author: O’Brien, J.

text:
    Henry George Dunstan, Resp’t, v. Cecil Campbell Higgins, App’lt.

      (Court of Appeals,

      Filed April 11, 1893.)

    Judgment — Foreign.
    A judgment rendered by a court of a foreign country is conclusive upon "the merits, andean be impeached only by proof that the court had no jurisdiction of the subject matter or of the person of the defendant, or that it was procured by means of fraud. A refusal of the foreign court to allow a commission to examine witnesses here does not affect the conclusive character of the judgment.
    Appeal from judgment of the supreme court, genera] term, first department, affirming judgment in favor of plaintiff.

      Cecil Campbell Higgins, for app’lt; S. R. Ten Eyck, for resp’t.

       Affirming 43 St. Rep., 764.

   O’Brien, J.

The plaintiff recovered in an action upon a judgment in his favor and against the defendant, rendered in 1890 by the supreme court of judicature in England. It appears that the plaintiff, in pursuance of an agreement, manufactured and shipped at London to the defendant at New York an omnibus and Beaufort cart, at a price agreed upon. Suit was brought upon the account by the plaintiff against the defendant in-England, and personal service of process was made upon him there, and jurisdiction obtained by the court of the person of the defendant and the subject-matter of the action. The defendant appeared and interposed for defense, in substance, that the articles were manufactured and shipped under a special contract, by which the price and the character and quality of the articles were particularly specified, and that the goods, when received by the defendant, did not conform to the agreement, but were practically worthless to him. The plaintiff denied that there was any agreement to manufacture such vehicles as the defendant claimed, and asserted that the articles delivered conformed in all respects to the defendant’s order. While the action was at issue in England, the defendant applied to the court for a commission to examine witnesses in this country to prove the allegations of his answer. This application was denied; upon what ground or for what reason does not appear. The defendant did not appear for trial, and the court ordered judgment against him, and for defense to-this judgment in our court he has interposed substantially the same facts, and insists that it is unjust and unfair, and that as he was not permitted to produce his proofs at the trial in England, he is not now bound by the judgment. He also applied to the courts here in this action for a commission to examine witnesses in England, which application was refused, and upon the trial the court held that the foreign judgment was conclusive, and that the plaintiff was entitled to recover.

The general term has affirmed the judgment, and also the order refusing the commission, and the appeal to this court is from both determinations. It is the settled law of this state that a foreign judgment is conclusive upon the merits. It can be impeached only by proof that the court in which it was rendered had not jurisdiction of the subject-matter of the action or of the person of the defendant, or that it was procured by means of fraud Lazier v. Weskott, 26 ÍT. Y., 146. The judgments of the courts of a sister state are entitled to full faith and credit in the courts of the other states under the constitution of the United States, but effect is given to the judgments of the courts of foreign countries by the comity of nations which is part of our municipal law. The refusal of the foreign court to allow a commission to examine witnesses here does not affect the conclusive character of the judgment. Such' applications are generally within the discretion of the court to which they are addressed, and then a refusal to grant them does not constitute even a legal error subject to review. But even if it appeared in this case, as it does not, that some legal right of the defendant was. denied in refusing the application, that would not affect the validity or conclusive nature of the judgment, so long as it stood unreversed and not set aside. Legal errors committed upon the trial or during the progress of the cause may be corrected by appeal or motion to the proper court, but they furnish no defense to an action upon the judgment itself. Where a party is sued in a foreign country, upon a contract made there, he is subject to the procedure of the court in which the action is pending, and must resort to it for the purpose of his defense, if he has any, and any error committed must be reviewed or corrected in the usual way. So long as he has the benefit of such rules and regulations as have been adopted or are in use for the ordinary administration of justice among the citizens or subjects of the country he cannot complain, and justice is not denied to him.

The presumption is that the rights and liability of the defendant have been determined according to the law and procedure of the country where the judgment was rendered, and there is nothing in the record to the contrary. The questions of fact or law settled by this judgment could not be re-examined in our courts. The judgment was properly authenticated and established at the trial under the provisions of the Code. The order of our courts refusing the commission to examine witnesses in England was, so far as appears, a matter of discretion. As the foreign judgment was conclusive the facts stated in the answer were not admissible as proof upon the trial, and therefore, it is clear that no legal right of the defendant was violated by the denial of his application.

The judgment should be affirmed, and the appeal from the order dismissed.

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


source: Caselaw Access Project

license: Public Domain

text:
    The Continental Insurance Co., App’lt, v. The Ætna Insurance Co., of Hartford, Conn., Resp’t.

      (Court of Appeals,

      Filed April 11, 1893.)

    Insurance (Marine) — Re-insurance—Construction op contract.
    On a contract of re-insurance made by defendant and two other companies with plaintiff, there was an indorsement to the effect that it should cover plaintiff “ to the extent of one-half of the amount of each and every risk which equals or exceeds in value the sum of $15,000,” which said plaintiff may have upon the cargo of any one barge or lighter and insured under open policies issued to certain persons named. “ On cargoes of the value of $50,000 and upwards, this policy is to cover the excess of $25,-000, not exceeding the sum of $50,000 on any one cargo.” The contract provided that any loss or damage was to be estimated according to the true and actual cash value on the day of disaster. Held, that the limitation in the indorsement referred to the entered or written value of the cargo, and not to the value thereof as shown on an adjustment of a loss.
    Appeal from judgment of the supreme court, general term, first department, overruling plaintiff’s exceptions, and' ordering judgment in favor of defendant.

      Elihu Root, for app’lt; Joseph A. Shoudy, for resp’t.

       Reversing 42 St. Rep., 775.

   O’Brien, J.

The plaintiff sought to recover upon an open policy or contract of reinsurance made by defendant and two other companies, in which they assumed certain obligations that are now in dispute, and bound themselves “ severally and not jointly, nor the one for the other, to the assured.”

The plaintiff had issued in each case an open policy of insurance to Twombly & Co., The N. Y. Lighterage & Transportation Company and John H. Starin, on account of whom it may concern, bearing date respectively September 1, 1881, February 1, 1883, and December 6, 1882: “Loss, if any, payable to assured upon all kinds of lawful goods and merchandise laden on board the good lighter or lighters, as indorsed hereon, or in a book kept for that purpose, for the several amounts, and on the goods and merchandise as specified in the said indorsement, the said assured agreeing to enter for insurance all goods carried by them at the full value thereof, and to report the same to this company on Monday of each week, or as such times as they may require.

“ At and from point or points in the harbor of New York as far south as the Narrows, and the inland waters of New Jersey, adjacent and tributary thereto, and on the North river as far as Piermont, and the Bast river as far as Throgg’s Neck * * *

“ The said loss or damage to be estimated according to the true and actual cash value on the day of the disaster.”

On March 17, 1885, merchandise on board the lighter “ Chase ” was indorsed by Twombly & Co. for the amount to be insured of $16,000 in the book referred to in their policy, and the same was reported by them to the plaintiff at the time required. The cargo was lost by perils covered by the policy, and the loss adjusted upon the basis of the actual cash value of the cargo on the day of the disaster in the sum of $12,058.48.

On the 19th of March, 1885, merchandise on board the barge James W. Eaton was indorsed by the N. Y. Lighterage & Transportation Company, for the amount to be insured of $15,900 in the book referred to in their policy, and the same was. reported by it to the plaintiff at the time required and in conformity with the contract. The cargo was lost by perils within the policy, and the amount adjusted upon the actual cash value of the cargo on the date of the disaster at $12,451.26. On October 7, 1885, goods on board the lighter Warren were indorsed by John H. Starin in the book referred to in the policy, for the amount to be insured of $16,000 and the same duly reported to the plaintiff. There was a loss upon the goods included in this cargo which was subsequently adjusted at $710. It is riot questioned that the plaintiff in each of these cases had made with the shippers valid contracts of insurance and was liable for the loss as adjusted. The plaintiff claims that these losses were covered by the contract of reinsurance with the defendant and the other two companies, bearing date January 1, 1885, and by which they agreed to re-insure the plaintiff on account of whom it may concern, loss, if any, payable to them pro rata, “ Upon all kinds of lawful goods and merchandise laden on board the good lighter or lighters, as indorsed hereon, or in a book kept for that purpose, for the several amounts, and on the goods and merchandise as specified in the said indorsement, the said assured agreeing to enter for insurance all goods at the full value thereof, and to report the same to the assurers on Monday of each week- or at such times as they may require.

“ The said loss or damage to be estimated according to the true and actual cash value on the day of the disaster/'

The true meaning and construction of the following indorsement made upon this policy and bearing date February 2, 1885, raises the only question presented by this appeal.

“ On and after this date this policy covers the Continental In surance Company as reinsurance to the extent of one-half of the amount of each and every'risk which equals or exceeds m value the sum of $15,000 and which the said Continental Insurance Company may have on cargo of any one barge or lighter and insured by them under their open policies issued to the following named persons, viz. •. Twombly & Company, John H. Starin, New York Lighterage & Transportation Company. * • * *

“ On cargoes of the value of $50,000 and upwards, this policy is to cover the excess of $25,000, not exceeding the sum of $50,000 on any one cargo.

“ John Newman, Agent.”

The defendant’s contention is, that as the value of the several cargoes which were lost proved, in each case, upon the adjustment, to be less than $15,000, the loss is not covered by the contract of re-insurance, and this view has been sanctioned by the courts below. The plaintiff, on the other hand, claims that as the entered or written value of the cargo, in each case, exceeded that sum, the defendant’s contract covers the plaintiff’s risk, and it is bound to make the plaintiff good for that part of the loss stipulated for in the contract of re-insurance. The plaintiff, in each case, treated the risk as re-insurance, and it indorsed in the book referred to in defendant’s policy the cargo for one-half the amount entered by the shippers, and reported the same to the defendant. The controversy, therefore, turns upon the meaning •of the word “ risk," as used by the parties m the above indorsement, which is the material part of the contract. In ascertaining the sense m which that word was used, the intention of the parties must govern, and the precise contract relations that each occupied to the other becomes important. The plaintiff, by its open policy issued to the carriers or shippers named, insured goods the nature, character and value of which were not known, and could not be known, when the policy was issued, but the kind and value thereof were to be particularly specified thereafter, from time to time, as occasion required, by indorsement, or in a book kept for that purpose, to be reported to the plaintiff once in each week, as required. When the goods were laden, and certainly when so entered at their full value, the contract was completed m every case, and the liability of the plaintiff began. When the goods and their value were reported to the plaintiff, it ■could then know the character¿ and extent of its risk under the policy, and the true value of the goods at the time of any disaster was to be the basis of its liability.

The defendant, and the two other re-insuring companies, agreed with the plaintiff to share one-half its liability for a certain class •of those risks. That class was to be specified and defined, not by the result of a disaster, but by indorsement on the policy of re-insurance which the plaintiff held. Accordingly, the parties limited the operation of the contract to each and every risk which equals or exceeds in value $15,000." The defendant's liability was not to attach to any other risks that the plaintiff might take. It must be presumed from the nature of the business and the purpose of the contract that both parties intended to define the class of risks to be covered by the re-insurance m such language as to enable each to know, when the entry was reported, whether the risk was re-insured or not It was important for the plaintiff to know, when the report was made, m each case, whether it had reinsurance1 or not, and it was equally important for the defendant and its co-contractors to know, as risks were reported, whether or not they had assumed any liability with respect to them. If the parties by the use of the words ,£ risk which equals or exceeds m value $15,00G ' meant only such risks as, after loss, and upon adjustment, equaled or exceeded that amount, then it is obvious that they could never Know whether there was re-insurance or not, save in the very few exceptional cases where there should be a loss, and it was finally adjusted at figures within the limit specified ; whereas if they meant the entered value of the cargo, or the :sum written, both parties would know precisely where they stood. It must be admitted that the entered value is the basis for the computation of the premium to be paid by the carriers or shippers of the goods to the plaintiff for the risk assumed. It is equally clear that the re-insuring companies are entitled to demand or share premiufns with the plaintiff on the same basis. The defendant’s position then must be that while it is entitled to demand and receive compensation for re-insurance in every case where the entered value of the cargo equals or exceeds $15,000, it is nevertheless shielded from any liability unless an adjusted loss to the actual value equals or exceeds that sum. An interpretation ' of the contract which would produce such a result •could scarcely be called fair, and there is a strong presumption that it is contrary to what was intended by the parties. ' The word risk in its ordinary and popular use, with reference to insurance, describes the liability assumed as specified on the face of the policy, and in that sense it is used in numerous statutes of this state regulating insurance companies, and in some adjudged cases. Century Dict., vol 5, p. 5194; Pitcher v. Hennessey, 48 N. Y., 415; Jackson v. St. Paul, etc., Ins. Co., 99 id., 129; Sun Mut. Ins. Co. v. Ocean Ins. Co., 107 U. S., 504; Laws 1849, chap. 308, § 13; Laws 1853, chap. 463, § 12; Laws 1880, chap. 110, § 1; Laws 1879, chap. 489, § 1; Laws 1874, chap. 189, § 8.

When, the parties splice of risks that equaled or exceeded $15,000, they meant to designate such risks as the plaintiff might have upon goods, upon the lighters named, that were entered or written for that amount or more, and they did not intend that the existence of a contract of reinsurance was to depend upon the constantly fluctuating value of the goods, the notions of an adjuster as to value, or the judgment of a court or jury. They intended that the obligations of the defendant should be complete and perfect when the goods were entered for insurance, and not that the existence of any contract whatever should be left to depend upon the extent of the loss, after the disaster, against the possibility of which the plaintiff was seeking to protect itself. The intention might have been expressed with more particularity and with greater precision, and made so plain that no controversy as to the meaning could ever arise. But we know that the multifarious transactions of business men are not always preceded by carefully and accurately measuring and weighing their words, nor are their ordinary agreements or contracts always ■drawn by persons skilled in the use of language. In the vast majority of such cases no controversy ever arises, and in the ■exceptional cases, in which the courts are called upon to settle the dispute, they should give to such instruments a reasonable and sensible construction, and which appears to conform the nearest to the justice of the case and the end which the parties sought to accomplish, but which, from inadvertence or the poverty of language, they have failed to express fully and accurately.

In this case the contract is clear enough, except that the parties, in defining the class of risks to be covered by the re-insurance, used an expression which perhaps left some room for controversy as to whether the entered dr actual value of the cargo was intended. But we think that the real intention of the parties is easily ascertained from the nature of the transaction, the language employed and the object which they evidently had in view. The construction which we are disposed to put upon the indorsement attributes to the parties a design to make a contract certain in its terms and just and reasonable in its operation, while the other view introduces into the contract an element of great uncertainty, and would operate unfairly in practice. ' When the language of the parties is not open to construction, the contract must be enforced however harshly it may operate, but when it is, then the considerations to which allusion lias been made are entitled to great weight. The plaintiff, when the goods were entered, became liable upon its open policy to pay the full sum written in case of loss should the value of the goods, on the day of the disaster, proveto equal or exceed that sum. The risk for which it might be' made liable was, therefore, the entered value. The circumstance that from fluctuations in value, or other causes, it was possible that the liability assumed might be less, does not prove that the sum ultimately paid was the real risk referred to. The sum which the plaintiff might ultimately become liable to pay was the risk to-which the parties referred in the contract of re-insurance. That was the risk which the plaintiff took by its open policy, and to that class of risks the contract of re-insurance applied. When two insurance companies contract with each other that one shall share the loss with the other as to all risks exceeding a certain sum, the contract applies to all risks that have been written for the sum so specified. The obligations of the re-insuring company can be determined without reference to the loss, and in this case had no loss occurred, the class of risks assumed by the defendant could be determined from the language used, and from the nature of the transaction. In that case a construction that would make the defendant’s liability depend, not upon the plaintiff’s risk, as expressed upon the face of its policy, but upon the market value of the goods as shown subsequently, in case of loss, would render it impossible to tell 'what risks, if any, were re-insured, and would be rejected as contrary to the intention of the parties.

The contract cannot be construed one way after a loss, and another and different way before, or one way for the purpose of collecting premiums and another way for the purpose of determining liability. When the question arises, as it does in this case, whether the reinsurance ever attached or the contract ever came into operation, it is reasonable and just to hold that the value referred to in the indorsement was the entered and not the actual value. The defendant’s contract attached, if at all, when the goods were laden upon the lighters, and as it was impossible then, or at least extremely inconvenient, to determine what their actual value was, the parties must have intended that the obligation under the agreement of reinsurance should derive its life and validity from the entered value of the cargo. In the opinion of the learned general term much importance is given to the point that the construction which the plaintiff contends for would create liability on the part of the reinsuring companies upon risks where the strippers or carriers had entered the property for insurance at an excessive or exaggerated value. In all contracts of insurance there is, of course, a possibility of fraud and dishonesty, but that contingency is not controlling in the process of ascertaining what the parties intended by the language used. While that danger is always present in such contracts, it seems to us to be as completely eliminated from that under consideration by the prescribed regulations and the real interest of all parties as it ever can be in human transactions. The shippers were bound by their contract with the plaintiff to enter the goods for insurance upon the book and report the same at the true value. If they were entered at a valuation grossly and manifestly excessive it would constitute a fraud that might vitiate the policy. Moreover, it is difficult to conjecture any possible motive for a shipper or carrier of goods to enter them for insurance at an excessive value, and pay premiums on such value, when, by his contract, he was limited, in case of loss, to the recovery of the actual market value at the date of the disaster. Indeed, the temptation would be, with carriers such as these parties were, to save premiums by entering the goods for a less sum than the true value, and doubtless it was to guard against this that the plaintiff bound them to enter the property for insurance at its full value.

The learned counsel for the defendant insists that the construction of the contract which we have here indicated as the proper one is contrary to the decision of this court in the case of Arnold v. Pacific Mut. Ins. Co., 78 N. Y., 7. This was an action by the owner or consignee upon an open policy of marine insurance to recover for goods lost. It was held that an honest mistake in reporting the cargo, and the route upon which the vessel was to sail, by the assured, did not vitiate the policy or furnish a defense against the loss. There was another question in that case growing out of a claim by the assurers that there was a deviation from or unnecessary delay in the voyage to which the contract applied, which, of course, has no application to the case at bar. The learned counsel is doubtless correct in his position that if the goods were lost after they were laden, but before entry in the book or report, the liability of the plaintiff to the shippers attached. But it does not follow from that, we think, that the word risk, as used in the contract, refers to the actual and not the entered value. The plaintiff’s contract with the shippers covered all goods laden upon the lighters specified without regard to value. The defendant’s contract with the plaintiff covered only such risks as the plaintiff had upon the same goods when the value amounted to a sum which was specified, and thus the liability of the defendant, unlike that of the plaintiff, was limited to cargoes the value of which equaled or exceeded a specified sum. On such cargoes the liability of the defendant also attached when the goods were laden, though it could not be known until the entry was made, and if, in the meantime, a loss occurred, a subsequent entry and report in good faith and without fraud or collusion would be necessary to perfect the right of action. The entered value, of course, is not conclusive either upon the plaintiff or the defendant as to the extent of the liability after loss. That is measured and governed by the actual market value of the goods on the day of the disaster. The importance of the entered value is that it clearly defines and separates the risks taken by the plaintiff which are covered by the contract of reinsurance from those which are not. That was a certain and convenient way to classify them, and that, we think, was the standard which the parties adopted to determine the value of the risks intended to be covered.

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

All concur.

Judgment reversed.


author: O'Brien J.

text:
    The Continental Insurance Company, App’lt, v. The Greenwich Insurance Company, Resp’t.

      (Court of Appeals,

      Filed April 11, 1893.)

    Appeal from judgment of the supreme court, general term, first department, overruling plaintiff’s exceptions, and ordering judgment in favor of defendant.

      Elihu Root, for app’lt; Joseph A. Shoudy, for resp’t.

       Reversing 43 St, Rep., 778.

   O'Brien J.

This case presents the same question as is passed upon in the case of the Continental Ins. Co. v. Ætna Ins. Co. of Hartford, Conn., and is decided upon the authority of that case.

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

All concur.


text:
    The Continental Insurance Company, App’lt, v. The Phoenix Insurance Company of Brooklyn, Resp’t.1

      (Court of Appeals,

      Filed April 11, 1893.)

    Appeal from judgment of the supreme court, general term, first department, overruling plaintiff’s exceptions, and ordering judgment in favor of defendant.

      Elihu Root, for app’lt; Joseph A. Shoudy, for resp’t.
   O’Brien, J.

This case involves the same question as is decided in the case of the Continental Ins. Co. v. Ætna Ins. Co. of Hartford, Conn., and is decided upon the authority of that case. Judgment reversed, new trial granted, costs to abide the event.

All concur.


author: Andrews, Ch. J.

text:
    Carder L. Stone et al., Resp’ts, v. The State of New York, App’lt.

      (Court of Appeals,

      Filed April 11, 1893.)

    1. Board of Claims — Jurisdiction.
    The board of claims has no jurisdiction to consider a claim for damages-sustained in 1889 through an overflow alleged to have been occasioned by the change of the channel of the Genesee river, made necessary in the construction of the Genesee Valley canal in 1840, and the negligence of the state in not maintaining and keeping in repair the guard bank, as the state, more than seven years prior to the accruing of the claim, had abandoned and sold the canal and.the lands connected therewith to a railroad corporation.
    2. Same — Evidence.
    Claimants were allowed to introduce, “to show the liability of the state," a record of an award made by the board of claims in 1887, to one Lee for damages sustained by washing away of his lands adjoining the channel of the Genesee river, caused by the new direction of the river and the failure of the slate to maintain proper and sufficient guard banks. Reid, error.
    3. Same.
    Even if a duty had rested upon the state to maintain the guard bank, and if as originally constructed it would' have retained the water within the new channel, the omission of this duty created a claim only in favor of siioh owners of lands overflowed who were injured in consequence of the action of the state in changing the channel, and who, except for this act, would not have sustained a similar injury.
    Appeal from an award of the board of claims in favor of claimants.

      S. W. Rosendale, att’y-gen’l, for app’lt; E. E. Harding, for resp’ts.
   Andrews, Ch. J.

This is an appeal from an award of the board of claims, made June 24, 1891, for the sum of $530 in favor of the claimants for damages caused by the overflow of the waters of Genesee river upon and over the farm of the claimants, in the town of Hume, Allegany county, on or about the 6th day of June, 1889.

The general facts found by the board and upon which the award is based are stated in the award. It was found that the state in the years 1839 and 1840, while engaged in the construction of the Genesee Valley canal, caused the channel of the Genesee river in the towns of Hume and Oaneadea, near the lands in question, to be changed, to avoid the winding course of the river, which ran a circuitous course of over two miles at this point, with a sluggish current. The new channel cut by the state was from 80 -to 100 rods in length, and turned the flow of the water, which formerly ran a distance of two miles or over, in the old channel at this point, within the new channel so constituted. The change in the channel resulted in the water of the river flowing upon and washing away the adjoining land. The farm of the claimants, however, was not affected by the erosion, as it did not adjoin the new channel.

It is found that in order to protect the adjoining lands from damage, which it was foreseen would result from -the change in the channel, the state constructed a guard bank parallel with the new channel,, on the north side thereof; that this bank was gradually undermined by the current running in the new channel during a period of more than thirty years; that the state negligently omitted to maintain it and keep it in repair, or to provide other protection against the overflow or washing away of the bank; that in June, 1889, the water in the new channel overflowed and ran over the land adjoining, and from thence on to the premises of the claimants, causing the damages specified.

It is found that at the time of the overflow complained of there was a freshet greater than had occurred in that locality in many years, but that the water did not rise to within about four feet of the top of a portion of the guard bank then standing as originally constructed. It was also found that the damages sustained by the claimants were not caused by the freshet, but were occasioned by the change in the channel and the negligence of the state in not maintaining and keeping in repair the guard bank, or providing other suitable protection against the overflow of the water.

The state has appealed from the award, and by the notice of appeal the validity of the award is challenged as against law and evidence, and on the point of jurisdiction and for errors in the admission df evidence.

It is claimed on behalf of the state that the evidence conclusively establishes that. the overflow of the river at the time in question was attributable to a freshet of unprecedented character, operating over a wide territory, and that the presence of a guard bank at the point in question would not have prevented the overflow. It was the same freshet which caused the Johnstown disaster in Pennsylvania, and it was admitted by the claimants, on the hearing of the claim, that such a freshet had not occurred in the locality in question for twenty-five years, and it was conceded (upon offer of proof being made) that the Genesee, on that occasion, overflowed the country at a great number of places, and that the water in the Chemung, at Elmira, rose from twenty to twenty-eight feet above its ordinary stage, causing serious damage. Indeed, the violence of the floods caused by the June freshet of 1889 is matter of common history.

But in view of the rule, which is made part of the statute regulating appeals from the board of claims, that only questions of law arising on the hearing of the claim are cognizable by this court upon an appeal from an award, writh the single exception of the quantum of damages, chap. 205, Laws of 1883, § 10, we cannot reverse the award upon the ground that there was no evidence that the guard bank, if it had been maintained as originally constructed, would not have prevented the overflow on the premises of the claimants.

But we are of opinion that there are several errors of law which require a reversal of the award.

The claimants, at the hearing, presented a record of an award made by the board of claims March 9, 1887, upon a claim filed by one Thomas R Leet against the state, “ to show the liability of the state.” The counsel for the state objected to the competency of the record as evidence in the case, stating the grounds in detail. The objection was overruled and an exception was taken, and the record was then read in evidence. The record showed that on March 9, 1887, the board of claims awarded to Thomas R. Leet the sum of $320 upon a claim originally filed by him June 29, 1870, before the board of canal appraisers, and afterwards transferred to the board of claims, for damages sustained by him, prior to that date, from the washing away of bis land adjoining the channel of Genesee river in the towns of Hume and Ganeadea in the county of Allegany, caused by the new direction and force of the current of the river, and the failure of the state to maintain proper and sufficient guard banks. This record was improperly admitted.

The claimants in this case were not parties to that proceeding. They were neither privies in law or estate with Thomas R Leet. The present claimants acquired their title to a part of the lands owned by them in 1872. and to all prior to the award made in the former proceeding. So far as appears, Thomas R. Leet never held title to the lands owned by the present claimants.

The doctrine is elementary that a judgment binds only parties or privies. A fact established and adjudged against one party in an action by another party, is never evidence in favor'of a different party in another litigation, although the party against whom the fact was established in the prior action is the same party against whom it is sought to be used in the subsequent action, unless, as has been said, there is privity between the two litigants in respect to the subject in controversy. Moore v. Albany, 98 N. Y., 396, and cases cited.

The admission of this record is sought to be justified on the ground that it was competent evidence of notice to the state of the defective condition of the guard bank. It was offered “ to show the liability of the state,” and the board of claims adopted several findings of fact material in this case from the findings in that record which are supported by no proof independently of the former record. Its admission was a material error.

Another error in the award arises out of the assumption that the damages sustained by the claimants resulted as a legal conclusion from the fact of the overflow and the omission of the state to maintain the guard bank in repair. Assuming, for the present, that a duty rested upon the state to maintain the guard bank, and that as originally constructed it would have retained the water within the new channel, the omission of this duty created a claim only in favor of such owners of lands overflowed who were injured in consequence of the action of the state in changing the channel, and who, except for this act, would not have sustained a similar injury.

It was shown that the guard bank was broken through at the point where it crossed the original natural channel of the river, and that through this opening the water followed the original channel till it came to an embankment originally constructed across its course for the Genesee Valley canal, and now used by the Genesee Valley railroad, which embankment formed a dam, detaining the water for a time, but which was also carried away, and the water then continued to flow through the original channel, but overflowing its banks, until it reached the lands of the claimants. There is no evidence that the lands of the plaintiffs were overflowed to any greater extent than they would have been if the new channel had never been made.

One of the witnesses for the plaintiff stated : “I don’t know if the water had gone through the old channel but it might have gone over the land just as it did on the first of June." He further testified: “ All the water did was to go in the line of the old channel, by breaking away the guard bank; then the railroad obstructs the old channel so it got around the old channel, so it broke through the railroad here, and came around and broke through at the lower end.” It is not suggested in the evidence that the damming of the. water by the railroad embankment, and its subsequent discharge after the embankment was broken through, increased the overflow on the claimants’ land beyond what would have occurred if no embankment had been there.

It must be assumed, we think, upon the evidence, that if no change in the natural situation has been made at any time by the state, the lands of the claimants would have flooded to an equal extent as they were flooded. The history of the freshet, as given by the witnesses, and the extensive flooding all along the line of the river, affords' strong confirmation of this view. The straightening of the river did not cause the injury, and while it is possible that if the guard bank had been maintained in repair it would have confined the water to the new channel, the state was under no obligation to maintain it to protect lands which would have been flooded to the same extent if the improvement bad not been made.

But there is a still more radical error in the award. The state is only answerable before the board of claims in respect to matters which it has consented to submit to its jurisdiction. The sovereign can be impleaded for the recovery of claims against it only in the mode, and to the extent, and as to such matters as the legislature has authorized. In the absence of statutory authority extending the jurisdiction of. courts to the determination of claims against the state, an appeal to the legislature is the only remedy of the citizen against the sovereign, whether the claim arose in consequence of wrongful acts of state officers or agents, or upon contracts made under authority or in behalf of the state. Lewis v. State, 96 N. Y., 71. The jurisdiction of the board of claims to take cognizance of and adjudicate the-elaim now under review, if it exists, was conferred by § 13 of chap. 205 of the Laws of 1883, which transferred to and vested in the board of claims “ all the jurisdiction and power to hear and determine claims against the state now possessed by the canal appraisers.” The jurisdiction of the canal appraisers, so far as it is now material, was defined by § 1, chap. 321 of the Laws of 1870, in these words:

“ Sec. 1. Jurisdiction is hereby granted to and conferred upon the canal appraisers to hear and determine all claims against the state, of any and all persons and corporations, for damages alleged to have been sustained by them from the canals of the state, or from their use and management, or resulting or arising from the negligence or conduct of any officer of the state having charge thereof, or resulting or arising from' any accident, or other matter or thing connected with the canals," etc.

The change in the channel of the Genesee river where the overflow in question occurred was, according to the finding, made by the state in 1839 and 1840, while engaged in the construction of the Genesee Valley canal. Reference to the map produced on the argument shows the canal crossed the old channel of the river north of the new channel, and the evident purpose of the change was to protect the canal. Appropriations were made by the legislature from time to time for protecting the canal “ against the encroachments of Genesee river,” and this was the primary purpose of the guard bank. See Laws of 1870, p. 1900.

It is insisted that the claim now under review comes within the words in the act of 1870, allowing the adjudication of claims for damages sustained from the canals, etc., “or other matter or thing: connected with the canals.” It is very doubtful, we think, whether these words would at any time have authorized an adjudication of a claim for damages for not maintaining the guard banlc But, however this may be, the legislature, under constitutional authority, by chapter 404 of the Laws of 1877, authorized the abandonment of the Genesee Valley canal on or after September 30, 1878, and the sale of the banks and prism of the canal for railroad purposes. §§ 1, 2, 3, 11. It was enacted by § 13 of the act that “no person or corporation shall have any claim against the state for or by reason of the abandonment or discontinuance of the said canals or any of them.”

By act, chap. 326 of the Laws of 1880, further provision was made as to the sale of the canal in question, and the sale seems to have been consummated prior to 1882. See chap. 219, Laws of 1882. It thus appears that the state, more than seven years prior to the accruing of the claim in this case, had abandoned and sold the Genesee Valley canal and the lands connected therewith to a railroad corporation, and ceased to have any proprietary or other interest therein. Under such circumstances we think it impossible to maintain that the claim filed in this case related to damages from the canals, “ or other matter or thing connected with the canals," and unless the claim was of this character, the board of claims had mo jurisdiction. The Genesee Valley canal in 1889, had no existence.

If any equitable reason exists for relief upon the facts disclosed in this record, the only remedy is by application to the legislature. We are not inclined to put a narrow constr action upon statutes defining the jurisdiction of the board of claims, but to extend it to such a case as this would, we think, be judicial legislation.

Since the conclusion we have reached is decisive of the ultimate right involved, the award should be reversed and claim dismissed without granting a new hearing.

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


author: Gray, J.

text:
    The People, Resp’ts, v. Thomas Pallister, App’lt.

      (Court of Appeals,

      Filed April 11, 1893.)

    1. Homicide — Justifiable.
    Defendant was walking with a friend in a street in New York and being jostled by some men a quarrel ensued between defendant and deceased. Defendant went off with his friend, who had been injured, procured a knife from a grocery store, came back and stabbed deceased so that he died two days after, and followed the others who were running from him, stabbing one man three times. Defendant’s counsel requested the court to charge that “ the defendant had a right to follow the deceased for the purpose of having him arrested, and to use all lawful means in procuring such arrest, and if assaulted by the deceased when engaged in endeavoring to have the deceased arrested, and he did apprehend or had reasonable ground to apprehend a design on the part of the deceased to do him some great personal injury, and that there was imminent danger of such injury being accomplished, then, under those circumstances, defendant was justified in taking the life of the deceased.” Meld, that defendant was not entitled to such a charge under the circumstances disclosed by the evidence.
    2. Same — Charge.
    The defendant’s counsel requested the court to charge that “The burden of proof rests upon the prosecution, and if upon the whole evidence, including that of the defense, as well as of the prosecution, the jury entertain a reasonable doubt of the guilt of the accused, he is entitled to the benefit of that doubt and must be acquitted."' Meld, that while the precise words of the request were not present in the judge’s charge, in substance and spirit its proposition was amply covered by the language of the charge and the jury were sufficiently informed as to where lay the burden of proof.
    3. Same--Evidence.
    Testimony was admitted as to the defendant stabbing a companion of the deceased, which occurred after the offense of which the defendant stood indicted. Meld, no error; as it occurred in the same affray in which the deceased was killed, and was sufficiently connected with the killing of the deceased, as an incident, to make it admissible.
    Appeal from judgment of court of general sessions of New York, convicting defendant of murder in the first degree.

      Orin Gambell, for app’lt; Henry B. B. Stapler, for resp’ts.
   Gray, J.

The appellant was indicted upon the charge of murder in the first degree, for the killing of Adam Kane. He was tried upon the charge, and a verdict was rendered, finding him guilty. The fact of the killing was not in dispute, but the defendant claimed it was a justifiable homicide. The evidence is conflicting only with respect to what immediately led to the killing of the deceased by the defendant. The defendant was walking with a friend upon Grand street, in the city of New York, in the evening of April 30,1892, and, while passing by a group of men, of which the deceased was one, some jostling occurred which provoked a quarrel and a fight between the defendant and the deceased. They were separated, and the defendant went off with his friend, who had been injured in the course of the affray. He soon returned with a knife in his hand, which he bad procured from a grocery store, to where the deceased and his companions were. He attacked them, and stabbed the deceased in the groin, inflicting a wound which caused his death upon the second day afterwards. He followed the others, who were running from him, and stabbed another man three times. 'According to the defendant’s evidence, he had been chased into the grocery store, and armed himself with the knife under those circumstances ; that he went out and told the deceased and his companions that he proposed to have them arrested, and would follow them for that purpose; that they then attacked him, and in the affray he used his knife, without knowing exactly what he did. The evidence for the prosecution, however, was overwhelming to show that the defendant, immediately after the fight between him and the deceased had been terminated by their separation, deliberately proceeded to arm himself with a butcher's knife and a steel knife-sharpener; went back with loud threats to attack thep arty of men, and commenced striking left and right, with the result of killing the deceased, and of cutting another. Being pursued by a police officer, he ran into the shop from which he had taken the knife and steel, and threw them down.

To the police officer’s question as to what he had done this for, he replied: “That is the way you have got to do them people.” The learned recorder, in his charge to the jury, instructed them upon the law applicable to the case most ably and carefully; and he reviewed the facts testified to clearly and in the most impartial manner. So satisfactory was his charge to the jury that, though defended by an experienced counsel, who was well versed in criminal law and practice, no exception was taken to it on the prisoner’s behalf. Prior, however, to the delivery of the charge certain written requests to charge had been handed to the recorder, and, upon the conclusion of the charge, counsel asked if he had seen the requests ; to which the recorder answered “ Yes,” and that he had “ covered them all as far as he intended to.” That was all that occurred, no exception being taken to the recorder’s action upon the requests. Upon this appeal the defendant is represented by another counsel, of experience and ability, and the only errors relied upon relate to the refusal to charge two of the written requests, and to a question of evidence. As to the requests, the argument is that the prisoner was entitled to have the jury instructed fully according to their tenor. As no exception was taken to any refusal to charge upon the requests, this court, in its review of the proceedings upon the trial, is not required to consider the contention of the appellant’s counsel further than to see whether it is made to appear that justice requires the ordering of a new trial. The presence of an exception is not, of course, essential in support of the appeal of the defendant; as the duty is imposed by the statute upon this court in capital cases to order a new trial, whether any exception shall have been taken or not in the court below, if considerations of justice, based upon the presence in the record of errors prejudicial to the substantial rights of the accused, demand it. But it may be observed very properly, the absence of an exception upon the trial, where the accused has been defended by counsel known to be able and experienced, deprives the argument of much force which seeks to assail in this court the correctness of some part of the proceedings. The requests to charge, to which the appellant’s counsel alludes, are as follows:

Sixth. The defendant had a right to follow the deceased for the purpose of having him arrested, and to use all lawful means in procuring such arrest, and if assaulted by the deceased when engaged in endeavoring to have the deceased arrested, he did ap' prebend or had reasonable ground to apprehend a design on the part of the deceased to do him some.great personal injury, and that there was imminent danger of such injury being accomplished, then, under these circumstances, defendant was justified in taking the life of the deceased.

“ Seventh. The burden of proof rests upon the prosecution, and if upon the whole evidence, including that of the defense, as well as of the prosecution, the jury entertain a reasonable doubt of the guilt of the accused, he is entitled to the benefit of that doubt and must be acquitted.”

As to the first, it is sufficient to say that the defendant was not entitled to it, under the circumstances disclosed by the evidence. Ho such condition of things was shown as a lawful and orderly endeavor to effect the arrest of wrongdoers. The defendant had no right to arm himself with a dangerous weapon and to pursue the deceased and his companions; for, whether upon his own evidence, or upon that adduced for the prosecution, it was clear that when he returned to the scene of the first affray he had so armed himself. He was under no obligation to pursue any of the parties with whom he had been in conflict. That was over, and if lie wished to cause their arrest, other ways were open to him tlian to do as he says he did. In his charge the learned recorder instructed the jury fully upon the law of self-defense, and the jury could have been under no misapprehension as to what circumstances would warrant a person in killing his assailant under an apprehension of personal peril.

With respect to the second of the requests mentioned, we have most carefully considered and weighed the charge and we do not find it open to adverse criticism. The precise words of the request are not present; but in substance and in spirit its proposition is amply covered by the language of the charge. It is essential to the correctness of a charge that it should be clear in its definitions of the prisoner’s legal rights, and that it should not tend to mislead the jury upon the rules of law which should govern them in their deliberation upon the evidence. Examined in the light of that rule, we think this charge is hot subject to the criticism of counsel that the jury were not sufficiently in formed as to where lay the burden of proof.

The learned recorder charged the jury most unequivocally and most emphatically; at one time, that the law gave the defendant “ the benefit of every reasonable doubt arising out of the evidence, and it gives him the benefit of the presumption that he is an innocent man until that presumption is overcome by proof satisfactory to you.” And again, that “ if you entertain any reasonable doubt on any feature of this case, the defendant is entitled to the benefit of that reasonable doubt.” He told them if they came to the conclusion that the defendant killed the deceased in lawful self-defense, to “ acquit him at once.” The defendant did not dispute the killing of the deceased, but rested upon the justification of self-defense. Under that issue, the recorder’s duty was performed when he instructed the jury as he did with respect to the presumption of innocence and the right of the accused to the benefit of every reasonable doubt upon the evidence. He was very full and clear in all that he said to the jury, and we think the charge unexceptionable.

The appellant’s counsel argues that it was error to admit the testimony as to the prisoner’s stabbing Patrick Kane, the companion of the deceased, inasmuch as it occurred after the offense of which the defendant stood indicted, and constituted no part of the res gestes. The exception is untenable. The stabbing of Patrick Kane was something which occurred in the same affray in which the deceased was killed, and was sufficiently connected with the killing of the deceased as an incident to make it admissible. It was one of those surrounding circumstances which re.lated to and illustrated the principal fact, and therein lay the principle of its admissibility. People v. O'Neill, 112 N. Y., 355; 20 St. Rep., 754.

Upon a careful consideration of the whole record, we are satisfied that the verdict was reached upon abundant and competent evidence, and that nothing appears which could justify us in awarding a new trial.

The judgment should be affirmed.

All concur.


author: Peckham, J.

text:
    The People, Resp’ts, v. John L. Osmond, App’lt.

      (Court of Appeals,

      Filed April 11, 1893.)

    1. Homicide — -Insanity.
    Defendant, charged with the murder of his wife, testified that he remembered all that took place at the interview in which the killing occurred up to the moment when he saw B. “ nudge his wife's knee,” and that from that time during several hours and at intervals his mind was a blank, except that he heard a shot before B. struck him, etc. His whole evidence showed a full and long acquired knowledge of his wife’s improper relations with B. and no attempt to punish either, although he continued to associate with both. Held, that the evidence showed a cool and deliberate murder of the wife of the defendant.
    2. Same — Indictment.
    The court charged that if defendant intended to kill B. and killed his wife, he was just as much guilty of murder as if he intended to kill her, and if he did this with premeditation and deliberation, he is guilty under the statute. Held, no error, as the indictment was in the common law form, and the People might prove any case which amounted to murder under the statute.
    3. Same — Evidence.
    The district attor 'ey asked amedical student called by him: “ Q. Now, I will ask you, doctor, if you have been sitting here and heard the defendant’s testimony; yes or no? A. Tes. Q. Is there any known form of insanity to the medical profession where the mind at fits comes, and there there is a blank and it goes? A. I do not know of any such form." Held, that the first question was harmless and the second was correct.
    4. Same.
    Evidence tending to show that defendant’s wife and B. were maintaining illicit relations is not admissible if defendant was ignorant of it.
    _ Appeal from, judgment of New York oyer and terminer, convicting defendant of the crime of murder in the first degree.

      Stephen C. Baldwin, for app’lt; Henry B. B. Stapler, for resp’ts.
   Peckham, J.

Examining this record with reference to the statute of 1887, chap. 393, for the purpose of determining whether the verdict was against the weight of evidence, or against law, or whether justice requires a new trial, we are entirely clear that no new trial should be awarded on any ground mentioned in this statute.

The evidence showed a cool and deliberate murder of the wife of the defendant, and at the same moment the shooting and killing of another person who was then with her.

The defense set up was the insanity of the defendant at the very moment of the killing, or if not insane that his mind was then in such a weak condition as to have been overcome, and that he was incapable of forming an intent to commit murder, and, therefore, his crime, if anything, was a lesser offense.

A careful examination of the whole evidence leaves no room for doubt that there was an utter absence of testimony which even tended to show the alleged insanity or weakness of mind of the defendant. The evidence of the defendant himself leaves no room for doubt that there was no insanity about him. It is true that he swears that just prior to the firing of the pistol his mind suddenly left him. He remembers with distinctness all that took place at the interview in which the killing occurred up to the moment when he saw Burchell “ nudge bis wife’s knee,” and from that time he says that during several hours and at intervals his mind was a blank, except that he heard a shot before Burchell struck him, and that the pistol went off toward the corner where Burchell was shot. There is no pretense of any shooting other than his own.

His whole evidence shows, if it be true, a full and long-acquired knowledge of his wife’s improper relations with Burchell, and with such knowledge a failure for months to make even an attempt to punish Burchell or his wife. His own account showed q continued association with his wife and with Burchell after this discovery, although, as he says, he was constantly complaining of it. He continued to live in the same rooms with his wife, the rooms themselves being part of the house occupied and owned by Burchell; the defendant, his wife and Burchell went on excursions, and Burchell paid the expenses with defendant’s acquiescence, and all this was long subsequent to the time when, as the defendant says, he surprised his wife and Burchell in bed together. It thus appears there was no such case as a husband suddenly confronted with proofs of his wife’s infidelity, but a full and clear knowledge of it for months before the killing and an intimate and daily association with both the guilty parties.

The evidence of his brother; and father, and stepmother only shows, if believed, that the defendant was somewhat nervous, irritable and excited over the behavior of his wife. Upon the merits there can be no rational doubt that the jury came to a correct conclusion.

We think it unprofitable to notice in detail all the objections which were argued here and upon which a new trial is asked. We have carefully reviewed them all, and do not think they call for specific mention further than we shall now give.

The defendant excepted to that portion of the charge where the court instructed the jury that if the defendant intended to kill Burchell and killed his wife, he is just as much guilty of murder as if he intended to kill her, because it is the killing of a human being with a deliberate and premeditated design to effect the death of the person killed or of another person, so that if he intended and fired at Burchell and killed her, intending to kill Burchell, with this premeditation and deliberation, then he is guilty under the statute, and it is your duty to say so.” The counsel for the defendant excepted, and asked the court to charge the contrary, as the indictment charged the defendant specifically and only with the intent to murder his wife.

The indictment in this case is in the common law form, and does not charge the killing to have been done in the statutory language, “ from a deliberate and premeditated design to effect the death” of Mary Osmond. It charges that the defendant killed her wilfully, feloniously and of his malice aforethought,” and it contains no charge that while intending to kill another the defendant killed his wife. Ever since the adoption of the Revised Statutes it has been held, without interruption, that an indictment for murder in the common law form was proper, and that under it the People might prove any case which amounted to murder under the statute, and if the proof did not bring the case within some one of the statutory definitions of murder, it was the duty of the court to give proper instructions to that effect to the jury, and, unless it appeared that the court has failed so to do upon request, the appellate court would presume that the proper instructions were given. Fitzgerrold v. People, 37 N. Y., 413, citing Peoples v. Enoch, 13 Wend., 159, and People v. White, 24 id., 520; People v. Conroy, 97 N. Y., 62; People v. Giblin, 115 id., 196; 24 St. Rep., 592. Under this indictment it was, therefore, proper to prove any facts which would show the defendant guilty of murder as defined in any portion of the statute.

Another answer might be made, that the record is barren of any evidence tending m the direction of showing that the defendant might have killed his wife while intending to kill Burchell. The evidence of the defendant simply is that he has no recollection whatever of the affair, while the evidence of the sister of the deceased wife is clear and unambiguous on this point. There was no error in this portion of the charge.

The defendant’s counsel also claims error in the charge as to-the burden of proof in cases of insanity. Whatever of error existed in the original charge was promptly cured when the attention of the learned judge was called to the subject, and he then charged the jury upon that question in a manner which is in accord with the decisions of this court.

The general fault found with the charge seems to be that it bore heavily against the defendant in speaking of and in referring to the evidence. We have read with care the whole of the charge, and we are unable to agree that it was in any way an unfair or improper presentation of the case. It gave the jury a fair review of the material evidence in the case, and let them understand that the facts were exclusively for them to decide. This was all that the defendant was entitled to. There were no er’rors as to the law which had not been fully and plainly corrected before the jury left the court room.

One or two questions in regard to the admission of evidence arose on the trial. The district attorney asked a medical witness called by him these questions : “Q. Now, I will ask you, Doctor, if you have been sitting here and heard the defendant’s testimony; yes or no ? A. Yes. Q. Is there any known form of insanity to the medical profession where the mind at fits comes, and then there is a blank and it goes?” The question was objected to and admitted on the ground that it was a hypothetical question, and the answer given by the witness was, “ I do not know of any such form.”

I think the question was perfectly proper. It called for a fact, whether there was any form of insanity such as the district attorney described known to the medical profession. It was not of a nature which made hypothesis necessary. The question whether the witness had been sitting in court and heard defendant’s evidence was wholly immaterial, for the question subsequently put did not call upon the witness to give any opinion as to the evidence which he had heard, nor was there any joining of the first as a part of the second question. The first question was harmless and the second was correct. The fact itself which was asked about was presented to the mind of the witness,"and he was asked whether there was such a form of insanity known to the medical profession. This was proper. His answer was also responsive and properly received.

Again, the counsel for the defendant claims evidence should have been permitted, even though the defendant was ignorant of it, which tended to show the wife and Burchell were maintaining illicit relations. Everything known by others and which was communicated to defendant the court allowed to come in for the purpose of bearing upon the state and strength of mind of defendant at the time of the killing. Any particular fact of which defendant was ignorant could have had no effect upon his mind, and was inadmissible. Most of the material facts bearing upon the relations existing between the wife and Burchell which were known to others were also shown to have been known to defendant. They were in reality not controverted or disputed. The further fact that they had been found in bed together was only known by defendant, and he testified to it without objection. The defendant did, in truth, obtain the benefit of everything that was known as to the relations between his wife and Burchell. In strictness, however, evidence of which he was ignorant was inadmissible on this subject. The principle is not the same as that decided in Stokes v. People, 53 N. Y., 164.

There the question was in regard to the character of the encounter which took place between the parties when the shooting was done; was it done by Stokes in self defense, or was he the aggressor ? It was held competent to prove the fact that the deceased had himself made violent threats against Stokes shortly before, even though those' threats had not been communicated to defendant. This was upon the ground that the jury might consider the fact in determining the character of the encounter between the parties. But how can evidence of acts of infidelity, or of acts which tended to prove infidelity on the part of the wife, in any degree tend to show the state of mind of the defendant upon this subject, if such evidence had not been known or repeated •to him ?

We entertain no doubt of the correctness of the ruling of the court below in this case.

The evidence on the cross-examination of the brother, as to whether he would regard his actions as irrational if he were nervous or irritable after divorce papers had been served upon him, was proper enough, although I think wholly unimportant It tended to characterize and develop the weight to be given the evidence of the witness on his direct examination. These áre all the questions upon which we deem it appropriate to specially remark. The whole case has been carefully reviewed both upon the merits and upon the legal questions presented by, the record.

We think the defendant has been fairly tried and properly convicted and the judgment should, therefore, be affirmed.

Judgment affirmed.

All concur.


text:
    Henry Hyman, Pl'ff, v. Anna Hauff et al., Def’ts.

      (Court of Appeals,

      Filed April 11, 1893.)

    1. Mortgage — Advances made after notice of subsequent lien.
    The rule that the lien of a mortgage to secure future advances will be postponed as to such advances as are made after knowledge of the existence of a subsequent mortgage, in favor of the holder of the latter, applies only against a security for future advances purely and plainly optional, the holder of which has actual notice of a subsequent mortgage for an existing debt or liability.
    3. Same.
    Where the obligation to advance exists, or where the right to decline depends upon facts dehors the instrument, and which may be the subject of dispute and contention, the holder of the first security is warranted in making the advances in reliance of his mortgage.
    3. Same — Conditions.
    A provision in such mortgage that if the owner fails to make his payments as they become due, the mortgagee is absolved from further performance, or that further advances should cease whenever the owner permitted any subsequent lien or incumbrance to be filed, is intended for the benefit of the mortgagee, and if it elects to waive such provision and go on and complete its contract, no subsequent mortgagee has any right to question the equity of its claim for payment.

      4. Same — Surplus proceedings.
    The court has power in surplus proceedings to impose costs upon any of the parties, payable either personally or out of the fund, and the exercise of such power is discretionary and not appealable to this court.

      Appeal from a judgment of the Mew York common pleas, general term, affirming order made at special term confirming report of referee directing the distribution of surplus moneys and charging appellant with the expenses of the reference.

      George G. Munger, for James Rogers, app’lt; T. W. Foster and Thomas C. Ennever, for resp’t.

       Affirming 50 St. Rep., 603.

   O’Brien, J.

This was a controversy between subsequent lienors as to the right to surplus moneys arising upon foreclosure sale in the action. Two of the defendants owned seven lots in the city of Mew York, upon which they desired to construct seven dwellings. They first gave a mortgage to the plaintiff to secure the payment of money advanced or to be advanced during the progress of the work. They subsequently made contracts with various parties for materials and work to be delivered and performed in the future, as specified in the contracts, and executed bonds and mortgages, absolute on their face, but intended by the parties to secure the payment of the moneys stipulated in the contracts. The mortgages were delivered and recorded in the following order : The Lorillard Brick Works Co., $6,000, October 28, 1890, recorded Movember 8, 1890 ; Buffalo Co., $16,700, December 16, 1890, recorded December 22, 1890; Cassidy & Adler, $7,500, December 16, 1890, recorded December 23,1890 ; Michael McCormick, $3,000, December 19. 1890, recorded December 27, 1890. There was a surplus of $27,687.76 upon the sale after paying the plain tiff’s mortgage and the costs. The referee appointed to report upon the respective claims to this surplus made full findings of fact and law, in which he held that distribution should be made as follows : (1) The expenses and costs of the proceedings; (2) the receiver of the Lorillard Co. $6,000, with interest from October 25, 1891; (3) the Buffalo Co. $14.200, with interest from August 6, 1891; (4) Cassidy & Adler $7,500, with interest from June 19, 1890. Thiá exhausted the surplus and left a considerable sum upon the last-named claim unpaid. The mortgage of McCormick, the payment of which was postponed for the other claims, which were preferred, had been assigned to James Rogers, who insisted, in the proceedings, that his claim, though subsequent in point of time, was, nevertheless, entitled to preference over the Buffalo Company and Cassidy & Adler, on account of certain equities in his favor, which will be hereafter considered.

The referee decided against him claim, and the court confirmed the report and ordered the moneys to be distributed accordingly. The court also ordered that Rogers pay the sum of $503.62-to-Cassidy & Adler to reimburse them for a portion of the loss sustained by them in the depletion of the fund by the payment of costs caused by his unsuccesful contention. He is the only party who has appealed, and the questions are raised by his exceptions-to the report. It is only necessary to state generally the attitude of the appellant with respect to the claim of the Buffalo ComE, in order to present the main question raised by his appeal., mortgage, it will be remembered, was given by the owners; to secure their payments,as stipulated in the contract between them, and the company, for furnishing sash, doors and other trim for the seven houses. It bound the owners to make payments in cash to the company in different sums, at different times in the future, and as the materials were furnished. It was agreed that if the owners should fail to make the payments according to the terms of the contract, the company might, at its option, cease to deliver materials, and thereupon the mortgage should become due to the extent of the goods delivered. The payments were not made as provided. The instrument also contained the following provision : “ It is further agreed that in case any lien or incumbrance of any kind shall be filed or docketed against or placed upon the said premises, or any part thereof, during the performance of this contract, the parties of the first part may, at their option, cease to deliver materials hereunder, and unless such lien or incumbrance shall be discharged of record within ten days, the said bond and mortgage shall thereupon become due and payable to the extent of the materials which shall then have been delivered.”

There were liens and incumbrances subsequently placed upon the property by the owners, as we have seen. The appellant contends, upon substantially these facts, that the mortgage was to secure future advances which were optional merely,, and that as to all such advances made after notice of his mortgage he has the prior lien. If he is right in this position, sufficient of the claims which have been held superior to his would be postponed to enable him to realize upon his debt. The doctrine applicable to mortgages given to secure voluntary future advances, as affected by subsequent liens, has been much discussed in England, and seems to have been settled there in accordance with the contention of the appellant, though not without controversy and strong dissent. Gordon v. Graham, 2 Eq. Cas. Abr., 598; Hopkinson v. Rolt, 9 H. L. Cases, 514; London & C. Bkg. Co. v. Ratcliffe, L. R., 6 App. Cases, H. L., 722; Bradford Bkg. Co. v. Briggs, 12 id., 29.

These cases hold that the lien of a mortgage to secure voluntary future advances will be postponed, as to such advances as are made after knowledge of the existence of a subsequent mortgage, in favor of the holder of the latter. Substantially this rule seems to have been followed in several of our sister states. Bank of Montgomery Co.'s Appeal, 36 Penn. St., 170; Spader v. Lawler, 17 Ohio, 371; Ladue v. Detroit & Milwaukee R. R. Co., 13 Mich., 390; Collins v. Carlile, 13 Ill., 254; Boswell v. Goodwin, 31 Conn., 74.

The general doctrine as announced in Hopkinson v. Bolt, supra, which is the leading case in England, has been somewhat considered by this court with approval, though it seems to me that the precise question was not decided. Ackerman v. Hunsicker, 85 N. Y., 43; Truscott v. King, 6 id., 147.

Without attempting to discuss the equity of the rule or to point out its precise limits and application, it is quite clear that it can operate only against a security for further advances purely and plainly optional, the holder of which has actual notice of a subsequent mortgage for an existing debt or liability. The mortgage which the appellant holds was given to McCormick to secure to him the payment of certain sums of money for work to be performed in the future in the construction of the houses. It is not clear from the record that the contract which it was given to secure was any more obligatory upon him than was the other contract with the Buffalo company, and if it was not, then the appellant has no superior equity in his favor. But we think that the mortgage to the Buffalo company was not to secure future optional advances within the rule referred to. At its inception, and upon its face, both parties were bound to perform it at the peril of being subjected to damages. True, it contains a provision that if the owner fails to make his payments for the property furnished as they become due, then the other party is absolved from the obligation to make further performance. But that is the case with most executory contracts, and the clause expresses nothing more than what the law would imply ordinarily upon the same facts. The other provision was that the obligation to make further delivery of materials should cease whenever the owner permitted any subsequent lien or incumbrance to be filed. These provisions-were both for the benefit of the Buffalo company, and if it elected to waive them and go on and complete its contract according- toils terms, no subsequent mortgagee has any right to question the equity of its claim to payment. If the party in whose favor the the stipulation was made chooses to waive it, a stranger to the contract cannot complain or derive any advantage or raise any question based upon a fact that in no way concerned him. When it-appears as matter of law, from an inspection of the instrument, that the prior mortgagee may decline to make the advances at his pleasure, without taking the risk of subjecting himself to damages or loss, the rule can be defended upon equitable principles. But where the obligation to advance exists, or where the right to decline depends upon facts dehors the instrument, and which may be the subject of dispute or contention, the holder of the first security is warranted in making the advances in reliance upon his .mortgage.

In the present case, the Buffalo company had no right to refuse further delivery of goods unless it could establish a breach of some of the conditions of the contract upon which the right to refuse depended. This it could not do by a mere production and inspection of the writing, but would be obliged to resort to proof of extraneous facts which might be disputed, and, in some cases, it is quite conceivable that a party might fail in the attempt to-establish them to the satisfaction of a court or jury. It would be incorrect in fact, and unjust in practice, to hold that goods delivered under such a contract were subject to the rule applicable to mere optional advances. Moreover, this contract may have been, and we must assume was, a profitable one for the parties who-agreed to furnish the building materials. They could not decline to go on, when the subsequent mortgage was given, without sacrificing profits to be derived from a full performance. The company not only protected itself by conditions in the contract for its own benefit, but by mortgage security. It was entitled to all the fruits of the contract, and, though the other party did not perform in all respects, the company could waive the omission and still go on earning these fruits upon the faith of its security. To hold that, under such circumstances, a subsequent mortgagee and a stranger could arrest the performance of such a contract, against the will of the immediate parties, would be, practically, to impair its obligations. All the cases hold that the principle does not apply when a party subjects himself to damages by declining to perform or to make the advances, and, if not, why should it apply to a case where the loss of the profits or fruits of the contract must follow a failure or omission to perform.In many cases the profits which a party is to derive from full performance of his contract are much larger than any damages which the other party to it could recover against him for failure to perform.

It appears that the appellant’s mortgage was, upon its face, expressly subject to all prior mortgages, and, further, that McCormick, after the assignment of it to appellant as collateral security, executed an instrument to the Buffalo Company, in which he stipulated that, irrespective of the date of the delivery of the material, the prior mortgage should be and remain the superior security. Of course, the object of the stipulation was to avoid the very question we have been considering. What effect it had, and how far, if at all, it bound the appellant, and what significance is to be attached to this clause in the mortgage, expressly subordinating it to all mortgages of prior date and record, are questions of interest ably discussed upon the briefs of counsel, and which have received the attention of the courts below. But as the appellant’s claim of equitable priority, which, so far as he is concerned, is fundamental, cannot be sustained, it is unnecessary to consider the other questions.

In regard to the question of costs, it is sufficient to say that the court below had the power to impose costs upon any of the parties, payable either personally or out of the fund. It was, therefore, a matter resting in discretion, and that part of the order presents no question of law which this court has jurisdiction to review.

It follows that, the order appealed from must be affirmed, with costs.

All concur.


author: Charles H. Otis, Referee. Cullen, J. Dyioian, J.

text:
    William Henry Beard et al., App’lts, v. Mary A. Beard et al., Resp’ts.

      (Supreme Court, General Term, Second Department,

      Filed February 13, 1893.)

    1. Executors and administrators — Commissions as trustees.
    Where the executors or trustees are empowered by the will to continue the testator’s business, the payment of moneys for expenses of such business, which are repaid by the receipts, are not such a receiving and paying out as is contemplated by the statute to entitle them to commissions, but merely a reinvestment of the capital.

      2. Same — Premature withdrawal oe commissions — Interest.
    Where executors or trustees withdraw sums for commissions before they are allowed, they are liable for interest upon such sums.
    Appeals by William H. Beard and Merrick D. Lawrence from portions of the judgment in this action giving judgment against them personally for the entire amount of commissions withdrawn, with interest.
   The following is the opinion of the referee so far as affects this question :

Charles H. Otis, Referee.

All the issues which were raised by tne objections to the account filed by the respective counsel and guardians ad litem for the parties have, by unanimous consent, been reduced to five questions:

I. The amount upon which the trustees are entitled to receive commissions.

II. The right of the trustees to withdraw and retain their commissions prior to the making and entry of a decree allowing the same, and as a corollary of this, the liability of the trustees to account for interest on the full amount retained by them for their commissions.

III. The use of income to pay for certain improvements which the defendants contend are not “ ordinary repairs,” but “ betterments” of the property.

IV. The reasonableness of the compensation paid by the trustees to J. Brice Martin, one of their number, for his special services during the years 1886 and 1887.

V. The obligation of the trustees to account for certain salaries received by J. Brice Martin from the Empire Warehouse Company, Limited, and from the Brooklyn Grain Warehouse Company.

I shall consider these questions in the order above enumerated.

1. The accounts of the plaintiffs, as trustees, have never been judicially settled. This action is the first proceeding which has ever been initiated by the trustees for that purpose, and consequently the amount to which they are entitled for their commissions has never been allowed or judicially determined by any court.

Trustees are entitled to receive the same compensation as is allowed by statute to executors for their services.

Under ordinary circumstances, the application of this statutory rule would not be difficult.

In the matter pending before me, authority is conferred upon the trustees, by the will of the testator, to carry on the storage business upon the so-called “ Erie Basin ” property. Under this authority, the trustees did carry on that business from the date of testator’s decease, January 8, 1886, until January 1, 1888.

During this period the total receipts of the business amounted to.......................... $607,272 91

Profits turned over to trustees...... $317,200 00

Cash on hand.................... 3,760 37

Expense........................ 286,312 54

--$607,272 91

The dispute between the parties arises in relation to the item of $286,312.54.

It is contended in behalf of the plaintiffs that, inasmuch as the unusual and extraordinary duty of carrying on a great storage business was cast upon them by the will of the testator, the law must have contemplated the payment of commissions upon all sums received and paid out in the conduct of the business, as a compensation for such extraordinary and unusual services. On the other hand, it is contended in behalf of the defendants that the “ receiving” of sums of money which did not go to swell the capital of the estate and property in their hands, and the “ paying out ” of sums of money for the expenses of the business, which were repaid in the general receipts of the business, are not such a receiving and paying out as are contemplated by the statute, but that the receiving and disbursing of all such sums, in the mere conduct of the business, constitute re-investments of capital.

The law is well settled in this state that executors and trustees are not entitled to commissions upon re-investments of the principal or capital of the fund in their hands. Matter of Kellogg, 7 Paige Ch., 265; Morgan v. Hannas, 13 Abb., N. S., 361; Betts v. Betts, 4 Abb. N. C., 317, 436.

If the amounts paid out as an expense of the business, and subsequently repaid to the trustees in the general aggregate receipts of the business, constitute such a re-investment, then the trustees cannot be allowed commissions upon the same.

In the Matter of Hayden, 54 Hun, 197; 26 St. Rep., 911, one of the executors, Charles A. Hayden, conducted a furniture business of the testator, for the benefit of his estate, from the tinie of testator’s death to the date of Charles A. Hayden’s retirement from his trust.

It was contended on behalf of the executor’s that they were entitled to commissions upon the aggregate receipts and disbursements of the furniture business carried on by them for the benefit of the estate.

Mr. Justice Barker, who wrote the opinion of the court in the Hayden case, says, at page 205 :

“ It appears that there was received and paid out in payment of ■debts and legacies, $12,577.26, and that there was received and paid out in the management and conduct of the business, $58,-844.36; as to the first of the sums, the will was fully executed, ■and full commissions should be allowed. Matter of Allen, 29 Hun, 10. As to the second amount, namely, $58, 844.36, received and disbursed in the management of the business, more difficulty exists. While it is apparent that the money was received and paid out in the execution of the provisions of the will, and pursuant to the authority given by it, it nevertheless does not appear that from the business any profit or any advantage resulted to the estate. The buying and selling incident to the conduct of a manufactory or other business is, at best, a species of reinvestment of the trust funds. If commissions were to be allowed each time a stock in trade were purchased or sold, it is quite probable, as well as possible, for a case to arise where the executor’s commissions would largely consume the body of the estate, especially where the stock in trade is rapidly turned over and no great profit is realized from the transactions. It is quite manifest that the claim for commissions on the $58,844.36 was properly disallowed.”

It is true that in the case presented the expenses of the business consisted largely of payment for labor, but I am unable to perceive any distinction in principle between the facts in this and those in the Hayden case.

In a manufacturing business the largest item of cost of production is usually the amount paid for labor.

If the principle contended for by plaintiffs were applied to such a business, in which the capital invested is frequently turned several times each year, and the rate of profit is small, the trustees’ commissions would certainly exceed the net return from the business, and it would only be a question of time when the trustees’ commissions would absorb the capital.

Moreover, the application of the rule contended for might operate as an inducement to trustees to'continue an unprofitable business, because its continuance would increase their compensation. The courts certainly will not favor such a construction of the statute as will render trustees liable to such a temptation,

I am of the opinion that commissions should not be allowed upon any sums received and paid out in the conduct of the Erie basin storage business which it would not have been necessary to* pay out if the business had not been carried on by the trustees, but that commissions should be computed upon the net profits of the business. * * *

2. The trustees have from time to time drawn from the fund and paid to themselves various sums of money on account of commissions.

The Eevised Statutes provide, in relation to compensation to executors, “ on the settlement of the account of an executor or administrator, the surrogate shall allow to him for his service ” his statutory commissions. 2 R. S., 93, § 58; 8th ed., vol. 4, p. 2564.

Section 2802 of the Code of Civil Procedure provides that “ Any trustee created by any last will and testament * * * may at any time file an intermediate account, and may also annually render and finally judicially settle his accounts before the surrogate; * * * in all such annual accountings 'of such trustee, the surrogate, before whom such accounting may be had, shall allow to the trustee or trustees the same compensation for his or their services by way of commission as are allowed by law to executors and administrators.”

If the accounting proceeding be brought in the supreme court, then that court instead of the surrogate must allow to the trustees their compensation.

The general rule is well established by numerous authorities, that commissions are allowed only by order of the court, and by the decree which judicially settles the executors and trustees’ account; and that executors and trustees have no authority to appropriate sums to their own use, as commissions, until they have been so allowed.

If trustees do retain and appropriate sums to their own use in advance of such allowance by the court, it is a misappropriation, and they are chargeable with interest from the date of withdrawal to the date of the decree finally allowing the commissions and determining their amount. Wheelwright v. Rhoades, 28 Hun, 57, 59; Freeman v. Freeman, 4 Redf, 211; Whitney v. Phoenix, id., 180; Wheelwright v. Wheelwright, 2 id., 501; Haskin v. Teller, 3 id., 316; Carroll v. Hughes, 5 id., 337; Matter of Peyser, 5 Dem., 244.

In Wheelwright v. Rhoades, supra, Judge Davis in bis opinion at page 59-60, says : The statute fixes the rate of compensation to executors and administrators, and provides the mode in which it shall be ascertained and paid; and until that statutory requirement is complied with, the executors have neither power nor right to pay themselves at their own discretion. * * *

“ The course of the executors in this case, although taken in good faith and under the advice of counsel, ought not to have been sanctioned, because of its danger as a precedent.”

The general rule is recognized in Hancox v. Meeker, 95 N. Y., 528, 538. Hancox v. Meeker, supra; Matter of Mason, 98 N. Y., 527, and Matter of Selleck, 111 N. Y., 284; 19 St. Rep., 601, are cited by counsel for plaintiffs as authorities sustaining the right of these trustees to appropriate sums of money, on account or in payment of their commissions, in advance of their allowance by the court.

The rule laid down by these cases is explicitly stated and limited by Judge Bari in the Matter of Mason, 98 N. Y., at page 535: “ We are of opinion that where a trustee is required to keep trust funds invested and to receive and pay out the income annually, and he receives the income and renders an account thereof to the beneficiary, and pays over the balance of the income, after deducting all expenses chargeable against the same, he has the right to deduct for his compensation full commissions on the income annually received, before paying it over. * * * *

In such case there is no occasion for a settlement before the court, and the law does not require the filing of annual accounts. If the income is received and promptly accounted for and paid over to the beneficiary, that is the end of it; any further accounting would be superfluous, a mere formality. A different rule might apply if the trustee received income which he was to accumulate, or which he allowed to accumulate in his hands for several years and then accounted for and paid over a gross sum to the beneficiary.”

So in Hancox v. Meeker the trustees paid over annually to the beneficiaries all of the income in their hands, retaining their commissions upon such income. They retained no commissions upon the principal of the trust estate. There was an annual settlement with and distribution among beneficiaries.

At page 589, Judge Miller says: “ Within the rule Stated we are unable to perceive why the commissions were hot properly retained by the executors.”

The rule is again stated by Judge Gray in the Matter of Selleck, 111 N. Y., at page 293; 19 St. Rep., 606.

“ In Matter of Mason, 98 N. Y., 527, this court held, that in cases where the trustees receive the annual income and render an account thereof, and pay over the balance to the beneficiary each year, there is no occasion for a settlement before the court, and the law does not require the filing of annual accounts. In such a case, upon a final accounting, the trustee may claim and be allowed full commissions on the annual income of the trust estate. He may deduct his compensation from the income annually received before paying it over. The construction in that case was most liberal toward the trustee.”

In this case there has never been any settlement of the income account; there has never been a time when there was not a balance of income in the hands of the trustees; there has never been a complete distribution and payment of income to those entitled under testator’s will.

In fact, it now remains as one of the questions to be determined in this action, as to whether a large amount of income has not been applied to ^ie payment of certain permanent improvements and betterments of real property, which should have been paid for out of the capital of the estate.

As I read the authorities cited by counsel for the plaintiffs, the underlying and necessary condition to be fulfilled, to entitle trustees to deduct and retain commissions from income, is, that there shall have been a settlement of the income account, and a payment over to beneficiaries of the entire balance of income in the hands of the trustees.

Such has not been done in this case.

I am, therefore, of the opinion that the plaintiffs should account .for all amounts withdrawn by them on account of commissions, with interest from the dates of such withdrawals respectively.

It is evident that all amounts retained by these trustees on account of their commissions were so retained under the advice of counsel, and in the confident belief that it was their legal right so to do. This is doubtless the fact both as to the amount retained and as to the time of payment.

The following is the opinion at special term :

Cullen, J.

I think the referee’sfindings of fact that the compensation paid to Mr. Martin by the Brooklyn Grain Warehousing Company was exacted by Martin as a condition of placing the property of the estate in the corporation, and that no services were rendered therefor, are sustained by the evidence. From this it follows that Martin must account for the whole of that sum ($10,000) to the estate. It is no answer to this claim to say that the Beard estate only contributed the portion of that compensation which its stock bore to the whole stock of the company. The company can make no complaint of the payments to Martin, for it agreed, to them and received or assumed to receive their equivalent by the entry of the Beard property into the combination. It could have justas well afforded to pay the Beard estate $10.000 a year as additional rent, as the sum paid proceeded not from Martin’s services, but from the use of the trust estate.

The determination of the annual salary or compensation to Mr. Martin is not impeached, and must, therefore, stand. The fact that Mr. Henry Beard assented to such determination under a misapprehension, when such misapprehension does not relate to the character or value of Martin’s services, is not sufficient to imperil the effect of his action.

The sum paid by the Empire Warehousing Company to Mr. Martin is found not to have been in excess of the value of his services. I think Martin should retain the sum. It fairly proceeded not from the trust estate, but from his own services. The original report of the referee will be modified in accordance with this decision, and, as modified, confirmed. I will hear the parties as to the allowance.

Dyioian, J.

This is an appeal from certain portions of a judgment entered upon the report of a referee in an action for passing and allowing the accounts of the plaintiffs as executors and trustees under the last will and testament of William Beard, deceased.

We think the case falls within the decision of Hayden, 54 Hun, 197; 26 St. Rep., 911, where the judge who wrote the opinion for the court said: The buying and selling incident to the conduct of a manufacturing or other business is, at best, a species of reinvestment of the trust funds. If commissions were to be allowed each time a stock in trade were purchased or sold, it is quite probable, as well as possible, for a case to arise where the executors’ commissions would largely consume the body of the estate.”

The judgment of the general term in that case was affirmed upon the opinion of the general term by the court of appeals. 125 N. Y., 776; 36 St. Rep., 1011. As we concur in the views expressed by the referee, and with the two opinions of the judge at special term, it seems unnecessary to elaborate those views.

The judgment should be affirmed, with cofets.

Barnard, P. J., and Pratt, J., concur.