text:
    Charles Kruse, Resp’t, v. The Seeger & Guernsey Co., App'lt.

      (City Court of New York, General Term,

      Filed October 15, 1891.)

    1. Conversion—Charge.
    In an action for conversion of samples alleged to have been delivered to defendant to enable it to sell plaintiff's goods and to be returned on demand, the defense was that they were not so delivered, but were sold for an agreed price, and that defendant had sold them before demand for their return was made. Held, that the court properly instructed the jury that if the transaction was found to be a sale and delivery for an agreed price the verdict must be for defendant; but if it was found that the goods had been delivered as samples to be returned upon demand, and the return had been demanded and refused, the verdict should be for plaintiff.
    2. Same.
    The court properly refused to charge that, the things having come lawfully into the possession of defendant, it was incumbent on plaintiff to . show that defendant has control of the goods and can return them in order to recover, and if it is found that they have been sold, although there was a conversion, there should he a verdict for defendant.
    Appeal from, a judgment entered on the verdict of a jury in favor of the plaintiff and from the order denying a new trial.

      A. Walker Otis, for resp’t; Wilmot & Gage, for appl’t.
   Van Wyck, J.

The complaint alleges a cause of action in tort for the conversion of certain samples of merchandise and is brought to recover about $100, the value of the same. The evidence on behalf of the plaintiff was that these samples were delivered to defendant for the purpose of enabling it to sell for plaintiff merchandise of similar character and quality, that the samples were to be returned upon his request, and that one year thereafter he demanded their return, which was refused. The evidence on behalf of defendant was that the merchandise was not delivered to it as samples to be returned, but was sold and delivered to it at an agreed price, and that long before such demand for the return of the same it had been sold by defendant The evidence presented a disputed question of fact as to what was the nature of the transaction, and the trial judge properly instructed the jury that if the transaction was found to be a sale and delivery for an agreed price the verdict must be for defendant, but if, on the other hand, it should be determined that the merchandise had been delivered as samples to be returned upon demand, and the return had been demanded and refused, then the verdict should be for plaintiff. The verdict was for plaintiff and should not be disturbed. Complaint is made by the defendant against the refusal of the judge to charge his request, which was as follows : “ I ask your honor to charge the jury that if they find as a matter of fact that these goods have been sold by the defendant, although there was a conversion, yet that they should render a verdict for the defendant, because if it is beyond their ability to return these goods, having sold them, the things came lawfully into their possession at first, and upon these facts it is incumbent upon the plaintiff to show that the defendants now have control of these goods and can return them in order to recover.” That the judge in refusing to charge as requested did exactly what he should have done is too apparent to call for expressions of justification. The judgment must be affirmed upon the facts and the law, with costs.

Ehrlich, Oh. J., and Newburger, J., concur.


source: Caselaw Access Project

author: Kennedy, S.

license: Public Domain

text:
    In the Matter of the Estate of Otis A. House, deceased.

      (Surrogate’s Court, Madison County,

      Filed March 5, 1891.)

    Divorce—Foreign—Administration.
    The deceased removed to Ohio, where he obtained a divorce from his wife on the ground that she had abandoned him, and afterwards remarried and returned to this state. The process in the divorce action was served by publication, no personal service being made on the wife, who was a resident of this state, and she did not appear in the action, hut she admitted service of notice of the taking of testimony in this state and consented that it he taken without notice to her. Held, that the court of Ohio never acquired jurisdiction of the person of the first wife; that its divorce was absolutely void in this state, and that the first wife was entitled to administer on the estate.
    Application for letters of administration.

      E. F. Haskell, for Anna E. House; H. D. Luce, for Mary F. House.
   Kennedy, S.

Application is made to the surrogate by Mary R House and Anna E. House to be appointed administratrix of the estate of Otis A. House, each claiming to be his legal widow and entitled to be thus appointed. The facts out of which the controversy arises are as follows:

The deceased and Mary E. House intermarried in Otsego county, N. Y., March 18, 1874, and thenceforward lived together as husband and wife in that county until March, 1876, when they separated. Subsequently Mr. House went to Ohio, where, after remaining more than a year, he commenced an action for divorce against his wife, who was then, and now, and always has been, a> resident of the state of New York. There was no secrecy on the part of House in procuring the divorce, for the certified copies of the records of the court show that a commissioner was duly appointed to take testimony in Otsego county as to his wife having abandoned him. Hpon the execution of the commission, Mrs. House was notified of the time and place of hearing, and gave the following admission of the service of such notice:

“ I hereby admit due personal service of a copy of the within notice and consent that depositions may be taken and witnesses summoned in this cause without further notice to me.

“ Richfield, January 10, 1883.

“ Mary F. House.”

Four witnesses were sworn and testified to the refusal of Mrs. House to live with her husband, and upon the evidence thus obtained the divorce was granted. No question is raised but that the evidence was sufficient to justify the court in granting a decree of divorce under the laws of Ohio, and it is admitted that the divorce obtained by said House from his wife on the 8th day of March, 1883, for willfully abandoning him, was granted in compliance with the laws of that state. It is also conceded that; Mary F. House was not in the state of Ohio at the time the action was commenced against her, nor has she ever, at any time, been a resident of, or within that state, and the record shows that she was never served with any process in the action, either personally or by mail, either in the state of Ohio or elsewhere. The action was commenced by the publication of a notice of the filing of a petition for a divorce in the court of common pleas of Lucas county, which notice was published for seven weeks in a newspaper published in Toledo, in that state, and the record shows that the defendant never appeared in said action, either in person or by attorney.

After the decree of divorce was obtained, and on the 29th day of March., 1883, the said House and Anna E. House intermarried at Erie, Monroe county, state of Michigan, and have since lived together as husband and wife. Soon after this last marriage the deceased and Anna E. removed to the village of Oneida, N. Y., and lived there until his death at that place, on the 23d day of December, 1890.

It is admitted that said last marriage was solemnized pursuant to the laws of the state of Michigan and was a valid marriage under the laws of that state.

The said House left no property save the usual household furniture necessary for himself and alleged wife, but having been accidentally killed on the railroad at Oneida, it is supposed his legal representatives have a valid claim against the railroad company for a large sum, and hence arises the contest over the appointment of an administratrix for his estate.

Upon the above state of facts we must hold that Mary E. House is entitled to be appointed administratrix notwithstanding the validity of the divorce elsewhere than the state of New York. The right of Anna E. House to administer upon the estate of the deceased does not depend upon the regularity of the Ohio divorce in that state, or the legality of the Michigan marriage, but upon the validity of said divorce in the state of New York; for, if invalid here, she has no rights under it which can be enforced in this state against Mary E. House., That said divorce is absolutely void in this state is apparent from the fact that at no time has the said Mary E. House been a resident of, or been in the . state of Ohio, but has lived and been a resident of this state, that no process in said action or notice of the same was ever served upon her in Ohio or in this state, and that she never appeared or authorized any one to appear for her in said action or proceeding.

Under such circumstances the Ohio court never had any jurisdiction of the person of Mary E. House, and could not grant a judgment against her which would be valid in this state, because, in matrimonial actions, the judgment of a court of another state has no binding effect here unless it had jurisdiction of the subject-matter and of each of the parties thereto, and this want of jurisdiction may always be interposed against such a divorce in this state when it is sought to be enforced, or when any benefit is claimed for it; and hence, when Anna E. House seeks to avail herself of this Ohio divorce, asserting its validity in the courts of this state, and claiming by reason of it and of her marriage to the deceased that she is the legal widow of Otis A. House, and therefore entitled to be appointed his administratrix, Mary E. House has the right to contest the claim and maintain her rights as widow upon the ground that, as to her, the Ohio judgment of divorce is a nullity in this state.

When Otis A. and Mary E. House intermarried in this state, being citizens thereof at the time, the law invested his wife with certain legal rights, and among them was the right to administer upon her husband’s estate, if she survived him, and this right could not be judicially or otherwise taken from her, either by the statutes or courts of another state, so long as she continued to be his wife and remained a resident of the state of Hew York. A court in Ohio cannot extend its process or its jurisdiction beyond the territorial limits of the state in which it exists, so as to subject the person or the property of the citizens of this state to its decrees, and it is .the duty of this state, and of its courts, to protect the person and property of its citizens against the enforcement of such judgments whenever their validity is claimed within its boundaries, or any attempt is made to enforce them. It is for this state to determine who shall administer upon the estates of its intestate citizens, and among whom their property shall be distributed, and not for the courts of other states. Our laws cannot thus be repealed and modified. Our courts have always maintained that a citizen of this state could not be charged in personam by the adjudication of the courts of another state unless he was personally served with process within the jurisdiction of such courts, or voluntarily submitted in some legal manner to their authority, and so long as the laws of this state are thus declared, divorces obtained like the one in this proceeding must be held to be absolutely void.

There is no injustice done to any one in holding such judgments to be a nullity, because parties thus obtaining divorces for the purpose of re-marrying and then returning to this state to live assume the risk of their illegality. Such divorces are only a cover ior a domestic life unrecognized by our laws, and tolerated only "by public sentiment or public indifference. If the husbands or wives of such marriages desire to enjoy the financial results which may be acquired by their industry, or otherwise, they should remain in those states where such divorces and marriages are recognized as valid, or else by will or otherwise dispose of their property in such manner as to confer its benefits upon the survivor.

It appearing, therefore, from the facts in this proceeding that the alleged divorce of Otis A. House from his wife is illegal and void in the state of Hew York as against her, and that she is now the lawful widow of the deceased, an order will be entered appointing Mary F. House administratrix of the estate of Otis A. House, deceased.


author: O’Brien, J.

text:
    Philip Schuyler, Pl’ff, v. Ernest Curtis et al., Def'ts.

      (Supreme Court, Chambers, New York County,

      Filed September, 1891.)

    1. Injunction—Erection of statue.
    The jurisdiction of equity to grant an injunction is not limited to cases in which damages could he recovered in an action at law. It has independent jurisdicti' n to prevent what the court considers a wrong, whether arising from a violation of an unquestionable right or from breach of confidence or contract.
    2. Same.
    An action may be maintained by the relatives of a deceased person who, during life, always remained a private citizen and never became a public character, to restrain by injunction the erection .of a statue of her in a public place.

      3. Same—Private persons.
    • A person to whom notoriety is distasteful does not surrender her character as a private citizen by merely engaging in private works of philanthropy.
    Motion to continue injunction.

      James B. Ludlow, for pl’ff; Walter S. Logan, for def’ts.
   O’Brien, J.

This is a motion for the continuance of a preliminary injunction restraining the defendants from proceeding with a project for making and exhibiting a statue of the late Mrs. George Schuyler, who, before her marriage, was a Miss-Mary M. Hamilton.

Mrs. Schuyler had no children; but the plaintiff, who is a nephew and stepson, brings this action on behalf of himself and all her other nearest living relatives.

The defendants, except Hartley, who is the sculptor engaged to execute the statue, are members of the “Woman’s Memorial Fund Association,” which has undertaken to raise money by public subscription for a life size statue of Mrs. Schuyler, to be designated as “ The Typical Philanthropist,” and has publicly announced its intention of placing this statue on public exhibition at the Columbian Exposition to be held in Chicago in 1893, as a companion piece to a bust of the well known agitator, Susan B. Anthony, which bust is to be designated as the “ Typical Reformer.”

Neither Mrs. Schuyler in her lifetime, nor her husband after her death, knew or consented to the project; and in view of the attitude assumed by plaintiff on behalf of her nearest living relatives, it must be concluded that so far as the family is concerned the project is unauthorized.

The defendants, however, contend that, irrespective of the wishes-of the family, they have the right to commemorate her life and worth by a suitable monument, and to that end to receive subscriptions from such of the public as are disposed to give.

They therefore contend that this action is not maintainable at-all; and if it were, its maintenance is against public policy.

As to the first point, it is urged that an injunction can only be-granted in a case where damages could be recovered in an action at law.

This objection to the granting of an injunction was raised in. Pollard v. Photographic Co., L. R., 40 Ch. D., 345, and thus disposed of:

“ But the counsel for the defendant did not hesitate to contend boldly that no injunction could be granted in a case where there-could be no injury to property in respect to which damages could, be recovered in an action at law. * * *

“ The right to grant an injunction does not depend in any way-on the existence of property, as alleged; nor is it worth while to consider carefully the grounds upon which the old court of chancery used to interfere by injunction. But it is quite clear that, independently of any question as to the right at law, the court of chancery always had an original and independent jurisdiction to-prevent what that court considered and treated as a wrong, whether arising from a violation of an unquestionable right or from breach -of confidence or contract, as pointed out by Lord Cottenham in Prince Albert v. Strange, 1 McN. & G., 25.”

The claim that the maintenance of the action is against public policy is based upon the argument that a recognition of such a right in relatives might prevent the public from erecting statues in Washington to Lincoln, or to any other great or distinguished man or woman.

I think, however, that the true distinction to be observed is between private and public characters.

The moment one voluntarily places himself before the public, either in accepting public office or in becoming a candidate for -office, or as an artist or literary man, he surrenders his right to privacy pro tanto, and obviously cannot complain of any fair or reaconable description or portraiture of himself.

It has not been shown that Mrs. Schuyler ever came within the category of what might be denominated public characters. She was undoubtedly a woman of rare gifts and of a broad and philanthropic nature; but these she exercised as a private citizen, in an unobstrusive way.

There is no refutation of the status given her by the complaint, which alleges that “ she was in no sense either a public character or even a person generally known either in the community in which she lived or throughout the United States, but that her life was pre-eminently the life of a private citizen. That she was a woman of great refinement and cultivation; that notoriety in any form was both extremely distasteful to her and wholly repugnant to her character and disposition, and that throughout her life she neither sought nor desired it in any way.”

. Such a person thus described does not lose her character as a private citizen merely because she engaged in private works of philanthropy.

It is sometimes difficult to determine in individual-cases when •one ceases to be a private and becomes a public character. This, however, does not destroy the value of the distinction, nor the grounds upon which it can be supported. It is equally difficult to apply to individual cases the principle of the reasonableness or unreasonableness of certain acts. As stated, therefore, it not having been shown that Mrs. Schuyler was a public character, her relatives have a right to intervene.

It is true that there is no reported decision which goes to this -extent in maintaining the right of privacy ; and in that respect, * this is a novel case. But the gradual extension of the law in the direction of affording the most complete redress for injury to individual rights, makes this an easy step from reported decisions much similar in principle.

In a recent article of the Harvard Law Review, Dec., 1890, vol. 4, No. 5, entitled “ The Right to Privacy,” we find an able summary of the extension and development of the law of individual rights, which well deserves and will repay the perusal of every lawyer. Among other things, it says:

“ This development of the law was inevitable. The intense intellectual and emotional life, and the heightening of sensations which came with the advance of civilization, made it clear 'to men that only a part of the pain, pleasure and profit of life lay in physical things.

‘•Thoughts, emotions and sensations demanded legal recognition, and the beautiful capacity for growth which characterizes the common law enabled the judges to afford the requisite protection, without the interposition of the legislature.

“ Recent inventions and business methods call attention to the next step which must be taken for the protection of the person, and for securing to the individual what Judge Cooley calls the ‘right tobe let alone.’ Instantaneous photographs and newspaper enterprise have invaded the sacred precincts of private and domestic life; and numerous mechanical devices threaten to make good the prediction that ‘what is whispered in the closet shall be proclaimed from the house top.’ For years there has been a feeling that the law must afford some remedy for the unauthorized circulation of portraits of private persons; and the evil of the invasion of privacy by the newspapers, long keenly felt, has been but recently discussed by an able writer.”—Scribner's Magazine, July, 1890, “ The Rights of the Citizen to his. Reputation,” by E. L. Grodkin, Esq., pp, 65, 67.

Marion Manola v. Stevens and Myers, decided by this court in June, 1890, involved the consideration of the right to circulate portraits.

The plaintiff alleged that while playing in the Broadway Theatre, in a role which required her appearance in tights, she was by means of a flash light photographed surreptitiously and without her consent from one of the boxes of the theatre.

It is true there was no opposition to the preliminary injunction being made permanent; but this court issued one to restrain any use being made of the pictures so taken.

Pollard v. Photographic Co., already referred to, is another instance where an injunction was issued against the unauthorized exhibition or sale of photographs or other likenesses of private persons.

These and the celebrated English case of Prince Albert v. Strange, 2 De Gr. & Sm., 652; S. C., on appeal, 1 McN. & Gr., 25, are a clear recognition (as shown by the article in the Harvard Law Review, supra) of the principle that the right to which protection is given is the right of privacy.

Upon the facts presented on the motion, and the law applicable thereto, the motion to continue injunction until the trial should be granted.


text:
    Orison B. Smith, Trustee, Pl’ff, v. Susan Harrigan, Def't.

      (Supreme Court, Chambers, New York County,

      Filed September, 1891.)

    Judicial sale—Interest of auctioneer.
    The failure of the auctioneer officiating at a judicial sale to_ disclose to bidders the fact that he was a party to the suit, and interested in the property sold, renders the sale voidable and subject to be set aside at the instance of the purchaser, although there was no actual fraud or bad faith, and the auctioneer’s interest was only that of tenant by the curtesy.
    Motion to hold the purchaser at foreclosure sale liable for deficiency that may arise on a resale.

      James S. Graves, for pl’ff; Alexander Thain, for def’t.
   O’Brien, J.

The motion for an order directing a resale of the premises to foreclose a mortgage on which the above action was brought has already been disposed of, leaving still for determination the question whether the plaintiff is entitled to an order adjudging the purchaser at the sale liable for any deficiency which may arise on such resale. The purchaser objects to taking title, and asks for a return of the money paid upon his bid, alleging as a reason that the auctioneer who sold the property was a defendant in the suit and interested in the property sold. There is no claim made of bad faith or actual fraud upon the part of the auctioneer, and although there is a suggestion that other than Iona fide bids were made, this, in the absence of any proof, must be disregarded. The naked legal question is thus presented whether or not a sale conducted by an auctioneer who is interested in the property to be sold, and who fails to disclose this fact, can be availed of as an objection by a purchaser. Upon grounds of public policy it is important that the utmost fairness should be observed in judicial sales, and the law, as shown by the decisions, has been ever vigilant to protect the public who, as intended purchasers, attend such sales.

In Randall v. Lautenberger, 16 R. L, 159, it is said: “ An auctioneer is the agent of the seller in making the sale. When, however, the property is struck off, he becomes also the agent of the purchaser to the extent of binding both parties by his memorandum of sale. Up to this point his duty is to the vendor.” It was accordingly held' in that case that if, without the seller’s assent, he bids for a purchaser, the sale is not enforceable. Thus following the rule laid down in Brock v. Rice, 27 Gratt., 812: “ That no person employed or concerned in selling at a judicial sale is permitted to become a purchaser, or even to act as a purchaser. It is impossible in good faith to combine the inconsistent capacities of seller and buyer, crier and bidder, in one and the same transaction. If the auctioneer faithfully discharges his duties, he will of course honestly obtain the best price he can for the property. On the other hand, if he undertakes to become a purchaser for himself or for another, his interest and his duty alike prompt him to obtain the property on the most advantageous terms.” In the same case cited above, page 161, it is said: “The conduct of an auction sale is eo completely in the hands of an auctioneer that it is an easy thing for him to strike off property according to his interest, even though by further urging other bids might be made. It is not enough to say to the seller, you cannot prove that I could get more. - There must be no room for temptation and the hazard of abuse. Upon this ground sales for a fair price have been set aside in some of the cases.” The auctioueer being, therefore, the agent for one or both of the parties at the same or different times during the sale, and the falling of his hammer fixing the rights of the buyer and seller, and his memorandum signed by him being a sufficient written -contract in law to bind both parties under the statute of frauds, it seems but right that, as between the parties, he should be indifferent. This of course does not mean that he should not exert himself for the seller, in order to obtain the best price possible, for to him he owes that duty up to the time when the property is struck off; still he should be indifferent in the sense that he should have no interest so opposed to Iona fide bidders or purchasers at the sale as would induce him, while acting presumably as agent for another, to take the position and the advantages accruing to a principal. It has been repeatedly held that a person will not be permitted to conduct negotiations, under pretense of acting as agent for another, and then take the position and advantages accruing to a principal. Nor will one acting as trustee, or in a fiduciary relation to others, -be permitted to deal with the trust property for his own profit or advantage.

The cases on this subject are ably and exhaustively collated and discussed in the case of The Metropolitan Elevated Railroad Co. v. The Manhattan Elevated Railway Co., 14 Abb. N. C., 252, wherein the principle is thus stated: “It will not be denied, I imagine, that as between natural persons where an agent or trustee has a personal interest opposed to that of the principal, or where one acts as agent of both parties to the contract, although he may have no personal interest on either side, that the principal, or cestui que trust may avoid the contract at will even if there be no actual fraud or damage." In that case the following language used in the case of Eavoue v. Fanning, 2 Johns. Ch., 260, was quoted with approval: “ However innocent the purchaser may

be in the given case, it is poisonous in its consequences. The cestui que trust is not bound to prove, nor is the court bound to adjudge, that the trustee has made a bargain advantageous to himself. The fact may be so, and yet the party not have it in his power, distinctly and clearly, to show it. There may be fraud, as Lord Hardwicke observed, and the party not able to prove it. It is to guard against this uncertainty and hazard of abuse, and to remove the trustee from temptation, that the rule does and will permit the cestui que trust to come in at his option, and without showing an actual injury, insist upon having the experiment of another sale. It is a remedy which goes deep and touches the very root of the evil.” In Taussig v. Hart, 58 N. Y, 425, the court says : “ It is no answer that the intention was honest and that the brokers did better for their principal by selling him their own stock than they could have done by going into the open market. The rule is inflexible, and although its violation in this particular case caused no damage to the principal, he cannot be compelled to adopt the purchase.” In the New York Central Ins. Co. v. The National Protection Ins. Co., 14 N. Y., 85, it was said: “ It is not necessary for a party seeking to avoid a contract on this ground to show that an improper advantage had been gained over him; it is his option to repudiate or to affirm the contract, irrespective of any proof of actual fraud.” To quote again from the case of the Metropolitan Elevated Railroad v. The Manhattan Elevated Railway Co., supra, in the language of the learned judge, who, after reviewing the above and many other cases, says: “ It

was intimated that although this rule was so stringent as to purchases and sales, yet that it was not applied with the same rigor to other contracts. I have failed to find any foundation for this distinction either upon principle or authority. It may be true that most of the adjudicated cases have arisen in reference to purchases and sales, but no distinction has been made by any court between contracts of this nature and any others which were tainted with the same infirmity. There is no reason for any such limitation, and I do not find that it has ever been attempted to be enforced.” The principle underlying these decisions is equally as applicable to an auctioneer as to any other kind of agent. Strictly speaking, the auctioneer, as before stated, is the agent of the seller in making the sale, but when the property is struck off he becomes also the agent of the purchaser, to the extent of binding both parties by his memorandum of sale. It has, therefore, been suggested that whether interested or not in the property, his duty was to obtain the highest price that'could be had for the property. A distinction, however, is to be observed between a case where the auctioneer is and where he is not interested in the property itself. In the former, the temptation may be present to impose on bona fide bidders by increasing the price beyond the actual bids received. The fact that the auctioneer’s fees are fixed by law, and are the same whether the parcel sold brings a large or small price, may be urged to support the view that this was intended to put the auctioneer in a position of entire indifference, so that he might perform his legal function of acting honestly between buyer and seller, thus removing any inducement to get more than the price honestly bid. As said in Ex parte James, 8 Vesey, 337: “ This doctrine as to purchases by trustees, assignees or persons having a confidential character, stands much more upon general principles than upon the circumstances of any individual case. It rests upon this, that the purchase is not permitted in any case, however honest the -circumstances; the general interests of justice requiring it to be destroyed in every instance, as no court is equal to the examination and ascertainment of the truth in much the greater number of cases.” And I take it, therefore, it is not necessary that it should be shown affirmatively that fraud or imposition was practiced, or that the amount bid was in excess of the value of the property.

If the principles referred to in the cases cited are applicable to an auctioneer who was interested in the property, which is a subject of a judicial sale, then this circumstance, undisclosed to bidders, would of itself be sufficient. It has been urged, however, that the interest of the auctioneer in the property was remote, he holding an estate as tenant by the curtesy. This is a definite, fixed interest in property under the law. In Davoue v. Fanning, 2 Johns. Ch., cited above, it was held “ that if a trustee or person acting for others sells a trust estate and becomes himself interested in the purchase, the cestui que trust is entitled, as of course, to have the purchase set aside and the property re-exposed to sale. And it makes no difference in the application of the rule that the sale was at public auction, bona fide, for a fair price, and that the executor did not purchase for himself, but a third party by a previous arrangement becoming the purchaser to hold in trust for the separate use and benefit of the wife of the executor, who was one of the cestuis que trusts, and had an interest in the land under the will of the testator.”

This and many other cases that might be cited would be authority for the position that it is the principle that one is interested in the property, and not the extent of his interest, or that one has' a confidential relation towards others, be that relation greater or less, that should determine the conclusion to be arrived at. As already stated, the doctrine stands much more upon general principle than upon the circumstances of any individual case. My conclusion, therefore, is that the auctioneer, having been a party to the foreclosure suit, and his entire family, including himself, having an interest in the property sold, that his failure to disclose this fact to the bidders at the sale rendered the same voidable and subject to be set aside at the instance of the purchaser thereat.

The motion to hold such purchaser liable for any deficiency that may arise on a resale, by reason of his refusal to complete his purchase, should, therefore, be denied.


author: Ingraham, J.

text:
    John Hope, Pl’ff, v. William Brewer, Jr., et al., Ex’rs, Def’ts.

      (Supreme Court, New York Special Term,

      Filed October, 1891.)

    Will—Trusts.
    A bequest to foreign trustees, competent to take a legacy, upon a trust valid under the law of the place where it is to be administered, although invalid under our statute against perpetuities, will be upheld by the courts of this state, and the executors be directed to pay it to the trustees named.
    Action to have declared void the residuary bequests in the will of Thomas Hope, deceased.

      Delos McCurdy, for pl’ff; James Thomson, for def’ts, ex’rs; R. H. McGrath and Daniel G. Rollins, for def’ts, Scotch trustees.
   Ingraham, J.

This action is brought to have the residuary bequests contained in the will and codicils of Thomas Hope, deceased,'declared void, and the question presented is whether the residuary bequest to the individuals, residents of Scotland, known as the Scotch trustees, upon a trust which is void in this state under the provision of the statutes regulating perpetuities, but which is valid by the law of Scotland, will be enforced by the courts of this state.

The exhaustive brief submitted by the counsel for the executors conclusively establishes that that question has been determined in this state in the affirmative. It is clear that, taking the will and codicils together, there was an equitable conversion of the testator’s real property. The title to the real estate vested in the heirs-at-law of the testator, subject to be divested by the execution of the power of sale contained in the will, and upon the execution of that power of sale the proceeds realized by the sale of the real estate became in the hands of the executors personal property, so that the whole estate of the testator must be deemed to be personal and be determined by the rules of law applicable to personalty.

By the will and codicils it was clearly the intention of the testator that the proceeds of the sale of the real estate and the personal estate, after the payment of certain specific legacies, should be paid to the three residuary legatees, residents of Scotland, to be held by them subject to the trust therein contained.

The trust thereby created would be void under the statutes of this state prohibiting perpetuities if it was to be carried out in this state, but is valid by the law of Scotland, where it was the intention of the testator that the trust should be administered. The question of the validity of such a bequest has been often presented to the courts of this state, and although there was some conflict in the earlier cases, it has been finally settled that such a bequest will be enforced.

It is necessary to refer to but two or three cases in which this principle has been announced.

In the case of Manice v. Manice, 43 N. Y., 303, it was held that a bequest to Yale College, upon a trust which provided for an accumulation of the income of the trust estate which, though void by our statutes, was valid by the law of the state of Connecticut (Yale College, being a corporation organized under the laws of that state, was capable of taking the property and administering the trust), was valid.

Rapallo, J., says: (page 388), “ The will of the testator, so far as the courts of this state can act upon it, is fully executed when the money is paid to the proper officer of the foreign corporation, and there is no law of this state prohibiting gifts to such foreign corporation. Though the laws of the state of that corporation may permit it to hold and administer property in perpetuity, or accumulate it, the local policy of this state upon that subject is not interfered with by allowing property of our citizens to pass to such foreign corporation and be administered by it in such foreign state according to its own laws.”

In Chamberlain v. Chamberlain, 43 N. Y., 432, the same question was presented to the court, and the bequest was upheld, Allen, J., saying: “ The courts of this state will not administer a foreign charity, but they will direct money devoted to it to be paid over to the proper parties, leaving it to the courts of the state within which the charity is to be established to provide for its due administration and for the proper application of the legacy. * * * Bequests in aid of foreign charities, valid and legal in the place of their existence, will be supported by the courts of the state in which the bequests are made. If the legatee, whether a natural or artificial person, and whether he takes in his own right or in trust, is capable by the lawof his domicil to take the legacy in the capacity and for the purposes for which it is given, and the bequest is otherwise valid, it will be sustained, irrespective of the law of the testator’s domicil.”

And in the Matter of Huss, 126 N. Y., 537; 37 N. Y. State Rep., 789, this principle was again applied. Gray, J., writing the opinion of the court, says: “ The ability to take a testamentary bequest depends upon the law of the legatee’s domicil. Our laws do not prohibit the bequest or the taking, and the sole question to be considered relates to the legatee’s capacity.”

In the last case cited the testator gave one-quarter of his residuary estate to the Community of Hochhausen, a municipality situate in the Grand Duchy of Baden, a state of the German empire, and the court held that the only question to be determined was whether the Community of Hochhausen had legal capacity to take the distributive share of the personal estate.

It would, therefore, appear that, while the payment of the legacy is to be governed by the law of the domicil of the testator, when it appears from the will that it was the intention of the testator that the bequest should be paid to a person named, who was competent to take the legacy, and that the bequest was not prohibited by the law of the state of the testator’s domicil, the bequest will be sustained and the executors directed to pay it to the legatees.

By the will and codicils in question it is clear that the testator intended that his residuary estate should be paid to the Scotch trustees. They are competent to receive the legacy, and there is no provision in the law of this state that makes a payment to them illegal. The disposition that they are to make of the property so bequeathed to them, after it is received by them, depends upon the law of Scotland. The people of this state are not interested in the manner with which the legatees dispose of the legacy in Scotland, and if the disposition of such legacy by the legatees, as directed by the testator, is valid by the law of Scotland, the courts of this state will carry out the intention of the testator so far as to direct the payment of legacies to the legatees named, leaving it to the Scotch tribunals to enforce the direction of the testator as to the disposition of the legacy by the legatees.

As was said by Lord Cottingham in Fordyce v. Bridges, 2 Phillips, 515: “ The fund being to be administered in a foreign country is payable here, though the purpose to which it is to be applied would have been illegal if the administration of the fund had been to take place in this country.”

There is nothing in the will that postpones the peuiod of payment of the legacy to the Scotch trustees. On the contrary, they are directed to pay it as soon as realized, and it stands in this respect in the same position as every other legacy in the will, and the law requires it to be paid in the ordinary course of administration.

It follows, therefore, that judgment must be directed in favor of the defendants that the residuary bequest is valid, and that the defendants executors pay the same to the residuary legatees. Costs of all parties to be paid out of the estate. Decision and •judgment to be settled on notice.


author: Bischoff, J.

text:
    Robert Grimshaw, Pl’ff, v. Frederick Hartley Woolfall et al., Def’ts.

      (New York Common Pleas, Special Term,

      Filed October, 1891.)

    1. Pleading—Joinder of actions.
    It is not a misjoinder of actions because one is ex contractu and the other" ex delicto, provided both arise out of the same transaction, or transactions, with the same subject of action.
    2. Same—DeIiurrer.
    Where a demurrer is interposed to two alleged causes of action jointly, on the ground of not setting forth facts sufficient to constitute a cause of action, such demurrer must fail if one of the alleged causes be sufficient, though the other be insufficient.
    Demurrer to complaint.
    The demurrer is interposed on two grounds : First, that of misjoinder of causes of action, and secondly, on the ground that the complaint fails to state facts sufficient to constitute a cause of action.

      James T. McMahon, for pl’ff; James A. S. Gregg, for def’ts.
   Bischoff, J.

There may be judgment upon the demurrer for the plaintiff, with costs, with leave to defendants to answer within twenty days, upon the payment of costs.

Assuming that the complaint sets out two valid causes of action, it is not a misjoinder of actions because one is ex contractu and the other ex delicto, provided both arise out of the same transaction, or transactions, with the same subject of action. Code Civ. Pro., § 484, sub. 9; Robinson v. Flint, 16 How. Pr., 240; Badger v. Benedict, 4 Abb. Pr., 176 ; aff’d 1 Hilt., 419 ; Rothchild v. G. T. R. R. of Canada, 19 Civ. Pro. R., 54; 30 N. Y. State Rep., 642; Bliss on Code Pleading, § 125; Boone Code Pleading, § 37; Lawson’s Rights, Remedies and Practice, Vol. 7, § 3471.

The assignment of the claim for damages growing out of the defendants’ alleged breach of contract vested the legal title thereto in the plaintiff, and he is thereby authorized to maintain an action to recover the same. As the defendants are in no wise interested in the execution of the trust, they cannot avail themselves of the objection that the assignment to the plaintiff constituted a breach of trust by the assignors. Nelson v. Eaton, 26 N. Y, 411.

The first alleged cause of action sets out, with sufficient clearness, the making of the contract between plaintiff’s assignors and defendants, performance by plaintiff’s assignors and refusal or neglect by defendants to perform. These facts, in the absence of proof of substantial damage, entitle plaintiff to recover at least a nominal sum, as the law assumes that the breach of a contract has resulted in some loss or damage to the party aggrieved. Sedgwick on the Measure of Damages, § 51; Wood’s Practice Evidence, 194, § 71; Bailey’s Onus Probandi, etc., 69; Gould ing v. Hewitt, 2 Hill, 644, 647. And a general averment of damage in an' action to recover the damages which naturally flow from the breach is sufficient. Bliss on Code Pleading, § 297a; Boone on Code Pleading, § 140.

The demurrer having been interposed to both causes of action jointly, and not to each separately, it is unnecessary to inquire whether or not the second alleged cause of action is sufficient. The first is so, and though the second is not sufficient, the demurrer must fail. Hale v. Omaha Nat. Bank, 49 N. Y., 626; Swords v. Northern Light Oil Co., 17 Abb. N. C., 115; Wheeler v. Conn. Mut. Life Ins. Co., 82 N. Y., 543, 555.


author: Vann, J.

text:
    Adolph Tode el al., Resp’ts, v. Lena Gross, App’lt.

      (Court of Appeals, Second Division,

      Filed October 6, 1891.)

    1. Covenant—Principal and agent.
    Defendant, the owner of a cheese factory, sold it together with the secret of manufacturing certain kinds of cheese to plaintiffs, covenanting for herself, her husband and two others that they would refrain from communicating the secret to others than plaintiffs and would not engage in the business of manufacturing or selling cheese for five years. Held, that the covenant applied with the same force to her agents as to herself and her personal act was not essential to a violation of" the covenant by her, and if she did not prevent her agents from doing the prohibited acts the covenant was broken.
    2. Same—Restraint oe trade.
    Such a covenant was not in restraint of trade, as it imposed no restriction upon either that was not beneficial to the other, by enhancing the price to the seller or protecting the purchaser.
    3. Same—Stipulated damages—Penalty.
    The contract stab d that it was made “under the penalty of five thous- and dollars, which is hereby named as stipulated damages.” Held, that the word penalty under the circumstances was not controlling and that the parties intended to liquidate the damages.
    Appeal from a judgment of the general term of the supreme court, in the second judicial department, affirming a judgment entered upon the decision of the court after a trial without a jury.
    Action for breach of covenant to recover the sum of $5,000 as stipulated damages.
    On the 15th of October, 1884, the defendant owned a cheese factory situate in the town of Monroe, Orange county, comprising two parcels of land, with the buildings thereon and a quantity of fixtures, machinery and tools connected therewith. For some ' time prior, with the assistance of her husband, Conrad Gross, her brother-in-law, August Gross, and her father, John Hoffman, she had been engaged in the business of manufacturing cheeses at said ■ factory, known as Fromage de Brie, Fromage d’Isigny and Neufchatel. Such cheeses were made by a secret process, known only to herself and her said agents. On the day last named she entered into a sealed agreement with the plaintiffs whereby she agreed to sell and transfer to them the said factory and all its belongings, together with the “good will, custom, trade-marks and names used in and belonging to the said business,” for the sum of $25,000, to be paid and secured March 1, 1885, when possession was to be given. Said instrument contained a covenant on her part that she would “communicate after the first day of March, 1885, or cause to be communicated to” said plaintiffs “by Conrad Gross, John Hoffman and August Gross, or one or other of them, the secret of the manufacture of the cheeses known as Fromage de Brie, Neufchatel and d’Isigny, and the recipe therefor and for each of them, and will instruct or cause to be instructed them and each of them in the manufacture thereof. And that she and the said Conrad Gross, John Hoffman and August Gross, will refrain from communicating the secret recipe and instructions for the manufacture of said cheeses, or either of them, to any and all persons other than the above named parties of the second part (plaintiffs), and will also, after the first day of April, 1885, refrain from engaging in the business of making, manufacturing or vending of said cheeses or either of them, and from the use of the trade-marks or names, or either of them, hereby agreed to be transferred in connection with said cheeses, or either of them, or with any similar product, under the penalty of $5,000, which is hereby named as stipulated damages, to be paid by the party of the first part (defendant), or her heirs, executors, administrators or assigns, in case of a violation by the party of the first part (defendant), of this covenant, of this contract, or any part thereof, within five years from the date hereof.” •
    She further covenanted that she, herself, as well as “ said Conrad Gross, John Hoffman and August Gross, during and up to :and until the first day of May, 1885, shall continue and remain in said county of Orange, and from time to time, and at all reasonable times during said period, by herself, or by said Conrad Gross, John Hoffman and August Gross, whenever so requested by the said parties of the second part (plaintiffs), impart to them, or either of them, the secret of making such cheeses, and each of them, and instruct them, and each of them, in the process of manufacturing the same and each of them, as fully as she or the said Conrad Gross, John Hoffman or August Gross, or either of them, are informed concerning the same.”
    Both parties appear to have duly kept and performed the agreement, except that, as the trial court found, “ subsequently to the first day of May, 1885, Conrad Gross, the husband of defendant, went to New York city and engaged in the business of selling  foreign and domestic fruits, and all kinds of cheese and sausages, etc.,’ * * * and while so engaged * * * sold and personally delivered from his place of business to one John Wassung three boxes of cheese, marked and named Fromage d’Isigny, and having substantially the same trade-marks thereon as that sold by defendant to plaintiffs, and having stamped thereon the name Fromage d’Isigny, and that said cheese so sold by him to said Wassung was a similar product to that formerly manufactured by defendant.”
    Also, that “ said August Gross, the brother-in-law of defendant, subsequent to the first day of May, 1885, engaged in the business of retailing fancy groceries in the city of New York, and in and during the fall of 1887, and prior to the commencement of this action, kept for sale, at his place of business in Mew York city, boxes of cheese marked or stamped Fromage d’lsigny.”
    The court further found that the cheese so sold by Conrad Gross, under the name of Fromage d’lsigny, as well as that kept for sale by August Gross, marked Fromage d’lsigny, “ was never sold by plaintiffs, nor made'or manufactured by them, or either of them, but that the same was a similar product.”
    The court found as conclusions of law that said agreement was a reasonable one, and was founded upon a good and sufficient consideration ; that said sale by Conrad, and said keeping for sale by August Gross, was a direct violation of the covenant in question ; that the restriction imposed was no more than the interests of the parties required, and that it was not in restraint of trade or against public policy.
    Judgment was ordered for the plaintiffs for the sum of $5,000„ as stipulated damages.

      John Fennel, for app’lt; Henry A. Bacon, for resp’ts.

       Affirming 22 N. Y. State Rep., 818.

   Vann, J.

The business carried on by defendant was founded on a secret process known only to herself and her agents. She had the right to continue the business and by keeping her secret to enjoy its benefits to any practicable extent She also had the right to sell the business, including as an essential part thereof the secret process, and in order to place the purchasers in the same position that she occupied, to promise to divulge the secret to them alone and to keep it from every one else. In no other way could she sell what she had and get what it was worth. Having the right to make this promise she also had the right to make it good to her vendees and to protect them by covenants with proper safeguards against the consequences of any violation. Such a contract simply left matters substantially as they were before the sale, except that the seller of the secret had agreed that she would not destroy its value after she had received full value for it. The covenant was not in general restraint of trade, but was a reasonable measure of mutual protection to the parties, as it enabled the one to sell at the highest price and the other to get what they paid for. It imposed no restriction upon either that was not beneficial to the other, by enhancing the price to the seller, or protecting the purchaser. Recent cases make it very clear that such an agreement is not opposed to public policy, even if the restriction was unlimited as to both time and territory. The Diamond Match Co. v. Roeber, 106 N. Y., 473 ; 11 N. Y. State Rep., 47; Hodge v. Sloan, 107 N. Y., 244; 11 N. Y. State Rep.,, 770; Leslie v. Lorillard, 110 N. Y., 519, 534; 18 N. Y. State Rep., 520 ; Water-town Thermometer Co. v. Pool, 51 Hun, 157; 20 N. Y. State Rep., 592. The restriction under consideration, however, was not unlimited as to time.

The chief reliance of the defendant in this court, where the point seems to have been raised for the first time, is that the covenant, so far as stipulated damages are concerned, is confined to the personal acts of Mrs. Gross and does not embrace the acts of her agents. A careful reading of the agreement, however, in the light of the circumstances surrounding the parties when it was made, shows that no such result was intended. What was the object of the covenant ? It was to keep secret, at all hazards, the process upon which the success of the business depended. On no other basis could the plaintiffs safely buy or the defendant sell for what her property was worth.

Who had the power to keep the process secret ? Clearly the defendant, if any one, as she had confided it to no one except her trusted agents, who were nearly related to her by blood or marriage. But could she covenant against the acts of those over whom she had no control ? She had the right to so covenant, by assuming the risk of their actions, and unless she had done so, presumptively, she could not have sold her factory for so large a sum. It was safer for her to sell it with such a covenant than it was for the plaintiffs to buy without it. She could exercise some power over her own husband, and her father and her husband’s brother, all of whom had been associated with her in carrying on the business and whose actions in certain other respects she assumed to control for a limited time, whereas the plaintiffs were powerless, unless they had her promise to keep the process secret at the peril of paying heavily if she did not. It is not surprising, therefore, to find that the restrictive part of the covenant applies with the same force to her agents that it does to herself, for she undertakes that neither she nor they will disclose the secret, or engage in making or selling either kind of cheese, or use the trade-marks or names connected with the business. We do not think that a personal act of the defendant is essential to a violation of this covenant by her, for if she permits, or even does not prevent her agents from doing the prohibited acts, the promise is broken. While it is her exclusive covenant, it relates to the action of others, and if they do what she agreed that they would not do, it is a breach by her, although not her own act. She violated her agreement, not by selling herself, but by not preventing others from selling. This construction of the restrictive part of the covenant would hardly be open to question, were it not that in the same sentence occurs the reparative or compensatory part designed to make the plaintiffs whole if the defendent either could not or did not keep her agreement. While this provides that any violation involves the penalty of $5,000, it adds “which .sum is hereby named as stipulate damages to be paid ” by the defendant in case of a violation bv her of the covenant in question.

What kind of violation is thus referred to ? The defendant says a personal violation by her only, but we think, for the reasons already given, that the spirit of the agreement includes both a violation by her own act and by the act of those whom she did not prevent from selling, although she had agreed that they would not sell. As no one not a party to a contract can violate it, every act of defendant’s former agents contrary to her covenant was a violation thereof by her, whether she knew of it or assented to it or not. Whenever that was done which she agreed should not be done, it was a breach of covenant by her, even if the act was contrary to her wishes and in spite of her efforts to prevent it. Her covenant was against a certain act by any one of four persons, including herself. Two of those persons separately did the act which she had agreed that neither of them should do, and thus there was a violation of the covenant by her the same as if she had done the act in person.

The argument of the learned counsel for the defendant that the contract fixed a sum to.be paid in case of a violation by the defendant, but not in case of a violation “ by the other parties,” while plausible, is unsound, for there were no “otherparties” who-could break the covenant She was the sole covenantor, and unless she kept the covenant, she broke it, and she did not keep it.

As the actual damages for a breach of the covenant would necessarily be “ wholly uncertain and incapable of being ascertained, except by conjecture,” we think that the parties intended to liquidate them when they provided that the sum named should be “ as stipulated damages.” The use of the word penalty under the circumstances is not controlling. Baghy v. Peddie, 16 N. Y., 469 ; Dakin v. Williams, 17 Wend., 448; aff’d 22 id., 201; Wooster v. Kisch, 26 Hun, 61.

As .there is no other question that requires discussion, the judgment should be affirmed, with costs.

All concur, except Brown, J., not sitting.


author: Follett, Ch. J. Vann, J. (dissenting).

text:
    James Sweeney et al., App’lts, v. Phœbe Jane Warren et al., Ex’rs, Resp’ts.

      (Court of Appeals, Second Division,

      Filed October 6,1891.)

    1. Will—Construction of—Power to sell real estate.
    Before the personal estate of a testator will he discharged from the burden. of paying the debts, it must clearly appear that he intended that it should be, which will not be inferred from the fact that authority is given to sell all, or some part of, the real estate for the payment of debts, and. especially where no disposition is made of the personalty.
    (Vann,' J., dissenting.)
    2. Same—Powers in trust.
    Testator directed his executors to sell certain specified real estate, naming no grantee, but saying, “ and it is my desire that the said land shall be sold in a body for commercial purposes." Held, that as this disclosed no purpose to be accomplished, nor any person or class of persons to be benefited by the alienation of the land, a valid power in trust was not created by it.
    3. Same—Beneficial power—Title.
    As the power sought to be conferred by the clause ran to the executors in their representative capacity, and not to them as individuals, and was not for their personal benefit, it did not create a valid beneficial power.
    4. Surrogate’s court—Jurisdiction.
    A surrogate’s court has no jurisdiction over realty left by a decedent, or its avails, unless brought within it by a will, or by a statute, for the purpose of being dealt with for some special purpose.

      Appeal from a judgment of the general term of the supreme court, of the fifth judicial department, entered on a verdict directed subject to the opinion of the general term.
    On October 12, 1854, John Sweeney died, leaving Caroline Sweeney, his widow, and several collateral relatives, who were his heirs-at-law and next of kin. He left a will executed October 9, 1854, which was probated December 26, 1854, and letters testamentary were then duly issued thereon to the two executors nominated therein, who immediately entered upon the execution of their trust and continued therein until 1856, when one of them died, and thereafter the survivor discharged the duties imposed by the will on both executors. In the first division of the will the testator devised two village lots to his wife in fee, and a life estate in a farm of sixty acres and the stock thereon in lieu of dower.
    In the second division the testator provided:
    “ Second. I hereby direct and authorize my executors, hereinafter named, to sell and convey to the New York Central Bail-road Company a certain strip of land (described), * * * on
    condition and in consideration that the said railroad company fulfill the agreement and contract made by them with the heirs of James Sweeney.
    “ I also desire and authorize my executors to sell and convey all that part of block F, on the Niagara river (particularly described), * * * and it is my desire that the said land shall be sold in a body for commercial purposes.” Then follows in this division thirteen specific devises, and also a devise of the remainder of the sixty-acre farm subject to the life estate of the wife. Near the end of the will, and in the second division, is the following provision: “I authorize and direct my executors to sell and convey (the land directed to be sold for commercial purposes) and also that piece of land on Sweeney street, east of the building known as the shoe shop, for the purpose of discharging all my debts.” The will contained no residuary clause and makes no disposition of the testator’s personal estate, nor of the avails of the two pieces of real estate directed to be sold unless used in payment of debts.
    The testator also died seized of four other parcels of land worth about $3,500, which were not disposed of by his will. January 27, 1855, the surviving executor sold and conveyed to the testator’s widow the land in block F for $500, at which time the executor and widow knew that after payment of all debts and expenses of administration there was a surplus of more than $1,200 arising from the personal estate. On the 10th of March, 1874, this action of ejectment was begun by the testator’s heirs-at-law against Caroline Sweeney to recover possessson of the lot purchased by her. Subsequently Mrs. Sweeney died leaving a will, which was admitted to probate, and her executors were substituted as parties defendants in her stead. On the trial of the action a verdict was directed for the defendants subject to the opinion of the general term, where a judgment was ordered for the defendants upon the verdict, and thereafter a case was made pursuant to § 1339 of the Code of Civil Procedure.

      Sherman S. Rogers, forapp’lts; E. C. Sprague, for resp’ts.

       Reversing 23 N. Y. State Rep., 49.

   Follett, Ch. J.

In considering the questions involved in this appeal it will be convenient to examine separately the two clauses which, it is asserted, gave the executor power to sell the lot sought to be recovered. The clause contained in the latter part of the will provides: “ I authorize and direct my executors to sell and convey the strip of land heretofore mentioned and described as lying on -the Niagara river, and also that piece of land on Sweeney street and on the Tonawanda creek, east of the building known as the shoe shop, for the purpose of discharging all my debts.” By this provision the lots mentioned are not converted into money, out and out, but the executors are empowered to convert them for a specific purpose, to wit: the payment of the testator's debts. When a testator authorizes his executors to sell and convert into money all, or a part of his realty for a specific purpose, which fails, or is accomplished without a conversion, the power is extinguished and the land cannot be sold by virtue of it, or treated as money ; but it descends to the heir unless it is devised. Wood v. Keyes, 8 Paige, 365 ; McCarty v. Terry, 7 Lans., 236; Jackson v. Jansen, 6 Johns., 73; Sharpsteen v. Tillou, 3 Cow., 651; Bogert v. Hertell, 4 Hill, 492 ; Hetzel v. Barber, 69 N. Y., 1; Read v. Williams, 125 id., 560; 35 N. Y. State Rep., 909; Hill v. Cock, 1 Vesey & B., 175 ; Chitty v. Parker, 2 Ves., Jr., 271; Taylor v. Taylor, 3 De Gex, M. & G., 190; Leigh & D. Conv., 93; Lewin Tr. (8th ed.), 149 and 953.

When the executor sold the lot both he and the purchaser knew that the testator’s personal property exceeded, by more than $1,200, the testator’s debts and the expenses of administration; which defeated the power to sell under this clause, unless, as it is argued, the testator intended that these lots should be sold and the avails applied towards the payment of his debts for the purpose of relieving to that extent the personal estate from the burden imposed by the rule of the common law, that it is primarily liable for the payment of debts, and must be first exhausted, unless there is a clear direction that the real estate, or some part of it, shall be first so applied. This question was considered in Heermans v. Robertson, 64 N. Y, 332, where it is said: “ The order of marshaling assets for the payment of debts is to apply, first, the general personal estate; second, estates specially devised for the payment of debts; third, estates descended; fourth, estates devised, though generally charged with the payment of debts. 2 Williams on Ex., 1526, note 2; Livingston v. Newkirk, 3 Johns. Ch., 312; 4 Kent’s Comm.-, 420. In order to effect a change in the order there must be some absolute and positive direction, clearly indicating an intent to relieve the class of assets primarily liable, and to charge some other portion of the estate in exoneration of the funds and property primarily liable. A mere direction to an executor to sell real estate does not make the proceeds necessarily liable as personal assets; but they will be only applicable to the payment of debts when the assets personal in their character shall have been exhausted.” (Page 344.) Before the personal estate of a testator will be discharged from the burden of paying the debts it must clearly appear that he intended that it should be, which will not be inferred from the fact that authority is given to sell all, or some part of the real estate for the payment of debts, and especially in a case where, as in this, no disposition is made of the personalty. Gray v. Minnethorpe, 3 Ves., Jr., 103 ; Hartley v. Hurle, 5 id., 540; Hancox v. Abbey, 11 id., 179. Under this clause the executor had no power to sell the lot in question.

It remains to be considered whether the sale can be sustained under the power contained in the earlier part of the will, which provides: “I also desire and authorize my executors to sell and convey all that part of block F on the Niagara river, running back from said river to a continuation of the west line (to the north) of a projected canal as laid down on a map made by Augustus Canfield, on lot or block Gr, being nearly on a parallel line with the said Niagara river, and it is my desire that the said land shall be sold in a body for commercial purposes.”

Powers, as they existed prior to January 1, 1830, were abolished by article third “ Of Powers ” of title 2 of chap. 1 of the second part of the Revised Statutes, § 73, which article was intended to be a codification of the law under which powers were thereafter to be created, governed and construed. Cutting v. Cutting, 86 N. Y., 522; Hutton v. Benkard, 92 id., 295, 305. As to beneficial powers, it is enacted by the ninety-second section that none except those enumerated in the article shall be valid.

“A power is an authority to do some act in relation to lands, or the creation of estates therein or of charges thereon which the owner granting or reserving such power might himself lawfully perform.” Section 74. All powers are divided into two general classes; beneficial powers and powers in trust “A * * * power is beneficial, when no person other than the grantee has, by the terras of its creation, any interest in its execution.” Section 79. “A * * * power is in trust, when any person or class of persons, other than the grantee of such power, is designated as entitled to the proceeds, or any portion of the proceeds, or other benefits to result from the alienation of the land, according to the power.” Section 94. These powers are subdivided into general and special powers. “A power is general, when it authorizes the alienation in fee, * * * of the lands embraced in the power, to any alienee whatever.” Section 77. Special powers are defined in the seventy-eighth section, but it is unnecessary to call attention to the definition, as it is agreed by counsel, and is clear, that the power claimed to be created is a general one.

To create a valid power, either beneficial or in trust, it is indispensable that the object, or objects to be benefited by its execution shall be specified in or be clearly ascertainable from the instrument by which the power is attempted to be created. Jennings v. Conboy, 73 N. Y, 230; 1 Sugden on Powers, 117 (3d Am. ed.), 173; Farwell on Powers, 29, 401; Abb. Law Dict, Objects of a Power; 4 Cruise R. P., chap. 19, § 32 ; vol 2, Greenl. ed., 294, § 32. For the creation of a valid power in trust it is essential that its execution be beneficial to some person, or class of persons other than the grantee of the power, who can compel the due execution of the trust, which person, or class of persons, must be designated in, or be clearly ascertainable from, .the instrument by which the power is created. 1 R. S., 734, § 94; Read v. Williams, 125 N. Y., 560; 35 N. Y. State Rep., 909. As this will discloses no purpose to be accomplished, nor any person or class of persons to be benefited by the alienation of the land under the clause last quoted, a valid power in trust was not created by it.

Does the clause create a beneficial power ? When a power is conferred upon an individual (not upon a trustee), and no person other than the grantee of the power has an interest in its execution, it is beneficial; and so, a power is beneficial when it is silent as to the person to be benefited by its execution. Jennings v. Conboy, 73 N. Y., 230. Undoubtedly á power may be vested in executors, as such, to be exercised for their own benefit as individuals, which would be a beneficial one; but when a power is conferred upon executors by virtue of their office, and not on them as individuals, there being no other evidence that it was intended to be beneficial to them, the presumption is that it was given for the purpose of being executed in the interest of the estate, and not for their own benefit In this case the power sought to be conferred by this clause runs to the executors in their representative capacity, and not to them as individuals; and it is clear that the testator did not intend to confer a power on his executors for their personal benefit, but for the purpose of administering his estate, which purpose has failed, as before shown.

Flo such beneficial power as is claimed to exist under this clause is authorized or enumerated in the article relating to powers, and consequently the clause in question does not create a valid beneficial power. 1 R. S., 733, § 92. Flo valid beneficial power, or valid power in trust being created by this clause, and the purpose for which the power was given in the clause first considered having failed before the land was conveyed,- no title was acquired under the conveyance executed by the executor.

After paying the debts and expenses of administration there was in the executor’s hands,arising from the personal estate, a surplus of $1,292.92 and $180, received from George H. Bryant for the lot sold to him, which sums, amounting to $1,472.92, were May 25, 1857, paid over to the widow, who at that time receipted therefor and also for the $500 due from her on the purchase of the lot in question, which three sums amounted to $1,972.92. In September, 1857, the executor applied to the surrogate’s court for a final settlement of his accounts, and a citation was duly issued and personally served on all the heirs, next of kin and persons interested in the estate (including these plaintiffs), to attend such final settlement On the 14th of September, 1857, the account as presented was settled, the two sums, amounting to $680, arising from the sale of real estate, were treated as personalty, and the payment of May 25, 1857, to the widow was ratified and confirmed, upon the theory that the testator not having bequeathed his personalty and not having left descendants, his widow was entitled to the residue of the personalty, unless it exceeded $2,000. Whether any of the persons interested in the estate were present, or were represented on the accounting, does not appear.

It is now insisted in behalf of the defendants that the heirs are estopped by the proceedings in the surrogate’s court from maintaining this action for the recovery of the land.

A surrogate’s court has no jurisdiction over realty left by a decedent, or its avails, unless brought within it by a will or by a statute for the purpose of being dealt with for some special purpose, like the payment of debts in case the personalty is inadequate for that purpose, and, therefore, there is no judicial estoppel by a court having jurisdiction. Hone of the elements of an equitable estoppel, or of an estoppel in pais, have been pointed out by the learned counsel for the respondent, nor have we discovered any. The sale was not induced by the conduct of any of the heirs. The widow, who purchased the lot, never changed her position, nor have her executors, the defendants, changed theirs by reason of any act done or omitted by the heirs. She paid nothing and parted with nothing in exchange for the deed which she took. It is true she agreed to pay $500, but she did not, that sum being charged as paid to her by the executor in his final account There is nothing in the record showing any expenditure or change made, or steps taken in respect to the property since the final accounting. The defendants are not purchasers of the lot for value, nor are they the representatives of one who purchased for value, relying upon the proceedings in the surrogate’s court and the acquiescence of the heirs.

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

Vann, J. (dissenting).

The will in question was made by the testator but three days before his death and in anticipation of that event He could not, therefore, have expected that any change in his estate would take place before he died and there was no proof of any. He was a man of good business ability, conversant with his business affairs and therefore presumed to know that his personal property was more than sufficient to pay his debts. In common with all men, he is presumed to have known the law, and hence to have known that his personal property would be first used to pay his debts unless he directed otherwise. His will should be interpreted in the light of these presumptions and his intention, when thus ascertained, carried into effect, due regard being paid to the rule that if the will is capable of two constructions, one leading to a legal and the other to an illegal result, the former is to be preferred. Crozier v. Bray, 120 N. Y., 366; 31 N. Y. State Rep., 506; Du Bois v. Ray, 35 N. Y, 162.

The paragraphs of the will that require construction are in these words: “ I also desire and authorize my executors to sell and convey,” the premises in question, “ and it is my desire that the said land shall he sold in a body for commercial purposes. ” In a later clause, after appointing executors, he adds, “ and I authorize and direct my executors to sell and convey ” said premises with another piece of land “ for the purpose of discharging all my debts.” His desire that the land should be sold for commercial purposes is not inconsistent with his direction that it be sold to pay debts, because, even if the former is not in the nature of a recommendation merely, both desire and direction could be satisfied by the same act and probably a higher price thereby realized. It will be observed that he directed his executors to sell the real estate for the purpose of paying all his debts. The use of the word “all ” indicates the intention that no part of his personal property should be used to pay debts, provided the proceeds of this real estate were sufficient for that purpose. Adequate force can be given to that word- in no other way than by holding that every debt was to be discharged through a sale of this land if possible. It was not a direction to sell and pay debts in order to provide against a possible deficiency of personal assets, but to sell ■“ for the purpose of discharging all ” the debts. “ All,” as thus used, means the whole and not the remainder after application of the personal property. He directed a certain act to be done and specifically stated the purpose of that act, and the act and purpose necessarily involved the exoneration of the personal property from the payment of debts, either absolutely or pro tanto. This was the natural and necessary result of the act directed with the purpose indicated. It was not essential for him to state that he gave that direction with that purpose, for the further purpose of relieving his personal property, because if all his debts were paid his personal property would necessarily be relieved and the last purpose was, therefore, included in the first. This construction prevents partial intestacy, Vernon v. Vernon, 53 N. Y., 351, prefers the widow to collateral heirs, gives effect to a clause which otherwise would be inoperative and is in harmony with the practical construction of the heirs themselves, who not only acquiesced in the settlement of the executors’ accounts based upon the sale as made under the will, but even waited for nearly twenty years after the death of the testator before they brought this action, claiming to have inherited the land from him. It is no longer necessary to use express words in order to exempt personal property from the payment of debts, but “ it is sufficient,” as was said by the court in Hoes v. Van Hoesen, 1 N. Y, 120, 122, “if there appears upon the will an evident demonstration, a plain intention, or a necessary implication.”

I think that the direction to pay all the debts from a certain fund by “ necessary implication ” prohibits the payment of any debt from any other fund until the former is exhausted, and I am, therefore, compelled to dissent from the judgment rendered by my associates and to vote in favor of affirming the judgment appealed from.

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

All concur, except Vann, J., dissenting, and Haight, J., not sitting.


author: Haight, J.

text:
    The Sheridan Electric Light Co. of New York, App’lt, v. The Chatham Nat. Bank, Resp’t.

      (Court of Appeals, Second Division,

      Filed October 6, 1891.)

    1. Corporations—Trustees mat appoint executive committee—Powers of.
    The business of a manufacturing corporation must be carried on by a board of trustees, but they may appoint an executive committee of their own members, investing it with power to transact the business of the company during the interval between the meetings of the board of trustees.
    2. Same—Power of executive committee to delegate power to endorse CHECKS.
    Where such executive committee, having the power to endorse and negotiate paper, payable to the order of the company, gives a power of attorney to a person to endorse certain checks, the proceeds of a contract made by it on behalf of the company, it authorizes a bank to accept and discount such paper.
    Appeal from a judgment of the general term of the supreme court, first department, affirming a judgment entered upon a decision made upon a trial before the court without a jury.

      Edward McCarthy, for app’lt; Sanford H. Steele, for resp’t.

       Affirming 24 N. Y. State Rep., 622.

   Haight, J.

This action was brought for an alleged conversion of certain checks upon banks located in the state of Ohio, and payable to the order of the plaintiff.

The plaintiff was a manufacturing corporation, and owned or controlled the patents for the Sheridan system of electric lighting. On or about the 8th day of February, 1882, it entered into an arrangement with O. 0. Kendrick and B. L. Shepard to organize companies in the different states and territories for electric lighting under the Sheridan system, and to every company so organ- _ ized having a capital stock of at least $100,000, they were to give the exclusive right to use and sell electric lights, lamps and dynamo machines for electric lighting under the Sheridan patents in the state or territory for which the company should be organized ; that each company so organized was to pay twenty-five per cent, of its full paid non-assessable stock to the plaintiff, and also purchase from the plaintiff before the licenses were granted treasury stock to the amount of five per cent, of the capital of such company; that is to say, should the capital stock of the company be $100,000, then such company must purchase and pay cash at par value $5,000 for treasury stock of the plaintiff, and in the same proportion be the capital more or less ; provided, however, that no single company shall be obliged to purchase more than $10,000 worth of the afore-mentioned stock. This contract was in the form of a letter addressed to Kendrick and Shepard, and signed by Ellis, the president of the plaintiff, and was authorized, by its executive committee.

Under date of March 3, 1882, Kendrick and Shepard addressed a letter to the president of the plaintiff, in which, among other things, they state: “ You are also aware that any profit accruing to us under our contract with the New York company of February 8, 1882, must come by way of any excess in cash or stock receipts from the companies we organize over and above the stipulations of said contract with your company. This is not provided for definitely in the existing contract, and as we may deem it best to cover that excess by making all the cash and stock coming to the company and ourselves payable to the order of the Sheridan Electric Light Company of New York, we respectfully ask you to give us an official paper something like the enclosed, marked ‘A,’ which shall secure the prompt payment of such excess in kind to our order.”

In answer to this the plaintiff, through its secretary, under date of March 21, 1882, answered as follows: “The contract made with you on the 8th of February specifies the amount to be paid this company. Any excess whatever in stock of this company, or in cash or stock of branch companies belongs to you, and should the same be received by us it will be immediately transferred to you.”

Kendrick and Shepard then proceeded to organize a corporation at Cleveland, Ohio, under the laws of that state, having a capital stock of $1,000,000. They procured the checks in question, amounting to $55,000, payable to the order of the plaintiff, and took therh. to New York. Thereupon the executive committee of the plaintiff, consisting of Mr. Ellis, the president and treasurer, and Mr. Smith, a trustee, executed and delivered to William A. Shepard, the other member of the executive committee, a power of attorney in which they constituted him their true and lawful attorney, in their name, place and stead, to close and consummate all transactions with Kendrick and Shepard in the matter of the sale of the rights to use and sell and to form companies to use and sell the rights and dynamo machines made under the Sheridan patents in and for the state of Ohio, and to receive all moneys and checks paid by Kendrick or Shepard and to sign all papers and checks or endorse the same necessary to carry out transactions, giving and granting unto such attorney full power and authority to do and perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises.

Under this power of attorney, W. A. Shepard endorsed the checks in question, and they were thereupon discounted by the defendant, and the proceeds thereof were delivered to Kendrick and Shepard, with the exception of the sum of $10,000, which was paid over to the plaintiff.

It is contended that this power of attorney did not authorize the bank to accept and discount the paper; that what it did was without authority, rendering it liable for the conversion of the checks.

The power of attorney in plain language does authorize William A. Shepard to endorse the checks and to receive the money thereon. If, therefore, the power was legally delegated to him the bank would be protected. It does not appear that the trustees of the plaintiff ever adopted any by-laws. It does appear, however, that they had elected an executive committee, consisting of the three persons named, who were also trustees, and that they were a majority of the board. There is some conflict in the testimony as to the power delegated to the executive committee, Mr. Shepard testifying that an executive committee was elected upon his motion, and that they were given full power to do any and all of the business of the company required to be done in the interim between meetings of the trustees. Mr. Falk, the secretary, had no recollection of such a resolution and bad no entry in his minutes thereof, further than that an executive committee of three members of the board of trustees' were elected. He, however, upon cross-examination, admitted that he only entered the substance of resolutions in his minutes and did not always enter them in full. The trial court appears to have believed the testimony of Shepard upon that conflict, and found the facts accordingly. Such finding having been approved by the general term must, so far as this review is concerned, be treated as final. We thus have an executive committee empowered to do all of the business of the company that is required. Such committee had made the contract with Kendrick and Shepard under which the Ohio Company was organized. It is under the provisions of that contract that the plaintiff seeks to recover the checks or the value thereof. The endorsing of the checks and drawing the money thereon was but a part of the transaction, and if the committee had the power to make the contract it would seem to follow that it also had the power to draw the money upon the checks which had been issued in payment for the rights granted thereunder.

The business of a manufacturing corporation must be carried on by a board of trustees, but such trustees are empowered to appoint such subordinate officers and agents as the business of the corporation shall require. 1 R. S., 600, § 1, subd. 5 ; 2 R. S. (7th ed.), 1531, § 5.

Under this authority they may appoint an executive committee of their own members, investing it with power to transact the business of the company during the interval between the meetings of the board of trustees. Olcott v. Tioga Railroad Company, 27 N. Y., 546-557.

Whether the executive committee may have power to delegate its judgment and discretion it is not necessary to now consider. The power delegated to W. A. Shepard was to endorse the checks and to receive the money thereon; purely ministerial acts.

The questions as to whether the plaintiff was the owner of the ■checks, except to the extent of the $10,000 which it received, and as to the subsequent ratification of the acts of the executive committee by the board of trustees are involved in another case pending between the plaintiff and Kendrick and Shepard. The conclusion which we have reached in reference to the power of Shepard to endorse the checks renders it unnecessary to now consider those questions, and we have thought it advisable to leave them to be determined in that action.

The judgment should be affirmed, with costs.

All concur.


author: Bradley, J.

text:
    Thomas T. Stewart, App’lt, v. Benjamin S. Stone, Resp’t.

      (Court of Appeals, Second Division,

      Filed October 6,1891.)

    1. Negligence—Burden of proof.
    The fact that plaintifE delivered milk to defendant, the manager of a cheese factory, and that it was lost through the destruction of the factory by fire does not make a prima facie case of negligence against the defendant. The burden is still with the plaintiff.
    2. Same—Breach of contract—Implied condition.
    The nature of the agreement of the cheese factory with its members was such that it must be deemed to have been contemplated by the parties to it that the articles to be manufactured should be made only from the materials furnished by the patrons and at the factory, so that there was an implied condition that relieved defendant from performance, rendered impossible without his fault, and from the consequences of his inability thus occasioned to fulfill his contract in respect of the subject of the bailment which was destroyed by the fire.
    Appeal from judgment entered on order of general term of the supreme court in the fourth judicial department, affirming judgment entered upon report of referee.
    The plaintiff and his assignors were patrons of the defendant’s factory, where they and others delivered milk to be manufactured into cheese and butter, marketed and the proceeds deposited by him for them respectively at a stipulated compensation. This was done by the defendant up to October 28, 1883, when the factory was destroyed by fire, and a quantity of milk, butter and cheese thereby lost Several of the patrons suffering such loss assigned their asserted claims against the defendant to the plaintiff, who brought this action, and in his complaint alleged that the destruction and loss by the fire was occasioned by the negligence of the defendant or his agents and servants.
    The referee found that such negligence was not established, and • directed judgment for the defendant.

      J. W. Shea, for app’lt; C. C. Brown and W. A. Poucher, for resp’t

       Affirming 16 N. Y. State Rep., 52.

   Bradley, J.

The plaintiffand his assignors agreed to deliver their milk at the defendant’s factory for that purpose, and he undertook for a stipulated compensation to there manufacture from it butter and cheese, sell such products and distribute between them the proceeds in the manner provided for by the agreement. The contract was one of bailment involving the performance of service by the defendant; and in the result the parties were mutually and beneficially interested. Mallory v. Willis, 4 N. Y., 76; Foster v. Pettibone, 7 id., 433. The duty assumed by the defendant was to exercise ordinary care for the protection and preservation of the subject of the bailment with a view to the faithful performance of his contract; and he was chargeable with liability to his patrons for any loss to them occasioned by his failure to observe and discharge such duty.

It is urged that the referee erred in his conclusion that the plaintiff had failed to show that the damages were caused by the negligence of the defendant. This contention is not only on the alleged ground that it did appear that the latter was in fact chargeable with negligence as the cause of the loss, but that the burden was with the defendant to relieve himself from the imputation of want of care.

After a careful examination of the evidence, we are" satisfied that the question whether the loss was attributable to his negligence was one of fact to be determined by the referee upon evidence somewhat conflicting; and that his conclusion in that respect is not here the subject of review.

The action was founded upon the charge of negligence of the defendant, and the burden was with the plaintiff to establish it. Lamb v. Camden, etc., R. R. & T. Co., 46 N. Y., 271.

As a general rule, when a bailee fails on demand to deliver to the bailor property to which the latter is entitled, the presumption of liability arises, and if the goods cannot be found, it furnishes the imputation of negligence as the cause. Fairfax v. N. Y. C. etc., R. R. Co., 67 N. Y, 11. But such prima facie case may be overcome when it is made to appear that the loss was occasioned by some misfortune or accident not within the control of the bailee. Then the onus continues upon the bailor to prove that it was chargeable to the want of care of the bailee. Claflin v. Meyer, 75 N. Y., 260; Mills v. Gilbreth, 47 Me., 320; 74 Am. Dec., 487. And although it may be that proof given by him explanatory of the reason for non-delivery may disclose circumstances which in their nature permit or require the inference of negligence on his part, Russell Mfg. Co. v. N. H. Steamboat Co., 50 N. Y., 121, the affirmative of the issue is not shifted to the defendant, but remains through the trial with the plaintiff. Heinemann v. Heard,, 62 N. Y., 448; Blunt v. Barrett, 124 id., 117; 35 N. Y. State Rep., 64.

In the present case the plaintiff alleged in his complaint, and it so appeared, that the loss resulted from the destruction of the factory by fire. From that fact alone no presumption arose to furnish aprima facie case against the defendant. But upon the main issue, whether it was attributable to the negligence of the defendant, the burden was with the plaintiff. Whitworth v. Erie R. Co., 87 N. Y., 413. The referee found that the charge was not sustained by the evidence. For the purposes of this review that question of fact must be deemed disposed of in the court below.

It is also urged that the defendant, having undertaken to manufacture the butter and cheese from the milk furnished him at the factory by the plaintiff and his assignors, market the product and pay to them the proceeds, is liable for breach of his contract irrespective of the question of negligence. This proposition, in view of the issue made by the pleadings, cannot now for the predication of error be treated as in the case, although to sustain a judgment issues may be deemed so broadened as to conform the pleadings to the facts proved when it can be done without violatian of any rule of law. But upon the basis of an alleged breach of contract the plaintiff’s action would not be supported upon the evidence and facts as found by the referee.

It is true that where an absolute executory contract is made, the contractor is not excused by inability to execute it caused by unforeseen accident or misfortune, but must perform or pay damages unless he has protected himself against such contingency by stipulation in the contract Harmony v. Bingham, 12 N. Y., 99 ; Tompkins v. Dudley, 25 id., 272; Wheeler v. Conn. Mut. Ins. Co., 82 id., 543. But there may be in the nature of a contract an implied condition by which he will be relieved from such unqualified obligation, and when in such case, without his fault, performance is rendered impossible, it may be excused. That is so when it inherently appears by it to have been known to the parties to the contract, and contemplated by them when it was made, that its fulfillment would be dependent upon the continuance or existence at the time for performance of certain things or conditions essential to its execution. Then in the event they cease, before default, to exist or continue and thereby performance becomes impossible without his fault the contractor is by force of the implied condition to which his contract is, subject, relieved from liability for the consequences of his failure to perform. People v. Bartlett, 3 Hill, 570; Dexter v. Norton, 47 N. Y., 62; Booth v. S. D. R. Mill Co., 60 id., 491; Taylor v. Caldwell, 3 B. & S., 826.

By the contract now under consideration the cheese and butter were to be manufactured at this factory and to be made from the milk furnished by the patrons, of whom the plaintiff and his assignors were members. The existence of that particular factory was terminated by its destruction, and the loss with it of the manufactured product and of the milk then remaining there unconverted into cheese and butter rendered it impossible for the defendant to further proceed with the performance of his contract in respect to those articles of material and product. And as the nature of the agreement was such that it must be deemed to have been contemplated by the parties to it that the articles to be manufactured should be made only from the materials furnished by the patrons and at the factory referred to, there was necessarily an implied condition so qualifying the defendant’s undertaking as to relieve him from performance rendered impossible without his fault, and from the consequences of his inability thus occasioned to fulfill his contract in respect to the subject of the bailment which was destroyed by the fire. There was no error to the prejudice of the plaintiff in any of the rulings of the referee to which exceptions were taken in the reception or rejection of evidence.

These views lead to the conclusion that the judgment should be affirmed.

All concur, except Follett, Ch. J., not sitting.