author: Parker, J.

text:
    Jacob Kimmer, as Administrator, etc., App’lt, v. John Weber et al., Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed March 16, 1894.)

    Master and servant — Delegation of duty.
    Where the master delegates to his foreman the duty to furnish safe appliances to his servants, he is liable for an injury caused by his foreman’s neglect.
    Appeal from a judgment in favor of defendants.

      Oscar M Langer {Theo. Avh, of counsel), for app’lt; Wilson & Wallis {Hamilton Wallis, of counsel), for resp’ts.
   Parker, J.

e think the evidence produced by the plaintiff fairly presented for the jury the question whether the defendants had performed the duty which they, as masters, owed to the plaintiff’s intestate—to furnish a safe and proper place in which, the employe should prosecute this work. On the 16tli day of February, 1891, plaintiff’s intestate, William Kimmer, was an employe of the defendants. The work in which he was engaged was that of pointing up arches with mortar in Koehler’s brewery, in this city. The doing of the work necessitated that he should stand upon scaffolding which was about 12 feet 6 inches above the floor, and within 7 feet 6 inches of the ceiling. While standing upon this scaffold, and engaged in the discharge of his duties, he was precipitated to the floor by the falling of the scaffolding, resulting in death. The evidence tends' to show that the breaking of the scaffold was due to the fact that it was not properly constructed. Indeed, it appears that it was not originally put up for the purpose of sustaining the weight required of it in doing thé mason work in which defendants’ employe was, at the time of its breaking, engaged. This scaffolding had been constructed for the use of plumbers, and when the defendants commenced to do the masonwork they did not strengthen it. Now, the defendants were bound to use all reasonable precautions necessary to make this scaffolding, upon which their employes were invited to stand and work, safe. The defendants, personally, do not appear to have paid any special attention to the construction of the scaffolding. That matter they committed to their foreman, Joseph Turner.. But as it was a duty which the defendants, as masters, owed to their employes, to exercise due diligence to make the scaffolding safe, Turner, in the performance of that duty, stood in the place of the masters. Defendant Weber testified that it was Turner’s duty to see that the scaffolding was properly put up. Turner testified that he gave directions with reference to it to certain employes, other than the masons working upon it. He denies that the scaffolding used was arranged in accordance with the directions given by him, at the same time admitting that he visited the place where the scaffolding was at least twice a day; saw that they were working upon a scaffold other than he had intended to have provided for their use, and allowed them to continue without attempting to stop it. Had the master so conducted himself, it would not be pretended that the court would not be required to permit a jury to say whether he had performed his duty. The situation is not changed when the master intrusts the performance of a duty which he owes to the servant to some one else. In such case, he who performs the master’s duty stands in the master’s place, and his act is the act of the master.

' The judgment should be reversed, with costs to the appellant, to abide the event

All concur.


source: Caselaw Access Project

author: Yan Brunt, P. J.

license: Public Domain

text:
    James A. Merritt, Resp’t, v. John A. Fowler, Impleaded, etc., App’lt.

      (Supreme Court, General Term, First Department,

      Filed March 16, 1894.)

    Judgment—Foreign—Action on—Leave oe court.
    Where a judgment has heen recoveied in another state on a judgment rendered in this state, plaintiff may sue here on such judgment.
    Direction of verdict in favor of plaintiff, and defendant’s exceptions ordered to be heard in the first instance at the general term.

      I. N. Miller, for motion; W. H. Beam, opposed.
   Yan Brunt, P. J.

This action was brought upon a judgment recovered in the supreme court of the state of New Jersey in February, 1887. The defendants set up as an answer that the plaintiff recovered a judgment against the defendants in this action in, March, 1871, in the supreme court of this state, in Putnam county, which was the original cause of action, upon which, in1 March, 1887, the plaintiff recovered the judgment in New Jersey referred to in the complaint. ■ The answer further alleged that on the 17th of May, 1887, one Martin was appointed receiver in proceedings supplementary to execution under said- judgment recovered in this state, and that said receiver sold at public auction all the right, title, and interest- of the defendant Fowler in and to certain real estate, and'delivered a conveyance thereof to the purchaser,. the defendant being ignorant of the amount realized upon said sale. The answer further alleges that the said receiver claims . that there is vested in him, as such receiver,- all the right, title, and interest of said defendant Fowler in and to'the said premises, and that said right, title, and interest are of a value far in excess of the amount of said judgment, and.more than sufficient to satisfy the same. The answer further alleges that no leave was granted to the plaintiff to sue upon the recovery in Putnam county, and that more than 20 years have elapsed since the recovery of said judgment; this action having been commenced in June, 1893. Upon the trial the plaintiff introduced an exemplified copy of the judgment roll in the action in New Jersey, wherein the plaintiff herein was plaintiff, and the defendant John A. Fowler was defendant, and it appeared that said action was based upon said judgment recovered in Putnam county. The defendants offered in evidence an order of the supreme court, filed in the office of the clerk of Putnam county, appointing a receiver of all the real estate, debts, property, equitable interest, and things in action of the defendants in an action in which the present plaintiff was plaintiff, and the present defendants were defendants; but what was the foundation of that order does not appear. The defendants also offered in evidence an order directing said receiver to sell all the right, title, and interest of the defendant Fowler in certain real estate. The parties having rested, the court directed a verdict in favor of the plaintiff, to which the defendants duly excepted, and the court ordered the exceptions to be heard in the first instance at the general term.

The claim made upon the part of the defendants upon this motion is that the j udgment between the same parties for the same original cause of action in the supreme court in Putnam county was a bar to this action; and various authorities are cited to the effect that an action between the same parties for the same cause is a bar to a new action, in respect to which there is no dispute. The difficulty with the defendants' contention, however, is that this action is not for the same cause of action for which the action in Putnam county was brought; this action being upon a New Jersey judgment, which is a contract in itself, and to recover upon the implied promise arising from the recovery of such judgment. It is matter of history that, prior to the inhibition of the statute requiring leave to sue upon a judgment in this state, immediately upon the recovery of a judgment an action might be maintained thereon, and another judgment recovered, and so on ad infinitum, and thus costs be heaped up to an extortionate extent; and, to prevent this abuse, legislation was had, by which, in respect to a domestic judgment, a suit could not be brought thereon except by leave of the court. The language of the Code is explicit in limiting this requirement to cases of judgments recovered in a court of equity of this state. If there was any doubt in regard to this proposition, it seems to be set at rest by the case of Gutta-Percha & Rubber Manuf'g Co. v. Mayor, etc., 108 N. Y. 276; 13 St. Rep. 607, where it is held that a judgment, even of a foreign state, obtained for a cause of action ex delicto, becomes a debt, and the plaintiff is entitled to the same remedies as in an action upon contract, and it was decided that the plaintiff was entitled to maintain an attachment. So, in the case of Taylor v. Root, 4 Keyes, 333, in which it was held that, in an action upon contract, a judgment obtained by the defendant against the plaintiff in an action of slander might be set up as a counterclaim; these cases holding that the recovery of a judgment is a new contract between the parties, and an action may be maintained thereon as upon a contract. There being, therefore, no inhibition against suing upon this New Jersey judgment,—this New Jersey contract,—and no requirement for obtaining leave of the court in sucli a case, there does not seem to be any reason why the plaintiff cannot maintain this action.

It is suggested that if this action is maintained the plaintiff may, immediately upon recovering, sue thereon in New Jersey a second time, return here, and sue a third time, and so on indefinitely, augmenting the costs, and evading our statutes against suing without leave. If our legislature has not provided against such a hardship, if any such exists, it is not for the court to supply the deficiency. They have legislated to prevent such abuses in respect to domestic judgments, and they are not to be feared in respect to those obtained in a foreign jurisdiction. The exceptions should be overruled, and judgment upon the verdict ordered for plaintiff, with costs.


author: Per Curiam.

text:
    The People ex rel. American Bible Society, Resp’t, v. Commissioners of Taxes and Assessments for City and County of New York, App’lt.

      (Supreme Court, General Term, First Department,

      Filed March 16, 1894.)

    Taxes—Exemptions.
    Chapter 498 of 1893, which exempts from taxation the property of certain organizations, applies to taxes levied during the year of 1893.
    Appeal from an order' granting a. peremptory writ of mandamus. f

      James M. Ward, for app’lts; Frederick S: Duncan, for resp’t.
   Per Curiam.

The one question which is presented on this Appeal is, whether the act of the legislature becoming a law on the 29th of April, 1893 (Laws 1893, chap. 498), and which, by its provisions, went into effect immediately, exempted the property of the relator from the taxes which were levied during the year 1893. It is urged on the part of the ¿appellants,that such exemption cannot be claimed, because it would make the operation of thé act retrospective. It will be observed that such cannot be the effect of the statute, since the levy of the tax does not become -complete in the city óf New York prior to the 1st of May, any party having the right to- apply to the commissioners at any time prior thereto and subsequent to the opening of the tax books for relief against erroneous taxation.

The order appealed from should, therefore, be affirmed, with costs.


text:
    Ellen R. Randall et al., as Executors, etc., Resp’ts, v. New York Elevated Railroad Company et al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed March 16, 1894.)

    1. Appeal—Case—Statement.
    A statement that the case “ contains all the testimony taken upon the trial of this action,” is not equivalent to a statement that it contains all the “evidence.”
    2. Same—Evidence.
    Where, in an action against an elevated railway for damages to abutting property, no harm results to the appellant from an error in the exclusion of evidence, the judgment will not be reversed.
    Appeal from a judgment in favor of plaintiff.
    The opinion of Charles N. Morgan, referee, to whom the cause was referred, is as follows :
    To the Supreme Court: This is one of the ordinary actions .brought against the elevated railroad companies for an injunction to restrain the defendants from maintaining and operating their road in Third avenue in front of the premises of the plaintiffs, and to recover damages for injury done to the premises in the past througli the building and maintenance of such road. The principal questions litigated before me were as to the amount of past damages suffered by the plaintiffs; that is, loss in rentals, and the extent to which the fee value of the property had been depreciated or affected by the taking of the easements of light, air, and access whicli were appurtenant thereto. The property in question is situated on the easterly side of Third avenue, about twenty-five feet southerly from 45th street, and is known as. Nos. 717 and 719 Third avenue. The lot has a frontage of thirty seven feet seven and inches, and a depth of eighty feet. There are erected on the lot two four-story brick buildings, having each a store on the first floor, the floors above being occupied as tenements, one family on each floot. There are six rooms on each floor. The buildings are sixty feet in depth, and were built in about the year 1870. Since the erection of the buildings they have been continuously occupied in the manner, and for the purposes, above described, the first floor being used and occupied as a store, and the floors above as tenements. The tenements are of the class that were built in 1870, and have few of the modern conveniences which are possessed by apartments of a corresponding class built in later years. They have gas and cold water in the kitchen, but not elsewhere on the premises. Two of the six rooms front on the avenue, and two look to the rear. There are two dark rooms, which are not lighted by air shafts, as in the more modernly constructed houses, but receive all their light from the adjacent rooms and from the halls. The elevated structure passes through the street in front of these premises, the westerly track of which is erected on columns, the nearest of which, standing in front of the premises, is thirty-seven feet and ten inches from the house line, and the nearest point of structure to the stoop line is about thirty-one feet. The height of the column is fourteen feet eight inches above the pavement, and is a square, latticed, iron column, eighteen inches east aud west, and fifteen inches north and south. Upon the top of the columns there rest iron trusses three feet in height, upon which trusses are placed the wooden ties supporting the track. Outside of the track, and on the easterly side, there is a footpath extending five feet four inches outside of the rail. The cars which pass along this structure are about twelve feet in height. The level of the track is somewhat above the center of tire first apartment,—that is, above the center of the window,— and the top of a passing car is above the sill of the second story. The width of the elevated structure, from the outside of the footpath to the end of the ties, is eleven feet and six inches. The building of the road was commenced in the year 1877, and was' completed and commenced operations in 1878. Evidence was presented showing that the structure and the passing trains obstructed the light which would otherwise reach the premises, especially the stores, and that, in operating the road, smoke, dust, and. cinders were emitted by the passing trains, and came into an,d upon the premises. There was also some evidence showing, or tending to show, that the noise of the passing trains rendered the premises objectionable for occupancy. The plaintiff, for the purpose of showing that damage had resulted to the property through the acts of the defendant, called witnesses who testified as to the-rentals received from the property prior to and subsequent to the building of the road. The witness Hall testified that he collected the rents from 1871 to 1875, and the witness McIntyre testified that he collected the rents from 1876 to the present time. From the testimony of these witnesses, the rentals appear to have been as follows:
    1871 to 1875.
    Stores. Apartments. ' $2,000 $2,120
    1876 .......
    1.800 1,928
    1877 .......
    1.800 1,928
    1878 .......
    1,800 1,928
    1881 to 1893
    1,440 1,344
    The total rentals in 1875 for both buildings were $4,120, and the total rental for both buildings in 1893 was $2,784, showing a decrease in rental of $1,336, or about thirty-two per cent. It appears, however, from the testimony of the witness Freund, that the ratio of rental to fee value in 1873-75, in this part of the city, was ten per cent., and that'the present ratio of rental to fee value is seven and one-half per cent. Davis, a witness called on behalf of the defendant, testified to the same effect. It seems to me, therefore, in view of this testimony, that a certain portion of the reduction in rentals above shown is accounted for by the decrease in the ratio of rental to fee values. Such decrease being twenty-five per cent., the decrease in rentals due to this fact alone, had the value of the property remained unchanged, would have been $1,030, so that the normal rent which, under this rule, might be expected to be realized from the property under this changed condition of rental value, would be $3,090.
    But the testimony discloses another factor which has operated in the reduction of rents, and that is the decrease in the value of the buildings erected on the premises. The witness Freund testified that the present value of the buildings was from $11,000 to-$11,500, and the same witness testified that in 1872 they were worth $16;000,—a decrease in the value of the buildings, from wear and tear, of $4,500. He further testified that the value of the whole property in 1874'was $41,000. Brom this amount deduct $4,500, amount of deterioration in buildings, and it leaves $36,500, which he testifies is about the present value of the property. Seven and one-half per cent.- of this reduced valuation •would give a normal rental of $2,737._50; the actual rental received, as shown above, is $2,784. This indicates that there has been no decrease in the rental value of the property since 1873—75. That the fee value has also remained unchanged, except so far as it has been affected by the deterioration in the buildings themselves, appears from the testimony of the witness Freund. He testifies that the present value of the property is about $37,000, and that in 1873 the value of the ground without the buildings was $25.500, and that the value of the buildings themselves at that time was about $16,000, making a total value of the premises at that time about $41,000. From that amount deduct what he testified has been the deterioration in thewalue of the buildings, $4,500, and we have $36,500 as the value of the property to-day. I am constrained, therefore, to the conclusion, from the evidence, that whatever reduction there has been, either in the fee value or the rental value of the property in question, has been due to two causes solely: First, the general reduction that has taken place in the ratio of rentals to fee value; and, second, the deterioration of the property through natural causes.
    It remains, therefore, to inquire whether property on the side streets adjacent to the property in question has advanced in value since a period of time previous to the building of the road, and whether the property in question has increased in value to the same extent, and, if not, whether its failure so to do is attributable to the presence and effects of the elevated railroad. Storclc v. Met. Ml. R. Co., 131 E. Y. 514; 43 St. Eep. 730, and Becker v. Met. Ml. R. Co., 131 E. Y. 509; 43 St. Ecp. 726. In- determining this question I do not think it proper to consider merely the rentals and the course of value of the property in suit, as disclosed by the evidence, for the reason that it is impossible to tell what adventitious circumstances or conditions may have operated to produce the result disclosed. I deem it safer and juster, for the purpose of determining the effect of the building and the operation of the road through Third'avenue upon the property abutting on the avenue, to consider the general course of rentals and values of property in the immediate vicinity, that there may be eliminated from the conclusion those factors and agencies, other than the road itself, the effect of which has been special and peculiar to the particular property. Testimony was offered by the plaintiff and the defendant showing the course of rentals of a large number of properties situated on Third avenue and in the immediate vicinity of the property in question, such inquiry having been limited by me to property situated within ten blocks of the property in suit. The witness Freund, called on behalf of the plaintiff, testified as to the course of rentals of various properties on third avenue, and in one instance he gave the history of the rentals of an entire block situated on the west side of Third avenue, lying between 47th and 48th streets, from 1874 down to the present time, the property being known as numbers 760, 762, 764, 766, 768, 770, 772, and 774 Third avenue. This block is situated in the vicinity of the property in question, and was built shortly before the building of the road, and I think may be fairly and properly assumed to furnish approximate, if not accurate, data from which to determine the effect of the bnilding of the road and its operation upon property situated as are the premises in question. The uses to which this block has been devoted since it was built have, been substantially the same as those to which the property in question has been applied ; that is to say, stores on the first floor, with apartments on the floors above. .'In 1874-76 the' total annual rentals of the block above mentioned were $33,498, and in 1893 the total annual rentals were $29,006, showing a decrease in annual rentals, during the period mentioned, of $4,492, •or about thirteen per cent. There was no evidence to show that the property in question had been affected in any particular manner by the act of the defendant, or that it had suffered any greater loss by reason thereof than other similar property similarly situated in the vicinity. The reduction in rentals of the property in question for the same period appeals, as above shown, to have been thirty-two per cent., but I think that the inference is inevitable that such property must have been affected by the causes or conditions which.were not general in their effect, and. the estimate of thirteen per cent, more accurately measures the reduction of rentals on Third avenue, and more properly expresses the real facts. Evidence was also offered showing the course of rentals of property in the side streets and avenues- in the vicinity of the property in question, but not on the line of the road, and presumably not affected unfavorably by its building or operation. The witness Dage, called by fl-he defendants, testified as to the course-of rentals of the property known as Numbers 399 to 413 Lexington avenue, inclusive; he also testified as to the premises Nos. 132 to 140 East 53d street; and the witness Pierrie, called by the defendants, testified as to the rentals of the premises 309 East 52d street. The total annual rentals of the foregoing properties, in the yeta 1874-78, were $35,076. The present annual rentals of the same property are $32,242, showing a decrease in rentals of about eight per cent. This would indicate that property situated off the line of the elevated roads in the vicinity of the poperty in question has experienced a less diminution in actual rentals than had been experienced by property on Third avenue and abutting'* on the road, the difference in reduction being about five per cent. The evidence discloses no other reason for this difference except the effect of the road upon the property abutting upon the street along wiiich it is built,f, which effect is shown to be an interference with light and access to, and the emission of dust, cinders, and ashes into and upon, the plaintiff’s premises; and I am of the opinion that to the extent of about five per cent, of the annual rentals of the property in question priorato the building of the road, which were $44,120, the plaintiff has suffered a reduction in rental value, due to the erection and maintenance of the road, and the appropriation thereby of the easements of light, air, and access, or about $200 annually,' which amount the plaintiffs herein, executors of the estate of Mary Pettigrew, deceased, are entitled to recover for six years prior to the commencement of this1 action, and down to the date of the death of their testatrix, Mary Pettigrew, which occurred on the 4th day of December, 1892. It would appear, also, from the foregoing and other evidence in the case, that while the fee value of the property, has not actually decreased since the building of the road, and, on the contrary, p'roperty on Third avenue has generally increased in fee value, it has not shared in the general increase of values which property situated in the side streets and avenues adjacent thereto has experienced during the same period. It has been shown that the general reduction of rentals on Third avenue in this vicinity is about thirteen per cent.; but, since the ratio of rentals to fee value has béen reduced from ten. per cent, to seven and one-half per cent, (that is, twenty-five per cent.) through, causes having no relation to the building or operation of the road, it follows that there has been an actual increase of rentals of twelve per cent., and that the actual value of the property producing such rentals must have increased sixteen per cent, in order to yield the same. It also appears, as shown above, that the general reduction in annual rentals of property situated on adjacent streets has decreased eight per cent, or an increase of productivity under the changed ratio of seventeen per cent., from which it follows'that the actual value of the property producing such rentals must have increased twenty-two and two-thirds per cent, in order to yield the same, indicating that such property has increased in value six and two-thirds per cent, more than property affected by the road, for which difference no reason is shown other than the effect above referred to, which the building and operation of the road has had upon the property abutting pn its line. Some portion of this difference is doubtless due to the depreciation in the value of the property occasioned by the noise of operating trains over the road. What proportion, however, is somewhat difficult of determination from the evidence. I think that twenty-five per cent, is a fair amount to be deducted from the total damage appearing, as the allowance to be made for the injury occasioned by noise alone. Assuming, therefore, that the actual present value of the property is $36,500, which I think may be fairly inferred from the evidence, it would appear, for the reasons above stated, that such value is five and one-third per cent, less than it would have been except for the building and maintenance of the road; that is to say, except for this cause, the property would have been worth $38,500, instead of $36,500, showing a damage to the fee from the taking of the easements above mentioned of $2,000. Substantially the same result would b'e reached if it were sought to measure the loss in fee value by capitalizing the loss in annual rentals. Such loss, as above shown, was $200, from which deducting twenty-five per cent, for the noise, leaves $150, which is seven and one-half per cent, of $2,000.
    There was but little evidence presented showing, or tending to show, that the increase in fee values of property on Third avenue and in the vicinity was by reason of th,e benefits resulting from the building and operation of the road. Whatever benefits resulted from the presence of the road to the property in question, or to other property on Third avenue, is necessarily included and considered in the analysis which I have attempted to make of the course of rentals and fee values of such properties. I am not satisfied that the increase in fee values off the avenue has been in any degree occasioned by the road. The whole section was practically built up prior to the coming of the road, and there, is no satisfactory evidence, to my mind, that the road added anything to the value of property off Third avenue, either by increase of traffic or otherwise. For these reasons I am of the opinion that the value of the plaintiff’s easements taken by the defendants in the building and maintenance of their road, measured by the effect which their taking has produced upon the property to which they are appurtenant, is $2,000, which amount the defendants should pay the plaintiff within ninety days, upon receiving a conveyance or release of the easements and property'so taken, and in default thereof the injunctive relief prayed for should be granted. Some testimony was taken showing sales made of property along the line of Third avenue in the vicinity of the property in question, and also sales made of property in adjacent streets, both before and subsequent to the building of the road. Expert testimony was also offered as to the value of property similarly situated for the same period. An analysis of that testimony tends to confirm, in my opinion, the result which I have reached as above set forth, and I do not consider it important that I should, in this opinion, further comment upon such testimony. I am persuaded from the evidence that the value of property in this section of the city is fairly and accurately measured by its productivity. It has been substantially built up for many years. It has no speculative or commercial value other than that which is determined and fixed 'by its power to produce income, and any other measure of value based upon opinions of experts, unrelated to actual transactions, applied to property of this character, produces results which, to my mind, are necessarily speculative and unsatisfactory.

      B. L. Maynard, fop app’lts; Eugene D. Hawkins, for resp’ts. •
   Per Curiam.

This is the usual action brought by a property owner to obtain an injunction nisi. There is no statement in the case on appeal that it contains all the evidence, the nearest approach thereto being one that it “contains all the testimony taken upon the trial of this action.” .That the latter expression is not the equivalent of the former has been many times held, and lately in the case of Koehler v. Hughes, 73 Hun, 167; 57 St. Rep. 131, where the authorities are reviewed, and wherein, as repeatedly before, it was held that, where the case does not contain all the evidence, this court is precluded from reviewing questions of fact.

The only questions of law urged upon our attention are those , having reference to the admission and exclusion of evidence, and two motions made to dismiss the complaint—one at the end of plaintiff’s case, and again when both sides had rested. In the light of the exhaustive opinion of the referee, which shows that he neither misapprehended nor misapplied the law bearing upon the questions involved in this class of litigation, his findings of fact and conclusions of law seem to us to require no further comment, justifying, as they do, his decision.

Upon the evidence, the only serious question relates to the exclusion of a question asked of one of defendants’ expert witnesses, as follows: “Is it a fact that apartments in bank buildings bring a higher figure than they do in others ? ” Notwithstanding the fact that the plaintiffs had adduced evidence, over defendants’ objection, as to the rental history of a bank building on the corner of Forty-seventh street and "Third avenue, the plaintiffs’ counsel objected to this question as immaterial aud irrelevant, and then specifically upon the ground that evidence as to bank buildings •was incompetent. This objection was-sustained, and we think erroneously; and, if there were other similar errors appearing in this record from which we could see that they in any way affected the judgment, it would be our duty to reverse it. It always comes with poor grace from counsel who themselves have got in evidence of a particular kind, over objection, to attempt to exclude the introduction of similar testimony when offered on their adversary’s behalf to explain or offset that first admitted. Where, however, as here, it can be clearly seen from the opinion of the referee, and the findings and conclusions made by him, that no harm has resulted to defendants, then should the principle be applied which is so well expressed in Steubing v. N. Y. El. R. R. Co., 138 N. Y. 658; 53 St. Rep. 186, as follows:

“ There is considerable difficulty attending the trial of this class of cases, and a judgment should not be reversed if, upon the whole record, we can see that no harmful error was committed, and that the proper principle of law was not misapprehended or misapplied.”

Our conclusion is that the judgment appealed from should be affirmed, with costs.


author: O’Brien, J.

text:
    Third National Bank of City of New York, Resp’t, v. Merchants’ National Bank, App’lt.

      (Supreme Court, General Term, First Department,

      Filed March 16, 1894.)

    1. Bills and notes—Warranty.
    An indorser of commercial paper impliedly warrants the genuineness of the instrument and of every preceding indorsement.

      2. Same—Forgery.
    A forgery may be committed by a person having the same name as the genuine payee.
    8. Same—Estoppel.
    In such case, no recovery can be had if the acts and conduct of the holder were such as to amount to an equitable estoppel.
    4. Same.
    An estoppel is never based upon conjectures but upon facts showing substantial damage.
    6. Same—Failure to discover.
    A failure to discover the forgery does not give a right of action,
    6. Same—Notice.
    The party detecting the forgery must act promptly in giving notice thereof.
    Appeal from a judgment entered on a verdict directed by the court in favor of the plaintiff.

      George S. Hastings, for app’lt; Thomas G. Shearman, for resp’t.
   O’Brien, J.

Aside from the question raised by the affirmative defense as to plaintiff’s duty of exercising diligence in giving defendant information that the payment was irregular or unauthorized upon the undisputed facts and the settled principles of law, the plaintiff was entitled to a verdict. As correctly argued by respondent, the plaintiff was bound to pay. any check drawn upon it by the Bank of ¡New Hanover. It is not disputed that it. did pay the check to the defendant, that the signature of the-payee was a forgery, and that the defendant indorsed the check. The plaintiff was, therefore, entitled to recover the amount from the' defendant, on the familiar principle that an indorser of commercial paper impliedly warrants the genuineness of the instrument and of every preceding indorsement. Canal Bank v. Bank of Albany, 1 Hill, 287; Turnbull v. Bowyer, 40 N. Y., 456; White v. Continental Nat. Bank, 64 N. Y., 316, 320 ; Corn Exch. Bank v. Nassau Bank, 91 N. Y., 74, That the forgery fwas committed by a person having the same name as the genuine payee makes no difference. It is the signature of the genuine person that transfers the title. The mere fact that another person may have the same name gives him no power to make the transfer, and the signature of such person is just as much a forgery as if the names had been different. Graves v. American Exch. Bank, 17 N. Y., 205; Paris v. Peck, 10 Abb. Pro. (N. S.). 55; Pen. Code, § 522. Appellant insists, however, that this rule oí law is varied by the fact (which it is claimed here appears) that the plaintiff was wanting in the duty which it owed to the defendant, of exercising diligence in giving notice after knowledge of the diversion of the check, and also in discovering it; and a quotation to support the proposition thus advanced is taken from an opinion of the presiding justieé of this court, wherein be says:

“ The parties were bound to proceed diligently after discovering the fraud, but no laches can be imputed prior to its discovery.” Central Nat. Bank v. North River Bank, 44 Hun, 116; 8 St. Rep., 466.

We" have no fault to find with this statement of the lawq nor with an equally well-settled principle invoked by the appellant, to be found in the opinion of Rapallo, J., in National Bank of Commerce v. National Mech. Banking Ass'n, 55 N. Y., 216, wherein he says:

If the defendant had shown tliat it has suffered loss in consequence of the mistake committed by the plaintiff—as, for instance, in consequence of the recognition by the plaintiff of the check in question, etc.—then clearly, to the extent of the loss thus sustained, the plaintiff should be responsible.”

These cases are authority for the position that, though the plaintiff would otherwise be entitled to recover where it has paid a check to the defendant, which, by the latter, was presented to-it through its correspondent, having thereon the signature of the payee -forged, nevertheless, no .recovery could be had. if the conduct and acts of the plaintiff were such as to amount to an equitable estoppel.- 'Such estoppel, it is 'claimed, exists in this case by reason of the plaintiff’s negligence. But we think that in this the appellant overlooks the essential element of an equitable estoppel, in failing to produce the evidence from which (assuming that in some aspects negligence might be imputed to the plaintiff.) ffie inference might be reasonably and fairly deduced that he has, by reason of such negligence, been injured.'

It will be noticed, in examining the cases relied upon by appellant, that they all hold that money paid by mistake can be recovered, provided the one seeking to recover has not, by his careless or negligent acts, injured or prejudiced the person from whom the recovery is sought. There is no claim that there was any negligence on the part of the plaintiff in paying the check when presented, or that it was wanting in any duty that it owed to the defendant up to the time when the latter paid the money to the wrong person. The insistence, however, is that, having received notice on November 18th, which was four day's after the check had been paid by plaintiff, and one day after the defendant had paid to the indorsee, this was negligence which should prevent a recovery by plaintiff. The difficulty with this position, however, is that, when the defendant paid the money to the wrong person, the harm was done; and the only evidence of any injury caused by the alleged delay of'plaintiff was given by the defendant’s cashier, who said that “if more seasonable notice had been given, the forger would have been arrested earlier, and more favorable results might have arisen.” Estoppels, however, are never based upon conjectures, the law requiring that facts must be presented showing substantial damages sustained by the delay. As said in White v. Continental Nat. Bank, 64 N. Y. 316 :

“ In the case at bar it is the merest conjecture, with scarcely a possibility to support it, that the defendant, or those from whom it received the bill, could, at any time after the transmission of the foreign bill of exchange to Baltimore, have taken any effectual measures either for arresting the swindler or reclaiming the bill bought and paid for upon the credit of the bill. Estoppels cannot be based upon mere conjectures, even if a proper foundation is laid for them in other respects.”

Although as early as December 3d, the Bank of New Hanover had notified the plaintiff that the check had not been received by the payee, and although plaintiff had then paid the check, that the plaintiff did not know of the forgery is evidenced by the fact appearing that as late as December 18th, 1891, it paid the duplicate check. It is certain, therefore, that it had no actual knowledge until the latter day, and the most that could be claimed from the notice that it received is that it was negligent in not having discovered the forgery sooner. But this claim of negligence is offset by the facts appearing,— that the plaintiff was paying three or four thousand checks a day, which, between November 13th and December 3d or December 18, would make many thousand checks which it had paid, and in the business connected with this mass of checks the plaintiff could not well be held to have been guilty of negligence in not having discovered the payment of the forged check at the time the second check was presented. As the defendant, however, chose to make the payment to a person who was not the payee, it alone is responsible for the loss; and it cannot get rid of such liability by showing that, after the loss had occurred, there was 'negligence on the part of the plaintiff in discovering the forgery, or, after it had discovered it, in giving notice to the defendant, unless in the latter contingency it was coupled writh proof that the defendant was damaged by the failure to give notice within a reasonable time after discovery. For this proposition we refer to the two cases of National Bank of Commerce v. National Mech. Bank. Assn. 55 N. Y. 211, and Corn Exch. Bank v. Nassau Bank, 91 N. Y. 74. But, apart from this, the fact that we have already adverted to—that it does not appear that by such delay the defendant was damaged—is a complete ansvrer to the defense thus sought to be interposed. As correctly said in Bank of Commerce v. Union Bank, 3 N. Y. 236:

“The greater negligence in a case of this kind is chargeable on the party who received the bill from the perpetrator of the foi'gery. ■ So far as respects the genuineness of the bill, each indorsee receives it on the credit of the previous indorsers; and it was the interest and the duty, in the present case, of the Bank of Charleston, (for which, in the case at bar, substitute the defendant,) to satisfy itself that the bill was genuine, or that its immediate indorser was able to respond in -case the bill should prove to be spurious.”

This is followed by what we regard as a very clear expression of the law:

“ The party who fraudulently passed the bill cannot avoid his liability to refund on the pretext of delay in detecting the forgery or in giving notice of it; and, if reasonable diligence is exercised in giving notice after the forgery comes to light, it ‘is all that any of the parties can require."

But a claim of negligence based upon a failure to discover is very different from one based upon a failure, after discovery, to give notice. A failure to discover, though resulting in loss to another, who might, if sooner apprised, have apprehended the forger and recovered the money, gives no right of action ; and for obvious reasons, one of which alone need be mentioned. There is no duty imposed on one who receives a forged check from another to unearth the crime. , He receives it presuming, as he has a right . to do, that all the signatures and indorsements are genuine, which is impliedly warranted by the person from whom it is received. This presumption, and the right to rely on this implied warranty, are only destroyed when, by inspection, the forgery could be detected because apparent on the face of the check or bill, or where, from the surrounding circumstances, the suspicions of-the person receiving the note, check, or bill should be aroused, and his scrutiny challenged. Not so after discovery, for then the duty is incumbent on the one detecting the imposition to act promptly in giving notice; and, if he fails therein, to the injury and damage of the one entitled to notice, he will be prevented from recovering the damage or injury shown to 'have been actually incurred. Upon the facts here, negligence is not imputable to plaintiff for failure to sooner discover the forgery, and, as it was not shown that any injury or damage resulted from the delay in giving notice after discovery, plaintiff was not precluded from recovering the whole amount paid to defendant by mistake. Upon an examination, therefore, of the entire record, we think there was no disputed question of fact, nor any fact from which different inferences could reasonably be deduced, which would in any way affect the liability incurred by the defendant, in paying to the wrong person, upon a forged indorsement, moneys which, by mistake, it had received from the plaintiff, and which the latter was entitled to recover from it.

The judgment, therefore should be affirmed, with costs.

All concur.


author: Bartlett, J.

text:
    Josiah J. White, App'lt, v. George C. Wood et al., as Trustees etc., Resp’ts.

      (Court of Appeals,

      Filed May 1, 1894.)

    Evidence—Immaterial.
    Where the reversal of a judgment, restraining the transfer of the property and franchises of a railroad company, is based upon the ground that the complaint sought to restrain a transfer already made, evidence, on the second trial, tending to show the impropriety of such transfer is immaterial.
    Appeal from supreme court, general term, second department.

      Hdward M Grout, for app’lt; Wheeler H. Peckham, for resp’ts.

      Affirming 50 St. Rep. 937.

   Bartlett, J.

This case comes here for the second time on an appeal from a judgment of the general term of the second department affirming a judgment dismissing the complaint. The first appeal was from a judgment in favor of plaintiff after a trial. This court reversed the judgment, and ordered a new trial. White v. Wood, 129 N. Y., 527; 42 St. Rep. 174. At the new-trial the complaint was dismissed on the ground that the questions sought to be litigated had been settled by this court in the decision above referred to. The plaintiff is a bondholder of the Chattaroi Railroad Company, a Kentucky corporation, and the defendants are trustees for the bondholders under an agreement executed pending the foreclosure of a mortgage. securing the bonds of the company, which gives them, among other things, the power to purchase the property for the benefit of the bondholders. These trustees were to sell the property at not less than a price indicated, and, failing in that, they were to form a new corporation, and make a certain disposition of the stock. The plaintiff brings this action, alleging substantially that the defendants have violated .the agreement creating them trustees, and entered into a contract with a third party which is hostile to the said agreement and beneficial to themselves.

On the first trial of this action both parties put in their proofs, and upon a full consideration of them this court reversed a judgment in favor of the plaintiff. The plaintiff’s counsel now insists that the present record is entirely different from the former one, and presents a new question. This requires us to look into the history of this litigation as disclosed by the former appeal.The defendants, acting under the trust agreetment, having purchased the property at the foreclosure sale, were unable to sell on the terms indicated, and therefore proceeded to organize a new company under the laws of Kentucky, as they were required to do. In July, 1889, they filed articles of incorporation of a new company, caljed the Ohio and Big Sandy Railroad Company, by which the capital was fixed at $2,000,000. The mortgage foreclosed secured the payment of two issues of bonds, aggregating $1,000,000, of which there were outstanding $994,000. The certificate of the new company provided that the $2,000,000 of stock should be issued pro rata as paid-up capital stock in exchange for receipts issued on deposit with the trust company of the sinking fund and gold bonds of the Chattaroi Railway Company, which aggregated $994,000. The statutes of Kentucky provide that the capital stock and bonds of a railroad company, organized by the purchasers of a railroad at judicial sale, shall not exceed in the aggregate the original cost of the construction of the railroad and equipment purchased, and such sum as may be necessary to complete the same. In order to , comply with these statutory provisions, which had been overlooked in filing the first certificate, a new certificate of incorporation was filed in August, 1889, fixing the nominal amount of the capital stock at $2,000,000, and providing'that $994,000 should be issued to and divided among bondholders as against their property conveyed to the new company, and that the balance of said capital stock might be disposed of by the board of directors, to be paid in upon the calls of the board. The first certificate was abandoned. The obvious intention of the new certificate was not only to compensate the original bondholders for the property conveyed to the new company, but to raise the necessary money to carry out the scheme contemplated by the trust agreement. It was by reason of this effort of the trustees to dispose of a portion of the new stock for cash under the provisions of the second certificate that plaintiff was led to begin this action. The complaint sets up the facts, and prays judgment that the defendants be restrained from conveying-the franchise or property of the said Chattaroi Railway Company over to the said Ohio & Big Sandy Railroad Company, or other persons or corporations, excepting to the said Ohio & Big Sandy Railroad Company, upon the issuing of its said $2,000,000 of stock and the distribution Thereof pro rata among the said bondholders; that the defendants be restrained from disposing of said franchise and property under any other agreement, or in any other way, or from receiving the sum of $56,000, or any other sum, to their own use; also prayed for an accounting and further relief. A reference to the former opinion ■ of this court, 129 N. Y., 527; 42 St. Rep. 174, will show that these various questions were disposed of as presented by the prayer for relief. It was held that the complaint sought to restrain- transfers which had been made before the commencement of this action, and the judgment in that respect was ineffectual for any -purpose; The filing of the first and second certificates of incorporation of the Ohio & Big Sandy Railroad Company, and the disposition of stock under the latter, were fully considered, and the issue of stock as contemplated approved. The transaction as to the $56,000 note was examined and also approved. The case was completely disposed of as then presented.

We now come to the consideration of the second trial, and the contention of plaintiff that the record is changed, and a new question presented. The proceedings were very brief. The plaintiff put in evidence five receipts of the Union Trust Company of Úew York for the twenty-seven bonds of the Chattaroi Railway Company deposited by him with the trust company, subject to the trust agreement; also the first article of incorporation of the Ohio & Big Sandy Railroad Company, filed in July 1889. Plaintiff then offered in evidence the construction and equipment account from the ledger of the -Chattaroi Railway Company, which, on objection was excluded. Plaintiff thereupon rested. Defendants also rested. On motion of defendants the complaint was dismissed. This disposition of the case was propei*, as the former decision of this court disposed of all the questions presented by the present record. This court having held that the complaint sought to restrain transfers by the trustees under the trust agreement which had been made before the commencement of this action, and the judgment in that respect was ineffectual for any purpose, the offer in evidence of the construction and equipment account, as contained in the ledger of the Chattaroi Railway Company, as tending to show the cost of the road and the impropriety of these transfers, was properly denied. This evidence was immaterial in view of the former decision, without regard to its competency as against the defendants. It is unnecessary to pass on this later question. We do not deem it important to consider the various points discussed on the argument and in the briefs, as the present record presents no new question, and the judgment must be affirmed, with costs. All concur, except Peckhah, J., taking no part. Judgment affirmed.


author: O'Brien, J. Follett, J.

text:
    Georgiana Upton, App’lt, v Abram N. Bernstein et al., Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed March 16, 1894.

    Wills—Proof of execution—Sepbeme Court.
    In an action in the Supreme Court, the execution of a will may be established by the testimony of a single witness.
    Appeal from a judgment entered on a dismissal of the complaint.

      L. A. Gould, for app’lt; Mojfet & Kramer, for resp’ts.
   O'Brien, J.

The plaintiff, as devisee of one Grescentia Mueller, brought this action to recover moneys received by defendants, who were real-estate agents employed by Mueller, in her lifetime, to collect rents of real property of which she died seized. To establish her title, plaintiff called one of three subscribing witnesses to a paper which purported to be the will of Mueller, and which, it appeared, had been presented to the surrogate of New York county for probate; but not probated at the time of the trial of the action. This one witness testified to the drawing and execution and publication of the will, after whicli the plaintiff offered the paper in evidence as the will of Mueller. If the factum of the will was established, the contents having been admitted, as. containing a devise óf the premises to plaintiff, she would have made out her cause of action. But the objection was made, to the admissibility of the paper in evidence as a will, that the testimony of two witnesses was necessary to establish its validity. The court sustained this objection, and dismissed the complaint, and it is from the judgment entered thereupon that this appeal is taken.

The single question presented, therefore, is whether, in an action in the supreme court upon the single issue as to the ownership of real estate, the execution of a will can be established, prima facie, by the testimony of a single witness, or whether there must be, as held by the trial court, two witnesses. Section 2618 o£ the Code of Civil Procedure provides that, “before a written will is admitted to probate, two at least of the subscribing witnesses must be produced and examined, if so many are within the state and competent and able to testify ;” and the succeeding section (2619) provides the mode of procedure in case of the death, absence from the state, lunacy, or other incompetency of a witness required to be examined. These sections require, therefore, that, in all proceedings relating to the probate of a will, two witnesses, at least, must be examined, if within the state, and competent and able to testify; and it is equally well settled that a will cannot be given in evidence to show title to personal property until it has been probated, but that such title is conclusively established by the probate of the will. In regard to real property, however, the will, even if probated, is but prima facie evidence of title. As the result of this difference of weight to be given to the probate of a will in respect to personal, as distinguished from real, property, appellant contends that a different rule prevails as to the number of witnesses required. The authority relied on to sustain this contention is said to be that of Harris v. Harris, 26 N. Y. 440. In that case the plaintiffs sought to partition the property which the defendants claimed to own by virtue of a will alleged to have been lost or destroyed. As shown by the statement of facts, the defendants gave evidence tending strongly to show that the will was made and executed with all the formalities required by the statute, and that the instrument was lost or fraudulently destroyed in the testator’s lifetime. “The provisions or contents of this will were proved distinctly and clearly by one witness, who drew it at the request o.f the testator, and who was one of the subscribing witnesses to it.” According to this testimony, the will contained a devise of testator’s lands described in the complaint to the defendants. To meet this, the plaintiff introduced in evidence the judgment roll in a suit brought by the defendants for the purpose of having such will established as a lost or destroyed will, and it was shown that such action was brought, and judgment finally entered dismissing the complaint, and this judgment was claimed to be á bar. It was held that the defendants were not concluded by this judgment obtained against them in their action; and in the course of the opinion, upon the question whether one or more witnesses were necessary to establish the contents, as distinguished from the factum, of the will, the court say:

“ifor can it be claimed that the probate of a will lost or destroyed in a surrogate’s court, or one lost or destroyed in the supreme court, under the provisions of the Revised Statutes, is in either case conclusive as to real estate. It is conclusive as to personal, but prima facie only as to real estate, and a failure to have a will probated * * * does not prevent those claimants under it from setting up and establishing their title by common-law evidence in an action in any court, either of law or equity, where the title to the real estate thereby devised may be involved or come in question, unless some statutory provision has altered the common-law rules of evidence in respect to the proof of a will lost or destroyed by accident or design, and made it incumbent, in all cases, to- prove the contents of such will by at least two- credible witnesses, or by one witness and a correct copy or draft of the lost instrument. About the only question in the present case is, whether such a statutory rule exists.”

It was accordingly held in that case that no such statutory rule exists, and that the common-law rule of evidence which allowed the proof of the contents of a will in the same manner as that of a deed, by a single credible witness, remained unaffected by statutory provisions relating to the mode of proof relative to probate proceedings. Probably, as the result of the misstatement in the head note of the decision in that case, it has been frequently quoted as authority for the proposition that it directly decided that, upon the single issue of ownership, the due execution of a will might be established, prima facie, upon the testimony of a single witness. The reporter, however, failed to make the distinction which exists in the case between proving the factum of a will and the contents, which are two very different things. That case, therefore, is authority only for the proposition that the contents of a will may be proved by the common-law rules of evidence. In the case at bar, the contents of the will were admitted; and it is conceded that, if the factum of the will was established, the plaintiff, as devisee, bv virtue thereof, was entitled to maintain the action and recover. Apart, however, from the case of Harris v. Harris, there is abundant authority among the earlier cases for the proposition that a will of real property in the supreme court might be proved and established by one witness, according to the' common-law rule of evidence. Jackson v. Le Grange, 19 Johns. 386 ; Dan v. Brown, 4 Cow. 483 ; Jackson v. Vickory, 1 Wend. 406; Caw v. Robertson, 5 N. Y. 134. In this last case (page 134), Gray, J., says:

“ If the title to real estate devised should be contested, one, only, of the subscribing witnesses, who can prove the execution of the will, need be examined.”

The only case where a contrary view is seemingly indulged in is that of Chapman v. Rodgers, 12 Hun, 342, wherein the plaintiff brought an action to have his title declared valid, or, if this were not done, that a partition and sale of the premises might be,had.

It was therein held, one of the judges dissenting (headnote), that the action was one in equity to establish the validity of a will of real estate conclusively as against all the'heirs,-and that the rule in such cases was that all the witnesses thereto must be called and examined, except in the event of death, insanity, or absence, or hnless the heir waived his right, and that the court below erred in this case in holding that it was sufficient to call and examine only one witness. In the course of the prevailing opinion the judge says:

“But where the object of the action, as in this case, is to establish a will forever and conclusively against all the heirs, the rule requiring the production of all the witnesses on probate before the surrogate, why should not all be produced in an action like this, which is conlcusive even as respécts real estate ?”

The difference between the rule of evidence which prevails upon probate proceedings and that in actions in the supreme court is based upon the fact that with respect to probate proceedings they are controlled by a statute, while in actions in the supreme court the common-law rule of evidence prevails. The jurisdiction of the two courts with respect to questionsarising as to the establishment ■or construction of a will, and the difference in the evidence that may be resorted to, have been discussed by the court of appeals in Re Keleman, 126 N. Y. 79 ; 36 St. Rep. 390, and in Re O'Hara, 95 N. Y. 403. It would thus ^appear, to put it most strongly, that if the title to personal property derived from a testator, no matter how small or insignificant its value, is involved, such title must be established by probate of the will undej; and through which the title is derived, which as we have seen, would require at least two witnesses, if within the state, and competent and able to testify, 'while,'on the other hand, a devisee of real estate under a will not probated is not required to establish his title under the proceedings for probate, but, in an action in the supreme court, wherein a single witness is produced, and without any explanation of the failure to'produce at least another subscribing witness, he may succeed in establishing the.wBL Whatever anomaly may, in reason, seem to exist, growing out of the difference in the number of witnesses required in the different forms, we do not regard the question upon authority as an open one. Our conclusion is, therefore, that the judgment must be reversed, and a new trial ordered, with costs to appellant to abide the event.

Van Brunt, P. J., concurs.

Follett, J.

April 2, 1893, the owner of the fee of No. 1001 Broadway, in the city of Brooklyn, died. For some time before that date the defendants had been employed by the owner to collect the rents from the tenants occupying the property, which they continued to collect after her death. This action was brought to recover the rents which had accrued and were collected by the defendants after the death of ’the owner. To prove title to the realty, and establish the plaintiff's right to recover rents accruing and collected by the defendants since April 2,1893, a paper purporting to be the last will and testament of the late owner of the property was, produced, by which No. 1001 was devised to the plaintiff. The plaintiff called the draughtsman of the will, who was one of the three subscribing witnesses, who testified that the testatrix signed, sealed, published, and declared the paper to be her last will and testament in his presence, and in the presence of two other persons who were subscribing witnesses, and that he and said two other witnesses, at her request, and in her presence, .and in the presence of each other, subscribed their names as witnesses thereto. The will was then offered in evidence, but, on the objection of the defendants that “ the statute requires that the testimony of two witnesses to a will shall be necessary to establish its validity,” it was excluded, and the plaintiff excepted. This was error. At common law, in an action where the plaintiff sought to establish his title to realty through a will, it was sufficient to prove its due- execution by one of the subscribing witnesses. Bull, N. P. 264; 3 Phil. Ev. (Edw. Ed.) 754, and cases cited. Such was the rule under the Revised Laws, when the statute required that there should be three subscribing witnesses to a will. Jackson v. Le Grange, 19 Johns. 386; Dan v. Brown, 4 Cow. 483; Jackson v. Vickory, 1 Wend.407. Suchis therule under the Revised Statutes. Caw v. Robertson, 5 N. Y. 134; Harris v. Harris, 26 N. Y. 433; Chapman v. Rodgers, 12 Hun, 347; Colligan v. McKernan, 2 Dem. Sur. 421. This rule has not been changed by §§ 1865 and 2621 of the Code of Civil Procedure. The judgment should be reversed, and a new trial granted, with costs to abide the event.


author: Van Brunt, P. J.

text:
    Emory M. Van Tassel, Resp’t, v. Frank Williams et al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed March 16, 1894.)

    Partnership—-Relation.
    Where a party agreed with one of the partners to furnish the capital and to have one-half of the latter’s share of the profits, and the co-partnership was formed upon such understanding, it is a question for the jury whether or not it was the intention of all the parties that the former should he a partner.
    Motion for a new trial on exceptions ordered to be heard in the first instance at general term after the direction of a verdict in favor of plaintiff.

      C. N. Bovee, Jr., for pl’ff; J. M. Bowers, for def’ts.
   Van Brunt, P. J.

This action was brought to recover upon several promissory notes alleged to have been given by the defendants, doing business under the firm name of F. Williams & Co., to the plaintiff. The only question involved was whether the plaintiff was a partner with the defendants in their business, and the money represented by these notes a contribution of capital as such partner by him. Upon the trial of the case, a verdict was directed by the court, and the question presented is whether there was any evidence which entitled the defendants to have this question submitted to the jury, or whether the evidence was of such a character that, as matter of law, the plaintiff occupied the relation claimed by the defendants.

There is a preliminary question raised as to the burden of proof, it being claimed by the defendants that under the pleadings the defendants were entitled to the opening and closing of the case. It is not necessary, in view of the disposition which was made of the case, to consider particularly this question. There being no denial contained in the answer of any of the allegations contained in the complaint, it was an admission of the plaintiff’s cause of action, unless the defendants could establish the allegations set up in their answer by way of defense, namely, that the plaintiff was jointly interested with the defendants in the business out of which these notes arose, and hence could not maintain this action against the defendants. In fact, upon the trial the plaintiffs offered no proof, and the court held the notes to be admitted. It is true, some letter-heads and signatures of F. Williams & Co. to .letters showing the individual names of the defendants were offered, but these were entirely unnecessary, in view of the fact that the copartnership of the defendants was not denied, the only allegation being the affirmative allegations as above stated. The court, however, having disposed of the question of the right of plaintiff to recover as matter of law, if such ruling was correct, this error should not affect the judgment. It appeared that prior to April, 1887, the defendant, Sanford H. Weeks, and the plaintiff were engaged in business together, and in said month the defendants Williams, Hungerford and Weeks entered into an agreement in writing for copartnership, the firm name to be F. Williams & Co.; Williams to do the outside work, Hungerford to attend to the correspondence, and general inside work, and Weeks to have charge of all the financial affairs and furnish the capital. It was further agreed that the capital invested in the business should draw six per cent.- interest, to be charged to expense account; that AYilliams should have one-fourth, Hungerford one-fourth and AVeelcs one-half of the profits; that Williams should draw out of the business $25, Hungerford the same amount and Weeks $50, per week; and that this agreement was to continue for two years. It further appears that there,was an understanding or agreement between all the four parties that the three defendants should form a copartnership, which was done by the agreement above referred to ; that the plaintiff should furnish the monev, and that Weeks should divide his half with the plaintiff; that the reason why the plaintiff did not wish his name to appear in the firm was that it would conflict with his other business ; that his name as a capitalist would be sufficient for the backing of the business; and that he was to have one-fourth of the profits of the business, being one-half of the half reserved to Weeks by the written agreement. It was in pursuance of this arrangement that the plaintiff contributed the money to the firm. Upon the expiration of the original agreement, it was renewed for two years longer. It further appeared that the plaintiff interfered, to some extent, with the management of the business, introduced the defendant Weeks to several banks and guaranteed his actions, and left his signature of F. Williarris & Co. at the Produce Exchange. In this condition of the proof, the court held that no partnership was established, and the action could be maintained, presumably under the authority of Burnett v. Snyder, 81 N. Y. 550; and this authority seemingly sustains the conclusion of the learned judge. But we think that the jury may find certain facts to exist which will be fatal to the plaintiff’s right to recover in this action.

In the case cited it was held that a contract between two or more partners and a third person, with the knowledge and assent of the other partners, by which the third person is to share in the profits and losses in the firm business of the partner'with whom lie contracts, does not constitute such a participation in the profits as will make the third person a partner, or liable for partnership debts. The ground upon which that decision was based seems to be that participation in the profits of the business does not, in all pases, make the participant a partner as to third persons. To haye that effect, the participation must be in the profits, as such, under circumstances which give him a proprietary right, as principal trader, in such profits before division. In that case it appeared that the party sought to be charged as partner had refused to become a partner, although his refusal had no connection with the knowledge of the liability which he would incur to creditors by becoming a partner, and that it was arranged between the parties that he should take” a share of one partner’s interest; and the only agreement made, so far as the party sought to be charged as a partner was concerned, was the agreement between him and one of the partners. The business of the firm did not require the contribution of capital, and none was contributed by any of the partners. The party sought to be charged aided the firm by purchases and consignments of merchandise to the firm for sale, but took no part in the management of the business. Upon these facts the court held that he was not a partner, either as to creditors or between himself and the other parties in interest. In the case of Nirdlinger v. Bernheimer, 133 N. Y. 45 ; 44 St. Rep. 323, it was held that a subpartner with one engaged with others in a joint enterprise is entitled to an accounting in reference thereto; and this, although the other partners had no knowledge of the sub-partnership. In that case, Burnett v. Snyder was referred to, and it was held not to be applicable because the subpartner there made no contribution to the capital of the principal firm, and had no proprietary interest in the funds or in the profits arising in its business before division, and the question involved related solely to his liability to the creditors of the firm. Flow, in the case at bar, it appears that the plaintiff was to contribute the capital of the business. His name was not to appear, but the defendant Weeks was to represent his interest in the firm, and he was to have one-quarter of the profits, the same as the other members, for the contribution of his capital. It is true it does not appear to have been stated, but such contribution of capital was the groundwork upon which his compensation depended. The evidence is that plaintiff was to furnish the money. It is true that in the agreement between the three partners, it is provided that Weeks shall furnish the necessary capital; but the testimony is that the plaintiff was the man from whom that capital was to come, and it was plainly the understanding and intention of the parties that such capital should be at the risk of the business. Besides, in the case at bar the plaintiff did interfere in the management of the business, changed the bank account, and thought himself enough of a partner to sign the name of the partnership, leaving his signature of F. Williams & Co. at the Produce Exchange. It seems to us that it may be inferred, from all these circumstances, that it was the understanding and intention of these parties that the plaintiff should be a .dormant partner in this concern, and that his interest should be ostensibly represented by Weeks. He did not decline to become a partner, as Snyder did in the case of Burnett v. Snyder, supra. All that he said on that subject was that he did not want his name to appear in the firm because it would conflict with his other business if it was known that he was interested in the business. Under all these circumstances, it seems to us that there is a0 clear distinction between the case of Burnett v. Snyder, and the one at bar; and it would seem that it was not the intention of the court of appeals that the case cited should be extended in its application. Under this evidence, it seems to be clear that the plaintiff could enforce a proprietary right in the profits of the business, that Weeks was his agent, and that, as far as the capital contributed was concerned, it was contributed as capital by the dormant partner, whose agent had agreed, on his behalf, that it should be contributed. We think, therefore, that there was at least sufficient to go the jury upon the question, under proper instructions, as to whether it was not the intention of all'these parties that the plaintiff should be interested in this business as a dormant partner represented by Weeks. If so, this action could not be maintained.

The exceptions should be sustained, and the motion for new trial granted, with costs to the defendants to abide.the final event.


author: Fitzgerald, S.

text:
    In the Matter of the Judicial Settlement of the Accounts of the Temporary Administrator of Clara M. Egan, Deceased.

      (Surrogate’s Court, New York County,

      Filed February, 1894.)

    Administrator—'Temporary— Compensation.
    A temporary administrator is entitled to commissions on specific tie-quests.
    Judicial settlement of the accounts of the temporary administrator of Clara M. Egan, deceased.

      George M. Barry, for temporary administrator; Redfield & Red-field, for legatee.
   Fitzgerald, S.

In re Estate of Lane, Surr. Dec. 1891, p. 388, the question was whether the temporary administrator was entitled to receive compensation measured by the value of his services, which he claimed to be in excess of the commissions fixed by statute for the services of an executor or administrator. It was held that the statutory commissions furnished the standard to be applied in measuring his remuneration, but no determination was made that the court, in applying the standard, should confine it to cases in which an executor or administrator could be awarded commissions. The fact that an executor is not entitled to commissions on property specifically bequeathed is no reason for depriving a temporary administrator of commissions thereon. It is the duty of the executor to deliver the property to the legatee pursuant to the direction of the testator, and in such case it is considered that there cannot be, actually or constructively, such a receiving and paying out within the meaning of the statute, or such a rendition of services as would entitle him to commissions. The object of the law in providing for the appointment of temporary administrator is to insure the safety and preservation of the property, and, ordinarily, its ultimate delivery in kind by the administrator upon the termination of his office, and the compensation which is awarded to him is given for these services. Green v. Sanders, 18 Hun, 308; In re Estate of Lane, Surr. Dec. 1891, p. 388; In re Stanfield, Surr. Dec. 1892, p. 237. The circumstance, therefore, that some of the bequests in this case are specific does not deprive the administrator of commissions on the same.

Decree accordingly.


author: Parker, J. O’Brien, J.

text:
    William E. Wamsley, App’lt, v. H. L. Horton & Company, Limited, Resp’t.

      (Supreme Court, General Term, First Department,

      Filed April, 1894.)

      1. Contract—Option—Validity.
    A contract for the purchase of stock, which recites an arrangement in the nature of an option held by the vendor, is binding upon the vendee, though both parties knew that the option was unenforceable and that the vendor might not be able to deliver the stock which he contracted to sell.
    2. Same—Impossible.
    There is nothing, in such contract, which suggests that performance on the vendor’s part would be impossible.
    3. Pleading—Demurrer.
    Where a complaint in an action against a corporation alleges that defendant, for a valuable consideration, made, executed and delivered a contract, a demurrer necessarily admits such fact as alleged, though it may appear on the face of the pleading that the name of the corporation was signed to the contract by a director.
    4. Same—Performance.
    A general averment of performance on the plaintiff’s part is sufficient as against the objection that the complaint should have affirmatively alleged the truth of certain statements in the agreement, upon the substantial truth of which its validity was conditioned.
    Appeal from order and interlocutory judgment sustaining demurrer to complaint. <

      Alexander S. Bacon, for app’lt; John B. Dos Passos, for resp’t.
   Parker, J.

Plaintiff’s assignor, Flanders, and Stout & Douglass executed a writing in which the latter in behalf of all the stockholders of the Knapp, Stout & Co., Company, pretended to give to the former an option for the purchase of all the stock of the corporation, aggregating four thousand shares of one thousand dollars each, which he in terms accepted.

This writing, which for convenience will be called an option, was not enforceable by either party. Stout & Douglass reserved therein the right to terminate the option at any time if dissatisfied with the progress of Flanders in his negotiations for a sale, while Flanders was in no way bound by it.

But Flanders, apparently confident that the option was enforceable, entered into an agreement with the defendants by which he bound himself to sell and deliver the four thousand shares of the Knapp, Stout & Co. Company, within a time specified to defendants, who in turn agreed to form a corporation to take the stock and pay the agreed price therefor in the event that the representations of Flanders as to the gross and net income of the business, and value of assets, should be verified by them in the manner provided in the agreement.

This plaintiff, as assignee of Flanders, seeks through this action to recover against the defendants because of their failure to perform the agreement. ■

The validity of the agreement is now challenged. It is urged that the recital of the alleged option between Flanders and Stout & Douglass, which was in reality of no effect, operated to nulify that which otherwise would have been a perfectly valid agreement.

This harmful and unintended result, it is said, comes from the • fact that by the appearance of the option in the contract H. L. Horton & Company were apprised that Flanders was not the owner of the stock, and that the option under which he expected to be able to procure it was not enforceable.

It has been said in a tentative way that the only consideration for the agreement was the option, and that being void the agreement was without support in that respect. But there is nothing in the suggestion. The agreement is under seal, and, beyond that, expressly recites a money consideration.

We have, then, to meet the suggestion that as both parties to the contract must be presumed to have known that Flanders could not have enforced the option, and, therefore, might not be able to deliver the stock which he contracted to sell, neither of them were bound by the agreement.

No authority for such a proposition is cited, and it is difficult to conceive of any principle of law relating to contracts which tends to support it.

It is a general rule of law that a man may contract for the sale of a specific thing which is not his own at the time. Among the exceptions to the rule are agreements to sell something which at the time belongs to the buyer; or property which cannot be the subject of private ownership at all, such as public buildings or a ship in the navy. Performance of such an agreement is impossible either by law or in itself, and therefore it becomes void.

The ground on which it is put is that the impossible nature of the promise shows that there was no real intention of contracting, .and therefore no real agreement, the usual test being not whether the thing contracted to be done is absolutely impossible,' but whether reasonable men in the position of the parties must treat it as impóssible. Pollock on. Contracts, 378, 382.

There was nothing in this contract which suggests that performance on Flanders’ part would be impossible, or that the parties so understood^ it, and. therefore had nó’intention- of contracting, or that would authorize the court to treat it as a contract impossible of performance.

On the contrary, the option indicated that performance by Flanders would be possible, and if for any reason it should have turned out otherwise, the validity of the contract would not have been affected, the remedy of the other party being an action for ■damages because of the breach.

It is further urged, in support of the order sustaining the demurrer, that the defendant is not bound by the contract pleaded, inasmuch as the name of the corporation appears to have been signed by a director. This position is not well taken, because the complaint alleges that the defendant, for a valuable consideration, made, executed and delivered a contract to Flanders, and the demurrer necessarily admits the fact to be as alleged.

Respondent makes the further point that the contract pleaded provides that “ if such statements (meaning statements vouched for by Flanders in the agreement) be substantially intibrrect, * * * this agreement shall cease and determine and be of no effect,” and insists that plaintiff has not alleged that the statements were substantially true and correct.

Without passing on the question whether plaintiff should bear the burden of establishing the truth of the “statements,” in view of that provision of the contract wherein the purchaser covenanted to send an expert within five weeks to examine the books of Knapp, Stout & Co. Company, and the promise of the seller that if the examination of the books and assets by the expert should not determine his statements to be substantially correct, then the vendee to have the right to decline to proceed further in the matter, we cite a paragraph in the complaint which the respondent has apparently overlooked. In it the plaintiff makes such allegations as entitle him to prove full performance on the part of his assignors. It declares that plaintiff’s assignor “ performed all the obligations of the said contract on his part and was at all times able, ready and willing to carry out all the conditions thereof, and frequently offered to do so.”

The order sustaining the demurrer, and the interlocutory judgment entered thereon, should be reversed with costs; the demurrer overruled, and defendant allowed to answer within twenty days, on payment of costs.

Van Brunt, P.J., concurs.

O’Brien, J.

(dissenting)—I do not concur in the views or the result reached in this case. The action is brought to recover damages for breach of a contract set forth in the complaint, alleged to have been entered into between one Flanders, who was plaintiff’s assignor, and the defendant company. The agreement recites in substance that Flanders obtained .from two persons, on behalf of all the stockholders of the Knapp, Stout & Co. Company (which was a corporation engaged in the lumbering business), an option to purchase all the stock of said corporation, consisting of four thousand shares, which option was to continue until the 1st day of August, 1891. The right was reserved, in the event of the corporation being dissatisfied with the progress made in the negotiation for the sale of the stock upon the terms specified, to terminate such option.

Flanders was in no way bound by the agreement, nor is it alleged that he paid any considerátion for the -option, and if the-question here involved were as to the binding force and effect of such an agreement upon the Knapp, Stout & Co. Company, or the persons giving the option, I think that the claim that it was a nudum pactum should.be sustained; because such an agreement, being a mere offer or option, without any binding or legal effect upon either of the parties, can in no sense be regarded as a contract. Flanders himself did not agree to buy or procure any one else to buy, nor did he undertake or assume any obligations, but without, as it appears, having paid any consideration therefor, he secured an option, under which the parties with whom he was dealing stated that they would deliver to him the capital stock of the corporation provided he complied with certain conditions as to payment, etc., on or before a day specified.

In Story on Contracts (§ 495) it is said : “If by the terms of an offer, a certain time be prescribed within which it may be accepted by the other party, it must be accepted within that time. The rule of law is that the party making such an offer may retract it at any time previous to its acceptance by the other party, and the ground upon which the rule is said to rest is that the offer being merely gratuitous, there is no sufficient consideration to support it until it is accepted.” The same rule is variously stated in Bishop on Contracts, §§ 178-180; Metcalf on Contracts, 16; Pollock on Contracts, 23, and Am. & Eng. Encyc. of Law, vol. 21, p. 452.

In the so-called agreement between Flanders and the defendant company, this option is set forth and is made the basis of an agreement between them, by the terms of which Flanders agrees to sell and the defendant to buy the capital stock of the corporation upon which such option had been secured by Flanders.

No doubt, one not owning property may enter into a valid binding agreement to sell it to another, taking the risk of being a|>le to secure it before the date fixed for the delivery of the property, and if he should fail in his expectations in this regard he would be liable to respond to the purchaser in damages. On the other hand, if the purchaser, under an agreement to purchase, should neglect or refuse to comply with the conditions, it would give to the vendor a corresponding right of action for damages. These reciprocal rights, however, grow out of the fact that one agrees absolutely and without reservation to sell something, and the other to buy that something upon terms and conditions fixed between the parties ; and thus the mutual promises are sufficient consideration to support the contract in favor of either party. But where, as here, the basis of the.agreement between the purchaser and seller is an option with respect to the property to be sold, which is made a part of the agreement, and which distinctly sets forth the relation of the seller to the property, then, unless by the terms of the arrangement the seller is in a position and does in fact enter into an agreement to sell, there would be wanting a consideration sufficient to support the agreement of the purchaser.

An examination of the terms of the alleged agreement relied upon, shows that what the vendor was to give, and what the defendant as purchaser was to take, were the rights which the vendor had or held under the option secured from those claiming to represent the stockholders or the corporation itself. Assuming therefore that the former recitals, showing a compliance with the terms and conditions of the so-called agreement on Flanders’ part, and the neglect or refusal of the defendant to comply with the obligations on its part, are fully set forth, I think the question as to whether this was a binding agreement, ora mere nudum paclum, is to be tested by the determination whether or not it could be enforced against Inlanders in such a way that, if he did not deliver the property agreed to be sold, a corresponding action for damages would result to defendant. Such a test seems to me to be conclusive, because unless there were some reciprocal binding promises, or, in other words, unless Flanders on his part had agreed to sell something, the agreement on the part of the defendant to purchase would be without consideration to support it, and would not give to Flanders a resultant action for damages upon failrue of the defendant to comply with the terms of what, in the absence of a better word, may be called an arrangement between the parties.

The parties, in the written arrangement entered into between them, fully set forth what rights Flanders had under his agreement with the corporation whose option, as alleged, he held, and the defendant was thereby fully apprised of the fact that such option was not of binding force and effect against either the corporation, or the persons who, on its behalf or on behalf of the stockholders, had given it to Flanders, but that it was a mere offer or proposition that they would sell upon certain terms and within a specified time, and which, as already said, was revocable, because without any consideration to support it, and without any binding -obligation upon the part of Flanders to purchase. As this underlying arrangement between Flanders and the corporation or persons from whom he secured the option was not, in a strict sense, a contract which was enforcable, the defendant company, who had full knowledge by reason of the option being fully set forth, could not enforce any action for damages, even assuming that they had complied with all the conditions on their part, and Flanders had refused to complete, or if, by the acts of the corporation or the persons who gave him the option, he was unable to complete. I think, therefore, as this underlying agreement was a nudum-pactum, and was made the basis of the arrangement between Flanders and the defendant company, that it was not a consideration sufficient to support any obligation upon the part of the defendant to purchase, and that a breach by either party would not give to the other an action for damages.

I am of opinion, therefore, that upon this ground the demurrer should be sustained.

The other two contentions in support of the demurrer I do not regard as well taken.

The first based upon the fact that the agreement appears to be signed on behalf of the defendant company by a director, and that therefore it is not a binding agreement of the defendant, is correctly disposed of by the learned Judge below, in saying: “ This claim cannot be sustained because of the allegation in the complaint that the defendant made, executed and delivered the agreement. Under this allegation the plaintiff may prove on the trial that the said Balch was authorized by the defendant to sign its name, and that the agreement was in fact made, executed and delivered by the defendant."

I do not think, however, that the Judge was equally correct in his conclusion that the demurrer should be sustained upon the ground that, as the agreement provided, if the statements made by Flanders should be substantially incorrect that then it was to cease, determine and be of no effect; and inasmuch as he did not allege that such statements were substantially true and correct, he could not be allowed to prove them, and that proof that such statements were correct was a condition precedent which must be alleged to have been complied with before a cause of action in favor of Flanders would arise. In this the judge overlooked the fact that the contract provided the manner in which the verification of the statements was to be made. It was therein provided that the defendant was to employ an expert who was to verify the statements, and that the employment'of such expert was to be by and at the expense in the first instance of the defendant. As the gravamen of the action was that the defendant had not complied with the conditions of the agreement, and that Flanders had fully performed all the obligations of said contract on his part, it is an erroneous construction to hold that, where the agreement provides that the defendant was, through an expert employed by him, to verify such statements, it is a condition precedent to plaintjff’s cause of action to allege and show that the statements were substantially true and correct.

I think, therefore, that it was error to sustain the demurrer upon' this ground, as we regard it equally erroneous not to have sustained it upon the ground therein first considered, namely, that the agreement sued on is not a valid binding agreement for breach of which an action in faVor of plaintiff or his assignor was created.

In my opinion, therefore, the order and interlocutory judgment should be sustained, with costs.