-i dence, that the check was delivered by the insurance company to defendant for the plaintiff. It can hardly be said it was deposited with the defendant for the purpose of clearing the title from the lien; The insurance company dealt with him as one authorized' to act for the plaintiff, and he assumed to have such authority, and to so act. No other conclusion could fairly be drawn from the evidence, but if different inferences or conclusions could1 be drawn from the evidence, the jury might, at least have drawn the conclusion we have suggested, and it was for the jury and not the court, to draw the conclusion. There is no evidence to show how the defendant happened to have a forged satisfaction of the lien to deliver to the insurance company, and so obtain the money in payment of the lien. The statement by defendant to plaintiff’s witness, drawn out on the cross-examination, is no evidence of the facts therein stated. The statements were mere hearsay. The money, when paid to defendant, was the money of plaintiff, obtained from the insurance company upon a forged satisfaction piece.

The defendant assumed to be, but he was not in fact, the agent or attorney for plaintiff. It is true the plaintiff was not obliged to follow the money into defendant’s hands, and seek to recover it from him. The insurance company did not relieve itself by paying the money to the defendant, and the plaintiff’s lien was satisfied by the filing of the forged satisfaction piece. The plaintiff might have proceeded to enforce its lien, and the insurance company, as a result, would have been compelled to again pay the money to plaintiff, and itself look to defendant for a return of the money which it had paid to him. But the plaintiff had a right to claim the money in defendant’s hands as his, and recover it from him. The defendant assumed to act as the agent and to receive the money for the plaintiff as his agent, though in fact not authorized to do so. The plaintiff might have repudiated the agency, but he chose to ratify it, and to claim the money as his. He demanded that it be paid over to him. The defendant refused to pay it over, and by such refusal he was guilty of a conversion thereof. This was the theory upon which the complaint was drawn, and this was the state of facts proved at the trial.

It is said that there could be no recovery because the defendant had a lien upon the moneys, for services as attorney, which had not been paid. We do not find any such defense alleged or suggested in the answer, nor was there any proof at the trial of any such lien. He merely said he refused to pay the money on the advice of counsel.

Upon the facts as proved at the trial, the plaintiff was clearly entitled to recover as for money converted by the defendant. The court erred in taking the case from the jury, and directing a dismissal of the complaint

The judgment should be reversed and a new trial ordered, with costs to appellant to abide event

All concur.


source: Caselaw Access Project

author: MERWIN, J.

license: Public Domain

text:
    Martha E. Seymour, App'lt, v. Spring Forest Cemetery Association et al., Resp'ts.

      (Supreme Court, Appellate Division, Third Department,

      Filed April 14, 1896.)

    1. Appeal—Dismissal.
    The fact that an interlocutory judgment is sought to be reviewed on an appeal from the final judgment is no ground for dismissal of the appeal though such interlocutory judgment has been already reviewed on a separate appeal, where there are other questions that may be raised on the proceedings to take the final judgment.
    2. Same.
    An appeal, which is effective for some purposes, will not, upon motion, be dismissed.
    3. Same—Waiver.
    Where the receipt by plaintiff of part of his judgmemt is consistent with the claim which he seeks to raise on the appeal, it does not operate as a waiver of such appeal.
    4. Corporations—Directors—Liability.
    Where a corporation, by its corporate action, the trustees, if they act in good faith within the limit of the power conferred by the charter, using reasonable care and diligence, are not responsible for mere mistakes or errors of judgment.
    5. Same.
    Where a corporation, by its corporate action, through its board of trustees, applies to its own use a portion of the proceeds that it has agreed to pay upon bonds, the trustees, if they acted in good faith under an honest mistake as to the character, extent or existence of the contract, will not be held personally liable for a misappropriation, in addition to the liability of the corporation.
    Appeal from a a judgment in favor of plaintiff against the association.
    Edward K. Clark and Roger P. Clark, for app’lt; A. D. Wales, Lyon, Painter & Hinman, and Israel T. Dayo, for resp’ts.
   MERWIN, J.

The motion to dismiss the appeal will be first considered. The grounds of the motion are (1) that the appeal was improperly taken, and (2) that the plaintiff has waived her right to take or prosecute it. The action was brought to enforce the collection of certain bonds issued by the defendant corporation in 1855 and in 1866. The defendants answered, alleging, among other things that the bonds were not valid. The issues were by stipulation referred to a referee to hear, try, and determine, The referee decided that the bonds were valid, and that the plaintiff was entitled to an accounting of the receipts from the proceeds of sales of lots in the cemetery of the corporation from July 1, 1878, to the time of the commencement of the action, on July 1, 1889. The form of the interlocutory judgment to be entered upon said report was, upon the motion of the plaintiff’s attorney, settled by an order of the Broome special term made the 30th June, 1891, and on the same day ^he interlocutory judgment so settled was entered on the motion of the plaintiff’s attorney. Thereafter the defendants appealed to the general term from the order of June 30, 1891, and also from the judgment of that date, and also made a motion at the general term for a new trial, under section 1001 of the Code of Civil Procedure. This motion was denied, and the order and interlocutory judgment were modified, and, as modified,' affirmed, with costs of the appeal against all the defendants. Seymour v. Association 45 St. Rep. 520. On the 23d July, 1892, on motion of the plaintiff’s attorney, judgment was entered on the decision of the general term, and in accordance therewith; the costs of the appeal being taxed at $169.45. The reference and; and accounting under the interlocutory judgment were then had, and the referee made his report on December, 21, 1892. The plaintiff then made a motion at special term for modification of the report and for final judgment. The defendants made a cross motion, asking, among other things, for a dismissal of the plaintiff’s i complaint as to the individual defendants. Upon these motions an order was granted for final judgment dismissing the complaint as to the individual defendants so far as it demanded a personal judgment against them, and awarded judgment in favor of the plaintiff against the defendant corporation for $14,631.69 damagesj and $230 costs. Judgment was accordingly entered and docketed! on July 4, 1893. On July 20, 1893 the defendants appealed, un-; der the provisions of section 1336 of the Code, directly from the final judgment to the court of appeals. There, 114 N. Y. 336, 63 St. Rep. 372, the judgment and determination of the general term were affirmed, with costs, and judgment upon the remittitur was on the 21st January, 1895, accordingly entered in the supreme court; the costs against the defendants being taxed at $146.48.

The present appeal was taken by the plaintiff on the 28th January. 1895. By the notice an intention is declared to bring up for review certain provisions of the interlocutory judgment of July 23,1892, and also certain provisions of the interlocutory j udgment of Jnne 30, 1891. The interlocutory judgment first named was the one entered on the decision of the general term upon defendant’s appeal, and took the place of the last named, which was entered on the order of the special term upon the report of the referee. The claim of the defendants on this motion is that the judgment of July 23,1892, cannot be here reviewed, becanse.it is in substance, the judgment of the general term, and that a review here of the judgment of June 30,1891, is not permitted by section 1316 of the Code, which provides only for review of an interlocutory judgment “which has not already been reviewed, upon a separate appeal therefrom, by the court or the term of the court, to which the appeal from the final judgment is taken.” If this ■claim is tenable, it does not follow that the appeal of the plaintiff should be dismissed, for there are other questions that may be raised on the proceedings to the final judgment. Code, § 1350. The appeal, being effective for some purposes, should not, upon motion, be dismissed. -Whether some particular question can be considered can, if necessary, be more properly determined when we come to the consideration generally of the appeal.

The second ground for the dismissal of the appeal is based on the fact that on the 28th July, 1895, the plaintiff received of the defendant corporation the sum of $6,414.47, in full satisfaction of the bond given by such defendant on the appeal to the court of appeals; and also on the fact that the plaintiff was paid the judgment for costs awarded against the defendants by the general term, amounting to $169.45, and acknowledged satisfaction thereof ©n the 17th April; 1895. The bond above referred to was an undertaking that the appellants on that appeal should pay all costs and damages which might be awarded against them on the appeal; and that, if the judgment appealed from was affirmed, the appellants would pay the sum recovered or directed to be paid by the judgment, or the part thereof as to which it was affirmed, except that the liability of the sureties should not exceed $6,414.47. In the receipt given by the plaintiff for the money it is stated that the money shall be applied first to the payment of the costs in the judgment of affirmance, amounting to $146.48, and the balance towards the payment of the damages awarded against the association in the judgment of July 4, 1893, being part of the moneys directed to be paid by the judgment. The only error claimed by the plaintiff as to the judgment against the defendant corporation is that the judgment is not large.enough by a certain item of interest, amounting to $602.37. Her receipt -of a part of the judgment was consistent with this claim, and -should not be held to be a waiver of her right to waive the question which she seeks to raise on the appeal. Knapp v. Brown, 45 N. Y. 207, 210; Clowes v. Dickenson, 8 Cow. 328. Nor does her receipt o£ the costs awarded to her on the appeal to the general term affect her right to appeal from the final judgment. That award of costs was absolute. Farmers' Loan & Trust Co. v. Bankers’ & Merchants’ Tel. Co., 109 N. N. 342; 15 St. Rep. 516. The motion to dismiss should be denied.

We come now to the question raised on the appeal. The plaintiff claims (1) that the judgment against the defendant corporation of $14,613.69, is to small by an item of interest amounting to the-sum of $602.37, and (2) that she was entitled to have judgment against the other defendants personally for the amount found due her and the costs.

1. .The referee, upon the accounting provided for in the interlocutory judgment, found that the total amount of the receipts of the defendant corporation from the sale of lots and the sale of timber from July 1, 1878, to July 1, 1889, was the snm of $21,-449.14 ; that the amount due on the bonds on the 1st day of July, 1889, arising out of such Receipts, was the sum of $15,320 81; that theSre was paid on said bonds from said receipts, between the-1st day of July, 1878, and the 1st day of July, 1889, the sum of $5,559.30, leaving a balance of $9,761.51; and, adding interest upon all deferred payments semiannually as in case of partial payments, which interest amounted to the sum of $2,504.64, there remained due and unpaid from the defendant corporation to the plaintiff upon the bonds on the 1st July, 1889, the sum of $12,-266.15. The amount of the judgment is arrived at by adding to-this sum the interest on the principal sum of $9,761.51 from July 1, 1899, to the date of the judgment. The plaintiff claims that, the interest on the entire sum of $12,266.15 from July 1, 1889the date of the commencement of the action, to the date of the-judgment, should have been added. The interest on $2,504.64-from July 1, 1889, to the date of the judgment is $602.37. This is compound interest, but the plaintiff says that for the purpose of the computation of interest a rest should be made at the date of the bringing the suit. The cases of Howard v. Farley, 19 Abb. Praa. 126, and Connecticut Mut. Life Ins. Co. v. Cleveland, C. & C. R. Co., 41 Barb. 9, are cited to sustain this view. In the Howard Case it was held that when, by the condition of a bond, the interest ts payable at specified times before the principal sum becomes due, such interest, on a demand of it after it has accrued, becomes principal, and will bear interest from the time of such demand, or if a demand is not proved, from the commencement of the suit. In the Connecticut Insurance Case interest was allowed on interest coupons attached to a railroad company bond from the time they became due. This latter case was in effect’ overruled in Williamsburgh Sav. Bank v. Town of Solon, 136 N. Y. 465 ; 49 St. Rep. 840, and Beattys v. Town of Solon, 136 N. Y. 662; 49 St. Rep. 847. The action here is not an action to recover on a specific promise to pay interest at a' certain date, but-is an action to recover the amount of certain payments, which it is alleged the corporation ought to have made, but did not, and' the plaintiff is allowed interest on the unpaid payments treated as principal sums. We are referred to no authority for making, in such a case, a rest at the date of the commencement of the suit, land in that way allow compound interest. The item claimed by the plaintiff is not, we think, allowable.

2. The more difficult question to determine is whether the defendants other than the corporation are liable in this action for .any portion of the claim of the plaintiff. On and prior to June 1,T853, eleven persons were the owners of about thirty-three acres of land in the then village of Binghamton, which they had 'laid out as land for a cemetery, and filed a map thereof in the clerk’s office of the county. They had expended large sums in ithe imprpvement thereof and in preparing it for burial purposes, and it was known as “ The Spring Forest Cemetery.” On the 6th December, 1853, at a meeting of the proprietors, at which .nine of them were present, it was resolved that a corporation be formed, with nine trustees, and that the corporation purchase of' the owners the land referred to, giving therefor bonds of the corporation amounting in the aggregate to $30,000, “conditioned and covenanting on the part of this corporation that they, for twdyears from this date, applying one-half of their entire receipts in ¡payment of said bonds, and after the expiration of said two years "¡that they will apply seventy-five per cent, of all their receipts upon said bonds; that said receipts shall be divided and applied upon such bonds semiannually.” On the 8th December, 1853, in .pursuance of this resolution, a certificate of the incorporation of' the defendant the Spring Forest Cemetery Association was duly filed under the act entitled “ An act authorizing the incorporation of rural cemetery associarions,” being chapter 133 of the Laws of 1847, and the laws amendatory thereof. The nine trustees named in the certificate were nine of the proprietors. In June or July, 1854, the land referred to was conveyed to the corporation by the-owners. In 1855, at divers dates, 22 bonds, amounting in the aggregate to $15,000, were issued by the corporation. Bach bond referred to the purchase by the association of the said property “ at the price of thirty thousand dollars, which sum they are to pay, and the interest thereon, by applying towards the payment of" the said sum and interest, for the first two years succeeding the date hereof, one-half of the proceeds of the sales of lots in the aforesaid-cemetery and the receipts of the said association, and after said two years seventy-five per cent, of the proceeds of the sales of said lots and the receipts of said association; the said proceeds and receipts to be applied in semiannual dividends, and residue of the said proceeds and receipts to be applied in each year to the improvement of said cemetery, and the necessary expenses thereof;” and each bond stated that it was given to secure the payment of a portion of the purchase money, .and the application of the proceeds and receipts as therein specified, and was conditioned for the payment of the sum therein named and interest “by paying and applying upon this bond such portion of .the aforesaid proceeds- and receipts above particularly described, in semiannual dividends, as the obligee herein will be entitled to receive upon a pro rata division of said proceeds and receipts among all the holders of the-bonds given by said association to secure the payment of the said thirty thousand dollars, and shall also apply the residue of said proceeds and receipts in each year to the improvement of the said ■cemetery, and the necessary expenses thereof.” In 1866 the corporation issued six other bonds, amounting in the aggregate to .$5,000. In these it was recited that the association had purchased the said property at the price of $30,000, “ which sum they are to pay, and the interest thereon from March 28,1855, by applying towards the payment of said snm and interest one-half of the proceeds of the sales made after March 28, 1855, of lots in the aforesaid cemetery, and of the receipts of the said association after March 28, 1855, the said proceeds and receipts to be applied in semiannual dividends; and residue of the said proceeds and receipts to be applied in each year to the improvement of said cemetery, and the necessary expenses thereof ” ; and the condition of these bonds was for the payment to the obligee of his proportionate amount of one-half of the said proceeds and receipts, and for the application of the residue of the proceeds and receipts to the Improvement of the grounds of the cemetery and the necessary expenses thereof. . No other bonds were issued. The twenty-eight bonds above described are the basis of this action, and they 'are set out in the complaint. It is alleged that the plaintiff is the -owner and holder of the same; that since July 1,1878, no account has been rendered to the holders of the bonds of the income and receipts of the association, or of the amount applicable to the payment of the bonds; that demand has been made of the association and of its officers for an account of the receipts, and such demand has been refused; that the defendants other than the corporation ■claim to be and are acting as trustees of the association, and have the custody of all the money and property of the said association; that a large amount of money—but what amount the plaintiff is unable to state, further than that it is between five thousand and twenty-five thousand dollars at the time the complaint is made— has been received by the defendants, which is applicable and .•should be applied on the bonds; that the defendants neglect and ■refuse to make any account whatever, refuse to recognize the validity of the bonds, and refuse to make any payment, though such account and payment have often been demanded. Judgement is demanded for an accounting bv defendants of all the receipts of the association since July 1, 1878, and that plaintiff be paid the net amount applicable on the bonds, with interest on the sums withheld from the time the payments withheld should have been applied, and that the individual defendants be held personally liable for the payments so withheld, and be adjudged to pay the same. In the answers of the defendants it is admitted that the association was incorporated substantially as alleged; that no bonds were issued other than the alleged bonds mentioned in the ■complaint; that the individual defendants claimed to be and are acting as trustees of the association, and that as such trustees they have the custody of the funds and property of the association, and "that they refused to'recognize the validity of the alleged bonds, ■and to make .payments thereon; that paper writings similar in form and purport to those alleged in the complaint were executed by certain parties, but their validity is denied. All the other allegations of the complaint are denied. Defenses are set up going to the "validity of the bonds and the existence of any debt for the purchase money of the property.

Upon the trial of the issues before the referee, it appeared that Giles W. Hotchkiss and Lewis Seymour, who were two of the original owners, and the former a trustee of the association and the latter its secretary, managed and controlled the business and financial affairs of the association from its incorporation down to the death of Seymour in January, 1873, and that thereafter Hotchkiss continued such management and control down to the time of his death, onJuly 5, 1878; that, before the death of Seymour, he and Hotchkiss became the owners jointly of all the said bonds, and, after the death of Seymour, Hotchkiss continued to own and control the same to the time of his death, and after that they were transferred to the plaintiff; that from the incorporation of the association down to the death of Hotchkiss the receipts from the sale of the lots amounted to about $44,000, and that Hotchkiss and Seymour received as applicable to the payment of the bonds, principal and interest, about the sum of $20,000. It was found by the referee that from July 1, 1878, to July 1, 1889, the aggregate amount received by the corporation for the sale of lots was the sum of $21,670.89 and for the sale of timber in 1880, $230, and that the proof failed to show how much of the entire sum of the $21',000 of bonds, principal and interest, remains unpaid, but that such balance amounts to several thousand dollars. The referee decided that the bonds were valid; that the plaintiff was entitled, as to the bonds issued in 1855, to have a proportionate amount of 75 per cent, of the proceeds of sales of lots applied thereon, and as to the bonds issued in 1866 an application of the proceeds on the basis of 50 per cent, being applicable to the payment of the bonds; and that the plaintiff was entitled to an accounting by the defendant of the proceeds since July 1,1878, to the commencement of the action on that basis, and an accounting for the purpose of ascertaining and stating the exact amount that remains unpaid on the bonds. Judgment was ordered by the referee in favor of the plaintiff, in accordance with the findings, with costs.

The question of the liability of the individual defendants does not seem to have been considered by the referee, except as it may be involved in one of the findings of law that “the plaintiff is not entitled to judgment against the defendants Erastmus D. Robinson, Tracy R. Morgan, Job N. Congdon, Benjamin Devoe, E. B. Stephens, Alonzo C. Matthews, Harris Rodgers, Robert Brown, and Cyrus Strong for having misappropriated the funds so received by them, unless upon an accounting it shall appear that they have misappropriated said funds.” The same finding, with others substantially in the form made by the referee, appears in the interlocutory judgment entered July 23, 1892, and by such judgment a referee was appointed “to take and state the accounts as herein provided.” The question of personal liability was not considered Toy the general term. In the opinion delivered it is said :

“The extent of the liability, if any, of the defendants other than-the corporation, is, in effect, undetermined by the referee. When the hearing shall be had upon the accounting, the facts in regard thereto will be developed, and a conclusion be reached more intelligible than can be declared upon the present state of the evidence. We forbear to express any opinion upon that subject at this stage of the case.”

In the interlocutory judgment, as settled by the special term,, and entered June SO, 1891, there was a provision that the plaintiff" recover costs generally against all the defendants. This was-modified by the general term by allowing costs against the defendant corporation only, and reserving all questions as to costs against the other defendants until the further direction of the court. The referee, upon the accounting, found that the amount unpaid on the bonds on the 1st July, 1889, was $42,272.70; that the total amount of the receipts of the corporation from the sale of lots and timber from July 1, 1878, to July 1, 1889, was $21,449.-14, of which $15,820.81 should have been paid on the bonds according to the principles laid down in the interlocutory judgment.. It was also found that the amount paid out during the same period' upon expense account was $8,800.70. This did not exceed 50 percent. of the proceeds, but did exceed, by the sum of $3,847.21,. the balance of the proceeds after applying at the rate of 75 per; cent, on the bonds of 1855 and at the rate of 50 per cent, on the-' bonds of 1866. The claim of the plaintiff is that the individual! defendants are personally liable to the plaintiff for this sum of! $3,347.21' The main item of the expense account was the salary of the superintendent of the cemetery, which for about seven years! was at the rate of $600 a year, and for three years at the rate of-$800 a year. The superintendent was Mr.. Robinson, one of the original defendants,'and for many years the president of the board.' A superintendent was necessary, and the salary paid was fair and .reasonable for the services rendered. It is found that the moneys-so paid out on expense account were paid with the approval of all the trustees who were members of the board at the time such pay-meats were made, except the defendant Strong, who took no parti in the proceedings of the trustees, and that no separate account was kept by the trustees showing the amount received applicable-to the payment of bonds, and the amount applicable to the pay-; ment of the cemetery expenses, and payments were made out of the general fund without reference to the source from whence came. When this action was commenced, in July, 1889, there-; were nine trustees, and they were all made defendants. Since then! three have died,—Robinson, Stephens, and Rodgers. The per-; sonal representatives of Rodgers have been substituted in his place. As to the other two the action has been continued without them. The defendant Morgan was one of the original proprietors, and trustees, though he was not present at the meeting when the formation of the 'corporation was agreed upon. The defendants Congdon and Devoe have been trustees since July, 1878; the fendant Matthews from July, 1879 ; and Brown and Rodgers from 1883 or 1884. The referee finds that “ each of the defendants acted in good faith, and in the exercise of his honest judgment, and the individual defendants have not collectively or separately misappropriated any of the funds belonging to the corporation defendant, and are not personally liable for the acts performed by them as trustees of such corporation,” and that the plaintiff is not entitled to judgment against any of them. He also found that “under the complaint plaintiff cannot recover against the personal defendants for money of cemetery lost by negligence of money mistakenly expended for the cemetery.” It may be that the referee in some of his findings went beyond the scope of the reference, still, as the special term, in ordering judgment, adopted the conclusion of the referee that the defendants were not individually liable, and as to them dismissed the complaint, it must be assumed that upon the facts the view most favorable to the defendants was taken.

It is claimed upon the part of the plaintiff that the individual defendants are liable to plaintiff as for1 money had and received. Assuming that the allegations of the complaint are sufficient to allow the plaintiff to take this position, and assuming that by the clause in the interlocutory judgment as to misappropriation herein-before quoted, there is no limitation upon the ground of any recovery by plaintiff, or, if a limitation, that the plaintiff is not bound by ft, are the facts such that an action for money had and received will lie ? It is argued that the individual defendants in their answer admit that they have the custody and control of the money that the <?plaintiff seeks. The answers cannot properly be construed in that way. They only admit that the individual defendants are trustees of the association, and as such trustees have the custody of the funds and property of the association. Such possession is simply the possession of the corporation. The defendants, as individuals, except the defendant Robinson, have received none of the money. There was no contract between them and the plaintiff. The title of the money was in the corporation. “The directors of trustees of a corporation are mere agents. They have not the legal title to the corporate.property.” Mor. Priv. Corp. § 523; Ang. & A. Corp. § 595; French v. Fuller, 23 Pick. 108. What right the plaintiff may have had against Robinson, one of the original defendant’s, who received for his services a portion of the fund, it is not necessary here to inquire, as Robinson is not now in the case. The defendant Matthews was the treasurer of the corporation, and as such received its moneys, and paid them out on the order of the board of directors. Hone of the present defendants received to their own use any of the moneys in question. The judgment obtained by the plain tiff against the corporation included those with other moneys. The plaintiff relies on the case of Ross v. Curtis, 30 Barb. 240, affirmed in 31 N. Y. 606. In that case the defendant was a supervisor of a town, and had receivedfrom the county treasurer a specific sum for the express purpose of applying the same upon certain bonds against the town, some of which were held by the plaintiff. The money had been raised in pursuance of a statute that directed its payment to the supervisor, to be by him applied in payment on the bonds on or before a certain date. It was held that the defendant could not question the validity of the bonds, and that an action for money had and received would lie. A number of cases are also cited where it has been held that a town could maintain an action as for money had and received against the county for moneys raised by taxes on railroad corporations and applied by the county for its general purposes, but which should, under the statute, have been paid over to the town for application on bonds issued by it for the benefit of the railroad corporation. In Mills v. Mills, 115 N. Y. 85; 23 St. Rep. 604, the suit was for a surplus in the hands of a mortgagee after the payment of the mortgage. Those cases do not seem to sustain the contention of the plaintiff. A cause of action against these individual defendants as for money had and received is not, we think, made out.

It is further argued by the plaintiff that the individual defendants are liable in this action as for a misappropriation to the extent of $3,347.21. It is to be observed that in the complaint there is no charge of misappropriation, or fraud, or negligence, or of any tortious act. And within the rule that the recovery must be according to the allegations of the complaint, it is quite doubtful whether the plaintiff is in a position to raise the question of misappropriation. It is not apparent that by any provision in the report of the referee upon the issues or in the interlocutory judgmen there was any design to enlarge the scope of the complaint. Assuming, however, that the question may be considered, can it be said as matter of law, upon the evidence and such findings*, thereon as the referee on the accounting may have properly made, or the special term be presumed in support of its judgment to have made, that the plaintiff was entitled to a judgment against these defendants as for a misappropriation? The rights of the plaintiff against the corporation are not founded upon any statute, but upon a contract. So that it is not a question whether the moneys were paid illegally or ultra vires, but whether the contract was properly performed. It was finally held that the corporation had violated its contract, and the question now is whether its agents, the trustees, are personally liable, as well as the corporation, for the 'deficiency. The evidence tends to show, and we must, I think, assume, that these defendants acted in good faith, and in the exercise of their honest judgment; and that the moneys, the expenditure of which was authorized by them as trustees, and is here complained of, were expended for the benefit of the corporation for its necessary running expenses. The expenditure, therefore, was in the line of their duty to the corporation. They were advised that the bonds were invalid, or had been extinguished. The circumstances under which the corporation hüct been managed and controlled from 1855 to 1878 by Seymour and Hotchkiss, who during that time became the owners and holders of the bonds, would naturally lead them to question their continued validity. By section 7 of the act under which the corporation was organized (chapter 133 of the Laws of 1847, as amended "by chapter 122 of the Laws of 1853, passed and taking effect. April 5, 1853), the application of the proceeds of sales of lots to> the payment of the purchase money of cemetery lands was limited ■to the one-half thereof, and the other one-half was directed to be appropriated to improvements and incidental expenses In I860, by chapter 163 of the laws of that year, the act was further amended by authorizing the trustees to issue certificates of outstanding indebtedness for purchase money and for improvements, and it provided for the keeping of a distinct and separate account of such certificates in the cemetery books, and applying at least twice in each year the proceeds of sales of lots “ in the manner provided by the seventh section of the act hereby amended.” This left the limitation in force as it was made by the amendment of 1853. In 1874, by chapter 245, section 7 was-amended, and the limitation referred to was left out. It was, however, restored by chapter 108 of the Laws of 1879. The amendment of the act of 1860 by chapter 433 of the Laws of 1884 did not relate to the manner of the application of the proceeds. So that when these defendants, or a portion of them, in 1879, entered upon the management of the property, they found in the statute this limitation apparently applicable which allowed only fifty per cent, to be applied on the bonds. They found also that in the bonds of 1866 it was stated that the original agreement of purchase was that one-half of the proceeds should be applied on the price of $30,000 and the balance devoted to. improvements and expenses. True, the defendants were notified of the claim of plaintiff. It was made by her in or prior to 1880, and in substance it was yielded to* and payments made to January, 1883. Payments were then stopped until the questions at issue should be legally determined, but no • action was taken by plaintiff to assert her rights until July, 1889-In the meantime the defendants, or such of them as were acting, authorized the expenditure of only so much of the proceeds as was necessary to pay the necessary running expenses, and the character and amount of their expenditures was known to the plaintiff or those that represented her. The balance of the proceeds was preserved, and the plaintiff has, in effect, had the benefit of'that. As a rule, directors or trustees of a corporation, if they,act in good faith within the limit of the powers conferred by the charter, using reasonable care and diligence, are not responsible for mere mistakes or errors of judgment (Hun v. Cary, 82 N. Y. 65, 70; 3 Thomp. Neg. § 4103); and it is said they are not responsible foian excusable mistake of law, even though it relate to the extent of their power under the charter (1 Mor. Priv. Corp. § 557 Thomp. Neg. § 4109; 2 Cook, Stock, Stockh. & Corp. Law, § 682). In Vance v. Insurance Co., 4 Lea, 385, it was held that directors who act in good faith and with reasonable care and diligence, but nevertheless fall into a mistake, either of law or fact, are not personally liable for the consequences of such mistake. The view which these defendants took of the extent of ■fhe obligation of the corporation to the plaintiff turned out to be mistaken one. It was 'said by the court of appeals, as one of gthe reasons for its judgment, that the bonds of 1855 represented purchase money, and also improvements, and that, therefore, the agreement to apply seventy-five per cent, was legal. The corporation, by its coi’porate action, through its board of trustees, applied to its own use a portion of the proceeds that it had agreed to pay upon the bonds. The fact that these defendants, some or all of them, formed a part of the board when such corporate action was taken, if they acted in good faith, under a.n honest mistake as to the character, extent, or existence of the contract, should not be held to be personally liable in addition to the liability of the corporation.

It is further argued by the plaintiff that she has a remedy under the-provision of the act of 1860, which provides that the trustees should keep a separate account of certificates for purchase money and those for improvements, and apply at least twice a year the proceeds of sales of lots in the manner provided in section 7 of the act of 1847, as amended in 1853. To this proposition it may be said that no such remedy is counted upon in the complaint. This is not an action for damages for neglect of duty. Besides, the bonds of 1855, if they may be termed “ certificates,” provided on their face for the payment on the purchase money of a greater proportion of the proceeds than the law allowed. This defect was finally deemed to be cured as against the corporation by proof that in fact the term “ purchase money," us stated in these bonds, included improvements made by the original proprietors. Until an adjudication to this effect, and especially in view of the statement of the purchase as contained in the bonds of 1866, it might be said with considerable force that "the trustees had the right to act on the theory that, as stated in the bonds of 1855, the $30,000 was in fact purchase money, and so a greater proportion of the proceeds than the law allowed was sought to be applied. The act of 1860 did not authosize the application of more than fifty per cent, on purchase-money certificates, and if the trustees had the right to assume that the bonds of 1855 at most had no greater effect than purchase-money cer-' tificates, it is not clear that the plaintiff has any good ground for complaint. By section 7, above referred to, it was left to the discretion of the trustees to determine what proportion of the fifty, per cent, applicable to improvements and expenses should be applied on improvements and what proportion to expenses. :

We have thus considered the main features of this case, and we find no good reason for disturbing the decision of the special term that the present individual defendants are not in this action personally liable. The judgment should be affirmed.

Motion to dismiss denied, with $10 costs.

J udgment and order affirmed, with costs.

All concur.


author: BARTLETT, J.

text:
    Edward F. Milliken, Resp't, v. Pauline Keppler et al., App'lts.

      (Supreme Court, Appellate Divison, First Department,

      Filed April 17, 1896.)

    1. Contract—Building—Construction.
    Where the performance of a contract is made ' contingent upon strikes and boycotts, it includes any strike which has a legitimate tendency to retard the contractor, whether occurring in his shops or elsewhere.
    2. Same.
    But, under such contract, the contractor is not at liberty to order material from a striking factory and then rely upon this provision for his protection.
    Appeal from a judgment dismissing a counterclaim.
    The appellants, the owners of certain land on the nortwest corner of Mulberry and Jersey streets, in the city of New York, on ■July 7, 1892, made a contract with the defendant-respondent the Carrere & Haas Iron Works whereby the latter agreed to erect and finish a building thereupon in accordance with certain plans •and specifications, furnishing the iron and all other necessary" materials specified in the iron specications. The work was to be 'done February 1,1893. The seventh clause of the contract read as follows: “The parties of the second part herein (Carrere & Haas Iron Works) agree with the parties of the first part that the said iron work for this new building shall be finished by them in the specified time as hereinbefore mentioned, and which item (as to said time) is considered herein and under this contract a most important feature; but should they fail to complete the job up to aforesaid ■date, and it should be proven that the delay is caused by the said parties of the second part, then they shall be held responsible and answerable, for the loss of the amount of rent caused to the parties of the first part on account of not having the building ready for .renting purposes by the first day of February, 1893.” Between the words, “In witness whereof,’ etc., and the signatures of the parties to the contract, were inserted the words, “Contingent upon strikes, boycotts, and delays unavoidable.” The last three words were stricken out before execution, leaving the contract contingent only upon strikes and boycotts. The work was not finished by February 1, 1893, and the appellants set up a counterlaim for loss •of rent. The plaintiffs and all parties other than the appellants, and the Carrere & Haas Iron Works and its receiver, are subcontractors who have filed liens against the property: A stipulation was entered into by all parties fixing the amount still due the iron works and the lienors under the contract, and for extra work. This stipulation is without prejudice to the counterclaim of the ■owners It disposes of all .questions except the validity of this counterclaim, which was dismissed by the trial court.
    Louis C. Raegener, for appellants; R. M. Martin, for respondent lienors; L. Sidney Carrere, for respondent receiver; Luke A. Lookwood, for plaintiffs respondents.
   BARTLETT, J.

The questionwhether or not the trial court erred in dismissing the counterclaim of the appellants is one of mixed law and fact. It will be well to consider first the construction to be given to the contract. The performance or the contract was made contingent upon strikes and boycotts. The appellants claim that the strikes referred to were only such as might occcur in the shops of the contractor. We see no reason for thus limiting the words. The obvious intent in inserting the clause was to protect the contractor from liability of delays which it could not help, so far as-they should be due to strikes. There is no reason to believe that any strike which had a legitimate tendency to retard the contractor was not meant to be covered by the expression in the contract. It does not, however, follow from this that the contractor was at liberty to order material from a striking factory and then rely upon the clause for its protection. A duty rested upon it to perform the contract if possible, and to exercise care, diligence and skill to this end. All that was obtained was immunity from the general rule of law which refuses to accept inevitable and unforseen accidentas an excuse for the nonperformance of an absolute agreement. Harmony v. Bingham, 12 N. Y. 99.

The facts are that the contractor made a contract with the Columbia Iron & Steel Company in March, 1892, providing generally for the furnishing of material of the sort required later in performing this contract; that on July 7th, the day when the contract was signed, the president of the Carr ere Works wrote the Columbia Company notifying it, and directing the forwarding of material; and that he learned a day or so later that the Columbia Company’s men were not at work, but took no immediate steps to place the-order elsewhere. He testifies:

“Previous to the signing of -the contract w’i-th the Puck people, on July 7th, we received bids, or tried to receive bids, from other concerns; and there was no concern that I would have liked to-have intrusted that work with at that time, outside of one, which were so busy that I did not think it advisable to go to them, especially as I had the promise of the vice -president and the manager of this mill that, if the contract were given to them, it would take precedence over all others.”

It also that this was the of the Homestead strike, and that the beam manufacturers were having a good deaf of difficulty in supplying orders. Mil liken, who had been engaged in the business of iron construction for fifteen years, testified that, it took anywhere from six to eight weeks in August and September to fill an order, on account of the demand during the summer months.. But the precedence which had been promised to the Carrere Works resulted in a delivery within two weeks from the time the works of the Columbia Company started up. Milliken’s estimate was probably conservative for this particular year. He was asked: “Were you delivering continuously at that time (August, September, and October, 1892)?” and he replied: “No. We were not delivering continuously. Some of our orders we were back three months on.” It also appeared by the evidence of the secretary of the Columbia Company that not until the end of July or the beginning of August was the situation at the works regarded as serious. The company’s contract with the labor association had expired June 30th, at, which time the men quit work; but negotiations as to wages were pending, and it was expected day by day that a settlement might be reached. All of this evidence was practically uncontradicted. The fair inference from it is that the contractor was justified in the belief that it would get justas good and prompt attention by leaving the order where it was originally placed as by attempting to place it elsewhera It follows that the contractor, while exercising reasonable prudence and diligence in executing its eontract, was prevented by “strikes.’’ The substantial claim of failure to perform was the delay in the delivery of the beams, and in this the contractor was not liable, under a fair interpretation of the contract

The view we have taken renders it unnecessary to discuss the testimony in detaill, or to consider at length the other question presented by counsel. Our conclusion, however, is that the delay caused by the strike in furnishing the beams was immaterial, in view of the tardiness of the mason, and that the acts of the appellants constituted a waiver of the delay. Our judgment might well rest upon these grounds, quite independent of the view we have taken of the strike clause. We have also examined the record as to the minor details of the work, notably the mullions, lintels, and shutter eyes; and we think that the decided weight of evidence favors the view that the contractor was not in default in any of these matters.

The judgment should be affirmed, with costs.

All concur.


author: BISCHOFF, J.

text:
    Amandus H. Cruse, Resp't, v. Robert G. Findlay, App'lt.

      (Supreme Court, Appellate Term, First Department,

      Filed April 27, 1896.)

    1. Statute of frauds—Oral agreement.
    The fact that the promise is oral does not affect the right to a recovery, where the evidence shows the agreement to have been an original one, and not a collateral assumption of another’s debt.
    3. Pleading—Statute of frauds.
    The statute of frauds is not available to the defendant, where it is neither pleaded in defense nor alluded'to upon the trial.
    3. Witness—Contradiction of one’s own.
    Where the matter in dispute is directly at issue in the case, a party is not bound by, nor precluded from, contradicting the adverse testimony of his own witness.
    Appeal from a judgment in favor of plaintiff.
    William C. Reddy, for app’lt; J. Bradley Tanner, for resp’t.
   BISCHOFF, J.

The plaintiff performed certain work upon an experimental device required by one Blanchard, an inventor, and the defendant was sought to be charged with the cost, upon his verbal promise to assume the debt. From the evidence, the fact that there was such a promise, and that the plaintiff performed the work in reliance upon it, appears quite sufficiently; and, while' there was a conflict of testimony upon the point, the justice was well authorized to credit the plaintiff’s version of the transaction. The fact that the promise was oral does not affect the plaintiff’s'' right to a recovery, since the evidence shows the agreement to have been an original one, and not a collateral assumption of another’s debt. Furthermore, the statute of-frauds is not available to the defendant, since it was neither pleaded in defense, nor alluded to upon the trial. Crane v. Powell, 139 N. Y. 379; 54 St. Rep. 659. There is also sufficient evidence tfiat the work was performed according to the plaintiff’s contract, and we cannot say that the preponderance of the proof, upon the conflict of evidence as to. its actual terms, is with the defendant. It is true that Blanchard, called as a witness for the plaintiff, testified to an agreement which was contrary to that shown by the plaintiff’s own testimony as to the requirements of performance; but the matter thus in dispute was directly at issue in the case, and therefore the plaintiff was not bound by, nor precluded from contradicting, the adverse testimony of his own witness. 29 Am. & Eng. Enc. Law, 812, and citations.

It is claimed that evidence as to former transactions, or of a nature similar to that in suit, was improperly admitted; but it appears from the record that the admission was conditional upon the evidence being properly connected, and the defendant not only failed afterwards to move that it be stricken out, but himself brought out testimony upon the point in explanation of the evidence in question.

We find no prejudice to the appellant in the rulings upon the trial, nor in final disposition of the case, and the judgment therefore should be affirmed, with costs.

All concur.


author: McADAMS, J.

text:
    Harry Thorp, Resp't, v. Emil Heyman, App'lt.

      (Supreme Court, Appellate Term, First Department,

      Filed April 27, 1896.)

    Pleading—Amendment.
    An amendment may be refused, if it be material, unnecessary or will not accomplish the purpose for which it is intended.
    Appeal from a judgment in favor of plaintiff.
    H. J. Hindes, for app’lt. Henry J. Goldsmith, for resp’t.
   McADAMS, J.

The action is by the plaintiff, on his own behalf and as assignee of one Riser, for commissions claimed to have been earned by them as canvassing agents while in the employ of the defendant. The defendant is the owner of a studio, in which photographs are taken and frames sold. His speciality is enlarging pictures, his plan being to employ agents to go through the country and solicit orders, agreeing that, if persons will supply their photo.graphs, the defendant will enlarge them free of cost, provided, that, when each picture is ready, the customer buys a frame at an expense of at least $3.95. The agreement with the plaintiff and his assignor was that they shouldhave 75 cents on all orders that were good, and 20 per cent, of 75 cents for those that were not good. It «was, therefore, expected that many of the orders would not be profitable; but they were, nevertheless, to be paid for as stated. The plaintiff procured forty-eight orders, and his assignor forty-seven,—making, in all, ninety-five. The defendant proved that twenty-eight of these orders were bad, and there was reason to believe that some were what the witnesses described as “ fake,” or fraudulent, orders; but there was no satisfactory proof upon this subject. Figuring on the proper basis, there was due to the plaintiff and his assignor just about the amount for which the justice ¡directed a recovery. Mr. Helsey, the manager of the defendant’s ¡portrait department, furnished the plaintiff and his assignor with slips which tend to corroborate the plaintiff’s evidence as to the balance due, and taken as a whole, the judgment is fully sustained 'by the evidence presented.

Upon employing the plaintiff and his assignor, the defendant ¡gave them each $25. They claimed this was a bonus to secure their services. Such was, no doubt, the fact, and the justice evidently so found. The defendent undertook to amend his answer by setting up a counterclaim, in the hope of recovering back or obtaining credit for the $50, and the justice refused to allow the amendment." Assuming as we do, that the justice might properly •have granted the application (Code, § 2944; Consolidation Act, § 1347), his refusal to do so was not error. An amendment may be refused, if it be immaterial, unnecessary, or will not accomplish the purpose for which it is intended. 1 Enc. Pl. & Prac. 523.

The case was decided upon conflicting evidence. The justice, ¡having seen the witnesses, and observed their manner of testifying, .was best qualified to determine the questions of credibility and weight of evidence; and the judgment rendered by him must be affirmed, with costs. All concur.


author: DALY, P. J.

text:
    Byron A. Beal, Resp't, v. American Diamond Rock-Boring Company, App'lt.

      (Supreme Court, Appellate Term, First Department,

      Filed April 27, 1896.)

    1. Assumpsit—Money loaned—Exchange op checks.
    An exchange of checks for equal amounts, between two parties,—one check being paid, and the other dishonored,— imports a loan to the party-receiving the money; and if the dishonored check he subsequently surrendered, without payment or satisfaction, an action for the amount of the loan may be maintained.
    35. Same—Evidence.
    The fact that the dishonored check was made by a company, to the order of a party who was its president, and the exchange was made by him with the plaintiff, and that he subsequently retired the check by giving two bonds of his own, taking hack an option to repurchase on or before a certain date, is not conclusive that the loan was made to the payee of the check, and not to the company of which he was president, nor that the subsequent surrender of the check, and receipt of the bonds, was a payment of the check.
    3. Same—Questioitfor jury.
    Upon the facts of the case, it was proper to submit to the jury tlie question as to whom the loan was made, and whether it was repaid.
    Appeal from a judgment of the general term of the city court of the city of New York, affirming a judgment.
    Burton N. Harrison, for app’lt; Putney & Bishop, for resp’t.
   DALY, P. J.

The transactions involved in this action were had between the president of the defendant company, Mr. Tompkins, and the plaintiff. In May, 1891, Mr. Tompkins called on the plaintiff, with a check of the company, signed by Mr. Tompkins, the president, and Mr. Bostelmnnn, the treasurer, to the order of Mr. Tompkins, for $750, dated May 4, 1891, and indorsed by Mr. Tompkins. Mr. Tompkins asked for an exchange of checks, and received from the plaintiff his check to the order of the defendant, the American Diamond Rock-Boring Company, for $750, dated May 4, 1891. This check was indorsed by Mr. Tompkins, “ American Diamond Rock-Boring Company, C. H. Tompkins, Prest.,” and collected. The check of the company, for which it was exchanged, was deposited by the plaintiff for payment, and returned unpaid. Some days afterwards Mr. Tompkins called on the plaintiff, and received the check on giving the plaintiff his own check for interest and commission, $37.50, and two bonds of the Idaho Mining and Irrigation Company; receiving from the plaintiff an agreement to reconvey the bonds to Mr. Tompkins on the payment of $750 by or before June 6, 1891. The exchange of the check of the defendant company for the check of the plaintiff, and the payment of the latter while the former was dishonored," imported a loan of money by the plaintiff to the company ; and" the subsequent surrender of the latter check, if, upon such surrender, there was no payment of the lean, nor release of the company,1 entitled the plaintiff to maintain ah action • against the company for the original consideration, to wit, the money loaned.

The case was submitted to the jury on the issue raised by the answer, as to whether the loan was made to Mr. Tompkins individually, or to the company of which he was president, and whether it had been paid and discharged. At the close of the whole case the defendant moved for a direction of a verdict in its favor, which-was denied, and an exception taken. The contention of the defendant that the transaction was a loan by the plaintiff to Mr. Tompkins individually, and not to the company of which he was president, is based principally upon evidence showing that he had a. previous individual transaction with the plaintiff, substantially upon collateral, which loan had been several times extended; and was still unsettled when he called on the plaintiff with the check in question; upon the testimony of Mr. Tompkins, “I went to Mr. Beal, * * * and asked him to loan me $750 by an exchange of checks for a few days; ” and upon the evidence that Mr. Tompkins took up the dishonored, check by giving his own check for the interest and commission thereon, and by giving him two bonds, his own property, with the option to repurchase for the amount of the loan. The facts are not conclusive against the claim of the plaintiff that the loan was made to the company, and not to Mr. Tompkins individually. The latter does not testify that he informed the plaintiff that the loan was upon his individual account. All that he stated to the plaintiff at the time is consistent with an application on behalf of the company. While it is significant that the •company’s check was made to his order as an individual, it is quite as significant that the plaintiff gave, and that Tompkins received in exchange for it, a ch. ck to the order of his company. The defendant seeks to avoid the effect of the transaction, as expressed by that instrument, by suggesting that the drawing that •check to the order of the company, and not to Mr. Tompkins individually, was due to a mistake. But there is no evidence of mistake,—no evidence that plaintiff did not intend to do exactly what he did, in drawing the check so that the money he loaned should go to the defendant; and the reasonable inference and presumption from the giving and receiving of the check so drawn is that the loan was made to the company, and was so understood by the plaintiff and by the president. The latter applied for an ex-•ehange of checks, and the plaintiff might fairly infer that the loan was asked on behalf of the party for whose check the plaintiff’s was exchanged. It was not conclusive that the defendant’s check was drawn to the order of Tompkins individually, since it might be assumed that this was done for the sake of convenience, in enabling him to transfer it by indorsement over to the party from whom he might he able to obtain a loan or exchange. The receipt afterwards from Mr. Tompkins of his bonds, and delivering the note of the company to him, is not very strong evidence that the original loan was not made to the company. It looks rather the other way, as indicating a desire on Mr. Tompkins’ part, by retiring the company’s written obligation, to prevent recourse against it for its indebtedness. Whether this latter transaction was a satisfaction of the company’s indebtedness was a question of fact. There was no evidence of an agreement to receive Mr. Tompkins’ bonds as payment, save what is to be inferred from the surrender of the check. To rebut the inference that the debt was then discharged, we have the undisputed fact that after that time the plaintiff tried to induce Mr. Tompkins to allow the $750 out of the moneys coming to the company which the plaintiff collected on collateral to a subsequent loan to the company. Mr. Tompkins testified:

“He wanted me to pay him the $750, claiming that I still owed him $750 on the alleged transaction he is referring to now. I told him that, if there was any indebtedness upon that, it was mine, and not the company’s ; that the company had nothing to •do with it, and that it was a matter between him and me ; that I •was willing to repay it to him out of this, if it could be done, but, in the condition in which the company then was, it could not be done; and that I would probably make an arrangement with him-shortly.”

This testimony of the defendant evidently disposed the jury to-regard the transaction by which the check was given up as not understood by either party as a payment of the debt This being so, there remained only the question as to whether the original loan was made to the defendant, and the evidence upon that point sustains the finding that it was.

The judgment and order should be affirmed, with costs.

All concur.


author: McADAM, J.

text:
    Bernard Schmidt, Resp't, v. William Livingston, Impleaded, etc., App'lt.

      (Supreme Court, Appellate Term, First Department,

      Filed April 27,1896.)

    1. Note—Presumrtíon.
    Where a note is given for a precedent debt, the presumption is that it ..■was not taken as payment, and the onus of establishing that it was so taken rests upon the maker.
    2. Same-Satisfaction.
    In such case, the original demand is not extinguished, though it is expressly agreed to take the note in satisfactien.
    8. Same—Original cause of action.
    If the note is not paid, it does not prejudice the remedies of the creditor on the original cause of - action, provided he surrenders the note at the-trial.
    Appeal from a judgment of affirmance by the general term of the New York city court.
    G. O. & L. S. Hulse, for app’lt; Ten Eyck & Remington, for resp’t.
   McADAM, J.

The action is to recover a balance due upon at promissory note for $492, made by the defendant Livingston, December 27,1893, to the order of David A. McLeod & Son, and" .payable three months after date at the West Side Bank. The payees transferred the note to the plaintiff for value, before maturity. The defense is that after the note became due McLeod & Son paid the plaintiff on account $250, and gave him a hew note for the balance, and that said, new note was accepted in satisfaction of the balance due on the old one. The infirmity in the defense is that the creditor did not surrender the old note, nor did he accept from the payees thereon any additional security ; and the,nature of the transaction suggests the mere giving of time to McLeod & Son, the payees and indorsers, to pay the old note,—a circumstance which did- not in any manner prejudice the appellant, who was the maker thereof. If the plaintiff had surrendered or destroyed the old note (Kent v. Reynolds, 8 Hun, 559), or McLeod & Son had given additional security for the-debt, so that the plaintiff had secured to himself some advantage-he did not before possess, there might have been merit in the appellaut’s contention. All McLeod & Son gave was a new promise-to pay an obligation on which they were already liable, and the debt could not be extinguished by a mere'unperformed promi seto discharge it. Cole v. Sackett, 1 Hill, 516. The plaintiff properly, sued upon the old note, and surrendered the new one at the trial. Id. IE McLeod & Son had paid the new note, there would have been an accord and satisfaction; but, as they did not, that question does not confront us. Where a draft or note is taken for a' present, debt,— that is, one contracted at the time,— the presumption is--that it was agreed to be taken in payment, and the burden of proving the contrary rests upon the plaintiff; while, if it was for .precedent debt, the presumption is that it was not taken as pay,ment, and the onus o£ establishing that it was so taken rests upon, ¡the defendant. Gibson v. Tobey, 46 N. Y. 637, 640; Hall v. Stevens, 116 id. 201; 26 St. Rep. 614. In Guilford v. Mulkin, 85 Hun, at page 491, the court said :

“ The note is but a written security for the debt, and only extinguishes it upon payment. The debt is not merged in the note, ¡If the note is not paid when due, the,security is dishonored, and! ithe suspended time of payment ended, and the debt still remains,, ¡and the creditor can sue on the original obligation. If the debtorrclaims that his written promise to pay accomplished the payment,, lie must show that his promise has been performed. He cannot, pay his debts with a broken promise.”

Chief Justice HOLT, in Ward v. Evans, 2 Ld. Raym. 930, held! |that “ paper is no payment where there is a precedent debt, for-¡when such is given in payment, it is always intended to be taken-under this condition, to be payment if the money be paid there¡on.” The rule has been almost uniformly followed in this state, Noel v. Murray, 13 N.Y. 167; Gibson v. Tobey, 46 id. 640; Hall v. Stevens, 116 id. 201; 26 St. Rep. 614; Parrott v. Colby, 6 Hun, 55, affirmed 71 N. Y. 597; Iron Co. v. Walker, 76 id. 522; Novelty Manufacturing Co. v. Connell, 88 Hun, 254. The original demand is not extinguished, although it is expressly agreed to take the note in satisfaction (Cole v. Sackett, 1 Hill, 516), a dom Itrine reiterated and approved in Parrott v. Colby, 6 Hun, at page 58, affirmed 71 N. Y. 597, and in Waydell v. Luer, 5 Hill, 448 and Hill v. Beebe, 13 N. Y. at page 562. See, also, Hawley v. Foote, 19 Wend. 516; Frisbie v. Larned, 21 id. 450, 452; Tobey v. Barber, 2 Hare & W. Lead. Cas. (5th Ed.) 245. Some of the-cases hold that the taking of a new note payable at a future day extends the time of credit until the new note falls due, and that, giving a note for an open account is a good consideration for an -extension. Place v. McIlvain, 1 Daly, 266; Maier v. Canavan, 8 id. 272; Fleischmann v. Stern, 90 N. Y. at page 115. Othersihold that, in the absence of an express agreement or a new consideration, the mere acceptance of a note does not even produce ¡that result. Graham v. Negus, 55 Hun, 440; 29 St. Rep. 114; Crary v. White, 52 N. Y. 138 ; Halliday v. Hart, 30 N. Y. 474; Parmelee v. Thompson, 45 id. 48; Bank v. Franklin, 55 id. 235. Whatever the effect may be, the cases agree that the original debts, is not extinguished, and that, if the note is not paid, it does not prejudice the remedies of the creditor on the original cause of action, provided he surrenders the note at the trial; and that is what the plaintiff did here. Burdick v. Green, 15 Johns. 247; Hughes v. Wheeler, 8 Cow. 77; Johnson v. Jones, 4 Barb. 369; Armstrong v. Tufts, 6 id. 432; Bank v. Dana, 32 id. 296; Armstrong v. Cushney, 43 id. 340 ; and kindred cases. The cases relied on by "the appellant do not conflict with these views. In Pratt v. Foote, 9 N. Y. 463, a bank received upon a debt a check drawn upon itself by.one of its own customers. It charged the check in account, and thereby appropriated the drawer’s funds to its payment. In Skinner Engine Co. v. Old Staten Island Dyeing Establishment, 12 Misc. Rep. 71; 66 St. Rep. 676, the "question was whether .a plaintiff who accepted a diverted note in payment of a precedent debt became a bona fide holder, and the court held he did not. In Jaffray v. Davis, 124 N. Y. 164; 36 St. Rep. 106, the defendant, who was indebted on a bank account, gave his note for one-half the debt, secured by a chattel mortgage, under an agreement witli the creditor that the same was to discharge the debt. Held, that tbe additional benefit to the creditor of the security was a suffici•ent consideration to support the agreement. Luddington v. Bell, 77 N. Y. 138, holds that the acceptance of the note of one partner of a dissolved firm for his share of the debt, followed by payment,of the note, was a good accord and satisfaction. The court followed Waydell v. Luer, 3 Denio, 410,. where the reason given for the ruling was that an individual note of one partner may be preferable to and a better security than a demand against the firm; for the court said “ that it may frequently occur that a claim against a fir.m may in fact be worth less than if held against one •of its members, not merely on account of the means of enforcing payment, but as to the availability of the fund out of which it is to be made.” In reaffirming the same rule, the court, in Allison v. Abendroth, 108 N. Y. 470, at page 472; 13 St. Rep. 813, said:

“ It is held that where there is an independent consideration, or the creditor receives any benefit, of is put in a better position, or from which there may be legal possibility of benefit to which he was not entitled except for the agreement, then the agreement snot nudum pactum, and the doctrine of the common law has no .application.”

The principles of these exceptional cases do not aid the appellant, for here there was no independent consideration, no benefit or possibility of benefit to the creditor, and he was not put in any better position than before. Livingston was liable to him maker of the note, McLeod & Son as indorsers. Unlike partners,1 the maker and indorsers were severally as well as jointly liable" (Code, § 454), and the payment of the $250 cash merely discharged pro tanto a duty owing, and does not arise to the dignity •of a new consideration. Parmelee v. Thompson, 45 N. Y. 58; Tammien v. Clause, 67 Barb. 430.

The suggestion that the indorsers may have been discharged irom the old note for want of notice of dishonor is effectually •answered by their letter (Exhibit C), in which it is stated that the notice of protest was received, and there is no intimation that it was not timely given. No defense was established, and the court properly directed a verdict in favor of the plaintiff for the balance due.

It follows that the judgment must be affirmed, with costs.

All concur.


author: VAN BRUNT, P. J.

text:
    Adolph Ladenburgh et al., Pl'ff, v. Commercial Bank of Newfoundland, Def't. George H. Davidson, Junior Attaching Creditor, App'lt.

      (Supreme Court, Appellate Division, First Department,

      Filed March 20, 1896.)

      1. Attachment—Vacation.
    In order that the moving party can succeed in a motion to vacate a prior attachment, it is necessary for him to show that he has a valid levy upon the property upon which the attachment sought to be set aside has been levied.

      2. Same—Service of summons.
    In order that the lien of an attachment shall continue, it is necessary that, with thirty days after the granting of the attachment, the summons shall be either personally served upon the defendant or service by publication begun.
    Appeal from an order denying a motion by a junior attaching ■creditor to vacate a prior attachment.
    J. J. Allen, for app’lt; B. N. Cardozo, for resp’ts.
   VAN BRUNT, P. J.

In order that the moving party can succeed in a motion of this description, it is necessary for him to show that he has a valid levy upon the property upon which the attachment sought to be set aside has been levied. In the case at bar it appears that the attachment of the moving party was issued on the 17th of December, 1895, and that the affidavit upon which the appellant moved to set aside the respondents’ attachment was made on the 5th of February, 1896. More than thirty days had elapsed between the granting of the appellant’s attachment and the making of the affidavit, and such affidavit fails to show that at the time it was made the service of the summons was made personally upon the defendant, or service by publication begun. In order that the lien of an attachment shall continue, it is necessary, under section 638 of the Code, that within thirty days after the granting of such attachment the summons shall be either personally served upon the defendant, or service by publication begun. The provision of the section in question is that a warrant may be granted by a judge of the court, or by any county judge, to accompany the summons, or at any time after the commencement of the action, before final judgment. Personal service of the summons must be made upon the defendant against ■whose property the warrant is granted within thirty days after the granting thereof, or else, before the expiration of the same time, service of the summons by publication must be commenced, or service thereof must be made without the state, pursuant to art order obtained therefor as prescribed in this act, and,' if publication has been or is thereafter commenced, the service must-be made complete by the continuance thereof. There being no evidence of a compliance with this section, there is no-proof that the lien of the appellant’s attachment continued ; and consequently he is not in a position to attack the respondents* attachment, even if there should be any defects in his papers or procedure.

The order should be affirmed, with $10 costs and disbursements. All concur.


author: BARRETT.

text:
    In the Matter of the Petition of Edward Lehman, as Guardian, etc., for the Payment of the Income from a Legacy, etc.

      (Supreme Court, Appellate Division, First Department,

      Filed March 20, 1896.)
    1. Wills—Construction.
    A bequest, which gives to the testator’s granddaughter a certain sum-,.' to be paid to her when she arrives at the age of twenty-one years, with interest, to be computed from the day of the testator’s death, at the rate of five per cent, per annum, and, in case she should die before arriving at twenty-one years of age, to go to her issue, and, in default of issue, to his legal heirs, vests in the granddaughter at the testator’s death.
    8. Same.
    Under the provision that, upon the death of the legatee, the bequest to go to her issue, and, in default of issue, to the testator’s heirs, such issue or heirs will take as substituted legatees, upon the death of the original legatee.
    Appeal from an order directing the executors to pay over to-the guardian a certain sum per month during the next ensuing three years for the support and maintenance of the ward.
    The payment was directed to be made from the income accumulated and to be accumulated from a legacy of $5,000 given to the infant by the testator under the tenth clause of his will,, which reads as follows: “ Tenth. I give and bequeath to my granddaughter, Selma Lewinslci, the child of my deceased-daughter, Hannah Lewinski, the sum of five thousand dollars, to-be paid to her when she arrives at the age of twenty-one years,, with interest, to be computed from the date of my death, at five-per cent, per aunum. Should my said granddaughter die before arriving at the age of twenty-one years, then the bequest hereby made shall go to her issue, and, in default of issue, then the said’ bequest of five thousand dollars shall go to my légal heirs, under the laws of this state.
    J. H. Rogan, for app’lts; Oscar Richter, for resp’t.
   BARRETT.

The gift here oc $5,000 is absolute. The sum is to be paid to the legatee when she attains her majority. But the legacy rests upon the death of the testator, though payment is postponed. Bushnell v. Carpenter, 92 N. Y. 270. The vesting is not affected by the provision that it is ultimately to be paid with interest. It was held in Smith v. Parsons, 146 N. Y. 116; 70 St. Rep. 263, that an accumulation of interest payable to a ¡legatee at majority vested at once, and, upon the legatee’s death during her minority, passed to her personal representatives. The intention of the testator here was not to postpone the vesting of either principal or interest, but merely to postpone the period of enjoyment in possession, and, in so postponing such peried, to secure to the legatee the intermediate usufruct. The legacy is thus vested, with its accruing fruit. Nor is this result changed by what follows. The gift over in case of the death of the legatee during minority, instead of suspending the vesting ab initio, denotes that the prior words point merely to the period when the legacy becomes absolute in enjoyment. See Mr. Bigelow’s note, page 855 of Jarman on Wills (5th Ed.). Jarman (page 850) says that, if the testator has given over the fund in case the legatee dies before the time named without issue, from which it is to be inferred that the legatee is to retain it in every other case, the natural conclusion is that the word is to be read as meaning “payable” or “indefeasible,” and that the gift is vested, liable only to be divested on a particular contingency. By the provision that upon the death of the legatee the bequest shall go to her issue, and, in default of issue, to the testator’s heirs, such issue or heirs, as the case might be, will take as substituted legatees, upon the happening of the prescribed event, namely, the death of the original legatee. These ulterior dispositions do not affect the main question. They are equally appropriate whether the legacy was vested or contingent. Consequently they throw no light upon the testator’s intention, nor do they vary the clear expression of that intention to be found in the preceding provision. The surrogate had authority, under chapter 173 of the Laws of 1891, to make the order in question. Whether it should be made was a matter of discretion, which the record shows was fairly exercised The surrogate was not bound to .put the estate to the expense of a reference to ascertain to necessity for this trifling allowance. The petition is supported by an affidavit, while the executors rested upon an answer to the petition merely ignoring the essential facts, and not denying what is stated in the affidavit.

The order should be affirmed, with costs»

All concur. '


text:
    Augusta C. Genet, App'lt, v. Delaware and Hudson Canal Company, Resp't.

      (Supreme Court, Appellate Division, First Department,

      Filed March 20, 1896.)

    1. Mining- contract—Construction.
    The agreement between the parties, in this case, was held to be a conveyance.

      % Same.
    The agreement, by its terms, was held also to raise an implied promise of the defendant not willfully or negligently to incapacitate itself from taking out more than the minimum quantity of coal; and that if, by unskilled conduct, this result was rendered impossible, the plaintiff had a, right oí action upon this implied promise of the defendant for the damages. sustained by the willful or negligent acts of the defendant.,
    Appeal from a judgment in favor of defendant.
    Geo. C. Genet, for app’lt; F. E. Smith, for resp’t.
   VAN BRUNT, P. J.

The action was brought in February, 3893, for the purpose of declaring the contract mentioned in the complaint executed and ended, and compelling the defendant to-remove its personal effects from the property which was the subject-matter of the contract, and which was situated in the state of Pennsylvania; and relief was also asked that the defendant, its agents and servants, be enjoined and restrained from claiming any further interest in the property under the agreement, or from claiming or alleging any right, title, or claim thereto, and from denying the rights of plaintiff to the property free of the agree- • ment, or in any way interfering with plaintiff's right and title to-the premises, the same as if said agreement had never been made, or that they be adjudged to release the same to the plaintiff. The defendant answered, putting in issue the material allegations of the complaint. The issues thus formed came on for trial, and the court awarded judgment dismissing the complaint upon the merits. The grounds for the decision were: (1) That the coal upon the lands described in the complaint as belonging to the plaintiff is-not exhausted, and the defendant did not commit any act or suffer any default respecting said lands of the plaintiff which justifies putting an end to the contract referred to in the complaint, or which entitles the plaintiff to the equitable relief she claims, or to-any relief consistent with the causes of action alleged. (2) That the instrument sued upon is in the nature of a grant of coal under the surface, and the defendants have acquired a base fee therein, determinable only when the coal upon said lands, and upon the-adjoining and contiguous lands, is exhausted; and said coal is not exhausted. (3) That the question of title concerning said coal, and the construction of the instrument sued upon, must be determined by the law of the state of Pennsylvania, where the lands are situated; and the law of said state concerning title to such lands is as testified to by Chief Justice Paxon and Judges Hand and Heydrick, the experts produced by the defendant. From this judgment the present appeal is taken.

In the consideration of the questions presented upon this appeal, it will be necessary to comment upon the various litigations which, the parties to this action have had since the execution of the'agreement referred to in the complaint. It appears that, in November, 1881, the plaintiff brought an action in the superior court of the city of New York,"claiming violations of the agreement on the part of the defendant in its failure to work the coal mines to the extent contemplated by the agreement, and in the erection of works upon the premises not contemplated by the agreement, and making the lands of the plaintiff subservient to adjoining lands belonging to the defendant. The plaintiff claimed damages by reason of the breach of the agreement, and an injunction restraining the use of her lands for the benefit of adjoining lands. The defendant answered, admitting the agreement, denying its violation, and alleging a prior adjudication between the parties. The action was tried before a referee, who reported in favor of the plaintiff, and a judgment was thereupon entered, in February, 1887, adjudging the plaintiff entitled to recover damages, and also> adjudging that the defendant should be enjoined and restrained from using certain erections upon the lands of the plaintiff for the purpose of mining and preparing for market coal from the defendant’s lands or from any other adjoining or contiguous lands, and enjoining and restraining the defendant from depositing the waste from coal mined from land other than the land of the plaintiff, upon the surface of the plaintiff’s lands, and also restraining it from running the water from other contiguous lands upon the plaintiff’s lands for the purpose of draining the former. An appeal was taken to the general term by the defendant from this judgment, and it was modified. The defendant thereupon appealed to the court of appeals, and the judgment against the defendant, was reversed and the complaint dismissed, with costs, the court holding that the legal effect of the agreement between the parties was to vest in the defendant an estate in fee in the coal as a separate piece of land, and that the defendant acquired a present, absolute, distinct, and independent right to the use of the structure upon the plaintiff’s lands for the mining of coal on the adjacent lands, and that the only obligation which rested upon the defendant as to the quantity of coal to be mined from the plaintiff’s land was to mine the quantity specified each year, and while it fulfilled that obligation the defendant’s right to take coal from, the adjoining property through plaintiff’s land could not be interfered with, and that the defendant had the right to pile upon plaintiff’s land the refuse coal taken from the adjoining lands, and that it also had the right to take the water from its adjoining lands upon the plaintiff’s lands for the purpose of facilitating them in drainage. 122 N. Y. 505 ; 34 St. Rep. 346.

In March, 1888, the plaintiff commenced another action in the supreme court of this state, alleging improper, unskillful, and unworkmanlike management in the conduct of the mining operations by the defendant upon the lands of the plaintiff, whereby the mine situated upon the plaintiff’s land was seriously injured and its value impaired, and damages to a large amount were claimed because thereof. The defendant demurred, upon the ground that the court had no jurisdiction of the subject of the action, and that the complaint did not state facts sufficient to constitute a cause of action. The special term overruled the demurrer, and from the judgment thereupon entered an appeal was taken to the general term, and the judgment was reversed, and the complaint dismissed. An appeal from this judgment was taken to the court of appeals, where the judgment of the general term was reversed, and that of the special term affirmed (136 N. Y. 503; 50 St. Rep. 53); the court holding that, although the second division of the court of appeals had, in the action hereinbefore referred to as being brought in the superior court, expressed the opinion that this contract? ■operated as a deed to convey the coal to the defendant, such decision was not material to a disposition of the case before that? ■court, nor was it necessary to its determination or within the issues presented, and it was not, therefore, necess'arily the law between the parties, although the court might regard it as a precedent; but that the right of the defendant to use the shafts and machinery on the plaintiff’s lands in aid of the mining operations on adjoining lands, the right to pile waste upon the surface of the ■plaintiff’s land, and the right of drainage thereon, were involved in the action before that court, and its decision settled the law upon this subject between the parties. The court then proceeded to examine the question as to whether the contract between the parties did or did not convey the coal in fee, and held that, neither by the law of the state of New York, nor by the law of the state of Pennsylvania, as gathered from the decisions of that state, was the agreement between the parties a present conveyance of the ■coal upon the plaintiff’s land, but was an executory contract, the thing sold and the price to be paid being dependent upon the revelations of the coal-mining process. And the court further held that the terms of the agreement raised an implied promise of the defendant not willfully or negligently to incapacitate itself from "taking out more than the minimum quantity of coal; that it was not in the contemplation of the parties that the plaintiff should be compelled to content herself with the minimum rate of royalty provided for by the agreement, but that she had a right to rely ■upon the fact of the advantageous nature of the contract to the defendant, and that their own interests would necessarily induce "them to mine all the coal which was possible, and by this means the royalty to the plaintiff would be increased far above the minimum; and that if, by unskillful conduct, this result was rendered impossible, the plaintiff had a right of action upon this implied promise of the defendant for the damages sustained by the willful’ or negligent acts of the defendant whereby it incapacitated itself from taking out more than the minimum quantity of coal.

In Re Kings County El. Ry. Co., 112 N. Y. 47; 20 St. Rep. 336, the right of the company to build its road, although the ■specifications and plans filed under the law were indefinite upon certain points, was sustained by the court upon the same prin-¡ ciple, namely, that the interests of the parties building and oper-" ating the road would necessarily impel them to make the struc-¡ ture conform to the requirements of the statute, although their specifications and plans were not definite in that regard.

In view of the decision of the court of appeals upon the question as to whether this was a present conveyance or an executory contract, it does not seem necessary to discuss the subject any further. It is clearly in opposition to the view which was taken by the learned judge in the court below in the disposition of this case. He held, notwithstanding this decision of the court of appeals upon this identical contract, that the instrument in questions was a deed, and that the question of title concerning the coal, and the construction of the instrument, must be determined by the law of Pennsylvania, and, inferential!/, that such was the law ■of that state. It is true that he also held that the plaintiff was not entitled to relief, because the coal upon the land had not been ■exhausted, nor had the defendant committed any act or suffered any default respecting the lands of the plaintiff which justified putting an end to the contract, or which entitled the plaintiff to any relief consistent with the causes of action alleged. But it is manifest that the basis of his decision was his interpretation of the instrument, and it seems to be equally clear that such interpretation is different from that which has been placed upon it by -the court of appeals in another action between the same parties. It may be entirely true that the court was justified in finding that the contract had not been executed because of the exhaustion of the coal upon the laud of the plaintiff, but it is not so apparent that the plaintiff may not be entitled to some relief under the implied promise contained in the agreement as interpreted by the ■court of appeals, by reason (if she establishes the fact) of the unskillful manner in which the defendant has conducted its mining operations under the agreement. It may very well be that such state of facts might be shown as would justify the court in terminating the contract because of the willful violation by the defendant of its duties in respect to the method of conducting the work, rendering it unsafe and improper for the plaintiff to permit her property to run the risk of absolute destruction if left to the tender .mercies of the defendant.

We think, upon the whole case, therefore, that the judgment should be reversed, and a new trial had, with costs to the appellant to abide the event. All concur.


text:
    Louise Wingrove, App'lt, v. German Savings Bank of the City of New York, Resp't.

      (Supreme Court, Appellate Division, First Department,

      Filed March 20, 1896.)

    -Judgment—Amendment—Subsequent term.
    The court cannot amend an order made at a previous term of court, held by another judge, so as to make the court rule upon a question which has never been presented to it.
    Appeal from an order by a different judge at a subsequent term amending such order, by adding thereto that plaintiff deposit the pass book mentioned in her complaint with the clerk of the court within six days after service on her attorney of a copy of the order.
    L. Wertheimer, for app’lt; J. A. Arnold, for resp’t.
   VAN BRUNT, P. J.

This action was brought to recover the amount of a deposit alleged to have been made by one Henry Gebhard, deceased, in the defendant’s bank, in the name of “ Henry Gebhard, in trust for Louise Unger,” a pass book for which was issued by the defendant. After Gebhard’s death, the' plaintiff demanded of the defendant the amount of the deposit. So did the administrator of the estate of Grebhard, the said estate-being insolvent. Upon these facts, the defendant made a motion for an order to substitute the administrator of Grebhard as defendant in the action, and to discharge the bank from all liability to* the plaintiff or to the administrator upon its paying the amount-of the deposit into court. This motion was granted, and an order was entered on the 21st of December, 1895, directing the deposit by the defendant with the clerk of the court before the 10 th day of January, 1896, of the sum of $1,000, and that, upon making such deposit, the administrator of Gebhard should be substituted as sole defendant in place of the then defendant. On the 8th of January, 1896, the defendant obtained an order to show cause-why there should not be added to the order thereinbefore entered a provision requiring the plaintiff to deliver to the defendant the pass book issued by the defendant, and mentioned in the complaint. This was opposed by the plaintiff, and heard by another judge; and on the 23d of January, 1896, an order was entered amending the order of the 21st of December, by further ordering that the plaintiff deposit the pass book mentioned in the complaint with the clerk of the court, within six days after the service upon her attorney of a copy of the order, wiffi notice of the entry thereof. From that order the present appeal is taken.

It- is difficult to see upon what theory or basis the court could amend an order made at a previous court, held by another judge, in the manner attempted to be done here. No such relief appears-to have been asked for by the original order, and the judge granting the original motion is made to decide a question which never was presented to him. While it may be true that an order may be amended to conform to a decision, it is somewhat difficult to-understand how an order can be amended so as to make the court rule upon a question which has never been presented to it. We' do not hereby mean to intimate that, even if an independent application had been made, it should have been granted.

We think the order should be reversed, with $10 costs and disbursements, and the motion denied, with $10 costs. All concur.