author: Peckham, J.

text:
    Henry G. Keasbey et al., App’lts, v. The Brooklyn Chemical Works et al., Resp’ts.

      (Court of Appeals,

      Filed June 5, 1894.)

    1. Appeal—Question op law.
    Where it does not appear, in the order of reversal, that the general term reversed the judgment on any question of fact, it must he presumed that it was not reversed upon any such fact.

      2 Same—Conclusions of law.
    If there is any evidence to sustain the findings of fact by the court, the only question remaining in the court of appeals is whether those facts sustain the conclusions based upon them.
    S. Trade-mark—What is.
    To render a word adopted as a trade-mark invalid as such on the ground that it is descriptive, the word must give some reasonably accurate and distinct knowledge of what the article is.
    4. Same.
    That a name has been previously used for other purposes, or in other departments of knowledge, is no objection to its use as a trade-mark.
    Appeal from order of the general term of the supreme court in the first judicial department, made December 6, 1892, which reversed a judgment in favor of plaintiffs entered upon a decision of the court on trial at special term and ordered a new trial.
    This action was brought to restrain defendants from using the words “Bromo-Caffeine,” which plaintiffs claimed as a trademark.
    The facts, so far as material, are stated in the opinion.

      William G. Choate, for app’lts ; Herman Aaron, for resp’ts.

      Reversing, 50 St. Rep. 483.

   Peckham, J.

This action was tried by the court without a jury, and judgment was given in plaintiffs’ favor enjoining the defendants from the use of the words “ Bromo-Caffeine ” upon bottles containing a substance similar to that sold by the plaintiffs under that name. The injunction was granted on the ground that the defendants by such use of the above words infringed upon and violated the legal rights which the plaintiffs had acquired in the exclusive use of those words for the purposes of a trade mark.

The general term of the supreme court reversed the judgment, and granted a new trial, holding that the plaintiffs had established no legal right to the exclusive use of the words. It does not appear in the order of the reversal that the general term reversed the judgment upon any question of fact, and it must, therefore, be presumed that it was not reversed upon any such question. Code of Civil Proc. § 1338. If there be any evidence to sustain the findings of fact by the court, those findings are conclusive upon us, and the only question remaining would be whether those facts sustained the conclusions of law based upon them. The plaintiffs are manufacturers of chemical and also of medicinal preparations. In 1873 they began the manufacture of caffeine preparations, and they say that they practically created the demand in medicine for them in this country. They testified that they had been annoyed by having other manufacturers make similar preparations and sell them for those prepared by the plaintiffs, and so they devised their last preparation and affixed labels to the bottles containing it, on which were printed the words “Bromo-Caffeine,” and the plaintiffs also complied with the law providing for registering labels as trade marks in the patent office at Washington. This use of the above words was commenced in the year 1881 by by plaintiffs, and they have spent between three and four hundred thousand dollars in advertising their trade in the preparation thus sold. 35Totwithstanding this enormous expense thus incurred by plaintiffs their claim to the exclusive use of the words as a trade mark is denied by defendants, because as they allege, the words used for that purpose were in common use at the time of their adoption by plaintiffs, and it is maintained that they indicate the character, quality and composition of the preparation made by plaintiffs, and that they correctly describe an article of trade so that its qualities, ingredients and characteristics would be recognized upon seeing or hearing the words.

The defendants urge that this case comes within the principles laid down in Caswell v. Davis, 58 N. Y. 223, while the plaintiffs claim that it is like those cases where the trade mark, while more or less suggestive of the ingredients, characteristics or composition of the article to which it was applied, yet did not define the facts to such an extent as to thereby forfeit protection for the exclusive use of the words as a trade mark for the particular article manufactured.

Before proceeding with the question further it will be well to see exactly what facts have been found by the trial court. It has been found that the manufacture of chemicals and of medicinal preparations are separate and distinct industries. In 1881 the plaintiffs commenced and have ever since continued the manufacture of a secret preparation of caffeine, composed of certain ingredients specially set out in the findings. This is a medical preparation and made for and adopted to the relief of headaches and other nervous disorders. In order to distinguish the preparation from all others, and to establish a trade mark, the plaintiffs designated and applied to the preparation a new, arbitrary and fanciful •name, which does not describe the article or its ingredients, the name being “ Bromo-Caffeine,” which name had never been before used in medical science to designate any other medicine or medicinal preparation, and which name the plaintiffs thereupon applied to and have since used for the preparation sold by them, and such preparation, by the name thus adopted and used, has become widely known as the preparation of the plaintiffs, and as designating their manufacture, and the preparation has acquired a large and extensive sale in the United States and other countries, and large sums of money have been expended by plaintiffs in advertising and introducing into the market this preparation.

In the year 1890 the defendants made a preparation similar to that of the plaintiffs, and intended for the same purpose, to which they applied the name of “ Bromide-Caffeine,” and subsequently they changed it to the name of “ Bromo-Caffeine,” and this name the defendants are still using to designate their preparation. It was further found that in the year 1867 a German chemist made a compound and called• the same “Bromo-Caffeine,” and an account of the making of the compound, including the process of making it, was published in a chemical journal at Leipsic in 1868. The formula is also to be found as published in Watts’ Dictionary of Chemistry, edition of 1872, and the article is called therein u Bromo-Caffeine.” This chemical compound contains one portion of bromine, which is a virulent poison, and it is mixed in-certain proportions with carbon, hydrogen, nitrogen and oxygen, and the result is that the caffeine entirely disappears. The evidence shows that the chemical compound thus described has no caffeine, but has bromine in it, and it is not an article of commerce nor is it generally known, and it is useless and valueless and unemployed, and outside the knowledge of expert or practical chemists. It is a mere curiosity of a chemical and not of a medicinal nature. While in the chemical compound the caffeine has wholly disappeared, and one atom of bromine has replaced one atom of hydrogen, the medical compound, on the other hand, as prepared by the plaintiffs, contains no bromine at all, and does contain caffeine and bromide of potassium, and several other substances. Thus, there is no identity of substance or of nature between the “Bromo-Caffeine” of chemistry and the “Bromo-Caffeine” prepared as a medicine by the plaintiffs. The-former is a worthless medical compound, while the latter is a valuable medicine. Bromine enters into combination with many different alkalies, and, when thus combined with an alkali, it becomes a bromide of such alkali; thus, when compounded with potassium in certain proportions it is called bromide of potassium, and when with sodium it is called bromide of sodium ;■ and so there are organic compounds into which bromine enters besides what are termed alkalies, probably hundreds of them. The term “Bromo-Caffeine,” therefore, cannot be said to indicate the presence of bromine in the plaintiffs’ preparation, because in truth there is no free bromine in it, while it is equally useless for indicating the particular alkali with which the bromine has in the particular preparation combined, out of twenty or thirty different ones with which bromine will combine some of which may not even be sedative in their effects. Further than that the words used would not show that there was necessarily any bromide used in the compound, because bromine'may enter into organic compounds which are not alkalies; and the term “Bromo” does not necessarily distingnish the substance as an alkali with which the original bromine may have combined before it entered into the final preparation compounded.

There is a finding that bromide of potassium and bromide of sodium were both well known to physicians prior to 1881, as possessing certain medical properties as sedatives, and the preparation sold by the plaintiffs contained the former bromide, while that sold by the defendants contained the latter, and both were mingled with caffeine and an effervescent salt and sugar and some other ingredients. The therapeutic effect of both bromides is substantially identical.

I think the finding of the court upon these facts is well grounded when it is said that the plaintiffs originated and applied their preparation to a new, arbitrary and fanciful name, which does not describe the article or its ingredients, and which had never been used in medical science to designate or name any other medicine or medical preparation. There is evidence which sustains the finding, and on this appeal the finding is conclusive upon us. The trade mark does not impart information as to the general characteristics and composition of the plaintiffs’ preparation at least to such an extent as to render the trade mark itself invalid on that ground. It is not descriptive to any such extent as that. The name may and probably would suggest to any intelligent man a suspicion or perhaps a belief that that the article had bromine or a bromide and caffeine in it in some conceivable form, together with possibly many other substances, but there is nothing in the name which necessarily suggests as the basis of this preparation any particular bromide out of the twenty odd which bromine may form with different alkalies, nor would it necessarily suggest that it was a bromide at all, for it might be one of the hundreds of other organic compounds with which bromine combines. Upon these facts how can it be said that by the use of these words there is any such description of the article as indicates to the public the principal ingredient of which the article is composed ?

The word “Bromo” cannot be claimed as descriptive of the ingredient bromine, because the word is also used with regard to substances which have no bromine in them, but only some one of the different bromides. Neither does the word describe any particular bromide. Neither does it give any clue to the substance other than a bromide with which the bromine may have been compounded. The word fails in fact to give information as to what the ingredient is, further than a possibility as above suggested.- This failure is very important, for unless the word give some reasonably accurate, some tolerably distinct knowledge as to what the ingredient is, it is clear that it is not descriptive within the meaning of that term as used with reference to a trade mark. When spoken of with reference to a preparation of which it forms a part, bromide of potassium is one ingredient, while bromide of sodium is another and a totally different ingredient, although both are substantially identical in their therapeutic effect. They are still and nevertheless distinct and different ingredients. In addition, however, is the fact that the word “Bromo” does not particularize sufficiently even to indicate that the ingredient is either one or the other of those two bromides out of the twenty or thirty bromides with which bromine may combine. And there is no finding and no proof that even the therapeutic effect of all the other bromides is either substantially or at all identical each with the other or with the two bromides above mentioned. All that any one could do on reading these words would be to guess that probably tire article contained some caffeine and some bromine free or combined with some bromide or else with some other organic compound which bromine will combine with, and as to which of these almost infinite possibilities was the fact, the word “ Bromo ” would convey no information whatever.

Tiie testimony of Dr. Hamilton is not contrary to this statement He said he did not know the ingredients composing the preparation, but supposed it might contain some preparation of the Bromo, but he did not know what it contained. He would understand from the use of the word “ Bromo ” that some form of bromide and caffeine are combined ; the phrase “Bromo-Oaffeine” vaguely conveyed to his mind that there was some preparation of bromide and caffeine together. The phrase, he said, was a term and not a scientific one, and he could not tell by the word “ Bromo ” what particular substance the bromide had combined with. The evidence shows that the word “ Bromo ” does not necessarily indicate the presence of any bromide. ■ The word is just as descriptive and just as applicable in case bromine itself were the substance combined in the compound and not a bromide at all. The word could only be said to inform one of the fact that bromine or some kind of bromide had entered into and formed part of the compound, but upon the question whether it was bromine or one of the many different kinds of bromides, the word “Bromo.” would give no knowledge whatever. A name which furnishes no information on this point cannot be said to be so far descriptive in its nature as to prevent its adoption as a trade mark so far as this question is concerned.

We think there is a distinction between the facts in this case and that of Caswell v. Davis, supra. In this case the term perhaps suggests that some one .among the hundreds of substances that bromine may combine with has been used in such combination together with caffeine. There are, however, some s'bven different ingredients in the plaintiffs’ preparation, and there is no free bromine among them, and there is no evidence as to what the substance is which the bromine (if any) had combined with befoen being used in the preparation, and so it is plain that the worrs “Bromo-Oaffeine" do not in fact describe the ingredients or eved give any clear general idea as to what the are.

The plaintiffs adopted the words as a trade mark after cousulation with counsel and before the name was in use in the United States as applied to any substance, while in the Caswell Case the combined words were not applied to the medicine as a name to designate the ownership, origin or particular manufacture of the preparation, but solely to indicate to physicians and the community of druggists the names of the three principal ingredients of which it was composed, and these three principal ingredients were known in materia medica and had been prescribed by physicians many years prior to 1860. The words did in fact show forth the quality and composition of the article sold. The name adopted was “Ferro-Phosphorated Elixir of Calisaya Bark,” and it was said that they did indicate to the medical profession, to the community of druggists and to the public, the principal ingredients of which the article was composed. It also substantially indicated that the Calisaya bark was treated or had been subjected to the action of the two substances, iron and phosphorus, both of them old and well-known names of articles used in medicine. All through the opinion of Judge Folg-er it is seen that the idea is prominent that the words did indicate the chief ingredients of the article, and it was only the particular strength of the different substances in their application to the bark that the words did not convey an exact knowledge of. In this case the object was to coin a name which should not be descriptive.

We think this case comes within the doctrine of those cases which have protected the words as a trade mark although they suggested more or less the composition, quality or characteristics of the article. Some of the cases are alluded to in the opinion of Rapallo, J., in Selchow v. Baker, 93 N. Y. 59, and the distinction is drawn in Electro-Silicon Co. v. Hazard, 29 Hun, 369.

'Nor do we think the words were in common use when applied by plaintiffs.

They had been used to designate a certain chemical compound as hereinbefore quoted from the findings of the trial judge, but, as stated therein, that compound was not in use and had no known useful quality and was but a chemical curiosity, and the words had no known significance in the medical world at the time when they were appropriated by the plaintiffs.

We think that there is evidence sufficient in this case to support the findings of fact made by the trial court and that such findings justify the conclusions of law based upon them.

The defendants should be enjoined from the further use of a name which the plaintiffs had legally appropriated as a trade mark many years prior to the time when the defendants commenced its use. We can see no reason for an appropriation of this name by the defendants other than that arising from an effort to convert to their own use and benefit the labor and skill of another. As this name adopted by plaintiffs does not describe the ingredients entering into defendants’ preparation, an injunction restraining the latter from the use of the name adopted by the plaintiffs can inflict no injustice upon defendants. And they should not be permitted to acquire any advantage to themselves by the unlicensed use of the plaintiffs’ trade mark. It could only be used by the defendants for a fraudulent and illegal purpose and the plaintiffs should be protected from such an improper use.

The order of the general term should be reversed and the judgment entered upon the decision of the trial judge should be affirmed, with costs in all courts to the plaintiffs

All concur.

Ordered accordingly.


source: Caselaw Access Project

author: O’Brien, J.

license: Public Domain

text:
    William H. Camp, Resp’t, v. James J. Treanor et al., App’lts.

      (Court of Appeals,

      Filed June 5, 1894.)

    Í. Contract—Construction.
    Where an agreement provides that out of, the payments due or to become due, all just claims for material furnished or labor performed under the said contract with the city be first paid, and should there be any surplus remaining after the payment of all just claims, then such surplus to be equally divided among the parties herein named, except the plaintiff, who is to receive as his share an amount equal to ten per cent, of the actual cost of the labor and materials used in the construction of the building as set forth and specified in the contract, and such ten per cent, shall be in full settlement of all claim the plaintiff has or shall have on account of said contract, and that at the time of the completion of the contract, if there is any deficiency from any cause whatever, then the said parties hereto agree to pay the same in the same proportion as the surplus was to have been divided; the plaintiff, in case of a surplus, is to have it to the extent of a certain sum measured by ten per cent, of the cost of the material and labor, and the balance is to be equally divided between the other parties in the enterprise.
    2. Same.
    In such case, where plaintiff, under contract, furnished a portion of the material and labor, he is entitled to recover therefor.
    Appeal from judgment of the general term of the superior court of the'city of New York, entered upon an order made January 3, 1893, which affirmed a judgment in fgvor of plaintiff, entered upon the report of a referee.
    The nature of the action and the facts, so far as material, are stated in the opinion.

      Benjamin Yates, for app’lts; Hector M. Hitchings, for resp’t.

       Reversing, 49 St. Rep. 621.

   O’Brien, J.

The plaintiff brought this action and has recovered upon a contract between the parties bearing date February 24, 1890, made under the following circumstances : In the early part of the year 1889 one Donnelly had a contract with Long Island City for the erection of a school house. He was to furnish the material and labor in the erection of the building for $28,000, payable in five equal payments specified in the contract, each when the work had reached a certain stage mentioned, and the last thirty days after completion. The plaintiff in this action, as well as all the defendants, were sub-contractors under Donnelly to furnish the'various materials necessary in the construction of the building, and each had -furnished and delivered materials of the value of several thousand dollars, when Donnelly failed and abandoned the Contract. The work had reached a stage that, except for the abandonment of the contract, about $10,000 had been earned upon it. The plaintiff and defendants in this action filed liens for their claims, but these liens probably represented nothing unless the payments coming due were earned and payable by the city. The parties to this action were interested in the completion of the building, and the city having advertised for bids for that purpose, the parties to this action all combined and agreed among themselves that they would all put in bids at various amounts, with a view of securing the contract. The motive for this was obvious, for if they or any of them obtained the contract at a low price the surplus payable on the work done by Donnelly would be-increased, and would inure to the benefit of the liens, and inasmuch as all had on hand the material they had agreed to furnish the original contractor, there was a chance to make some profit from its use in completing the building. It appears that the plaintiff’s bid was the lowest, and after consultation with the defendants, who were interested with him in the matter, he entered into a contract with the city, agreeing to complete the work for $14,000, and two of the defendants became sureties upon his bond. The parties then entered into the agreement upon which this action was based. It recites the facts before stated and is signed by the plaintiff and the defendants. They agreed between themselves to furnish bonds to enable the plaintiff to secure the contract ; that a committee of two be selected from the parties with power to make all agreements for labor and materials necessary in the performance of the contract, but to be purchased from the parties themselves if in their line, and to have general charge and supervision of the work. The plaintiff assigned his interest in the payments, as. they became due, to his bondsmen, who were to receive the money from the city to be used by them in defraying the expenses of performing the contract, rendering an account to all the parties. Then follows the stipulation which has given rise to this action in this language: “And it is further agreed that out of the payments due or to become due, all just claims for material furnished or labor performed under the said contract with the said city be first paid, and should there be any surplus remaining after the payment of all just claims, then such surplus to be equally divided among the parties herein named, except Mr. William H. Gamp, who is to receive as his share an amount equal to 10 per cent, of the actual cost of the labor and materials used in the. construction of the building as set forth and specified in the contract, and such ten per cent, shall be in full settlement of all claim Mr. Gamp has or shall have on account of the said contract.

“And at the time of the completion of the contract, if there is any deficiency from any cause whatsoever, then the said parties hereto agree to pay the same in the same proportion as the surplus was to have been divided.”

The learned referee has found that there was no profit made in the contract, but, on the contrary, a very considerable loss. That a commission of ten per cent, on the actual cost of the materials and labor used in the construction of the building was, nevertheless, by the terms of the contract, to be paid to the plaintiff by the defendants whether the contract resulted in a profit or loss, and such commission, amounting to more than $1,500, was awarded to the plaintiff by the judgment, and the further sum of $932, the unpaid balance on a contract which the plaintiff had with the committee for furnishing and setting the freestone used in the construction of the building. Thus it has been held that the contract imposed an absolute obligation on the defendants to pay the commissions to the plaintiff whether there was a profit or a loss. We think that this view is opposed to the language of the contract and all the circumstances of the case. The enterprise was a joint one, and the parties engaged in it, including the plaintiff, occupied with respect to each other, the relation of partners. They were to complete the building and to share the profits or bear the loss. The plaintiff’s debt against Donnelly was $2,250, and he had the first lien, and, therefore, was interested even more than the defendants in securing the unearned payments on the old contract. There was work done under that contract which had not been paid for, as the contractor had abandoned the contract before the work had reached the payment stage, but the benefit of this work would, under the new agreement, inure largely to the benefit of the plaintiff. JSTo other reason is apparent for providing a different method of measuring the plaintiff’s share than the one adopted as to the share of the defendants, unless as a method of compensation for services, and nothing was said upo,n that subject in the contract and there is no finding that there was any agreement to pay such compensation. Whatever was to-be paid to the plaintiff under the contract was to come from any surplus, remaining after paying for the labor and materials, and there was no such surplus. The defendants did not agree in that event to pay to plaintiff a fixed sum without regard to the result of the enterprise. If the defendants intended to bind themselves to pay this comparatively large sum in any event to the plaintiff, they would have said so in words so plain as to preclude any argument as to the meaning. The contract provided a method for dividing surplus profits anticipated but never realized. I think that the correct interpretation of the agreement is-that in case of a surplus the plaintiff was to have it to the extent of a certain sum measured by ten per cent, of the cost of the material and labor, the balance to be equally divided between the other parties in the enterprise. The reason for adopting this method of measuring the plaintiff’s interest is not quite apparent, but the words used will not permit the construction adopted by tl^e learned referee. There is nothing in the language or the circumstances upon which to build a personal promise by the defendants to pay a fixed sum as commissions in any event. It follows that so far as the judgment is based upon such an absolute undertaking it cannot be upheld.

The plaintiff contracted to furnish the freestone and to set the same for a specified sum, that is to say, for $4,000, and was paid from the payments made from time to time by the city to the bondsmen, as assignees, the sum of $3,133. No reason has been suggested why the plaintiff is not entitled to enfore this contract in the same way as any other person who furnished materials or labor for the performance of a contract between the city and the plaintiff, the latter acting, not for himself, but for the others as well. The contract in form ran to the plaintiff, but it was, in fact, and for all the purposes of the case, the contract of the defendants as well, and the plaintiff is entitled to recover anything due on it for labor or materials. It is claimed on the part of the defendants that the plaintiff, in fact, never fully performed this contract; that he failed to produce the architect’s certificate to that effect as the contract required. On the other hand, the plaintiff claims that he abandoned the contract when nearly completed in consequence of the refusal of the defendants to furnish money to go on with the work, and hence the obligation of the defendants to furnish money for the completion of the building, before the expenditure of all the payments due or to become due from the city disclosed a deficiency is involved. We will not now attempt to solve the questions arising upon this branch of the case. They can be more fully and satisfactorily examined upon a new trial.

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

All concur, except Gray, J., who dissents as to construction of the contract. Judgment reversed.


author: Gray, J.

text:
    Samuel H. Willard, Resp’t, v. Holmes, Booth and Haydens, App’lts.

      (Court of Appeals,

      Filed June 5, 1894.)

    Í. Malicious prosecution—When maintained.
    Where a party has been subjected to some special, or added, grievance, as by an interference with his person or property, in a civil action, brought without probable cause, he may maintain a subsequent action to recover any legal damage which he avers and is able to show, has been occasioned to him.
    3. Same—Corporation.
    Such action, in a proper case, may be maintained against a corporation,
    3. Same.
    To sustain such action, the circumstances must appear to have been such that no reasonable man could have been influenced thereby to the belief that the former action was maintainable.
    4. Same.
    In such case, the question is, not what the actual facts were upon which the action was taken, but what the defendant had reason to believe they were; and, if they furnished reasonable cause for instituting the proceedings, its failure is no evidence of want of probable cause or of malice.
    Appeal from judgment of the general term of the court of common pleas for the city of New York, entered upon an order made February 7, 1893, which affirmed a judgment in favor of plaintiff entered upon a verdict, and also affirmed an order denying a motion for a new trial.
    The nature of the action and the facts, so far as material, are stated in the opinion.

      John E Parsons, for app’lts; Marshall P. /Stafford, for resp’t.

      Reversing 51 St. Rep. 569.

   Gray, J.

This action was brought to recover damages for the malicious prosecution of a civil action. Whether such an action may be maintained, regardless of whether the plaintiff in the former action had interfered with either the person or property of the defendant therein, is a question we are not call upon to determine. The general rule at common law that an ordinary action, maliciously brought and without probable cause, which had terminated in favor of the defendant, gave rise to a right of action, certainly seems to have disappeared in England with the enactment-of statutes giving costs to successful defendants. Blackst. Com. 126 (Chitty’s notes); Quartz Hill, etc., Co. v. Eyre, 11 C. B. 674, 683. In this country the authorities are not agreed upon the doctrine governing such actions; as may be seen by reference to the cases collated in the American and English Encyclop. of Law, vol. 14, p. 32. But I am prepared to assume that there may be satisfactory authority for holding that where a party has been subjected to some special, or added, grievance, as by an interference with his person, or property, in a civil action, brought without probable cause, he may maintain a subsequent action to recover any legal damage, which he avers, and is able to show, has been occasioned to him. See Bump v. Betts, 19 Wend. 421; Whipple v. Fuller, 11 Conn. 582; Potts v. Imlay, 2 Southard N. J. 330; Mayer v. Walter, 64 Penn. St. 283, and Cooley on Torts, p. 187. The action generally is not to be viewed with any favor; for, in theory of law, the costs awarded by the statute to the successful defendant are an adequate compensation to him for all damages. There is no reason, of course, why the action, in a proper case, should not be maintained against a corporation. The motive for the corporate suit is imputable to the corporation and not to the individual directors. In this case it appears that plaintiff’s property was attached, in the former action against him, and if it has been shown that it was instituted without probable cause and that there was an abuse of the processes of the law in the procuring of the attachment, furnishing the ground for an inference of malicious interference, the action may be said to have been attended with a special grievance; which, by adding to the expenses some injury to property, differentiated it from an ordinary action. The attachment issued upon the affidavit of the plaintiff’s (this defendant’s) president; alleging the non-residence of the defendant in the action. It was a process which the1 statute authorized and which is usual in such cases, and its use subjects this defendant to no unfavorable criticism, if it accompanied the institution. of an honest suit. The complaint and the affidavit in the former action contain no charges of fraud, or of a defamatory character ; and they, as well as an examination of the facts connected with its bringing and maintenance, seem to disclose only an effort to recover a sum of money, which the plaintiff’s directors supposed to have been lost to the company, through the unauthorized act of the defendant, while its treasurer and managing officer. Under such circumstances, every intendment should and will be against this plaintiff upon reviewing the case presented. Such an action as the present one comes very near to being, if it is not actually, a re-trial of the former case, and, for its justification, requires the plaintiff to make out a very glaring case of the commencement of an action against him without any reasonable ground, at the time, for a belief that he had rendered himself liable thereto. The circumstances to sustain this right of action must appear to have been such, that no reasonable man could have been influenced thereby to the belief that the plaintiff had unauthorizedly committed the company, whose officer he had been, to a liability which it should not have incurred and which was foreign to its chartered purposes. It is our judgment that the facts did not justify the trial court in submitting the case to the jury and that, upon all the evidence, it was error to deny the defendant’s motion to dismiss the complaint. The material facts were not in dispute and whether there was probable cause for the prosecution of the former action became a question of law, solely, for the court. Besson v. Southard, 10 N. Y., 236.

A review of the facts will make this clear and seems justified bv the magnitude of the recovery at the circuit and the subsequent affirmance of the judgment by the general term.

In 1886 the plaintiff, Willard, was the treasurer and_ the general manager of the defendant, a Connecticut corporation styled Holmes, Booth & Haydens, which- was chartered for the purpose of manufacturing and dealing in brass, copper, and German-silver goods, etc. Willard had been intrusted by the directora with a management of the company’s business, which was, practically, uncontrolled. He had executed a contract between the company and the Forest City Carbon Company, a corporation in Ohio, engaged in manufacturing carbons for electric lighting purposes; under which the latter company was to sell all of its manufactures to the Holmes, etc., Company. The Carbon Company desired to increase its facilities and to extend its plant and, in July, 1886, made arrangement with Willard, who undertook to procure the means by lending his company’s credit. It made its promissory note to the order of the Holmes Company for $10,000; which Willard indorsed in the name of the payee and procured to be discounted; remitting the proceeds to the Carbon Company. Before the maturity of this note, Willard resigned from the Holmes Company. In November, 1886, the Carbon Company, being unable to meet its maturing note, sent on another note for $10,000, made to the order of the Holmes Company, to Adams, then the agent of the latter company. Adams indorsed the note with the payee’s name and procured its discount. The company’s check for $10,000 was then sent to the Carbon Company, which that company used to take up its July note. During and prior to these transactions, Willard and Adams were also interested, as stockholders, in the Carbon Company. After Willard left the service of the Holmes Company, Wayland, its president, succeeded him as treasurer and general manager, in the latter part of January, or early in February. Being made aware of the outstanding liability of the company as indorser upon the note, and being informed that the maker was unable to provide for its payment, he procured the discount of another note of the Carbon Company, for the same amount, at the bank and the proceeds being credited to the Holmes Company, the November note when due was charged to its account. At the time, Wayland was ignorant of the facts attending the making of the note, and supposed it related to the renewal of some customer’s note. Upon investigation, he discovered the history of the matter and that, at the time when Willard, in July, 1886, had agreed to lend the credit of the company in aid of the Carbon Company, in the manner mentioned, that company, with a capital of only $25,000, was already indebted to the Holmes Company in the sum of $22,388.47, and that a first note had been paid with funds furnished by his company. He at once consulted with the company’s attorney and was advised that the company could recover damages against Willard, measured by the amount which the company had to pay upon the note. A complaint was prepared and sworn■ to; which charged Willard with, having indorsed the company’s name upon the Carbon Company’s note, without consideration received by the former company and without authority; with having remitted the proceeds of the discount thereof to the sole benefit and use of the Carbon Companjr and that the Holmes Company had been obliged to pay the same at maturity. Judgment was demanded against Willard, for damages to the amount of the note. An affidavit was also prepared and sworn to; which set forth the defendant Willard’s non-residence ; the cause of action and that the source of the information of Wayland, the deponent, was in an inspection of the books and records of the plaintiff company. Prior to the actual commencement of the action, however, Wayland had' an interview with Willard; in consequence of which Willard consented to attend at a meeting of the directors of the Holmes Company, and he then explained to them the purpose of the note transaction in July 1886; namely, to enable the Carbon Company to supply them with carbons in larger quantities and he claimed to have acted legitimately. He was asked to secure the company against loss by assigning some of his securities; but he declined to do so and the directors, refusing to excuse him, advised Way-land to proceed with the action; which was at once done. When the action came on for trial, the complaint was dismissed and judgment ordered in favor of Willard ; which was, eventually, affirmed in this court. 125 N. Y. 75 ; 34 St. Rep. 455. We held that the dealings with the Carbon Company were ultra vires the Holmes Company; but, as there was no proof to the effect that any director, or stockholder, was ignorant of these business transactions with the Carbon Company, it must be assumed that they were acquiesced in and, hence, no action should be maintained against the managing officer, for any resulting damage. If the company was, in fact, carrying on an illegitimate business to the knowledge of the directors, the general manager had the same authority and discretion as he had in the legitimate business. The failure of the company in its suit against Willard was due to the necessary assumption that, in the absence of all proof to show a want of knowledge on the part of the directors and stockholders of the business, which Willard was conducting with the Carbon Company, they must have known of and acquiesced in it. Upon the trial of the present action, it appeared that of the directors of the Holmes Company only Willard, Adams and Me Gill were pecuniarily interested in the Carbon Company; and that beyond Willard and Adams none of the directors bad any knowledge of these transactions with the Carbon Company, unt,il discovered.by Wayland. Willard, by virtue of his position, and Adams, by .virtue of express powers, conferred by resolution upon him as agent of the company, to endorse commercial paper and to sign checks in the company’s business, were enabled to conduct these transactions with the Carbon Company and, being left practically, if not actually, without supervision by the other directors, they were not discovered until brought to Wayland’s attention by the failure of the Carbon Company to . meet its note in March, 1887, and the resulting investigation into the books. Therefore, while it is possible that, despite the ignorance of the directors concerning the full extent of Willard’s transactions with the Carbon Company, due to their official inaction and blind confidence, in his and Adams’ management of affairs, the company itself might have been precluded from maintaining an action against Willard to recover any damages, the question was mainly one of law, and a mistaken belief as to his liability to the company, upon the supposed facts, should not have exposed the company to a suit for malicious prosecution. The burden in this action was upon the plaintiff to prove a want of probable cause for the institution of the legal proceedings against him and that necessitated that he should show that the directors had authorized and acquiescedhis in methods of corporate management. He not only did not do this; but precisely the contrary was established as the truth. In the opinion of the learned general term judges, it was deemed conclusively established that Willard had been prosecuted without probable cause;"sinee,” to quotef rom it, “it would imply stultification by defendant to urge that it did not know what authority it had given plaintiff,” and that knowledge of the" fact was chargeable to it, because of Willard’s explanation, made upon the occasion of his meeting with the directors, at the instance of President Way]and. The difficulty with the view of the general term is that it fails to appreciate that, whatever the knowledge attributable to the corporation as matter of law, in this action Willard utterly failed to prove, as lie was bound to do, that, in fact, the disinterested directors and stockholders ever either authorized, or knowingly acquiesced in, these transactions of his. This was necessary to be shown, in order to prove that the company’s suit should never have been brought, when its directors became cognizant of the transactions complained of. The proof was that Willard never was authorized to make advances to the Carbon Company and that he made them without the knowlege of the directors; other than Adams, who was interested with him in the matter. Willard was protected against liability to his company, for the reasons stated in our former opinion ; 125 N. Y. at p. 81; 34 St. Rep. 455, which applied to his .case an exception to that rule which prohibits corporations from engaging in transactions ultra vires and subjects corporate officers, committing them to such, to a liability to respond in damages. For the respondent, Willard, it is argued that the former action had no reasonable cause ; for the reason that its allegations' of an unauthorized indorsement, made without consideration to the company, and of the payment by the company of the indorsed notes and of the consequent loss were all false. They were not. The indorsement was made without authority expressly given; and the fact that the company failed in its action against its officer does not affect the question, for reasons already stated. That the indorsement was made to extend the facilities of the Carbon Company, in supplying goods under its contract, may have been perfectly true; but the contract between the companies did not call for advances of money and whether there was any consideration moving to the Holmes Company was questionable. That may have been Willard’s opinion ; but it was open to the directors to question and deny the existence of any consideration. The note in question in the other action was, in fact, paid by tlie Holmes Company, its indorser. It was only in form paid by the Carbon Company, its maker ; for, before it became due, the check of the Holmes Company was for. warded and furnished the means wherewith the former company took it up. That the moneys proceeded from the discount of a new note of the Carbon Company does not alter the matter. It was the fact, too, that, in the end, the $10,000 advanced to that company were not repaid and the Holmes Company had to take up the renewal notes from the bank. Except in the fact that the plaintiff in the former action mistook the law of the case and did not anticipate the decision of the courts, upon the question of the defendant's legal liability, there was no ground for alleging that its action was without probable cause. Upon that question, of whether a cause existed, the company had the advice of respectable counsel, and the directors authorized the suit; relying upon it and in good faith believing the facts to warrant them in holding Willard in damages. It may be observed in this connection, as evidencing their consideration for Willard, that though the president was advised by counsel that the company might proceed against Willard upon the ground of fraud, for a misappropriation of funds, and would be entitled to arrest him, he refused to take a proceeding, which might oppress and disgrace him. The advice of counsel was given yrith all the facts known to the president;' except that it said the exact mode in which the note was paid by the company, and the explanations of Willard as to the transactions, were not communicated. The respondent’s counsel, in his brief upon the evidence, asserts that the attorneys “ were perfectly well aware of the true state of facts." But, assuming any doubt in that respect, as to the attorneys’ knowledge of all the circumstances, it does not alter this case. The note was paid from the company’s funds and Willard’s explanation to the directors, while it evidenced his belief that he had been acting in the interests of the company, did not alter the question of his lack of actual authority. The mistake of the attorneys was upon the legal questions.

Without going further into the evidence, we' think the plaintiff failed to show that this defendant was without reasonable grounds for the belief that he was liable in damages. There was reasonable ground, in the discovery by the directors of the facts connected with Willard’s, transactions, upon which to found a genuine belief that a cause of action existed against him and, with the advice of counsel there was justification for their proceeding; in the facts, if not in the law. They were bound to predicate their action upon facts, real, or honestly supposed; but they were not to come under legal condemnation, for not having anticipated the legal conclusion of the court from the facts as proved. In this, as in every such case, the question is not what the actual facts were upon which the action was taken; but what the defendant had reason to believe they were, and if they furnished reasonable cause for instituting the proceeding complained of, its failure is no evidence of want of probable cause or of malice. Stewart v. Sonneborn, 98 U. S. 187; Fagnan v. Knox, 66 N. Y. 525; James v. Phelps, 11 Ad. & El. 483. Judge Cooley, in his work on Torts, p. 181, after referring to the definitions of what constitutes probable cause, says “there must be such grounds of belief as would influence the mind of a reasonable person,” under like circumstances. “ The complainant,” he says, “ cannot be required to act with the same impartiality and absence of prejudice, in drawing his conclusions as to the guilt of the accused, that a person entirely disinterested would deliberately do.” In Lindsay v. learned,, 17 Mass. 190, it was complained that an action had been commenced to recover upon some promissory notes and the person of the plaintiff had been arrested and his property attached in the province of East Florida; when, at the tune, a judgment had been recovered in a suit brought in Massachusetts upon the same notes, wherein an attachment had also issued, and that, because of the action so pending, the Florida suit was dismissed. A nonsuit at the circuit was upheld and in the opinion of the court language was used, which may, not inappropriately, be referred to in connection with this case. Judge Putnam said, referring to the defendant’s action: “Anxious to recover a considerable debt, he took those measures, and those only, which, under the best advice, he supposed adapted to that purpose, without any apparent desire to harass or vex his debtor. Undoubtedly the present plaintiff has sustained considerable loss, in consequence of the suits which the defendant instituted. But it must not be forgotten, in this part of the case, that the defendant has never to this day obtained payment of debt notwithstanding all his exertions. The misfortunes of the plaintiff have arisen from his pecuniary embarrassments, and not from any abuse of the processes of law, to which the defendant had recourse.” Although it may be without legal bearing upon the discussion of the question, whether the evidence showed such a want of probable cause as to warrant the submission of the case to the jury upon the question of malice, it is not altogether out of place to observe that this record contains no outward evidence of the existence of malice in the prosecution of the former action. The issue of the attachment was with the purpose of securing the payment of a claim, which the company was supposed to have against the defendant therein; a perfectly legitimate use of a statutory process. Nor should the court be influenced, in determining the question of the defendant’s liability to such an action as this, by a consideration of any subsequent statements by its officers, which may have reflected discreditably upon Willard’s character or capacity. They may have furnished material for individual suits; but could not help out the cause of action here; which turned solely upon the existence of probable cause for instituting the former suit. It may be further observed that, as matter of fact, the favorable result to this plaintiff in the former action might have been regarded by him as a vindication of his fair fame. Whatever reasons the directors had for the allegations'in the complaint against him, in a state of facts which might reasonably operate upon the minds of men of ordinary prudence, the action went against the company and the judgment was awarded to this plaintiff upon the issues. He was without justification, in instituting the present action to recover damages for the prosecution by the company of its action, and in re-opening a litigation, which had terminated successfully for him. The result has been to fail in making out any cause of action and to enable the defendant to establish the existence of probable cause for the maintenance of its action against him to recover the amount of the note for $10,000; upon which he had indorsed the company’s name, in a matter not within the scope of its legitimate business, and which, now, appears not to have been authorized, or known to the disinterested directors.

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

All concur.

Judgment reversed.


author: Andrews, Oh. J.

text:
    Mary Spencer, Resp’t, v. The Citizens’ Mutual Life Insurance Association, App’lt.

      (Court of Appeals,

      Filed June 5, 1894.)

    Evidence—Burden—Affirmative defense.
    The burden of proof is upon a defendant to establish an affirmative defense set up in his answer. This burden is not changed by the presentation of evidence which presumptively establishes the defense.
    Appeal from a judgment of the general term of the superior court of the city of New York, entered upon an order made April 4, 1893, which affirmed a judgment in favor of plaintiff entered upon a verdict, and also affirmed an order denying a motion for a new trial.
    This was an action upon a policy of insurance issued by defendant upon the life of John L. Spencer, the husband of the plaintiff; she was named therein as the beneficiary.
    It appeared that the defendant failed to pay a premium which-became due February 9, 1890, in consequence of which default the policy lapsed. The decedent, in order to renew his policy and induce the defendant to accept the overdue premium, made, and on February 13, 1890, delivered to the defendant a warranty in writing, in the form of an application for re-instatement, in which he declared that he was then in sound health and free from any symptoms of disease, and there was then no condition of his person or occupation tending to impair his health, injure his constitution or shorten his life, and that he had not been sick or required the services of a physician, and that there had been no change in his family history or physical condition since the date of said policy. The defendant thereupon accepted the overdue premium and re-instated the policy.
    The defense is that the statements and warranty aforesaid were false and untrue.
    The further material facts are stated in the opinion.

      Louis C. Whiton, for app’lt; Carlton P. Pierce, for resp’t.

      Affirming 52 St. Rep. 442.

   Andrews, Oh. J.

The insured, John L. 'Spencer, in his application for re-instatement dated February 13th, 1890, warranted that he was in sound health, and a breach of this warranty was the defense on the trial. The insured died May 7th, 1890. The plaintiff is the widow oí the insured and the beneficiary named in the policy. The policy was for $3,000, and the company bound itself thereby to pay out of the death fund to the plaintiff the said sum “upon acceptance of satisfactory proof at his home office of the death of John L. Spencer during the continuance of the policy.’’ The plaintiff on or about the 13th day of August, 1890, delivered to the defendant proofs of the death of the insured, consisting of verified anwers to questions prepared and furnished by the company. One series of questions were answered by the claimant and another by the attending physician of the deceased. In both series the affiants in substance declared in answer to questions upon the point that the illness of which the insured died commenced February 6th, 1890. The physician stated that the immediate cause of his death was “acute Bright’s ■disease of the kidneys,” and that his sickness commenced with a catarrhal cold. It does not appear that an action was taken by the company on receipt of the proofs delivered on the 13th of August, either by way of acceptance or rejection. Subsequently, in November and before the commencement of the action, supplementary affidavits of the plaintiff, the attending physician and the daughter of the deceased, were served on the ■company, correcting the statement made in the affidavits previously served and fixing the time when the last illness of the deceased commenced as the 16th of February instead of the 6th of February, the date specified in the former proofs, and explaining the discrepancy. The explanation in substance was that the date in the first instance was fixed by reference to a memorandum of professional visits made by the physician to the family of the deceased, and that the entry of February 7th related to a visit made on account of the illness of the daughter and not of the father, who was then in good health and so remained until February 16th. On the trial the physician and the daughter of the deceased were sworn and gave evidence tending to confirm the facts stated in the supplementary affidavits. The plaintiff was not sworn on the trial.

The only point seriously urged for the reversal of the judgment arises upon the claim of the defendant that, under the circumstances, the burden of proof was upon the plaintiff to establish that the insured was in good health on the 13th of February, 1890, when the policy was re-instated. The question was raised by exceptions to refusals to charge and by an exception to the charge made,.“that as evidence stands the plaintiff is entitled to recover, unless the defendant satisfies the jury by a fair preponderance of •evidence that John L. Spencer was not in good health at the time of the re instatemeut, February 13th, 1890.” There was no error in the charge or in the refusal to charge that the burden was upon the plaintiff to show that the insured was in good health when the policy was re-instated. The representation made by the insured at that time was a warranty. The answer alleged a breach of the warranty. This was a defense which the defendant wa§ bound to establish to the satisfaction of the jury. It was an affirmative issue interposed by the defendant, and the burden of establishing an issue is upon the party tendering it. The only proof upon which the .defendant relied was the admission in the original proofs of loss that the illness of the deceased commenced February 6th, 1890. This was competent evidence in support of the issue, because it was an admission by a party to the record against her interest. . But it raised no estoppel. No action had been taken based on the original proofs which changed the situation of the defendant. The original proofs were subject to correction, and the company were advised by the subsequent affidavits of the claim that the date of the first illness in the original proofs was incorrectly given, and that in fact it was subsequent to the re-instatemeut of the policy, and proof to substantiate the allegation of mistake was given on the trial. It was for the jury to weigh the evidence, the admission on the one side and the proof of the actual fact of the date of the illness in connection with the explanation of the admission on the other. The burden of proof was not changed by the admission. Unexplained it would have been conclusive, and the defense would have been made out. But when explained it lost its significance, provided the jury accepted the explanation. When the evidence was all in it was for the jury to say whether, upon the whole evidence, the breach of warranty had been established by a preponderance of evidence. The burden of this issue at no time during the trial shifted from the defendant to. the plaintiff. What the plaintiff did was simply to prove facts tending to break the force of the fact relied upon by the defendant, and to show that the admission in the original' proofs was the result of mistake or apprehension. It was not necessary that the plaintiff should offer herself as a witness to prove or explain the mistake. It could be established by the testimony of other witnesses. The cases in this court upon. the burden of proof and that it is not changed by evidence which, unexplained, makes out a prima fade defense, are conclusive against the point upon which the defendant relies. Lamb v. C. & A. R. R, etc., Co., 46 N. Y. 279; Heinemann v. Heard, 62 N. Y. 455 ; Goldschmidt v. Mutual Life Ins. Co., 102 N. Y. 486; 2 St. Rep. 421. The judgment should be affirmed.

All concur. Judgment affirmed.


text:
    Edward B. Mingay, App’lt, v. Mary Estelle Lackey, Resp’t.

      (Court of Appeals,

      Filed June 5, 1894.)

    1. Judgment—Partition—Interlocutory.
    A judgment in partition, which directs a reference for sale, inquiry for compution and for accounting and provides for distribution, is interlocutory and not final.
    3. Same—Life-tenant.
    Where the interlocutory judgment provides for a gross sum in satisfac-.. tion of a tenancy by the curtesy, and the life tenant dies before the sale, the proceeds should not be charged with the supposed value of such life ; the special term has power to correct such judgment so as to conform it to the new state of facts.

      Appeal from order of the general term of the supreme court in the second judicial department, made December 1, 1893, which affirmed an order of special term.
    This appeal is from an affirmance by the general term of the second department of an order of the special term amending, upon the application of the defendant, Mary Estelle Lackey, an interlocutory judgment in the action entered April 8, 1893, by cancel-ling and striking therefrom a provision directing a sale of the interest of James B. Mingay, a tenant by the curtesy in- the premises directed to be sold, and payment by the referee appointed to make the sale out of the proceeds of a gross sum in satisfaction of such interest, to be- fixed by him “ according to the principles of law applicable to annuities.” The action was for partition. The plaintiff is the son of Mary L. Mingay, who died September 8, 1892, seized of three parcels of land situated respectively in Westchester county, the city of New York and the city of Brooklyn, leaving surviving her her husband, James B. Mingay, and two children, the plaintiff and the defendant Mary Estelle Lackey. The plaintiff brought this action November 16,1892. It is alleged in the complaint that Mary L. Mingay died intestate, seized of the three parcels of land above mentioned, and leaving her husband and two children above named her only heirs at law surviving her; that the lands descended in equal shares to the plaintiff and the defendant Mary Estelle Lackey, subject to the tenancy by the curtesy of the husband; that subsequent to the death of Mary Louise Mingay, the defendant James B. Mingay assigned and conveyed his life interest to the plaintiff. The complaint prays partition of the premises according to the rights of the parties as alleged therein, or for a sale and division of the proceeds if actual partition cannot be made. The defendant Mary Estelle Lackey answered and put in issue the allegation of the complaint that the mother died intestate, and alleged that she.made a will devising the whole of the property sought to be partitioned to the defendant Mary Estelle Lackey. The issue was brought to trial before a jury and resulted in a verdict for the plaintiff. Thereafter, upon due application, the court, at special term, directed judgment to be entered in the action and an interlocutory judgment was thereupon entered. The judgment declared the rights and interests of ’ the several parties as stated in the complaint, viz., that the plaintiff Elwood B. Mingay and the defendant Mary Estelle Lackey were each entitled to the undivided half of the premises in fee, subject to the life estate of James B. Mingay as tenant by the. curtesy, which life estate had by transfer become vested in the plaintiff. It adjudged that an actual partition could not be made, and directed that the whole premises be sold by a referee named and that the “ tenancy by curtesy be included in the sale,” and that the referee pay out of the proceeds of the sale “ a gross sum in satisfaction of the said tenancy by the curtesy to bo fixed by the said referee according to the principles of law applicable to annuities.” The judgment also provided for a reference to take an account of rents and profits received by the defendant Mary Estelle Lackey, and made provision for costs and for an extra al« low anee to be fixed on a sale of the property, and contained other provisions not necessary now to be stated.
    After the entry of the interlocutory judgment and before a sale or any further proceedings, and on the 27th of April, 1893, the said james B. Mingay died. Thereafter a motion was made in behalf of the defendant Mary Estelle Lackey to correct the interlocutory judgment by striking out the provisions for the sale of the estate by the curtesy and the payment of a gross sum in satisfaction thereof.. The motion was granted, and from the order made thereon an appeal was taken to the general term where the order was affirmed.

      Sidney H. Stuart, for app’lt; Edwin S. Babcock, for resp’t. <

       Affirming 56 St. Rep. 270.

   Andrews, Oh. J.

The judgment of April 8th, 1893, was interlocutory and not final. It declared the then existing rights and interests of the parties to the litigation in the land. But it divested no titles. It directed a reference for sale, for inquiry for computation and for accounting. It provided for a distribution of the proceeds of the sale based upon the several interests in the land which should be included in the sale. But the sale would become binding only upon confirmation by the court, and until confirmation the purchaser would not be required to pay the purchase money, and until the purchase money was paid or secured there would be no fund for distribution. The practice in partition proceedings of entering in the first instance an interlocutory judgment, to be followed by a final judgment upon the termination of the proceedings -authorized by the interlocutory judgment, prevailed in chancery and is expressly authorized and required by the Code. 1 Barb. Ch. Pr. 327; Clarke v. Brooks, Ct. App., 2 Abb. N. S., 585; Code of Civil Pro., §§ 1545, 1546, 1577.

James B. Mingay as the original tenant by the curtesy was properly joined as defendant in the action. He had conveyed his life estate to the plaintiff. He was a proper party in order to conclude him by a judgment, adjudging that his title had been vested in the plaintiff. When the interlocutory judgment was rendered the life estate of John B. Mingay had not terminated. It was an estate in the land, which, if he had continued in life, could only be divested by a sale of the land and the final judgment confirming the sale. If he had survived that event he would have been entitled to an interest in the proceeds, represented by' a gross sum. But that sum, whatever it may have been, would have been awarded to him for his estate which passed by the sale. The interlocutory judgment is based on this view. It assumes that the estate by the curtesy will continue and be in existence at the time of the sale, and will then be sold. It in terms directs that the “ said tenancy by the' curtesy be included in the sale.” It declares that the purchasers shall hold the property free and discharged of any claim by virtue thereof. It provides for the payment of a gross sum “in satisfaction of . the said tenancy by the curtesy, to be fixed by the said referee according to the principles of law applicable to annuities.” These provisions would be absurd and unmeaning unless they contemplated that the life estate of James B. Mingay would be in existence at the time of the sale and would be extinguished thereby. If the life estate terminated by the death of the life tenant before the sale, there would be no life estate to s.ell; the purchasers would need no discharge therefrom; and unless the life tenant survived the sale, there would be no basis for fixing a gross sum out of the proceeds, estimated by the probable duration of life under the annuity tables, for the life would be gone. The statute also contemplates that the proceeds of sale in ¡jartition proceedings are to be distributed among the persons whose interests are affected by the sale. Section 1580 of the Code declares that the proceeds of sale must be awarded to the parties whose rights and interests have been sold, in proportion thereto.” The death of the life tenant after the interlocutory judgment and before any further proceedings had been taken/ rendered impossible the execution of the part of the judgment directing that the sale should include the life estate and the provisions for ascertaining its value. If the subject of the partition had been property of which actual partition could be made, and the interlocutory judgment had provided that the life tenant should have actual possession during his life, his death would at once terminate any right under the judgment. When the judgment provides for a gross sum, and before any sale is had the life, tenant dies, it would be most inequitable to charge the proceeds with the supposed value of a life which had already terminated. The case of Robinson v. Govers, 138 N. Y. 425; 53 St. Rep. 932, does not justify the claim of the plaintiff. There the dowress had consented to take a gross sum, based on the value of the lands. Tne sum had been judicially ascertained and the court had confirmed the final report of the referee providing that the plaintiff was entitled to the sum specified. The actual entry of the order on the decision was the only thing lacking to formally complete the proceeding and constitute a perfect judgment fixing the plaintiff’s right. It was held that her death, after the decision and before the entry of the order, did not defeat the claim, and that an order might be entered as of the time when the decision was made. The proceedings in the present case had not reached the point of a final ascertainment of the sum which should be paid for the value of the life interest. The proceeding was tentative and incomplete, and the right of the life1 tenant to a share of the proceeds was conditional, and not fixed and absolute. We entertain no doubt of the power of the special term to correct the interlocutory judgment to make it conform to the new situation brought about by the death of the life tenant after that judgment was entered and before any further proceedings had been taken. It was, we think, a power inherent in the court in the interest of justice. See McCall v. McCall, 54 N. Y. 541; Matter of Price, 67 id. 231; Matter of City of Buffalo, 78 id. 362.

The orders of the general and special terms should be affirmed.

All concur.

Orders affirmed.


author: Bartlett, J.

text:
    In the Matter of the Estate of Josiah H. Monroe, Deceased. Levi Campbell, Petitioning Creditor, Resp’t, v. Charles C. Allen, as Administrator, etc., App’lt.

      (Court of Appeals,

      Filed June 5, 1894.)

    1. Administrator—Real estate.
    An administrator is not precluded from purchasing the real estate of his intestate upon a foreclosure sale, and from holding the same in his own right.
    2. Surrogate’s court—Findings.
    The surrogate’s court, in a proceeding to remove an administrator, should make the specific findings of facts upon which his decree is based. The appellate court is not bound to search the record for facts that should oe incorporated in the findings.
    3. Same—Jurisdiction.
    A surrogate’s court has no jurisdiction to declare a trust and enforce it by decree.
    4. Same.
    Such court does not possess the general powers of a court of equity.
    5. Same.
    Even if the administrator, as an individual, is liable to account for the moneys alleged to have been realized by him upon the purchase of real property of the estate, a court of equity is alone competent to try the issues and render a decree binding upon all the parties.
    Appeal from judgment of the general term of the supreme court in the fifth judicial department, entered upon an order made January 22, 1892, which affirmed a decree of the surrogate’s court of Chautauqua county revoking letters of administration granted to the appellant as administrator of Josiah H. Monroe, deceased.
    The nature of the proceeding and the facts, so far as material, are stated in the opinion.

      William IT. Henderson, for app’lt; A. G. Wade, for resp’t.

      Reversing 43 St. Rep. 969.

   Bartlett, J.

This is a proceeding instituted by a creditor in the surrogate’s court of Chautauqua county to remove Charles -C. Allen as administrator of the estate of Josiah H. Monroe, deceased. On the 23d of May, 1889, a decree was entered to the effect that the administrator had mismanaged and injured the estate and the property committed to his charge, and by reason of his mismanagement, misconduct and dishonesty' in the execution of his office he was unfit to fill the same, his letters of administration were revoked, and he was charged personally with the costs and disbursements of this proceeding. The general term affirmed the decree, and the administrator appealed to this court, and having since died, his executor, Thomas J. Fenton, has been duly substituted. The record discloses that the administrator received his letters September 24th, 1883 ; filed his inventory the following December ; presented his first account in January, 1887, and a supplemental account in March, 1888. Objections were filed to the first account and the accounting stood adjourned to June 24th, 1887. Pending the adjournment this proceeding was instituted to remove the administrator, and adjourned to the same d,;ite as the accounting. Both proceedings came up before the surrogate on the 24th of June, 1887, and the administrator asked to go on with his accounting. The request was refused, the accounting postponed, and this litigation allowed to proceed. It remains for us to determine whether the decree in this long and expensive, proceeding, which has postponed the settlement of the estate for years, and subjected the late administrator to public disgrace and removal from office, can be sustained. This proceeding is instituted under sections 2685 and 2686 of the Code of Civil Procedure. The petition states three grounds for the removal of the administrator which were relied upon at the trial, viz.:

1. That the administrator has wasted and improperly applied money and assets belonging to the estate which have come into his hands as administrator.

2. That he has improvidently managed and injured the estate and the property committed to his charge.

3. That he has been guilty of° misconduct in the execution of his office in numerous instances and upon divers occasions.

The very general charges of this petition were sought to be sustained by affidavit proof as required by the Code, in order that citations might issue. Code Civ. Proc. § 2686. As this court has no power to weigh the evidence on disputed questions of fact, and can only deal with legal error, it becomes necessary to examine the findings of fact and conclusions of law upon which the decree rests. The case on appeal is voluminous and the evidence has been introduced to a considerable extent without regard to the issues framed by the petition and answer. There are findings of fact upon matters not included in the allegations of the petition ; there are numerous alleged findings of fact the mere statements of conclusions, entirely destitute of specific facts and utterly without value. The Code does not contemplate such practice; and to permit it would be to impose upon an appellate tribunal the laborious duty of searching the record for facts that should be incorporated in the findings. Of the thirty alleged findings of fact in this record nearly one-half of them are defective. The findings of fact, which are in form and substance sufficient, deal substantially with three distinct topics : First, a few items of personal property alleged to have been omitted from the inventory, the value of which would not aggregate two hundred and fifty dollars; second, an alleged corrupt offer said to have been made by the administrator to one Amos Bills, to allow as a claim against tlie estate a note presented by said Bills on which he insisted there was due a little more than three hundred dollars and interest, if Bills would divide with him the amount he received from the estate; third, alleged profits realized by Charles C. Allen individually, from sales of real estate formerly owned by the intestate on which said Allen held mortgages, foreclosed after intestate’s death, the mortgagee buying the property at the sales.

The petition herein, among other things, charges substantially .that at the time of intestate’s death the administrator owned certain mortgages covering intestate’s real estate, and that after he had entered upon the discharge of his duties as administrator he proceeded to foreclose them; that at the sales the mortgagee prevented bidding by promising the creditors of the estate to bid in the properties for the amount of his respective liens, make a private sale of the same, and account to the estate for the profits realized in these transactions and thus save the expense of surplus money proceedings; that creditors and others did refrain from bidding at these sales; that the mortgagee did take title, make subsequent private sales and realized profits for which he refused to account to the estate or its creditors. The administrator denies these charges in his answer, and in substance avers that the foreclosures of the mortgages were duly and regularly conducted. It seems to have been the theory of the petitioning creditors that the administrator, acting as an individual in the pursuit of his legal remedies as mortgagee, became, by reason of the facts stated, a trustee in invitum, and liable to the estate and its creditors for the profits alleged to have been realized in the subsequent sales of real estate bid in by him at the foreclosure sale?. It is difficult to understand upon what theory the surrogate’s court proceeded to try questions lying wholly outside of its jurisdiction, and m^ke elaborate findings relating to the same; it does not possess the general powers of a court of equity; if Charles C. Allen, as an individual, was liable to account for the moneys alleged to have been realized by him as before stated (we express no opinion as to his liability) a court of equity is alone competent to try the issues presented and render a binding decree as to all parties after a full investigation of the facts. An administrator, as such, has no authority or control over the real estate of his intestate, a'nd assumes no obligations in reference to it, and owes no duty to the heirs; he is not, therefore, precluded from purchasing such real estate upon a foreclosure sale, and from holding the same in his own right. Hollingsworth v. Spaulding, 54 N. Y. 636. Jf the alleged profits in the hands of Charles C. Allen are to be regarded in equity as surplus moneys, they would be real estate and recoverable as such. Dunning v. Ocean National Bank, 61 N. Y. 497. The mere fact that the interest of the administrator individually was opposed to that of the estate in the transaction now under consideration presented no embarrassment and did not require his removal from office. A proper plaintiff could have invoked the aid of a court of equity, making the interested parties defendants, and the rights of all would have been fully protected. A surrogate’s court has no jurisdiction to declare a trust and enforce .it by decree. Fulton v. Whitney, 66 N. Y. 557.

It may, however, be urged that admitting the surrogate’s court had no jurisdiction to try the issues growing out of the administrator’s mortgagee interests, and compel him, by final decree, to account for alleged profits in his hands to which the estate is entitled, yet it was competent for the court to take testimony bearing on this subject upon the theory that the acts of the administrator showed him to be hostile to the estate and unfit to continue in office.

We do not decide that such evidence would not be competent under proper limitations.

If legal and substantial grounds for removal had been alleged and proved, it might well be that such evidence would tend to characterize the attitude of the administrator towards the estate.

In the case at bar we have no such situation presented; the record discloses findings covering all of these mortgagee transactions, and we cannot assume that the surrogate based his decree of reversal upon the trivial matters already referred to, but we are satisfied he must have given undue importance to the real estate transactions which could not he the basis of a decree removing the administrator from office.

This is a proceeding, not to punish the administrator, but to protect the estate, and it was invoked in this case under circumstances wholly unnecessary and unjustifiable.

The court found that the administrator and his sureties were financially responsible and able to make good the estate if it suffered loss. The unimportant and vexatious questions litigated in this proceeding could have been disposed of on the accounting and the administrator charged in a final decree for all losses he had caused the estate, if any such were proved.

Creditors now find themselves, after years of wasting and fruitless litigation, standing at the threshold of the accounting proceedings which afforded them an abundant remedy at the outset, and compelled to resume the settlement of this estate at the point where it was interrupted in June, 1887.

The decree of the surrogate’s court and the judgment of the general term should be reversed, with costs to the appellant in all courts.

All concur.

Judgment accordingly.


text:
    In the Matter of the Application of Andrew D. Beard et al., Relators, App’lts, for a Writ of Mandamus to G. Cochrane Broome et al., Supervisors, etc., Resp’ts.

      (Court of Appeals,

      Filed June 5 1894)

    1. Assembly districts—Division.
    A large measure of discretion is necessarily left with the board of supervisors in dividing a county into districts for the election of members of assembly.
    2. Same—Application to court.
    The deviation from equality of population, which will justify or warrant an application to a court for redress, must be so grave, palpable and unreasonable that, when the facts are presented, argument will not he necessary to convince a fair man that a very great and wholly unncessary inequality has been intentionally provided for.
    8, Same—Compact.
    The Constitution does not require the districts to be made up of compact territory.

      4. Same—Wards.
    The Constitutional prohibition against the divisions of towns does not apply to wards of a city.
    5. Appeal—Court of appeals—Discretion.
    It is not the function of the court of appeals to revise official action involving the exercise of discretion.
    Appeal from, order of the general term of the Supreme Court in the second judicial department, made February 12,1894, which affirmed an order of special term denying an application for a writ of mandamus.

    On May 19, 1893, the petitioners procured a writ of mandamus to the supervisors of Kings county, which directed them “to divide the said county of Kings into eighteen assembly districts, each of which shall consist of convenient and contiguous territory and each of which shall be made equal as to population so far as that is attainable, while making each district of convenient and contiguous territory and keeping the towns of said county undivided." On J une 9, 1893, the board of supervisors met and made an apportionment. The relators then moved for an order “deciding and determining that the supervisors have not obeyed the writ, and that they have failed to divide the county into assembly districts, etc., and directing that another or alias writ be issued * * * commanding them to do and perform as commanded by the writ heretofore issued * * * and commanding them in such terms and with fuller directions that shall state that the division like or similar to the one made and returned by them as aforesaid, is not the division they are commanded to make, and that such writ -contain such other and further directions as to the court may seem meet and agreeable to the rules and practice,” etc., which motion was denied.
    The facts, so far as material, are stated in the opinion.

      Jesse Johnson, for app’lt; Almet F. Jenhs° for resp’t.

         Affirming 59 St. Rep. 640.

   O’Brien, J.

When this case was here on a former appeal, Baird v. Supervisors, 138 N. Y. 95 ; 51 St. Rep. 690, we held that the board of supervisors of the county of Kings were required by the Constitution, when apportioning the assembly districts for the election of members of assembly from that county, to make the division equal as to population, as far as that was reasonably attainable, while making each district of convenient and contiguous territory and keeping the towns undivided. It was not claimed in defense of the apportionment then before us that there had been any attempt to comply with this rule. The legal question then presented to the court was whether the Constitution imposed any such restriction upon the board when dividing the county into assembly districts. The board have since made another division of which the relators complain, but there is no dispute as to the principle that should govern in the performance of that duty, or as to the requirements of the Constitution. The only question that is now before us is whether our former decision has been in fact obeyed, and whether the present apportionment was made in such a way as to present any question of law reviewable b}r this court. In the former decision it was admitted that a large measure o£ discretion was necessarily left with the board in dividing the county into districts for the election of members of assembly. The duty which the board had to perform was to divide the territory within the boundaries of the county into eighteen assembly districts, each of equal population, as near as may be, while forming each of convenient and contiguous territory, and keeping the four towns in the county undivided. When the population of the county, returned by the census, is divided by eighteen, the number of members assigned to the county by the act of the legislature, it is found that if each district was formed so as to include exactly the same number of inhabitants, it would contain 54,877 people. But under the constitutional limitations forbidding the division of towns, and requiring convenience and contiguity of territory in the formation of the districts, absolute equality of population is not possible, and this is admitted by the learned counsel for the relators. The present apportionment, made under the command of the writ issued after the former-judgment of this court, has so divided the county that eleven of the eighteen districts contain each a population ranging between 53,000 and 58,000. Three of the remaining districts contain the. following population respectively: 61,263, 60,808, 60,381. Three others contain 50,393, 49,197, 48,944, and the other district 58,550. The relators, contending that the writ had not been obeyed, applied to this court for an alias writ, and the motion was denied and this order affirmed at general term. The appeal raises the question how far this court can interfere with the action of public bodies in the discharge of ministerial duties involving the exercise of discretion. Upon the former appeal the nature and limits of that power, when applied to the duty of a board of supervisors creating legislative districts under the mandate of the Constitution, were stated in this language : “We do not intend by this decision to hold that every trifling deviation from equality of population would justify or warrant an application to a court for redress. Such, we think, is not the meaning of the provision. It must be a grave, palpable and reasonable deviation from the standard, so that when the facts are presented argument would not be necessary to convince a fair man that very great and wholly unnecessary inequality has been intentionally provided for. This is as near an exact definition of the meaning of this section in this regard as I am able to now give.”

The court is again asked to, interfere on two grounds : (1) That the division has not been made in such a way as to secure equality of population among the districts as near as may be. (2) That at least one of the districts, though made up of contiguous territory, has not been formed with reference to convenience as required by . the Constitution. This is the 16th district composed of two towns and a part of three wards of Brooklyn. The learned counsel for the relators has printed and placed upon his points a map of this district side by side with one of that famous district in Massachusetts credited to Governor Gerry which introduced a word of somewhat odious signification into the language. The district is certainly irregular in form though there is nothing to show that it is inconvenient. The comparison is liable to be quite misleading. A shoe-string district cut across the state of Massachusetts eighty years ago, embracing the sparsely peopled regions of that state might well be said to be inconvenient, while a district of irregular form in the densely populated parts of a great city of to-day would not be. The Constitution does not require the districts to be made up of compact territory. When the Constitution of 1846 was framed the idea of convenient territory and the integrity of towns in the formation of legislative divisions referred principally if not wholly to the rural parts of the state where the population was scattered. It did not forbid the division of wards in cities nor was it supposed that any great inconvenience could result from the formation of districts of irregular shape in the great cities as they exist to-day. Indeed, it is quite conceivable that assembly districts in New York and Brooklyn might be so irregular in form as to present an unfavorable appearance when mapped upon paper, but which would in fact be more convenient when laid out with reference to streets, blocks and election districts than if they were compact and regular. The difficulties of intercourse between different sections of a large county, which were present to the minds of the framers of the Constitution in that day have been largely overcome by modern means of communication, and, if they ever existed, they have entirely disappeared in the great cities of the state. The record discloses no ground for judicial interference with the action of the board on account of any actual inconvenience or difficulty arising from the territorial form of any of the districts. The only ground of complaint, if any exists, is the inequality of population. The learned counsel for the relators has attempted to show how this could and should have been avoided and how a division could have been made which would make the population of each district more nearly equal. It is quite possible that he could have made a more equitable division of the population. It is quite likely that the courts could have made a better apportionment than the one now before us. But neither the courts nor the counsel have been intrusted with this power or duty by the Constitution. This division of the county of Kings into assembly districts is the product of many minds and not of one mind. It is what the board finally agreed upon. Each member may have had views of his own with reference to his locality. These conflicting views and local demands, always clamorous in such a body, had to be reconciled. It was the duty of the members to agree upon some plan of division reasonably fair and just, and it was perhaps impossible to formulate one that would be mathematically accurate. In the nature- of things much must be left to the discretion of the board, the members of which come front every ward and town of the county. The remarks of the learned judge who gave the opinion of this court in another case where the action of the legislature in the formation of senate districts was under review,are applicable: “Certain districts may be picked out from the whole number and compared with certain others, and inequality be charged against them. But when all the counties in the state are to be arranged, and brought into connection upon some plan in which the express commands of the Constitution as to contiguous territory and county lines are to be observed, it will pass the wit of man to make such an alteration of the senate districts for this state that may not be the subject of adverse criticism, and of alleged possible improvement.” People ex rel. Carter v. Rice, 135 N. Y. 473; 47 St. Rep. 702.

The board had the same difficulties to meet in the formation- of assembly districts that the legislature had in the formation of senate districts. I do not think that the present apportionment is of such a character as to j ustify the interference of the courts within the principle laid down in the former appeal. It may not be, and probably is not, an ideal one. But it was made by the body having the power and discretion under the Constitution for that purpose. It adopted no erroneous rule or principle of action as it did in making the first apportionment. The objection to the result grows out of the exercise of the discretion which, it must be concéded, the board possesses. The supreme court in the locality has examined its action and refused to interfere. The order of the court below was right unless legislative apportionments are to be made, in the end, by the courts instead of the legislature and the local boards appointed for that purpose. The great and principal function of this court is to review questions of law passed upon by inferior courts or arising from the action of ministerial or governmental bodies, and not to revise official action involving the exercise of discretion. If this apportionment does not, upon the face of the record, indicate such a manifest abuse of discretion as virtually to amount to an evasion or disobedience of our former decision, then the court cannot interfere or set it aside without drawing to itself powers which have been confided by the Constitution to other departments of the government. The power of the court to compel local boards of apportionment to perform the duty imposed -upon them by the Constitution was asserted on the former appeal, and nothing more need now be added to what was then decided. The record now before us does not disclose such an abuse of discretion as to justify judicial interference. There is inequality of population in the districts as formed, but not to such an extent or in such a degree as to warrant us in holding as matter of law that the board has abused its powers or refused to exercise its discretion. It does not seem to me that all the criticism of the learned counsel for the relators upon the action of the board is well founded. The division of a great county containing a million of people or more into assembly districts in such a way that one-half the members of assembly were elected by each of two great political parties at the last election, as was admitted upon the argument, cannot be so essentially and plainly vicious as to justify an appeal to the courts. If the one hundred and twenty-eight members composing the assembly could' be based upon constituencies without any greater inequality in population than exists in the eighteen districts of Kings it would, I think, be regarded as a reasonably fair distribution of power. But, as already observed, the question here is not whether the division is the best that could have been made, but whether the board had jurisdiction and proceeded according to legal rules. If so, the courts cannot require them to undo the work on account of errors, mistakes or inequalities resulting from the exercise of their discretionary powers, and to perform it in some other way, without assuming governmental powers with which they have not been intrusted by the Constitution or the laws. The Constitution forbids the division of towns, but not the division of wards in the formation of assembly districts. The town is a municipal division of the state of very ancient origin. The wards into which cities are divided have no resemblance to it unless it be in the circumstance that they are represented in the board of supervisors. The indivisibility of wards in the creation of assembly districts cannot be implied from the provision against dividing towns. A ward is not a town, though it may be treated as a town for some purposes of municipal government. The framers of the Constitution, in prohibiting the division of town's, had no intention to include the wards of a city within the provision. If they had, they would have said so. Hence, the board did not transcend its powers by dividing wards in the formation of the districts.

The order appealed from should be affirmed.

All concur.

Order affirmed.