text:
    The Phœnix Ins. Co., Resp’t, v. William H. Parsons, Survivor, App’lt.

      (Court of Appeals,

      Filed December 1, 1891.)

    1. Insurance (Marine)—Construction op policy,
    .A clause in a cargo policy, which subjects freight and advances insured thereunder “to the terms and conditions of freight policy attached hereto ” means that, to the terms and conditions of the cargo policy such are added of the annexed freight policy as are pertinent and might concern the risk, and does not import an exception of the terms of the cargo policy from the contract of insurance.
    2. Same—Insurable interest.
    Defendants in New York procured a charter for the owners of a bark on which they claimed a commission, and afterwards accepted and paid a draft by the captain and effected an insurance with the plaintiff without any instructions from the owners. Subsequently the owners requested defendants to insure “so that they would not call on the owners for reimbursement.” They replied that they had “ covered the amount by insurance out only to Buenos Ayres.” The vessel being lost, the plaintiffs paid the insurance to defendants, taking an assignment of the latter’s claim against the owners for $1,500. In an action to recover back the sum paid, after failure to recover of the owners, Held, that the insurance effected for advances became one for the owners’ benefit and released them from personal liability, and that the condition in the cargo policy relating to any release of irght of recovery against the owners was clearly broken by the defendants, and plaintiff, having paid in ignorance of such breach, was entitled to recover back the amount so paid for advances and defendants’ commission thereon, with interest.

      Appeal from judgment of the New York superior court, general term, affirming judgment in favor of plaintiff, entered upon verdict of jury.
    The defendants, Parsons and Loud, were shipping and commission merchants in New York city, and they procured, in March, 1884, for the owners of the bark “Elliott Eitchie,” a charter upon which they claimed a commission of $341.63. Subsequently, on March 25, 1884, they accepted and paid a draft by the captain, at Brunswick, Gra., for $1,125, expenses incurred for the vessel. At the time defendants held an open policy of insurance, issued by the plaintiff company, consisting of a cargo policy, to which was annexed, in a separate sheet, a freight policy. By the cargo policy the plaintiff made insurance and caused defendant to be insured “on cargo, freight and advances.” It also contained a clause that “it is understood that freight and advances insured under this policy are subject to the terms and conditions of freight policy attached hereto.” The cargo policy also contained the following clause: “In case of any agreement or act, past or future, by the insured, whereby any right of recovery of the insured against any persons or corporations is released or lost, which would, on acceptance of abandonment or payment of loss by this company, belong to this company but for such agreement or act; or in case this insurance is made for the benefit of any carrier or bailee of the property insured, other than the person named as insurer, the company shall not be bound to pay any loss, but its right to retain or recover the premium shall not be affected.”
    On March 31, 1884, the defendants effected insurance, under their open policy, for the sum of $1,500, “ on advances on board the bark Elliott Eitchie, at and from Brunswick, Gra., to Buenos Ayres.”
    On March 27, 1884, the defendants had written to the owners that the captain had drawn upon them and requested advice whether the owners would remit the amount or would have defendants advance it. Under date of April 1, 1884, the Boston owners replied to that letter, and instructed defendants, in the following language, to “ please get the advances insured, if you have not already done so, so that in case of loss you will not call upon th.e owners for the advances.” On April 2, defendants acknowledged the receipt of the Boston letter, and say : “We have covered the amount by insurance out only to Buenos Ayres.”
    The bark was lost upon the voyage, by perils insured against, and in August, 1884, the plaintiff paid to the defendants the amount of their insurance of $1,500, taking from them an assignment of $1,500 of their “claim of $1,570, which.we have against bark 1 Elliott Eitchie,’ and owners for advances, commissions, etc., etc.” Defendants also assigned to plaintiff, by endorsement upon the captain’s draft for $1,125, all claim on account thereof “ in consideration of the amount insured as advances on the vessel being paid.” The assignment was made upon the insistence of the company and their refusal to pay otherwise. Subsequently the plaintiff company sued the owners in the United States district court at Boston, to recover the amount paid to the defendants in New York; alleging the assignment of the claim against the owners. The trial was upon an agreed statement of the facts and, after hearing, the libel was dismissed. This action was then brought to recover back from the defendants the $1,500 paid to them, and the disbursements in the Boston litigation. At the circuit a verdict was directed for the plaintiff. Upon an appeal from the judgment thereupon entered, the general term modified it, by deducting from the recovery the items of sums paid for counsel fees and for copying in the Boston suit, leaving in only the costs of that suit. The defendants have further appealed to this court.

      Wm. W. Goodrich, for app’lt; Geo. A. Black, for resp’t.

       Modifying and affirming 37 St. Rep., 874.

   Gray, J.

Upon these facts two of the" questions which arise may be briefly disposed of. In the first place, I entertain no doubt concerning the effect of the clause in the so-called cargo policy, which subjects freight and advances insured thereunder “ to the terms and conditions of the freight policy attached thereto.” The insurance of the defendants' advances was effected in or by the instrument called the cargo policy. It so reads, and it would be straining after construction to import into the language of the added clause referred to a meaning that the freight policy controlled alone as to the terms and condition of that insurance. The insertion of the clause must be taken to mean, naturally,.that, to the terms and conditions of the cargo policy, such are added of the annexed freight policy as were pertinent and might concern the risk. The importance given to the clause grows out of the defendants' effort to avoid the effect of the condition of the cargo policy against any past or future action of the assured whereby the right of recovery of the assured against the owners had been, or might be, released or lost. The value of that condition in the contract of insurance, to the insurer, was in the warranty or agreement of the assured that the right of subrogation of the insurer had not been, and would not be, released or lost by any action of the assured. Nothing in the language of the clause we are at present considering imported an exception of the terms of the cargo policy from the contract of insurance.

In the next place, the condition in this cargo policy relating to any release or loss of the right of recovery against the owners, was clearly broken by the defendants. When, after acceptance of the captain’s draft for disbursements upon the bark, the defendants effected the insurance for their advances with the plaintiff, they were without any instructions from the owners. Those instructions came a day or two afterwards in the letter of April 1st, and requested the defendants to insure their advances, so that in case of loss they would not call upon the owners for reimbursement They replied that they had “ covered the amount by insurance out only to Buenos Ayres.”

This was a plain advice to the owners that to that extent of voyage their request as to insurance had_ been complied with. The result was that the insurance effected became one for the owners’ benefit and in case of the loss of the bark any moneys received from tBe insurer would go in discharge of the indebtedness of the owners; or, if none were recoverable from the insurer, for any cause attributable to the defendants or not, the claim against the owners was, nevertheless, gone. They were thenceforth estopped from asserting any claim against the owners for advances to the bark; for the owners were justified in relying upon the defendants’ representations in reply to their instructions to insure and in believing their personal liability released and the claim transferred to the insurance. It is of no consequence that the insurance was effected before the owners wrote their letter of instruction. By the correspondence of the parties the agreement was established that the insurance should be for the owners’ benefit and their personal liability released. Mor is it material that the defendants may not have realized the effect of their reply to the- owners’ letter of instruction. The question is, what had the owners in Boston the right to believe and act upon. As the right of the defendants to recover against the owners of the bark was lost by their own act, a material condition of the agreement to insure them was broken, and that brings us to the question of what effect the breach had upon the relative rights of the parties to that contract

Unquestionably, had the insurer known of this violation of the condition of the contract by the defendants, it could have defended against the claim upon the policy. As it was, the breach of the conditions had operated to relieve the insurer from the obligation of its contract. And here another question, which suggests itself, may be referred to, and that is that besides a defence to any liability upon the policy for indemnity as to advances, the insurer could have defended against a claim for the payment of so much of the amount of insurance as would not be included within the advances to the bark. Of the $1,500, written under this policy, only the sum of $1,125, was actually for advances to the captain, and the balance, to make up the whole sum of $1,500, which was paid over under the arrangement between the parties, was composed of items of a commission for procuring a charter of the bark for the owners, of a commission on advances, of premium for insurance on the advances and interest on the aggregate of all the items.

The insurable interest of the defendants in the vessel, I suppose, might fairly extend so far as to include the commission for lending the money, and interest on the money; but it could not extend to the claim for a commission for procuring a charter. The law merchant has always given to the lenders of money borrowed by the master of a vessel for its necessities, a maritime lien upon the vessel. They have that security, as well as the liability of the owner, and their lien on the vessel constitutes an insurable interest. See Cowper, 636; Insurance Company v. Baring, 20 Wall., 159.

But the commission claimed for procuring a charter for the vessel is a personal liability of the owner and constitutes no interest in or lien upon the vessel which could make it insurable. Therefore, the policy of insurance here not only by its language specified the defendants’ advances as the subject for insurance, but the assured had no insurable interest in the vessel as to anything beyond what the term advances might reasonably include. That was the defendants’ only interest at risk upon the voyage. The insurer’s contract was to indemnify them against any loss in respect thereto during the voyage from the perils or sea risks specified. This plaintiff, therefore, could have defended against any claim for the $1,500 written under the policy.

How did the formal assignment by the defendants to plaintiff, with the endorsement over of the captain’s draft, affect the situation ? Obviously no claim for the advances passed. Any per- ' sonal claim for that against the owners had been released by the assured. -It was not necessary, as the general term below considered, that the right of the plaintiff to recover back the moneys paid upon the policy should rest upon any implied warranty in the defendants’ assignment to them. Its cause of action was perfect, independently; for it made the payment in ignorance of the •defendants’ breach of the condition, and the force of that condition was quite as great in aid of a recovery back of the moneys paid in ignorance of the fact that the defendants had forfeited or lost their right to the enforcement of the owners’ personal liability, as it would have been to defend against a claim for payment if the insurer had been made aware of the breach of the agreement.

The principle of the equitable right of the insurer to subrogation was discussed in the opinions delivered by the vice-chancellor and chancellor in the case of Atlantic Mutual Ins. Co. v. Storrow, 1 Edw. Ch., 627 and 5 Paige, 294, and reference to them may be had. The insurer could not be deprived of that subrogation to the right of the assured which was his in equity, and the loss of which was especially secured against here in the contract of ■insurance.

But I think the-deed of assignment did have the effect to pass ■over to the plaintiff whatever claims the defendants had against the owners growing out of the transactions disclosed here. For the $1,500 paid by the plaintiff for the assignment, it must in fact have become the owner of such of the claims specified in the deed as were still owing to the defendants. Such would be the commission for procuring a charter of the vessel. That assignment read that it “ assigned $1,500 of our claim of $1,570.47 which we have against bark * * * and owners for advances, commissions, etc.” Contemporaneously the captain’s draft was assigned over by endorsement, and that contained the information that the sum of $1,125 represented what had been advanced for disbursements upon the bark. The plaintiff, if it did not actually know, was chargeable with the knowledge, or was put upon its inquiry, that defendants claimed against the owners for other amounts than for mere advances. Of course the plaintiff supposed it was acquiring "the right to all the claims against the owners, and undoubtedly the object of the assignment was gone with the loss of the claim upon the owners for re-imbursement of the advances; but how -can it be said that the assignment was ineffectual as to the balance ■of the claims ? They became the plaintiff’s property by purchase, and I can see no reason why the assignment was not enforceable “pro tanto.

There was no error in admitting the record of the United States: district court in the action between this plaintiff and the owners of the bark. It proved a judgment, rendered by a court having jurisdiction of the subject matter and of the parties, dismissing the libel filed by the plaintiff here against the owners of the bark to recover the advances which the libellant had paid, and which it supposed it had acquired the right to recover from the original debtor. The record there showed a case upon the same material facts as here, and it was competent evidence of the fact of a judgment dismissing the claim which the assignment purported to' transfer to libellant. First Nat. Bank v. Fourth Nat. Bank, 89 N. Y., 412.

The reduction by the general term of the judgment, by the dis-allowance of the counsel fees in the Boston suit, is not complained of here. Had these defendants been notified of the suit the question would have been different, and they might have been held to pay that item of damage. As it is, I somewhat doubt that any notice was due them, for the plaintiff was not defending an action, but was suing as the holder of a claim, by the right of subrogation and by virtue'of an assignment. However, the reduction has not been made the subject of an appeal. But as to the actual costs which were paid in that action, I think it right that the plaintiff should recover them. The suit certainly was the natural sequel, or consequence, of the defendant’s acts.

No other point of the appellant’s demands our consideration, and I advise that the judgment as entered upon the order of the general term should be further modified, by deducting therefrom a sum which shall be equal to the difference between the amount of the verdict of $2,358.11 and an amount made up by adding together the sum of $1,125, advanced on the captain’s draft, the commission thereon of two and a half per cent and interest on these two sums at six per cent, from March 25, 1884, to the day of the trial, and that the judgment, as so modified, be affirmed, but without costs to either party as against the other.

All concur.


source: Caselaw Access Project

author: Earl, J.

license: Public Domain

text:
    Alonzo A. Wicks et al., App’lts, v. Albert D. Thompson, Resp’t.

      (Court of Appeals,

      Filed December 8, 1891.)

    Appeal—New trial.
    Where all the evidence offered by plaintiffs was received and no evidence of defendant received to which they objected, and the record contains no exceptions, the denial of a motion for a new trial is not subject to review here:
    Appeal from judgment of the supreme court, general term, second department, in favor of defendant, in action for trespass in tearing down a fence claimed to be upon plaintiffs’ land.

      William G. Nicoll, for app’lts ; Wilmot M. Smith, for resp’t.

       Affirming 38 St. Rep., 340.

   Earl, J.

The plaintiffs brought this action to recover damages for trespass upon their real estate. The jury rendered a verdict against them. They made a motion on the minutes of the trial judge for a new trial, which was denied, and judgment upon the verdict was entered against them. Then they appealed to the general term from the order denying the new trial, and from the judgment, and the order and judgment were affirmed, and then they appealed to this court.

There is nothing for review here. The record does not contain a single exception taken by the plaintiffs. All the evidence offered by them was received, and no evidence of the defendant was received to which they objected. The charge of the judge was entirely satisfactory to the plaintiffs, and no part thereof was excepted to by them. We have many times said we can review here only questions of law raised by exceptions taken during the progress of the trial. In such a case as this, where the record contains no exceptions, the denial of the motion for a new trial is not subject to review here. Duryea v. Vosburgh, 121 N. Y., 57; 30 St. Rep., 683.

The judgment should be affirmed, with costs.

All concur.


author: Andrews, J.

text:
    Fred. P. Wilcox, Resp’t, v. The City of Rochester, App’lt.

      (Court of Appeals,

      Filed December 8, 1891.)

    Taxes—Personal property—Must be assessed within the assessment DISTRICT IN WHICH THE TAXPAYER RESIDES.
    The residence of the person assessed within the assessment district is essential to give jurisdiction to the assessors to make a valid assessment of personal property. It is immaterial that the assessors were ignorant of the change of residence of the taxpayer, where he did nothing to mislead them.
    Appeal from judgment of the supreme court, general term, fifth department, affirming judgment setting aside a tax sale.
    The city assessors of Rochester inserted the name of the plaintiff in the assessment roll of the Seventh ward of said city for the year 1884, as the owner of lands therein, valued in the assessment roll at $1,400, and as the owner of personal property amounting to $50,000, and subsequently the general city tax was extended upon the roll, and the sum of $1,656.29 was entered therein against the plaintiff as the aggregate tax upon the real and personal property so assessed to him. The plaintiff was the owner of the lands assessed to him in the Seventh ward, and the proportion of the aggregate tax chargeable to him on account thereof was $45.11. But he was not a resident of the Seventh ward when the assessment was made, but from the 1st of January, 1884, until the 9th of December in that year he resided in the Fourth ward of the city, and his residence there was open and unconcealed and generally known among his acquaintances.
    In August, 1884, the plaintiff duly tendered to the proper officer the amount due for the tax on the lands owned by him in-ended in the assessment roll, with the fees for collection, but the officer refused to receive the sum or to cancel the tax on the real estate, and plaintiff has ever since been ready and willing to pay the same.
    On March 26, 1885, the city treasurer sold the real estate for' the whole amount of the real and personal tax, with interest charges and expenses added, and the land was struck off to the-defendant and a certificate of the sale was made and delivered to-him by the treasurer. The plaintiff, prior to January 1, 1884,. had lived in the Seventh ward of the city. He was acquainted with the city assessors, but did not inform them of his change of" residence, and it does not appear that they knew of it when the assessment was made, and it does not appear that the plaintiff knew that he was assessed for personal property in the Seventh, ward before the roll was completed and delivered to the city treasurer in July, 1884. He removed to the state of Michigan in December, 1884, where he has since resided. He was the owner ' of personal property to the amount of $50,000 when the assessment in question was made.
    The judgment in the action set aside the tax assessed and levied" upon the personal property of the plaintiff, and also the sale of" the lands made by the treasurer.

      Chas. B. Ernst, for app’lt; Edward F. Wellington, for resp’t

       Affirming 26 St. Rep., 477 ; 30 id., 1020.

   Andrews, J.

It is provided by the city charter, Laws of 1880,. chap. 14, § 85, that the common council shall, during the month, of June in each year, assess the city taxes in the same manner in which county taxes are by law to be assessed by the board of supervisors. By the Revised Statutes it is declared that “Every person shall be assessed in the town or ward where he resides-when the assessment is made, for all personal estate owned by him,” 1 R. S., 389, § 5, and this rule, except as modified by amendments not material here, is the rule governing assessments of county taxes.

It has repeatedly been decided under our statutes that residence of the person assessed within the assessment district is essential to-give jurisdiction to the assessors to make a valid assessment of" personal property. People v. Suprs. of Chenango Co., 11 N. Y., 571; Mygatt v. Washburn, 15 id., 318 ; Bell v. Pierce, 51 id., 16.

These authorities are conclusive of the invalidity of the assess-_ ment of personal property included in the assessment against the plaintiff, in the Seventh ward of Rochester. It is found, and is undisputed, that during the whole of the year 1884, the plaintiff" was a resident of the Fourth ward. It is immaterial that the assessors were ignorant of his change of residence. He did nothing to mislead them, and their mistake did not in the least affect the jurisdictional question.

The point made that as the same assessors were assessors for the whole city they had jurisdiction of the person of all the taxable inhabitants, including the plaintiff, and that, therefore, the assessment is irregular only, is not tenable. One object of the charter in prescribing that the assessment shall be made in the town or ward where the person assessed resides, is that he may have certain notice of proceedings of the taxing officers, so far as they may affect his interests. In a certain general sense it may be said that the assessors had jurisdiction of all taxable inhabitants of the city, but the requirement that the inhabitants should be assessed for personal property in the ward where they reside is a limitation of their jurisdiction, and not simply a directory provision, the disregard of which is not of the essence of their power.

It is also insisted that, assuming the invalidity of the tax and of the sale thereunder, nevertheless a case was not made for equitable relief for the reason that the proceedings had not progressed to the point where the presumption of regularity attached to the proceedings so as to constitute a cloud upon title. It is a sufficient answer to this contention that this point was not taken on the trial. The defendant asserted the validity of the sale and claimed a lien upon the land sold for the whole tax, and its denial that the proceedings were a cloud on the title was based simply upon the contention that they were valid and that the sale was legal. It was incumbent upon the defendant, if it desired to raise the question of the appropriateness of the remedy, conceding the invalidity of the proceedings, 'to have raised the point distinctly.

The judgment should be affirmed

Judgment affirmed, with costs.

All concur.


author: Peckham, J

text:
    Roxanna H. Lawrence, Ex’rx, et al., Resp’ts, v. Henrietta Church, Ex’rx, App’lt.

      (Court of Appeals,

      Filed December 8, 1891.)

    Appeal—Remittitur—Amendment oe.
    In an action upon a contract to pay plaintiff individually a certain sum, and to pay the debts of an estate in consideration of receiving the proceeds of mortgages held by the estate, this court reversed a judgment in favor of plaintiff and granted a new trial. The estate of the defendant being insolvent, ánd plaintiff being willing to remit all items except the-sum payable to her, remittitur amended so as to permit such reduction.
    Motion to amend remittitur.

      J. H. Stevens, for motion; no one in opposition.

       See 40 St. Rep., 406.

   Peckham, J

In this case if the question had been presented to us of striking out all other items of recovery and simply retaining the-judgment for the $3,000, with interest from the commencement of this action, we think we should have made such an order. The plaintiffs’ willingness to so consent was not presented and had not occurred to us. The record shows no error regarding the $3,000 item, excepting the allowance of interest from the time of the execution of the contract A plain case for recovery of the principal sum was proved. There was, however, no demand for its payment prior to the commencement of this action proved, and we thought that the plaintiff might very probably be able to prove it, and such demand would permit interest to run on the principal from the time it was made. We assumed the plaintiff would also desire to prove her other demands. She, however, thinks proper to remit all interest, except from the time of the commencement ■of the action, and to remit all right to recover any other item which entered into the original judgment. We think she should be permitted to do this.

The statement as to the insolvency of the estate of the defendant’s testator certainly strengthens the reason for granting the amendment. The defense has been heard as to the $3,000 item and no valid answer to the claim was shown. If there be a question as to the solvency of the estate, the plaintiff should have the benefit of the judgment she obtained, modified as provided. Upon all the facts it is clear that justice will be promoted by granting this motion.

Ordered, that the supreme court be requested to return remittitur here into this court, and when so returned it is further ordered that the remittitur be amended by providing that the judgments of the general and special terms be reversed and new trials ordered, unless the plaintiff stipulates and consents that the original j udgments against the defendant be modified by deducting therefrom all sums excepting the amount of $3,000 with interest thereon from the commencement of this action, and in case the plaintiff so consents, then the judgments so modified are affirmed, without costs to the plaintiff in any court.

All concur.


author: Vann, J.

text:
    Lewis E. Waterman et al., App’lts, v. Edward L. Shipman et al., Resp’ts.

      (Court of Appeals, Second Division,

      Filed December 8, 1891.)

    1. Tbade-marks—Jurisdiction—Patents—Action as to license for, when mat be tried in state court.
    An issue as to the existence of a license to make and sell a patented article is an issue as to the existence of a certain kind of contract and involves simply a question of title to property, which does not fall within the jurisdiction of the federal courts when all the parties are citizens of the same state.
    2. Same—Revocation of license—“ Manufacturing.”
    The putting of unpatented pens into a patented penholder, where no particular pen was to be used with the penholder, is not such a “ manufacturing ” of penholders as would' justify a revocation of a license granted on condition that returns should be made at certain intervals of penholders “manufactured” or that the license should be void.
    3. Same—Fanciful name—“ Ideal ” fountain pen.
    The word “ Ideal” as applied to a fountain pen is non-descriptive, arbitrary and fanciful, and has no natural or necessary application to a pen, and the right to so use it is in the nature of property, and the use of it by defendants after plaintiff had acquired a reputation for his pen under that name authorizes a court of equity to restrain them from passing off wares of their own manufacture as those of plaintiffs.
    Appeal from a judgment of the general term of the supreme court, in the second judicial department, entered on an order made December 13, 1889, affirming a judgment entered on the decision of the court at special term.

      This action was brought to restrain the defendants from using an alleged trade mark of the plaintiffs, consisting of the name, “ Waterman’s Ideal Fountain Pen,” and to compel them to account for all profits realized by them from the sale of fountain pens stamped with that name.
    The answer, after denying certain allegations of the complaint, alleged that the name in question denoted a certain kind of fountain pen, patented in the name of the plaintiff Waterman, and that it was the only name under which such patented pens were known or sold in the market; that it had no reference to the particular manufacturer of the pens, and that the defendants had never manufactured or sold except as lawful licensees under said patent.
    Upon the trial it appeared that on February 12, 1884, and also on November 4, 1884, letters patent of the United States were issued to Lewis E. Waterman, one of the plaintiffs, for an invention described “ as a new and useful improvement in fountain pens." The application for the earlier issue of said patents was filed September 19, 1883, and for the latter, June 20, 1883, and. in July of the same year said Waterman adopted the name, “Waterman’s Ideal Fountain Pen” for the fountain pens made under said patents, which were “ substantially alike,with only slight differences.” The specifications describe the invention as a “ fountain pen," without using either of the other words. After the patents were issued, Mr. Waterman made and sold a large number of said fountain pens, each conspicuously stamped with said name and by that name, on account of his experience and skill, as well as the good quality of the pen, it had become widely known in the community and had acquired a high reputation as a valuable and useful article. It commanded an extensive sale and was the source of great profit to the proprietor. The plaintiff corporation has acquired from the patentee an interest in the sale of such pens, and both of the plaintiffs have applied said name only to fountain pens so made, which are known to the trade and the public exclusively by that name.
    From March 22 to November 25, 1884, the “Ideal Pen Company,” a firm composed of said Waterman and the defendants, owned the right to manufacture and sell fountain pens under the patents, and, with the consent of Mr. Waterman, held itself out to the public as the sole licensee and manufacturer thereof. At the latter date the firm was dissolved by mutual consent, Waterman taking the assets, except the bills receivable, which passed to the defendants, who assumed all the debts and obligations. As a further consideration for the adjustment, said Waterman, with one Sarah E. Waterman, gave to the defendants their joint promissory note for $6,500, payable November 28, 1887, with annual interest, and to secure the payment of the same, said Sarah E., who was then the owner of the letters patent, assigned them to the defendants subject, however, to an exclusive license previously granted by her to said Lewis E. to manufacture and sell fountain pen holders under said patents. The license required said Lewis E. to make returns to said Sarah E. on the 1st of each month, of all fountain penholders, “ containing the said patented improvement, manufactured by him,” during the month preceding and on or before the 5th day of the month following to pay her the sum of twenty-five cents as a license fee on every fountain penholder so manufactured. Upon a failure to make returns after .thirty days, or to make payments after ninety days from the times when returns or payments respectively became due, it was provided that said Sarah E. might terminate the license by giving written notice to the licensee. The defendants transferred said note and such interest as they had in the patents to one Asa L. Shipman, who on the 12th of December, 1887, after the note had become due and while it was unpaid, attempted to give them a .sole and exclusive license to manufacture and sell fountain pens under said patents. January 10, 1888, he assumed to revoke the license to Lewis E. Waterman, apparently for the reason that the latter continued to sell fountain pens under the letters patent, and on April 26, 1888, he served a second notice of revocation, on the ground of a failure to make returns due on the 1st of January and February, 1888, and payments due on the 5th of December, 1887, and January, 1888. After judgment had been recovered on said note, supplementary proceedings were instituted and a receiver appointed, and on May 16, 1888, the judgment and all costs were paid. Between the maturity of the note and the date of its payment the defendants engaged in the manufacture of penholders under said patents, in imitation of and similar to those so made by said Lewis E. Waterman, and after causing them to be stamped “ Waterman’s Ideal Fountain Pen,” offered them for sale. When the judgment was paid they ceased to manufacture, but continued to sell such as they had on hand, all of which had been made between the dates aforesaid. Both Waterman and the defendants stamped the pens made and sold by them with the dates of the patents under the name of the pen.
    After finding substantially the foregoing facts, the trial court found .as a conclusion of law that the name in question, being applied to a patented article, is not a trade-mark showing the ■origin and manufacture of the patented article; that whoever has the right to manufacture under the patents has the right to affix said name to the pens so made; that the defendants, while manufacturing and selling, claimed the right so to do by virtue of a license from the owner of the patents and the complaint was dismissed because it was held that the only remedy of the plaintiff was by a suit for infringement of which the federal courts alone have jurisdiction, or by a direct action to compel a reassignment of the patents and, as incidental thereto, an accounting for the profits.

      Walter S. Logan, for app’lts; Antonio Knauth, for resp’ts.

       Reversing 30 St. Rep., 152.

   Vann, J.

The defendants rest their right to the use of the name in question upon the allegation that they have a license under the letters patent to make and sell the patented article, and that the right to make the article involves the right to use the name adopted by the patentee. The plaintiffs insist that no effective license was ever granted to the defendants, who in reply say that they claim to have acted under a valid license and that the assertion of this claim divests the state courts of jurisdiction. We think, however, that an issue as to the existence of a license is an issue as to the existence of a certain kind of contract and involves simply a question of title to property, which does not fall within the jurisdiction of the federal courts when all the parties are citizens of. the same state.

The United States government, by virtue of its laws and the procedure of its patent office, created a certain exclusive privilege, popularly known as a patent right, and granted it to Lewis E. Waterman. That exclusive privilege is property, not visibly existent, but actually existing, and the official evidence thereof appears in letters patent issued by the federal government to said Waterman as patentee. That property, like other property, is capable of transfer by assignment The statute which created it expressly gave it the quality of assignability, either as a whole, ■“ or any interest therein.” U. S. E. S., § 4898.

The assignment of a certain interest has become known as a license, which is a transfer pro tanto of the property represented by the letters patent. An action, therefore, to determine whether a license has been given is an action to determine the title to property and while it involves the existence of a contract relating to a patent right, simply as property, it does not arise “ under the patent * * * laws of the United States,” as interpreted by its courts. Hartell v. Tilghman, 99 U. S., 547; Albright v. Teas, 106 id., 613; Dale Tile Mfg. Co. v. Hyatt, 125 id., 46: Ingalls v. Tice, 14 Fed. Rep., 352; McCarty & Hall Trading Co. v. Glaenozer, 30 id., 387; Merserole v. Union Paper Collar Co., 6 Blatch., 356.

The same rule has been repeatedly recognized by this court, which has held it applicable even when the action involved the validity of a patent. Hyatt v. Ingalls, 124 N.Y., 93; 35 St. Rep., 114; Middlebrook v. Broadbent, 47 N. Y., 443; Continental Store Service Co. v. Clark, 100 id., 365; Marston v. Swett, 82 id., 526.

An infringement, as applied to patents, is a violation of the exclusive right conferred upon the patentee. An adjudication that a certain act is an infringement necessarily requires the construction of the right, and, by comparison of principles or processes, a determination as to its nature and extent. An action to prevent an alleged infringer from using the right, as patented, involves the existence or preservation of the monopoly granted by the patent and necessarily arises under the patent laws. Jurisdiction of such actions has been conferred upon the federal courts, and it is held to be exclusive. St. Paul Plough Works v. Starling, 127 U. S., 376; Hyatt v. Ingalls, supra; Hat Sweat Mfg. Co. v. Reinoehl, 102 N. Y., 167; 1 St. Rep., 340; Smith v. Standard Laundry Machinery Co., 19 Fed. Rep., 825. Clearly no question as to infringement arises in this case, because both parties recognize the existence, validity and use of the patents, but differ as to the ownership of certain rights thereunder, which will now be considered.

The instrument relied upon by the defendants as a license is dated December 12, 1887, and purports to be a grant to them from their assignee, under a writing of an earlier date, of “ the sole and exclusive right and license to manufacture, use and sell the several inventions described in said two letters patent throughout the United States.” The power to make this grant depended upon the assignment from Sarah E. Waterman to the defendants, dated November 25, 1884, which was in the nature of a mortgage, and was to be “ null and void ” upon payment of the note that it was given to secure. U. S. E. S., § 4898 ; Waterman v. Mackenzie, 138 U. S., 252. That assignment, however, was made subject in express terms to the license agreement dated November 20, 1884, from Sarah E. to Lewis E. Waterman, whereby she granted to him “ the sole and exclusive right and license to manufacture and sell fountain penholders containing the said patented improvement throughout the United States.” While these instruments were in force, it is clear that the only person who had a right to make or sell articles protected by the patents was Lewis E. Waterman, as his grant was prior in date, and exclusive in scope. The defendants acquired by the original grant to them of November 25, 1884, simply the right to returns and royalties, with the ■remedy for default in making either as provided in the instrument dated November 20, 1884, and they acquired no greater right from their assignee on' December 12, 1887. The grant to the defendants of the right to make and sell in certain territory, subject to the grant to Lewis E. Waterman of a prior and exclusive right to make and sell throughout the same territory, conferred upon them no right either to make or sell, as their grantor could not transfer to them what had been previously transferred, with their knowledge, to another. Even if the grant to the defendants, although not operative as a license, transferred to them such rights as their grantor possessed at the time, which it did not purport to do, still the defendants would be without the protection afforded by a license, because the trial court did not find, and there is no evidence authorizing him to find, an effective revocation of the exclusive license to Lewis E. Waterman. The evidence relied on to establish such a manufacturing of penholders as to require the making of returns and the payment of royalties, consisted of testimony showing that Mr. Waterman put unpatented pens into patented penholders that he had made and had on hand before the note became due, and prior to that time it is not seriously claimed that there was any obligation to make returns. This was not a manufacturing of penholders, but simply an adjustment to suit the tastes of customers, as no particular kind of pen was to be used with the penholder. If one buys a penholder and pen, he can change the pen without the imputation of manufacturing. The specifications of each patent refer to “ the ordinary writing pen,” and contemplate its use with the article invented. Mr. Waterman “ manufactured ” no fountain pens, within the proper meaning of that word as used m his license, prior to February, 1, 1888, and after that date his returns were regularly made and before any pay-meats became due the loan was paid, and there was no further obligation to make either returns or payments to the defendants, or their assignor. The attempts to revoke the license, therefore, were without effect. This conclusion makes it unnecessary to consider the effect of receiving payment in full of the loan upon licenses or rights previously granted under the mortgage assignment. West v. Crary, 47 N. Y., 423; Waterman v. Mackenzie, supra.

Mr. Waterman’s exclusive license was therefore in full force when the defendants made the fountain pens in question and stamped them with the name, “ Waterman’s Ideal Fountain Pen.” The existence of the letters patent furnished them no protection in thus using the name, because, as already appears, they had no right to manufacture or sell the patented article. The relief that the plaintiffs may be entitled to, in the proper forum, on account of the making of fountain pens by the defendants is not involved in this action, which relates not to the use of the invention but to the use of the name.

If our reasoning thus far is sound, but little difficulty remains in the way of pronouncing judgment in this appeal. With the patents eliminated from the case, as immaterial facts, it stands on the theory of the complaint, which makes no allusion to them. Thus we have a case where, in the language of this court in Selchow v. Baker, 93 N. Y., 59, 69, “ a manufacturer has invented a new name, consisting * * * of a word * * * in common use, which he has applied for the first time to his own manufacture, or to an article manufactured for him, to distinguish it from those manufactured and sold by others, and the name thus adopted is not generic or descriptive of the article, its qualities, ingredients or characteristics, but is arbitrary or. fanciful, and is not used merely to denote grade or quality.”

While the word “fountain,” as applied to pens of a certain kind, is a common appellative, the word “ideal,” as applied to fountain pens, is non-descriptive, arbitrary and fanciful, and has no natural or necessary application to a pen. It serves to indicate that the article sold by Waterman was of his own manufacture. The right to so use it was in the nature of property and had become valuable. The use of it by the defendants tended to deceive purchasers by inducing them to believe that the pens sold by them were made by one who had established the reputation of his wares by the superiority of his workmanship and the excellence of his materials. The result, being injurious to the public as well as to the plaintiffs, authorized a court oE equity to interpose its preventative remedy for the protection of both the private right and the public interest by restraining the defendants from passing off wares of their own manufacture as those made by another. The ground of interference by the court is the false representation by the defendants through their acts in stamping the pens made by them with a word that had obtained currency as indicating pens made by Waterman. Even if in so doing they did not intend to defraud, as the necessary tendency of their acts was to deceive the public, the court was authorized to interfere. Newman v. Alvord, 51 N. Y., 189; Canal Co. v. Clark, 80 U. S., 311; Singer Mfg. Co. v. Wilson, 24 Week. Rep., 1023; Sykes v. Sykes, 3 B. & Cr., 541; Millington v. Fox, 3 My. & Cr. 338 ; Celluloid Mfg. Co. v. Cellonite Mfg. Co., 32 Fed. Rep., 94; Singer Mfg. Co. v. Larsen, 8 Biss., 151.

In the case last cited a patent had established the name of the “ Singer Sewing Machine.” It was held that, although after the expiration of the patent the defendant could make that machine and call it by that name, still he could not “ do any act, the necessary effect of which would be to imitate, or to make anyone believe that the machine which he constructs and sells is manufactured by the plaintiff.”

The function of a trademark is to point out the maker of the article to which it is attached. It individualizes the particular make of one who adopted the name for that purpose and with that effect. The defendants claim that the use by them of the name in question did not point out the maker, but the inventor, but we think it indicated both. “ Waterman’s Fountain Pen,” with the date of the patent following, pointed out the inventor, while the insertion of the word “ Ideal,” together with the use made of it, pointed out the maker. The learned trial court found that Waterman, for a long time prior to the commencement of this action, “ had been the manufacturer and vendor of an article known as a fountain pen, which he had for many years * * * offered for sale and sold, stamped and labeled with his own proper device and trademark, adopted by the plaintiff for that purpose in the year 1884, as follows: Waterman’s Ideal Fountain Pen.’ ” Also, that “it is known as such article to the public and to the buyers and consumers thereof ” by that name, and by the plaintiff’s own proper device and trademark aforesaid.” As the name was also used to indicate the patented article, it performed the double function of identifying not only fountain pens as made by Mr. Waterman, but also as patented by him. Can this fact take anything from his rights, or add anything to those of the defendants ? Can not a patentee adopt the same name to designate his workmanship, as well as his invention? Assuming that upon the expiration of the patent any one may use the name, until that time arrives why should the inventor be deprived of a right, which, without question, would be his if he had not taken out a patent for his invention ?

We think that the word “ Ideal,” as applied by Mr. Waterman to fountain pens of his own manufacture, comes within the comprehensive definition of a trademark as given in Selchow v. Baker, supra, and that the plaintiffs, as the owners of the name, are entitled to the protection which the law affords to owners of trademarks, notwithstanding the fact that the name is also used to designate the invention. Upon the facts found, the plaintiffs were entitled to an injunction restraining the defendants from using the word “Ideal,” as applied to fountain pens.

The judgment should, therefore, be reversed, and a new trial granted, with costs to abide the final award of costs.

All concur, except Bradley, J., not voting.


text:
    Edwin F. Babbage, App’lt, v. Daniel W. Powers, Resp’t.

      (Court of Appeals, Second Division,

      Filed December 8, 1891.)

    1. Nuisance—V ault under sidewalk—When consent to mat be inferred FROM LONG ACQUIESCENCE OF MUNICIPAL AUTHORITIES.
    Actual knowledge by city officers having the power to give consent of the construction of a vault under a sidewalk, and their persistent acquiescence for year after year, both'before and after the premises had changed owners, in the maintenance of said vault, has the effect of actual consent thereto.
    2. Same.
    Such consent will be inferred from the acquiescence of those having charge of the street for the public for a period of nine years.
    Appeal from an order of the general term of the supreme ■court, in the fifth judicial department, denying a motion of the plaintiff for a new trial, and directing judgment for the defendant on a nonsuit granted at circuit and from the judgment entered on said order.
    Action to recover damages for a personal injury to the plaintiff, ■caused, as alleged, by a nuisance maintained by the defendant in a public street.
    The complaint alleged that on the 7th of November, 1885, the defendant, being the owner and, through his tenant, in possession of certain premises situate on State street in the city of Rochester, “ without authority of law or permission from the municipal authorities of said city,” maintained and continued under the sidewalk immediately in front of said premises “ a certain vault excavated under said sidewalk, * * * covered ■only by the. stone flagging used by the public for passing and repassingthat said stone flagging “ was insufficient and inadequate in strength, through deficiency in quality or thickness, or by reason of some other defect to the plaintiff unknown, to sustain the ordinary travel of the publicthat by reason of such insufficiency, and by the sudden breaking of one of the flagstones upon which the plaintiff was standing, he fell into the vault and sustained serious inj uries.
    The defendant by his answer denied certain allegations of the ■complaint, admitted that he owned the premises therein mentioned, but alleged that he did not own to the center of the street, nor beyond its outer line. He further alleged that said excavation was made and the flagging over the same was laid with the consent of the proper authorities, before he became the owner of the building; that the area and flagging were well and sufficiently made and maintained; that he had no knowledge or notice of any imperfection therein and that the accident happened without any negligence or default on his part.
    Upon the trial it appeared that the plaintiff was injured in front of a building known as the Ashley Block, consisting of three stores, erected in 1876. A vault, ten or twelve feet deep, excavated at the same time in front of each store, was walled up on three sides in a substantial manner, and connected on the fourth by an archway opening into the cellar of the store. Bach vault was covered with flagstones, supported by solid iron girders running lengthwise of the sidewalk and resting on the walls. In the sidewalk were three openings, closed by iron doors, one in front of each store, for the purpose of raising and lowering goods. The sidewalk was ten or twelve feet wide with three rows of flagstones. After the covered area was thus constructed, and in 1883 or 1884, the defendant purchased said block and has owned it ever since. At the date of the purchase the store in question was rented to one Harris, who thereupon attorned to the defendant and he has since occupied the store under renewals of the lease. ¡November 7, 1885, the plaintiff, a man weighing 235 pounds, was walking with a friend in front of said store and meeting some ladies, turned toward the west, while his friend turned to the east, to allow them to pass. In thus turning out the plaintiff stepped on a flagstone next to the curb and thereupon fell into the vault underneath, the stone in two pieces, one a little longer than the other, falling with him, and he was seriously injured. Said stone was from two to two and one-half feet wide, by four or five feet long and four or five inches thick. It did not appear when or how it was broken, nor whether it was defective in any respect, nor was the cause of the accident shown, except as thus stated. The plaintiff, who had an office and lodging rooms next door to the Ashley Block, and had for years passed over the walk, testified that at the time of the accident it “ was apparently just as he had always seen it”
    It did not appear expressly that the defendant had ever seen said block or that he knew or had heard of the existence of said excavation. The evidence from which it is claimed that notice of its existence should be inferred is the purchase of the block by him; the receipt of rent therefor through his clerk; the renewal of the Harris lease by him in person and. his presence on one occasion in the city of Rochester, where a witness met him “ as he was coming out of his bank.” It was admitted that “ no evidence was given of any negligence on the part of the defendant, or of his grantor, in constructing or maintaining the flagging which gave way, any further than such negligence is inferable from the accident itself.”

      Theodore Bacon, for app’lt; Albert H. Harris, for resp’t

       Affirming 26 St. Rep., 799.

   Vann, J.

The plaintiff does not claim that the defendant was. negligent, but seeks to make him liable as a trespasser, upon the ground that the covered excavation in the street had never been authorized or consented to by the municipal authorities.

The law holds those who impair the safety of a public street to a strict liability. Thus in Congreve v. Smith, 18 N. Y., 79, it was said that “persons who, without special authority, make or continue a covered excavation in a public street or highway, for - a private purpose, should be responsible for all injuries to individuals resulting from the street or highway being thereby less safe for its appropriate use. * * * The general doctrine is that the public are entitled to the street or highway in the condition in which they placed it, and whoever, without special authority, materially obstructs it, or renders its use hazardous by doing anything upon, above or below the surface, is guilty of a nuisance. * * * Ho question of negligence can arise, the act being wrongful. * * * There can be no difference in regard to the nature of the act or the rule of liability, whether the fee of the land within the limits of the easement is in a municipal corporation, or in him by whom the act complained of was done.”

In another case, arising out of the same accident, it was held that even if the stone covering the excavation was broken, after it was laid, by the wrongful act of others, the defendants would still be liable, because they were bound at their peril to keep the area covered in such a manner that it would be as safe as if it had not been built. Congreve v. Morgan, 18 id., 84. These cases have been followed and made the basis of judgment in many others. Creed v. Hartmann, 29 N. Y., 591; Irvine v. Wood, 51 id., 224; Whalen v. Gloucester, 4 Hun, 24; Anderson v. Dickie, 26 How., 105; Wendell v. The Mayor, 39 Barb., 329 ; S. C., 4 Keyes, 261. Although called to the attention of the court, they seem to have been disregarded in McCarthy v. City of Syracuse, 46 N. Y., 194, 199, where it was said: “The excavation by the plaintiffs of the area under the sidewalk was not unlawful. They owned to the center of the street, subject to the right of way of the public over the surface. For any interference with this right of way the plaintiffs would have been responsible, but so long as they did no injury to the street, they were at liberty to use the space under it, as they might any other part of their property.” Assuming, however, the rule to be as stated in the Congreve cases, supra, when the excavation is made without authority, Clifford v. Dam, 81 N. Y., 52, 56, it is clear that when it is made with the consent of the proper municipal officers, the rule of liability relaxes its severity and rests upon the ordinary principles governing actions of negligence. The person receiving the license is held to impliedly agree to perform the act permitted with due care for the safety of the public, and is made liable for any violation of duty in this regard. Village of Port Jervis v. First National Bank, 96 N. Y., 550, 556 ; Clifford v. Dam, 81 id., 52 ; Dickinson v. The Mayor, 92 id., 584, 587; The Village of Seneca Falls v. Zalinski, 8 Hun, 571, 574; Newton v. Ellis, 85 Eng. C. L., 123.

When conditions, whether express or implied, are annexed to the license, substantial compliance therewith is essential to the protection of the licensee, but consent and compliance relieve the owner from the imputation of trespassing in doing the act consented to, and place him in the position of one liable for negligence only. Wolf v. Kilpatrick, 101 N. Y., 146; Nolan v. King, 97 id., 565 ; Elliott on Roads and Streets, 541.

It did not appear on the trial of this action that express authority had been given by the city of Eochester, or in its behalf, either to the defendant or his grantor, to construct or maintain the covered area in question. On the contrary, a witness called by the plaintiff testified that during and prior to the year 1876 he was a member and the clerk of the board of public works, which had charge of “public matters, streets, -walks and such things,” and the members of which were commissioners of highways; that such board expired in April or May of that year and was succeeded by the executive board, possessing similar powers, and that he was also clerk of that board; that upon examining the records of both boards kept by him for the year 1876 “ and about that time,” he did not find any written permission had been given by either of those bodies “ to excavate and construct a vault under the sikewalk in front of the premises knewn as the Ashley block,” and that at this time “ the common council did not exercise jurisdiction over such subjects.” On the cross-examination of this witness, however, it appeared that while he was a member of one or the other of said boards he observed the work of constructing the Ashley block as it was going on; that in 1876 and for some years prior, it was the common practice to make excavations such as that in question under the sidewalks, to cover them with flagstones and to make openings therein as means of access thereto and to the cellars of stores; that this was very common on State street, in the neighborhood of the Ashley block; that one Thompson, who, as contractor, built the vault in front of that block, was at the time a member of the board of public works; that another member did business a little below said block, and other members in the same locality, and that all of the members were accustomed to go about the city for the purpose, as it is assumed, of inspecting the streets and sidewalks. It appeared from other testimony that State street was a business street and that covered excavations, such as the one under consideration, were common all over the city. There was no evidence of any objection on the part of the city or its officers. At the close of the evidence a motion to nonsuit was made and granted upon the ground, among others, that the plaintiff had failed to make out a cause of action against the defendant. No request to submit any question to the jury was made by the counsel for the plaintiff, who contented himself with an exception to the decision of the court in granting the motion.

The foregoing facts, which were undisputed, were deemed sufficient by the courts below to justify the nonsuit upon the ground, as stated by the learned general term, that, “ While it does not appear by positive proof that the owner obtained a license or permit from the municipal authorities to excavate the space under the sidewalk, such authority may reasonably be inferred from the use of the same for the period of nine years, without objection, with actual knowledge on the part of the city officials that the same existed.”

The question presented for our determination, therefore, is whether consent to the maintenance of this vault may be inferred from the long acquiescence of the municipal authorities under the circumstances stated?

A similar question was under consideration by this court in the case of Jennings v. Van Schaick, 108 N. Y., 530; 13 St. Rep., 686, where the plaintiff fell through an uncovered and unguarded coal-hole in the sidewalk. Although the building was rented in flats or apartments to tenants who used the coal-hole, the owner was held liable because he remained in control of the halls and a part of the basement, and employed a janitor to take care of the premises, who, in the discharge of his duty as such, controlled the coal vault and the opening thereto in the sidewalk, and through his negligence in leaving the hole unguarded the accident happened. The court in discussing an exception to the charge of the court that the action was based on a wrongful act said : “ It does not appear that the defendant, who owned the premises, had ever obtained from the municipal authorities any formal license or permission to construct the opening in the sidewalk, but such authority was a reasonable inference from an acquiescence of eighteen years without objection from the city. Assuming, however, that authority for the construction had been granted, the duty of safe covering and of protection when open remained, and if not performed the unguarded opening became at once a wrong and a nuisance. * * * We have assumed that, from long use and acquiescence, the consent of the municipal authorities to the construction of the coal vault and its aperture should be inferred, and so the structure was not, in and of itself, a nuisance. But the consent of the city is conditional upon certain modes of use, and if the opening is left unguarded it becomes at once a trap anda nuisance.”

Thus, while the court held the owner liable on the ground of negligence, it also held that he was not liable as an original trespasser, because it inferred from the acquiescence of the municipal officers that they had consented to the construction and maintenance of the covered area. The question was presented to the supreme court of the United States in Chicago City v. Robbins, 67 U. S., 418, 425, and also in Robbins v. Chicago City, 71 id., 657, 679, where it was held that permission to build and maintain an area in a public sidewalk might be inferred from the fact of its construction and maintenance without objection from the officers-of the city. So, it has been held that the deposit of building materials in a street for use in the erection of a house, with the full knowledge of the superintendent and trustees of the village, is-sufficient to authorize and even compel a jury to find consent by implication to such use of the street. The Village of Seneca Falls v. Zalinski, 8 Hun, 571, 573.

The supreme court of Massachusetts, in laying down a similar rule, said: “ What may be deemed a reasonable and proper use of a way, public or private, must depend much on the local situation, and much on public usage. The general use and the acquiescence of the public is evidence of the right. The owner may make such a reasonable use of a way adjoining his land as is usually made by others similarly situated. As to the reasonableness of the use, it may well be laid down that in a populous town, where land is very valuable, * * * when the owner of a lot "x" * "x" has occasion to build, and for that purpose to dig cellars, he may rightfully lay his building materials- and earth within the limits of the street, provided he takes care not to improperly obstruct the same, and to remove them in a reasonable time.” Van O'Linda v. Lothrop, 21 Pick., 292, 297.

The supreme court of Michigan holds that excavations properly and safely constructed under the public streets of cities for the convenience of the owners of premises adjoining are not unlawful, even in the absence of permission from the municipal authorities. Fisher v. Thirkell, 21 Mich., 1, 21.

In Illinois, the rule as laid down by its supreme court is that while the corporate authorities of a city have knowledge of the fact that a lot owner is constructing a vault under the sidewalk for his own convenience, and make no objection, authority to construct the same may be inferred, and when the same is continued for many years without objection the acquiescence on the part of the city will be regarded as sufficent authority to construct and maintain it in a careful and prudent manner. Gridley v. City of Bloomington, 68 Ill. 47, 50. In an earlier case involving the same question that learned court said: “We are not prepared to admit that the defendant could, by reason of his ownership of the adjoining property, claim the absolute right to take up the sidewalk and extend his coal cellar under it, but as such a privilege is of great convenience in a city, and may with proper care be exercised with little or no inconvenience to the public, we think that authority to make such cellars may be implied in the absence of any action of the corporate authorities to the contrary, they having been aware of the progress of the work.” Nelson v. Godfrey, 12 Ill., 20, 23. See also Clark v. Fry, 8 Ohio St., 358 ; Wood v. Mears, 12 Ind., 515; Mallory v. Griffey, 85 Pa. St., 275; Hundhausen v. Bond, 36 Wis., 1; Irvin v. Fowler, 5 Rob.; 482; Dillon on Municipal Corp. Vol. 2, §§ 699, 700; Cooley on Torts, 748. We have been referred to no case and have found none, criticising or condemning the doctrine of implied consent as thus laid down by the courts.

The giving of consent is an executive act, which from its nature does not require an ordinance or resolution, as in the case of a legislative act, or a written entry or decision, as in the case of a judicial act Where the power resides in a single officer, and there is no statute regulating the subject, no reason is apparent why his verbal consent would not suffice the same as a verbal license from an adjoining owner to his next neighbor to construct, on the land of the latter, a wall or anything which, without consent, would be a trespass. Miller v. Auburn, etc., R. R. Co., 6 Hill, 61; Murray v. Gibson, 21 Ill. App., 488; 13 Am. & Eng. Enc., 546. So consent by a board might be given orally by the assembled body when inspecting the premises. An individual proprietor, standing by and witnessing ah erection on his land by the adjoining owner, which would be a trespass if not consented to, by not objecting, impliedly consents.

Why should not actual knowledge by city officers having the power to give consent, and their persistent acquiescence for year after year, both before and after the premises had changed owners, in the maintenance of said vault, be given the effect of actual consent thereto ? In answering this question due consideration should be given to the convenience of commerce and the necessities of business in crowded cities. Due regard should also» be had to the custom with reference to constructing vaults under sidewalks, so universal in the erection of modern buildings for business purposes in the cities of this state, that the court may take judicial notice of the fact as a matter of constant observation and common knowledge. Gibson v. Stevens, 49 U. S., 384, 399; Raymond v. City of Lowell, 6 Cush., 524, 534; Wade’s Law of Notice, 2d ed., §§ 1408, 1410 and 1417.

We think that both upon principle and authority consent to an act so common and necessary as the construction of a vault under the sidewalk in front of a block erected and used for business purposes must be conclusively inferred from the acquiescence of those having charge of the street for the public for so long a period as nine yc-m s,

The judgmem, :/h< -uld be affirmed, with costs.

All concur, except Eradlev cud Parkcc JL, no- citing. '


author: Parker, J.

text:
    Morris Steinhardt, Resp’t, v. Edward Cunningham, App'lt.

      (Court of Appeals, Second Division,

      Filed December 8, 1891.)

    1. Wills—Trusts—Express trust.
    F. devised Ms estate, in trust to pay legacies to his children, to his wife and one H., who were made executors. After directions as to how the legacies were to be paid, he gave the residuum to his wife, and gave his “trustees, executor and executrix,” full power to sell his real estate and “invest the proceeds, or to let or sell the same as they may deem best for the interest of my family.” H. did not qualify, but the wife did. Held, that a valid express trust was not created by the will so as to vest in the wife and H. the title to testator’s real estate.
    2. Vendor and puchaser—Title—Foreclosure—Parties.
    Defendant’s title was derived through a sale on foreclosure of a mortgage g yen by F. in his life-time on said premises. Held, that H. was not a necessary party to the foreclosure.
    Appeal from an order of the general term of the supreme court, first department, reversing a judgment rendered in favor of the plaintiff at special term.

      Theodore W. Dwight, for app’lt; George H. Yeaman, for resp’t.
   Parker, J.

This action was brought to recover money advanced on an executory contract for the purchase of land, and for the expenses of a search subsequently incurred, on the ground that the defendant is not able to give a good title.

The defendant acquired his title through a judgment of foreclosure and sale, and it is contended by the appellant that one of the parties in whom the legal estate of an undivided one-half of the premises was vested at the time of the commencement of the suit was not made a party, and therefore such estate did not pass to the purchaser at the foreclosure sale.

Solomon Freedman died seized of one undivided half of the premises in question, subject to a mortgage. He left a will in which, after directing the payment of his debts and funeral expenses, he in terms devised and bequeathed all his estate “ to my beloved wife Rosa Freedman, and to my good friend Jonas Heller, of New York city, to have and to hold the same to themselves, their heirs and assigns forever, upon the uses and trusts following, "viz.: at the time of my death, should my daughters Fannie and Rachel, or either of them be unmarried, I give and bequeath to such of them as may be unmarried, the sum of $5,000.”

In item 2d, the testator declares: “ I give, devise, and bequeath to each of my sons, Jacob, William and Simon Freedman, the sum of $5,000, lawful money of the United States, as soon as they respectively attain their majority. * * * To my son Benjamin Freedman, I give and bequeath $5, * * * he having already received from me in cash, $5,000. These bequests shall, by my executor and executrix, trustees and guardians hereinafter named, be safely invested upon interest for their and each of their, my said children’s benefit and behoof * * Then follows finis residuary clause: “All the rest and residue of my estate, real, personal and mixed, of which I may die seized and possessed and to which I may be entitled at the time of my death, after providing for the aforesaid bequests and the accumulations thereon, I give, devise and bequeath absolutely and forever to my beloved wife Rosa Freeman, subject solely to her own free will and control and disposal as to her may seem meet and proper in lieu of her dowry.”

Item 3d provides for the disposition of the share bequeathed to either of the children in the event of their death before a division of the estate.

Item 4th authorizes the executors to withhold payment of the bequests to the sons until such time as their conduct or position in life should be deemed satisfactory.

Then follows item 5: “I give to my said trustees, executor and executrix, full power and authority to sell any, or all, of my real estate at public or private sale and invest the proceeds thereof, or to let or sell the same as they may deem best for the interest of my family.”

Item 6 has no bearing on the question before us.

Item 7 is as follows: “I hereby nominate, constitute and appoint my said beloved wife Rosa Freedman and my friend Jonas Heller, of the city, county and state of New York, trustees and guardians of the persons and effects and of the estate of my children during their and each of their minority, and also the executor and executrix of this my last will and testament. And I commend my children to their fostering care and protection.”

Jonas Heller omitted to qualify as executor, but Rosa Freedman did, and letters testamentary were therefore granted to her alone, and she thereafter proceeded to the discharge of the executory duties devolving upon her. In the suit brought for the foreclosure of the mortgage the legatees were defendants and Rosa Freedman was made a party individually and as executrix. But the plaintiff insists that by the terms of the will an express trust was created by which the title to the real estate became vested in the trustees; that while Heller did not qualify as executor, he took no action for the purpose of divesting himself of the estate . devised to him by the testator; and therefore was a necessary party.

We are first to inquire, then, whether by the terms of the will a valid express trust was created which vested in Mrs. Freedman .and Jonas Heller the title to testator’s real estate. If not, we need not examine the other questions discussed by the appellant, because this proposition lies at the very foundation of his contention.

It may be doubted whether the testator intended to create an •express trust, notwithstanding the devise was in terms to the executors as individuals, in view of the other provisions of the will. True, after the direction to the executors to pay debts and funeral expenses, he in terms devised all his estate to Eosa Freedman and Jonas Heller, their heirs and assigns forever, upon the uses and trusts following. But this devise is not immediately' followed by the direction to the trustees to sell or mortgage the estate, or to receive rents, profits and income thereof, and make disposition of them in a manner provided. On the contrary, the next sentence is as follows: “ At the time of my death, should my daughters, Fannie and Eachel, or either of them, be unmarried, I give and bequeath to such of them as may be unmarried the sum of $5,000.” Item 2d follows with a bequest of a like amount to each of the testator’s sons, and it concludes with a residuary clause in which the testator gives and devises all the residue of his estate, real, personal and mixed, to his wife, Eosa Freedman. And after “items 3 and 4” he confers by “item 5,” upon the persons named as executors, authority to sell any or all ■of his real estate and invest the proceeds, or to let or lease the .same, as they may deem best for the interests of the family.

The executors were not required to sell, but they were authorized to sell if necessary to discharge the executorial duties conferred upon them. It seems to be clear that the testator had in mind that should his personal estate prove sufficiently large to discharge the legacies given by the will, then there would be no •occasion to sell the real estate, for he devised in terms the residue of his real estate to his wife, and by the power of sale, which •stands alone, he empowers a sale of any or all of his real estate or permits it to be leased. But assuming that the testator intended to pass the title of his estate to the individuals named, it is not •contended that a valid express trust was created, unless it may be said to be within the protection of subd. 2 of § 55, which provides for a trust to sell lands for the benefit of legatees or to satisfy a charge thereon.

This provision is qualified by § 56, which declares that: “ A devise of land to executors or other trustees to be sold or mortgaged, where the trustees are not also empowered to receive the rents and profits, shall vest no estate in the trustees, but the trust shall be valid as a power, and the land shall descend to the heirs or pass to the devisees of the testator, subject to the execution of the power.

Where leases are to be made, tenants put into possession and dispossessed, the possession of the legal estate in the trustees is-convenient and reasonably necessary, and for that purpose the statute permits a grant or devise of title to those charged with the execution of such duties. And it is true that no particular words are necessary to create a trust, and one may be implied where from the whole will it is apparent that the testator intended that, the trustees should be empowered to receive the rents and profits, and for that purpose and to accomplish the other objects of the will it appears to be convenient and advantageous that they should be vested with the legal estate Robert v. Corning, 89 N. Y., 237. But in all other cases of a grant or devise of land to-executors or trustees to be sold or mortgaged, the title of the land descends to the heirs or passes to the devisees subject to the execution of the power. The scheme of the statute is, therefore, in the direction of such a construction as will vest the title in the heirs or devisees rather than the executors, and permits the working out of the wishes of the testator when legal under.a trust, power. And we are unable to discover in this will any barrier in the way of the accomplishment of the purposes of the testator through a trust power; therefore no reason exists for straining after a construction that will declare a trust.

The power of sale is not coupled with the language intended to create a trust; does not in terms refer to it, or apply to the trust pui'pose; nor is it imperative. It does not direct a sale of all his lands, leaving the time of sale merely in the discretion of the executors, but authorizes a sale of “ any or all ” of testator’s real estate, or permits it to be let or leased as may be deemed for the best interest of the family. And this discretionary power is consonant with the residuary clause in the will which, after the payment of bequests, gives and devises to his wife all the rest and residue of his estate, real, personal and mixed.

It has been held by this court in Cooke v. Platt, 98 N. Y., 35, that it is essential to the constitution of a valid trust for either of the purposes referred to in § 55 “ that the power of sale conferred upon the trustees must be absolute and imperative, without discretion except as to the time and manner of performing the duty. imposed, and that it is not sufficient to invest the trustees with a merely discretionary power of sale which may or may not be exercised at their option, and which does not operate as a conversion.” As a valid trust was not created, the legal estate was not vested in the trustees.

It follows that Heller was not a necessary party to the foreclosure.

The judgment should be affirmed.

All concur, except Haight, J., absent

       Affirming 29 St. Rep., 162.