author: Ingraham, J.:

text:
    John D. Elwell, as Assignee, etc., of The Duplex Street Railway Track Company, Respondent, v. Ronald T. McDonald and Another, Appellants.

      Pleading — action for damages for a breach of contract, where a rescission of the contract is alleged — when the complaint sets up but one cause of action.

    The complaint in an .action alleged the execution of a contract and that certain acts were done by the defendants which prevented a construction company, the plaintiff’s assignor, from fulfilling the contract, and asked judgment for the damages sustained in consequence of such breach on the part of the defendants; it was also alleged in the complaint that, in consequence of certain specified-breaches of the contract by the defendants, the contract became rescinded,but no distinct cause of action was based upon any rescission of the contract, or any acceptance by the plaintiff’s assignor of an option to rescind the contract given to it by the acts of the defendants, and no relief based upon such rescission was demanded.

      Held, that the complaint alleged but one cause of action, which was for a breach by the defendants of the contract, and was not demurrable.
    Appeal by the defendants, Ronald T. McDonald and another, from an interlocutory judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 7th day of November, 1894, upon the decision of the court rendered at the New York Special Term overruling the defendants’ demurrer to the complaint.
    The complaint in the action was in the following words :
    “ The plaintiff respectfully shows unto the court:
    “ 1. That the Duplex Street Railway Track Company, hereinafter called ‘ Duplex Company,’ was duly organized as a corporation under the laws of the State of West Yirginia, in the year 1891, for the purpose of manufacturing and selling street railway track material and in the building and construction of street railways, and also in the building of street railway track, and continued to be such a corporation from the date aforesaid to the time of its assignment to the plaintiff for the benefit of creditors on the 17th day of July, 1893, as hereinafter set forth.
    “ 2. That on or about the eighteenth day of August, 1892, the said Duplex Company and the said defendants entered into an agreement in writing at the city of Fort Wayne, in the State of Indiana, whereby the said Duplex Company agreed to furnish certain specified material to and to construct 'for said defendants at the city of New Orleans, in the State of Louisiana, a double and single track railroad in certain streets in and about the said city, and named in said contract, at and for certain prices also named therein, as will more fully appear by said contract, of which a copy is hereto annexed, marked Exhibit A, and which the plaintiff prays may be taken as a part of this complaint.
    “ That in the month of October following the execution of the contract aforesaid, and after the said Duplex Company had furnished and delivered to the said defendants at the said city of New Orleans, in accordance with said contract, a large quantity of said railroad material for the construction of said railroad, to wit, sufficient for seven miles of the track thereof, and had already constructed twenty-seven thousand and seven hundred (27,700) feet of the said railroad track, in accordance with the provisions of said contract, there was commenced and prosecuted an action by Newton Buckner and others, owners of real estate fronting upon or lying contiguous to Coliseum street in said city of New Orleans, between Louisiana avenue and Bace street, against the said defendant Judah Hart, in the Civil District Court for the parish of Orleans, in the State of Louisiana aforesaid, the said court having full jurisdiction of the subject-matter and of the parties thereto; in which the said defendant Judah Hart, his representatives, agents and assigns, were asked of said court to be wholly prohibited and enjoined from building any street railway on Coliseum street, between Louisiana avenue and Bace street in said city, upon the ground, among others, that the grant by the said city of New Orleans to said Judah Hart, for the building of said street railway in said city, was invalid and void; and such proceedings were thereafter had in such action that on or about the eighteenth day of November, 1892, the said defendants and the said Duplex Company, by the judgment of said court in said action, were wholly enjoined in the further prosecution of the work of building said railway tracks under the- said contract so made by and between the said Duplex Company and the said defendants as aforesaid, on Coliseum street, within the limits aforesaid, the said court at the same time adjudging that the entire grant by said city of New Orleans to said Judah Hart to build street railroads in said city, and upon which grant alone the said contract was based, was invalid and void.
    “ That the said enjoinment of work was wholly the fault of the said defendants, and was not, by reason of any acts, omission or default of the said' Duplex Company, save in the latter constructing said railroad according to the terms of said contract upon the streets therein named, and in all of which said streets the defendants claimed 1 to the said Duplex Company that they had the right to build the same, and in which they authorized the said Duplex Company to build the same as their servant. That the said court, in the action aforesaid, adjudged that the said defendants did not have said right or authority, and that the said Duplex Company, at the time of making the said contract, and until the decision and judgment of said court in said action, was wholly ignorant of their not possessing the same. That the said Duplex Company, by reason of the said judgment of the said court, and by the demand of the said defendants, was wholly stopped from the further continuance of their work of constructing said street railway, and that said stoppage and discontinuance of said work continued for the space of three months, to the damage of the said Duplex Company in the sum of ten thousand dollars ($10,000).

      “ S. And the said plaintiff further shows unto the court that after the decision and judgment of the court as aforesaid, the said defendants were permitted by the said city of New Orleans to build the said street railway tracks in part upon certain other streets in said city, but only in fractional portions thereof, and at different named times, in place of building the same continuously, as provided in said contract.
    “That the said Duplex Company, at the request of said defendants, continued the work of construction aforesaid in the said newly-designated streets and portions thereof, and in so doing were frequently stopped by said defendants to await the designation of the place to continue their work, and were obliged also to remove the material for said tracks, which had been distributed by it along the lines of the streets named in said contract, to the newly-designated locations, and also their tools and machinery for said work, to the cost and damage of the said Duplex Company of seven thousand dollars ($7,000).

      “ i. That during the continuance of said work on said newly-designated streets the said defendants at divers times, for the purpose of obtaining stoppages of the same, and thereby gain time for negotiating with the said city of New Orleans for changes in the route of said, street railway, and to obtain license from the said city to construct the same upon other streets than those named in said contract, made frivolous and unfounded complaints to the workmen of said Duplex Company as to the materials furnished by it for said street railway, and also as to said workmen’s construction work thereon. That said defendants thus wrongfully demanded of said workmen and induced them to stop their said work at divers times, to the damage of said Duplex Company of six thousand dollars ($6,000).
    “ 5. That the said defendants during said construction work failed to furnish the roadbed therefor, as they had agreed to do, whereby the work of said Duplex Company was greatly hindered and delayed; and, also, they so carelessly and incompletely performed said roadbed work that the said Duplex Company was obliged, in order to carry forward its superstructure thereon, to finish and complete the same, to the damage of the said Duplex Company of twelve thousand dollars ($12,000).
    “ 6. And the said plaintiff further shows unto the court that he is informed and believes that down to the date of complete stoppage of said construction work by the said Duplex Company, to wit, the date of its general assignment for the benefit of creditors to the plaintiff on the seventeenth day of July, 1893, the said defendants had not obtained permission or license from the said city of New Orleans or legal authority to construct said street railway upon the streets named in said contract, or upon a sufficient length of other streets in said city, to use the material provided and delivered by the said Duplex Company to said defendants under the contract aforesaid and required by the terms thereof, and that said Duplex Company was, therefore, unable to finish and complete said contract according to its terms by reason of the same. That in addition also to the breaches of said contract hereinbefore set forth the said defendants wholly failed and refused to make their payments to the said Duplex Company, according to the terms thereof, and failed to accept or pay the drafts drawn upon them by said Duplex Company for the price of said material, in compliance with the terms of said contract, and that they failed to pay, although the same was demanded, nineteen (19) cents per foot for the construction work of said street railway performed by said Duplex Company, as provided in said contract.

      “ That by reason of the said breaches of the said contract by the said defendants, the said contract at the time of the occurrence of each breach thereof became rescinded and the said defendants became immediately indebted and liable to pay to the said Duplex Company the value of all the materials thus furnished and delivered to them, and the value of all the construction work done for them by said Duplex Company, what said material and work were worth, and also became indebted and liable to pay said Duplex Company all damages and expenses which said delays, extra work and changes of route caused to the said Duplex Company.
    “ That the said Duplex Company, in accordance with the terms of said contract, had, prior to the first day of February, 1893, furnished and delivered to the said defendants at the said city of New Orleans, all of the said railroad materials, and the special work connected with the same stipulated for in said contract, and sufficient to build all of the street railway track provided for therein, and delivered the same along the streets of said city where said railroad was.to be built, so far as the said Duplex Company could learn and ascertain the routes thereof from said defendants, and subsequently thereto also furnished and delivered to said defendants, in place of certain cast iron chairs stipulated for in said contract, and at request of said defendants, steel chairs in place thereof, and that said Duplex Company has also, in accordance with the terms of said contract, built and constructed for said defendants on the streets designated by them in the said city -of New Orleans, seventy thousand (70,000) feet of said railroad track. That the value and worth of the said material thus furnished and delivered to the said defendants were the sum of $135,801.70, and that the value and worth of the said work thus performed by the said Duplex Company' in building said railway track for the said defendants, were the sum of $13,300, and that the sums thus named as the value of the materials and work aforesaid are the same also and do not exceed that so agreed to be paid by the said defendants therefor to the said Duplex Company. That the amount due to the said Duplex Company from said defendants, at the time of its assignment to the plaintiff for the said materials and work, as above mentioned, and now dne to the said plaintiff over and above all credits and payments thereon, is the sum of $65,259.25, and that the defendants neglect and refuse to pay the same.

      “ And the plaintiff further shows unto the pourt, that on the seventeenth day of July, 1893, the said Duplex Company, by its deed duly executed, and under its seal, assigned and transferred to the said plaintiff the -several claims and demands against the said defendants, heretofore set forth, for the benefit of its creditors.
    “ Wherefore, the said plaintiff demands judgment against the said defendants for the damages for breaches of contract and for the value of said work and materials, as above set forth, in the sum of one hundred thousand two hundred and fifty-nine and dollars ($100,259.25), with interest from the seventeenth day of July, 1893, besides the costs of this action.”

      George IF". Seligman, for the appellants.

      Eustace Gonwa/y, for the respondent.
    Present — Yan Brunt, P. J., O’Brien and Parker, JJ.
   Judgment affirmed on opinion of court below.

The opinion of the Special Term was as follows:

Ingraham, J.:

The objection to the complaint raised by this demurrer is that there are two causes of action alleged, one for a rescission of the contract and another for a breach thereof by the defendants. It is plain, however, that there is no cause of action for a rescission of the contract. The complaint alleges the execution of a contract and certain acts of the defendants which, it is claimed, prevented the plaintiff’s assignor (a construction company) from fulfilling the contract, and the plaintiff asks for a judgment for the damages sustained by reason of the breaches on the part of the defendants which prevented the plaintiff’s assignee from completing the contract. It is alleged-that in consequence of certain specified breaches of the contract by the defendants the contract became rescinded, but just what the pleader intended by this allegation is not apparent. Certainly no distinct cause of action is based upon any rescission of the contract by the company, or any acceptance by it of an option to rescind the contract given to it by the acts of the defendants. No relief based upon such rescission is demanded. The complaint alleges one cause-of action for a breach by the defendants of the contract. Several acts, each of which in itself would constitute a breach of the contract, are alleged; and the complaint also alleges the various items of damage that the company sustained in consequence of the breach by the defendants of their obligation under the contract, and a sum of money is demanded as damages sustained by the plaintiff in consequence of the defendants’ failure to comply with the contract on their part. The demurrer, therefore, must be overruled and judgment ordered for plaintiff, with costs, with leave to the defendants, to answer upon payment of costs.


source: Caselaw Access Project

author: Parker, J.:

license: Public Domain

text:
    Peter Flanagan, an Infant, by Schuyler C. Carlton, his Guardian ad Litem, Respondent, v. The New York, Lake Erie and Western Railroad Company, Appellant.

      Personal injuries — duty of am, employer to furnish a safe place for ids employees — expert evidence as to the operation of gates at railroad crossings inadmissible.

    The duty rests upon an employer to provide a reasonably safe place for his. employees to work in.
    In an action brought to recover damages arising from personal injuries resulting from the defendant’s alleged negligence in failing to provide a safe place for its employee to work in while engaged in operating gates on a railroad track at a street crossing, evidence of expert witnesses, as to whether they considered that the gates could be operated in a safe manner and with safety to the operator, is inadmissible in evidence as that is the question to be decided by the jury, and the plaintiff is not entitled to have it determined for them by experts. If such testimony be admitted in evidence against the objection and exception of the defendant, a judgment rendered in favor of the plaintiff will be reversed on appeal.
    To. make expert evidence proper, the subject under consideration must be one relating to science or skill or one of which observation and experience have given the opportunity and means of knowledge which exist in reason rather than in descriptive facts, and, therefore, cannot be. intelligently communicated to others not familiar with the subject, so as to possess them with a. full understanding of it.

      Appeal by the defendant, The New York, Lake Erie and Western Railroad Company, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 8th day of January, 1894, upon the verdict of a jury rendered after a trial at the New York Circuit, and also from an order entered in said clerk’s office on the 9th day of January, 1894, denying the defendant’s motion for a new trial.

      Frederick B. Jermi/ngs, for the appellant.

      Howard O. Wood and Frederick T. Hill, for the respondent.
   Parker, J.:

We think this judgment must be reversed, because the court received against the defendant’s objection and exception the opinions of alleged experts upon the leading issue to be determined by the jury, .in violation of the rule that to make such evidence proper the subject must be one of science or skill or one of which observation and experience have given the opportunity and means of knowledge which exist in reason rather than descriptive facts, and, therefore, cannot be intelligently communicated to others not familiar with the subject, so as to possess them with a full understanding of it.

Plaintiff entered the employment of the defendant on the 18th of December, 1890, to act in the capacity of gateman, at the Grove street crossing, Jersey City. Grove street is crossed by five tracks of the defendant running parallel with one another, and at right angles to Grove street. For the protection of the public at that crossing, gate poles, capable of being raised and lowered, were situated on either side of the crossing. They were raised or lowered by means of handles projecting from upright posts located between tracks Nos: 3 and 4. At these posts the plaintiff, as gateman, was stationed at the time of. the injury, which was about half-past four on the morning of December twenty-first, three days after his employment.

At that time he observed a milk train, of twenty or more cars, running at the rate of about twelve miles an hour, going west on track No. 3, and he commenced to lower the gates, turning the handle of the east post first and then the handle of the west one. The gates being lowered, he stood on one side of the posts, as he had been instructed to do, with bis left band on the handle of the left post and facing track No. 3.

This position he took as the milk train was about reaching him, and, according to his testimony, he remained in that position, neither turning nor stepping forward or backward, when suddenly, and before the milk train had passed, and without any previous warning, he felt a sudden blow on the back of his head, and he fell forward upon one of the rails of track No. 3 under the moving cars of the milk train, his left arm being crushed beneath the wheels, necessitating amputation. -At the time of the accident, an engine, without any cars attached, was going west on track No. 4, and, according to the testimony of the men on it, it was opposite the eighth car on the milk train, which was running somewhat faster than the engine. It is the claim of the plaintiff that he was struck by some part of the light engine, and the evidence is of such a character as to warrant the finding that such was the fact. He contends that the defendant failed to discharge its duty towards him, as an employee, in that it did not use reasonable care and prudence in providing a • safe place in which to do the work assigned him. The facts, other than those already referred to, offered for the purpose of establishing his contention, are that the entire space between tracks Nos, 3 and 4, where plaintiff was stationed at the post, was eight feet three and five-eighths inches, and the distance between the handles projecting from the posts and track No. 4, upon which the light engine ran, was three feet four and three-eighths inches, and the overlap of freight cars, on a standard gauge road, is from one foot nine inches to two feet, and of engines about the same.

The engine that struck him belonged to the heaviest class and had an overlap of two feet, thus leaving an average space of sixteen and three-eighths inches between plaintiff and the engine passing at his back. A witness, with considerable railroad experience, testified to the effect of rapidly-passing trains upon a person in close proximity and unaccustomed to the sensation. Another witness suggested that a gateman would be more secure if he should push himself between the posts after the gates had been lowered ; but there was some evidence that this only could be done when the handles happened to be hanging exactly right, which was not always the case.

Maps descriptive of tbe locus in quo and photographs were put in evidence, together with testimony, to the effect that it was entirely feasible to have provided a place for a gateman to raise and lower the gates entirely outside of the railroad tracks.

We have thus called attention to some of the leading facts bearing upon the question whether the defendant had omitted to discharge ■ the duty resting upon it of using proper care and caution in providing a reasonably safe place for the plaintiff to work. And we think the evidence was of such a character as to present a question for the jury.

But the jxlaintiff, after proving the facts, was not content to permit the jury, in accordance with the long-established rule, to determine from them whether or not the defendant had discharged the duty which it owed to the plaintiff, and he undertook to have that question determined for them by the opinions of experts. This was attempted to be done by means of hypothetical questions, which assumed the existence of the facts to which we have referred, and concluded, would you consider that these gates could be so operated in a safe manner and with safety to the operator ? ” This question was for the jury, and the plaintiff was not entitled to have it determined for them by experts. (Harley v. B. C. M. Co., 142 N. Y. 31; Schneider v. The Second Ave. R. R. Co., 133 id. 583 ; Roberts v. N. Y. E. R. R. Co., 128 id. 455 Van Wycklen v. City of Brooklyn, 118 id. 424.)

The ruling of the court in receiving the evidence, against the objection and exception of the defendant, constitutes error for which the judgment must be reversed.

Yan Brunt, P. J., and O’Brien, J., concurred.

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


author: Patterson, J.:

text:
    Mary L. M’Cready, as Executrix, etc., of Benjamin W. M’Cready, Deceased, Respondent, v. The Metropolitan Life Insurance Company, Appellant.

      Power of sale contained in a will — when it is immaterial that a trust created by the will is invalid.

    The intention of a testator in the creation of a power of sale contained in his will must, if possible, be ascertained, and when ascertained it controls the exercise of such power.
    A testator, by the second clause of his last will and testarhent, appointed his daughter Mary Louisa M’Cready executrix thereof, and further provided, “I give and grant unto her in her discretion full power and authority to mortgage, sell or otherwise dispose of any and all real estate of which I may die seized, either at public or private sale, and to give good and sufficient deed or deeds for the proper conveyance of the same. And I hereby direct that no bonds or securities shall be required of my said executrix.

      “‘Sixth. All the rest, residue and remainder of my property, whether real, personal or mixed, and wherever the same may be situated, I give, devise and bequeath to my said executrix, Mary Louisa M’Cready, in trust nevertheless for the following express purposes : To invest and keep invested the same in bond or bonds secured by mortgage upon improved real estate situated in the cities of New York or Brooklyn, or in bonds or other dividend-paying securities of the city, county or State of New York, or of the United States of America ; and to receive the rents, issues, income and profits thereon, and to apply the same to the following purposes, to wit: To divide such income into four equal parts and to pay over one of such parts to each of my daughters, namely, Mary Louisa M’Cready, Frances Jane Harris and Elizabeth Beck Sykes, except as the same may be diminished by the respective payments hereinafter provided for, and to divide the remaining one of said parts among the children of my deceased son, Thomas Lawrence M’Cready, equally share and share alike.”
    In an action brought by the executrix named in the will to compel the specific performance of a contract to purchase a portion of the real estate of the testator which passed under his will,

      Held, that the power contained in the second clause of the will was a complete power of disposition by the exercise of which the executrix and trustee therein named could, by deed, convey a good title, and that if she did not exercise that power the additional and implied power contained in the sixth clause of the will was to be exercised for the purpose of the constitution of the trust referred to in the said sixth clause ;
    That the sixth clause of the will operated as an equitable conversion of the realty into personalty for the purposes of the trust therein created and that an implied power of sale existed therein ;
    That the power contained in the second clause of the will was independent of the power in trust, and that it was immaterial whether the trust created by the sixth clause of the will was invalid or not.

      Appeal by tbe defendant, The Metropolitan Life Insurance Company, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 14th day of December, 1894, upon the decision of the court, rendered after a trial at the New York Special Term, adjudging a certain power of sale created by the second clause of the will of Benjamin W. M’Cready, deceased, to be a valid power of sale and directing the specific performance of a contract by the defendant.
    The plaintiff’s testator left a will, pursuant to the following provisions of which the plaintiff claimed -that she had to convey title in fee simple to certain premises referred to in the complaint in the action:
    “ I, Benjamin "W. M’Cready, physician, of the city, county and State of New York, do hereby make, publish and declare this as and for my last will and testament.

      “First. I hereby revoke, annul and declare void and of no effect each and every will, testament or codicil thereto by me at any time heretofore made,-published and declared.

      “Second. I make, constitute and appoint my daughter Mary Louisa M’Cready, of the city, county and State of New York, sole executrix of this my last will and testament, and I give and grant unto her in her discretion full power and authority to mortgage, sell or otherwise dispose of any and all real estate of which I may die seized, either at public or private sale, and to give good and sufficient deed or deeds for the proper conveyance of the same. And I hereby direct that no bonds or securities shall be required of my said ' executrix.
    “ Thi/rd. I direct that all my just debts and funeral expenses first be paid out of my estate.

      “Fourth. I give to my niece, Elizabeth Hills, of Harlem, New York, two thousand dollars.
    “ Fifth. I give all my household furniture, books, pictures, silver, bric-a-brac, ornaments, etc., to my said daughter Mary Louisa M’Cready, now residing with me. '

      “Sixth. All the rest, residue and remainder of my property whether real, personal or mixed, and wherever the same may be situated, I give, devise and bequeath to my said executrix, Mary Louisa M’Cready, in trust nevei’thless for the following express purposes: To invest and keep invested the same in bond or bonds secured by mortgage upon improved real estate situated in the cities of New York or Brooklyn, or in bonds or other dividend-paying securities of the city, county or State of New York, or of the United States of America; and to receive the rents, issues, income and profits thereon, and to apply the same to the following purposes, to wit: To divide such income into four equal parts and to pay over one of such parts to each of my daughters, namely, Mary Louisa M’Cready, Prances Jane Harris and Elizabeth Beck Sykes, except as the same may be diminished by the respective payments hereinafter provided for, and to divide the remaining one of said parts among the children of my deceased son, Thomas Lawrence M’Cready, equally share and share alike.
    “ Seventh. Upon the death of either of my said daughters to pay over the one-fourth part of the principal of my said residuary estate, except as her share may be reduced by the subsequent provisions of this will, to such person or persons as such deceased daughter may by last will or testament duly executed, nominate and appoint.
    “ Eighth. To pay over to each of the children of my deceased son, Thomas Lawrence M’Cready, as they shall severally arrive at the age of 21 years, the sum of two thousand dollars; and upon the arrival of the youngest survivor of said children at the age of 21 years, to distribute the residue of said remaining one-fourth part to such children of said Thomas Lawrence M’Cready as may then survive, share and share alike.
    “ Ninth. In case either of my said daughters should die without a will leaving children her surviving, then the principal sum of her said one-fourth part to be divided equally among the children of said deceased daughter.

      “ Tenth. I give to my daughter Elizabeth Beck Sykes the house in which she now lives at Scotch Plains, N. J., valuing it at $6,000.00 in fee simple absolute, to her and her heirs forever, such amount to be deducted from the one-fourth portion of' my estate set ajiart for her benefit under the terms of this my will as hereinbefore provided.
    “ Eleventh. I give to my daughter Mary Louisa M’Cready the sum of six thousand dollars to be deducted from the one-fourth portion of my estate set apart for her benefit as hereinbefore provided.

      “ -Twelfth. I give to my daughter Frances Jane Harris all advancements made and hereafter to be made by me; the same to be deducted from the one-fourth portion of my estate set apart for her benefit as hereinbefore provided.

      “ In witness whereof, I have hereunto set my hand and affixed my seal this 14th day of March, in the year one thousand eight hundred and ninety-two.
    “ BENJAMIN W. M’CREADY. [l. s.]
    “Witnesses: 3

      “ G-. Emily Reynolds,
    “T. J. McMahon,
    “ Herbert W. Taylor.”
    The action was brought to enforce the specific performance of a contract -for the sale of premises No. 43 East Twenty-third street, New York city.

      G. JT. Borne, Jr., for the appellant.

      M,Oready JSykes, for the respondent.
    Present —Yan Brunt, P. J., Follett and Parker, JJ.
   Judgment affirmed, with costs on opinion of Special Term.

The opinion of the Special Term was as follows :

Patterson, J.:

The question in this case relates to the sufficiency of the power of sale pursuant to which the plaintiff claims she can convey a title in fee simple to the premises referred to in the complaint. It is understood that both parties desire to complete the contract, specific performance of which is sought in this action; but the defendant questions the ability of the plaintiff to give a valid title. If this power, namely, that contained in the second clause of Dr. M’Cready’s will, is to be considered as a simple power in trust and one limited and restricted to the power of paying debts, legacies, or for distribution, it might be regarded as insufficient to authorize the conveyance tendered by the plaintiff, when the eighth clause of the will is taken into consideration, from which clause it may be successfully argued that the absolute power of alienation is suspended during four minorities, and hence that the power of sale, being in aid of a perpetuity, cannot be supported, and that a conveyance pursuant' to it would not clothe the purchaser of t the land with a valid title. But it would seem that this power is one of the character to be exercised when “ in ihe judgment of the donee the prudent or profitable management of the property required its exchange into some safer or more remunerative investment,” and it is one that could be exercised or omitted at the discretion of the donee; and it seems to me, taking the whole scope and purpose of the testator’s will into consideration, that it was the intent of the testator by the power contained in the second clause of the will to grant to the executrix and trustee a complete power of disposition of all the testator’s real estate in her discretion. If we examine critically this second clause of the will, we ascertain that the power of sale is associated with the widest latitude of management and control of the whole estate. ¥e find that it is a power created at the beginning of the instrument before any dispository provision is mentioned; that it stands separate from any other provisions of the will, and that it is not by necessary construction made inseparable from the trust which is created in the residuum of the estate. This clause confers not only a power -of sale, but in terms an “ authority to mortgage, sell or otherwise ■dispose of any and all real estate of which I may die seized, either ;at public or private sale, and to give good and sufficient deed or «deeds for the proper conveyance of the same.” There is no limit to this discretionary power; it may be exercised for any legitimate purpose satisfactory to the executrix; standing by itself it neither promotes nor otherwise affects the establishment of the trust, whether the land is converted into money or kept- in specie or a division is made or not. In the case of Benedict v. Webb (98 N. Y. 460) it was held that under the terms of the will the power could not be executed as a separate and independent provision, and that as it could be exercised only in furtherance of the establishment of a void trust, it could not be upheld. But that does not seem to me to be the effect of this power when we come to consider other provisions of the will. The intention of the testator in the creation of this power must be ascertained, and, of course, when ascertained, is to control; and I think it is clear, from other provisions of the will, that this was a general power of safe, embracing the widest power of disposition that could be granted to the discretion of an executor or trustee; for it is associated with an authority to mortgage, sell or otherwise dispose of the testator’s land. The words ■“ otherwise dispose of ” are somewhat vague; but they certainly have some meaning, and were employed with some intention. I have suggested that this power of sale, standing alone, has great significance as indicative of the testator’s intention, and a study of this will will further disclose that the testator meant it to be operative independently. Coming to the examination of the sixth clause, we ascertain precisely what the scheme of the testator was with respect to the creation of the trust which is claimed to be invalid. It is obvious that the testator’s intention was to grant another power with reference to the sale of the land for the purpose of constituting the alleged invalid trust, and that, therefore, he has conferred two powers of sale; and the fair inference is that the one, the first power, was a general power of disposition, by the exercise of which the executrix and trustee could by deed convey good title, and that if she did not exercise that power the additional and implied power contained in the sixth clause was to be exercised for the purpose of the constitution of -the trust referred to in the sixth clause. It will be observed that by the provisions of the will last referred to, the executrix is required to invest all the real estate, as well as other ^property of the testator, in certain specified securities qí a particular character. Of course that could not be done without disposing of the real estate, and this clause operates as an equitable 'conversion of the realty into personalty for the purposes of the trust, and an implied power of sale, therefore, exists. "Whether the purposes of the trust are valid or invalid does not affect the question of the intention of the testator in making this provision of his will; but the provision itself shows that there must have been in his mind a distinction between the two powers, and that he did not intend the first, a general power, to be cut down simply to the purposes of the creation of the trust. It seems to me, therefore, that this power "contained in the second clause is independent of the power in trust, and that it is unnecessary to consider the question of the invalidity of the trust; for if the trust is void the estate would pass to the heirs at law of the testator subject to the execution of the power contained in the second clause; and it may well be that this power was intended to facilitate a division of the testator’s estate irrespective of the trust if for any reason that trust could not be constituted lawfully. 1 think the power can be upheld, and that such construction should be given to it as would uphold it according to the intention of the testator; and if this construction is right, the defendant can acquire a good title by the conveyance tendered.


author: Patterson, J. :

text:
    John S. Lyle and Another, Appellants, v. Joseph J. Little and Others, Respondents.

      'Wall erected between two lots — interference therewith enjoined — cm ovw'hanging wall — title not at issue.

    Where a wall between two lots stands entirely on one of them, the adjoining lot owner will, in a proper case, be enjoined from interfering with such wall, but the owner of the lot on which such wall stands has no right to maintain an overhanging wall which prevents the adjacent owner from erecting a building with a perpendicular side wall upon his own lot. Whatever may have caused such defect in the wall, it will not be allowed to interfere with the rights of the adjacent lot owner.
    The title to the land on which a wall adjoining a division line between two lots is to be erected, cannot be determined in an action brought to restrain the owner of the lot on which such wall is to be erected from interfering with or removing any part of the wall built upon the adjoining lot.
    Appeal by the plaintiffs, John S. Lyle and another, from au order of the Supreme Court, made at the New York Special Term on the 14th day of June, 1894, and entered in the office of the clerk of the county of New York, restraining the defendants from removing or cutting a certain wall, in so far as said order excepts from its provisions a portion of such wall.
    This action was brought to restrain the defendants from interfering with or removing a wall alleged to be erected on the plaintiffs’ premises.

      Joseph JJUng, for the appellants.

      Alfred B. Thaeher, for the respondents.
    Present — Yan Brunt, P. J., O’Brien and Eollett, JJ.
   Order affirmed, with ten dollars costs and disbursements on opinion of Special Term.

The opinion of the Special Term was as follows:

Patterson, J. :

It is stated in the complaint in this action that the wall, interference with which on the part of the defendants is enjoined by the temporary injunction, stands altogether upon the plaintiffs’ land, and if such is the fact the injunction must be continued.

The question of title to the two inches of ground, which it is said the defendants intend to occupy by their wall, cannot be determined in this action. The answering affidavits state, however, that the defendants have no intention of building beyond their own line, but to prevent any further misunderstanding and dispute with reference to that subject, the injunction will be continued, to prevent any interferences with the plaintiffs’ wall as it now stands, except as hereinafter stated.

It is claimed on the part of the defendants that there is an encroachment of the plaintiffs’ wall, caused by its bulging or overreaching at various points the foundation, above the land of the defendants, and that such bulging prevents the erection of a wall on their land, which shall be perpendicular from the foundation to the top of the building. This condition of the wall seems to be established. The plaintiffs have no right by prescription or otherwise to maintain the overhanging wall, so as to prevent the defendants erecting their building with a true perpendicular side wall, or to compel a change in their plans to accord with the defect in the plaintiffs’ wall. To whatever cause this encroachment may be attributable, its existence cannot interfere with the defendants’ rights, and there is no sound reason suggested why they should be obstructed in the occupation of that space for their building which justly belongs to them. If by cutting in the wall, as the defendants propose to do, the plaintiffs’ building may be rendered insecure, it is for them to see that it is made safe, and the answering affidavits show that the defendants have not only expressed a willingness, but that they are ready to co-operate with the plaintiffs in any reasonable method of rendering the plaintiffs’ building safe, and for that purpose the plaintiffs would be permitted to enter upon the defendants’ land. It is somewhat indefinite from the papers at what part of the wall and to what extent this overhanging exists; this is a matter which should be determined by an accurate survey of the wall, so that a proper provision may be made as to the parts of the wall in respect to which the injunction is not to apply. It would seem appropriate that such a survey should be procured from an officer of the department of buildings of the city of New York.

The injunction will be modified in the manner suggested, and the order may be settled on two days’ notice.


author: O’Brien, J.:

text:
    William H. Starbuck, Respondent, v. The Housatonic Railroad Company, Appellant.

      President of a corporation — presumption as to his compensation, where he is also a stockholder or director thereof— questions properly submitted, to the ju/ry in an action therefor.

    A stockholder or director of a corp oration cannot sustain his claim for salary as president thereof unless such claim is founded on a contract entitling him to compensation, and the inference of the existence of a contract from services performed by request which arises between individuals does not exist between the president and his corporation when he. is a stockholder or a director thereof; on the contrary, the legal inference is that his services as president are to be rendered without compensation.
    On the trial of an action brought by the former president of a corporation to recover of it the amount of salary alleged to be due him, it is proper to submit to the jury for its determination the question whether it was the purpose of a certain resolution of the corporation to fix the salary of its president at a certain sum and whether the plaintiff understood that such resolution was so general as to fix the salary of any person who should happen to be president of such corporation at such sum, and, if so, whether he, in full belief that he would be entitled to the rate of compensation in such resolution specified, entered upon and performed the duties of president; and an affirmative answer to such questions will entitle the plaintiff to judgment.
    Appeal by the defendant, The Housatonic Railroad Company, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 15th day of June, 1894, upon the verdict of a jury rendered after a trial at the New York Circuit, and also from an order entered in said clerk’s office on the 18th day of June, 1894, denying the defendant’s motion for a new trial made upon the minutes.

      Wheeler JET. PecTcham and PEoffmcm, Miller, for the appellant.

      Pmicl McClure, for the respondent.
   O’Brien, J.:

The action was brought on a check given by the defendant to the plaintiff in part payment of his salary as president of the defendant railroad. The answer denies that defendant made or delivered such check, and alleges that at the time the check was drawn plaintiff was president of defendant and was about to resign; that he caused such check to be drawn without any authority of defendant’s board, and that at the time defendant was not indebted to plaintiff. The answer contains a counterclaim for $8,716.67, representing cash of defendant obtained by plaintiff, which, with the check, made up the total amount claimed by him for salary as president.

On the trial it was shown that the check in question was drawn by the plaintiff’s direction to pay him an amount, which he claimed defendant had agreed to pay, for salary as president of defendant from December, 1887, to June 15, 1892. Defendant claimed that it had not agreed to pay plaintiff any salary, and the question at issue was whether defendant had so agreed.

The plaintiff, being both a stockholder and a director in the company, could not sustain his claim as president unless he brought himself within the well-settled rule of law that such claim must be founded on a contract entitling him to compensation. (Mather v. E. M. Co., 118 N. Y. 632; Smith v. L. I. R. R. Co., 102 id. 193.) In the former case it is said : It is well settled that a director of a corporation is not entitled to compensation for services performed by him as such without the aid of a pre-existing provision expressly giving the right to it.” And in the latter case, wherein it appeared that the person suing had been appointed secretary of a railroad corporation in which he was not a director or stockholder, it was held that to entitle him to a reasonable compensation for his services it was not essential that a rate of compensation should be agreed upon, or that there should be an express agreement to pay a compensation; and in the course of the opinion the distinction between a person standing in this, position and one who, being a stockholder and director, performed services, is pointed out, it being therein said : “ The rule that directors or trustees cannot recover for services rendered for the corporation upon an implied promise is an application of the general rule applicable to trustees.” And in Kelsey v. Sargent (40 Hun, 156) we find a quotation from Pierce on Railroads, which says: The directors are presumed to perform the duties of' their trust gratuitously; they are not entitled to compensation even for services outside of the ordinary duties of their offices, unless it is expressly stipulated before the services are rendered; but an express contract by the board to pay a fixed or reasonable sum is binding. Some authorities require a vote or resolution as evidence of the agreement, while others do not require such formal action as essential where there is an actual employment. A subsequent vote of the board to pay a director for his services where there was no previous agreement is not binding. The expectation of a director. that he was to receive compensation, there being no previous vote or promise, does not entitle him to it. The rule which excludes compensation applies to the president chosen by the directors from their own number, and also to a treasurer when a director, but not to officers and agents not being directors, who are entitled to recover on a quamtum meruit where no price is fixed.” (See, also, Barril v. Calendar W. P. Co., 50 Hun, 258 ; Gill v. N. Y. Cab Co., 48 id. 524.)

These authorities sustain appellant’s position, that a president of a corporation, if a stockholder or director, can make good his claim for salary only by showing a contract therefor. Inferences of a contract from services performed by request which obtained between individuals are not allowed between a president and his corporation. On the contrary, the legal inference from these facts is, that services as president are to be rendered without compensation.

At the close of the case the defendant moved for a dismissal of the complaint or a direction of a verdict in its favor, on the ground that there was no evidence that the plaintiff had any contract or agreement with the defendant for the payment of a salary. If upon an examination of the evidence this claim is supported, that there was no proof of an agreement sufficient to present it as a question for the jury, then either of defendant’s motions should have been granted.

The testimony shows that prior to 1869 it had been the rule of the company to pass a resolution annually with regard to salary, either naming the president who was to receive the same, or expressly limiting the effect of the resolution to the year ensuing its passage ; but in 1869, subsequent to an election, a resolution was entered upon the books of the defendant, as follows: “ Resolved, that the salary of the president be fixed at the sum of $3,000 per annum.” In 1870 the amount having been increased, a new resolution was necessary, which is recorded on the minute book as follows: “ Yoted, that the salary of the president shall be $5,000 per annum.” Plaintiff’s immediate predecessor in the office of president of defendant was a Mr. W. IT. Barnum, who was elected in February, 1872, and remained in office for fifteen years. Some months after the election of Mr. Barnum, and in the month of September, 1872, the board of directors passed a resolution in the following terms: “Yoted, to the president a salary of $5,000 a year.” And it was shown that, without any other action of the board, for nearly fifteen years thereafter, Mr. Barnum received a salary as president of the road in accordance with that resolution.

It will be noticed that this resolution is general in terms; that it does not mention the name of Mr. Barnum, nor is it limited to the particular year, having been passed some months after Mr. Bamum was elected ; but it votes a salary to the president, and the inference, therefore, is that during the period that Mr. Barnum was president both he and the defendant regarded the action thus taken in 1872 as a standing or continuing resolution, because under it and pursuant to its terms Mr. Bamum received the salary. It is not claimed that upon plaintiff’s accession to office this resolution was in any manner modified or rescinded, and it was, therefore, competent evidence upon the question of defendant’s attitude relative to the matter of salary. Standing alone, however, it would not make an agreement; and while assuming it to be some evidence expressive of the intention of the company to pay its president a salary of $5,000, we must go one step further .and determine the plaintiff’s position in respect thereto.

It is not claimed that the plaintiff in any way waived his right-to compensation, his testimony being, to use his own language: “ I knew the salary was $5,000 a year. * * * I did not know of any action of the board of directors after I was elected president upon the subject of salary; I never supp'osed it to be requisite. * * * I have examined the book of minutes of the -defendant company many times. The first time I examined the book was shortly after I was elected president. I looked to see ' what the book of minutes said as to the salary of the president. * * * At the time I was elected there was no resolution passed uj>on the subject; I did not think it was necessary. * * * When I became president I was aware of the existence of a. resolution in the minutes of the board fixing the salary at $5,000. When I became president I may not have known of it —■ of the existence of that resolution that day — but I knew that the president had received $5,000 for nearly a year, for I had seen his check. I knew that the president had received that salary always, or for a. great many years, and that president was William II. Barnum.”

This testimony tended to prove that the plaintiff entered upon the discharge of his duties with knowlege of the resolution and with the expectation that he was to receive the salary; and considering it. in connection with the peculiar phraseology of the resolution and the conduct of the parties, including a discharge of the duties of the office of president, it presented for the jury these questions:

1. Was it the purpose of the resolution to fix the salary of the-president, whoever he might be, at $5,000 a year ?

2. Did the jilaintiff understand that the resolution was so general as to fix the salary of any person who should happen to be president at $5,000 ? If so, did he with such understanding, and in full belief that he would be entitled to that rate of compensation, enter upon and perform the duties of president ?

An affirmative answer to both questions would of course entitle the-plaintiff to judgment. It was not, therefore, error for the court to submit the case to the jury.

The only exception taken to the manner of submission was to this-portion of the charge : “ The language of the resolution, therefore,, is broad enough to cover the fixing of the salary of the president of' this corporation at $5,000 a year.” It is insisted that by so charging, the court conveyed to' the jury the impression that under such resolution the plaintiff was entitled to a salary if the evidence showed that-he, and he alone, thought that such salary was due to him thereunder, thus ignoring the company’s understanding in passing such resolution.

If the charge were otherwise silent upon this question we should regard the criticism as meritorious. But as it abounds in statements, to the effect that the plaintiff could not recover under»the resolution alone, it must be said that the portion of the charge excepted to was properly qualified. It was, indeed, but a step taken in the ordinary presentation of the issue. The jury had to be advised that if the corporation intended to fix the' salary of the president, whoever he might be, at $5,000, the resolution was broad enough to accomplish that purpose; and, considered in connection with the rest of the charge, the language excepted to meant that and nothing more.

The appellant insists that it was error to receive the check sued upon in evidence, the claim being that when the objection was made the evidence showed that it was not legally issued and that its delivery was the culmination of a conspiracy between plaintiff and the vice-president to take this money from the treasury of the company; and further, that a by-law of the company provided that “ the treasurer shall have charge of the finances of the company, subject to the direction of the board of directors; ” and further, that the voucher for the check did not conform to the requirements of the by-laws.

The by-law relating to the duties of the treasurer has regard to the custody of the funds and, as clearly appears, has no relation to the manner in which checks shall be issued by the corporation. The criticism upon the voucher we assume to be that it is not signed by the officer whose duty it was to examine it and ascertain whether it was correct, and that it was not approved for payment by the vice-president. It must be remembered, however, that it was presented by the president of the company to the vice-president and general manager, whose duty it was to approve of the payment, and it was examined and registered by the auditor. But apart from this, if the check was issued by the proper officers for a valid indebtedness, we do not think that upon the question of liability the voucher would have any important bearing. The check was signed and countersigned by the proper officers, and the authority for issuing it was, not only the examination made by the auditor, but the request of the vice-president, who, together with the president, had authority to issue checks of the defendant company.

The final objection, that its delivery was the culmination of a conspiracy between the plaintiff and the vice-president to take the money from the treasury, necessarily relates to the merits of the controversy. If it were an indebtedness of the company to the plaintiff, for which he was entitled to receive the check, then this criticism would be untenable. If, on the other hand, the plaintiff had no right to the money represented by the check, or to the other moneys taken from the treasury, then the criticism would be justified. The way in which the payment was sought to be enforced, just at the time when the plaintiff was about to resign and was turning over the company to new directors, the payment to Stephenson of the cash obtained upon the check, and the failure immediately to apprise the directors of the action taken in the assertion of his claim to salary, justly subjected the plaintiff’s acts to criticism and suspicion. They were, however, fully gone over in the testimony and in the charge, and were proper considerations for the jury; but upon this appeal we have refrained from dilating at any length upon them, for the reason that we think the merits of the appeal must depend upon the solution of the ci’ucial question which was presented upon defendant’s motion to dismiss the complaint or direct a verdict in its favor for want of evidence. This we have examined with care and in the light of the able argument made to support appellant’s contention, and have concluded that it is not well founded.

If the evidence was sufficient to sustain the verdict in favor of the existence of a contract, thus upholding the plaintiff’s rights to the moneys which he took, together with the amount represented by the check, the manner in which he secured the money, or the use that he made of it, have no direct bearing upon his right thereto; and for this reason we do not feel that it is necessary to comment on testimony which has no direct bearing upon the legal questions presented on this appeal.

The judgment and order, therefore, should be affirmed, with costs.

Yan Brunt, P. J., and Parker, J., concurred.

Judgment and order affirmed, with costs.


author: Per Curiam:

text:
    Mayer Kahn, Appellant, v. Henry C. Schmidt and Another, Respondents.

      Equity actions — costs therein are discretionary — must he awa/rded or they are not taxable — extra allowance, only granted when costs are given.

    In an action in equity the granting of costs is within the discretion of the court, and where costs are not awarded to the prevailing party hy the decision of the court, the entry of a judgment hy the clerk awarding costs to him, is, in such respect, erroneous.
    If the trial court in an equity action does not award costs, a different justice sitting at Special Term cannot grant an extra allowance in the suit, nor can an extra allowance he granted in an action unless the party asking for it is entitled to costs, either hy virtue of the statute or by the decision of the court.
    Appeal by the plaintiff, Mayer Kahn, from a judgment of the Supreme Court in favor of the defendants, entered in the office of the clerk of the county of New York on the 10th day of August, 1894, upon the decision of the court, rendered after a trial at the New York Special Term, dismissing the plaintiff’s complaint upon the merits and for costs, and also from an order of the Supreme Court, made at the New York Special Term and entered in said clerk’s office on the 6th day of August, 1894, granting the defendants’ motion for an extra allowance in addition to costs.

      Joseph Klvug, for the appellant.

      Edward J. Krug, Jr., and Louis Oohen, for the respondents.
   Per Curiam:

The suit was in equity, and whether costs should be granted was, therefore, committed to the discretion of the trial court. Costs were not awarded to the prevailing party by the decision, and the entry of a judgment by the clerk awarding costs was in such respect erroneous. The court had not settled the judgment to be entered, and the clerk was wholly without authority to perform that duty for it. As the trial court did not award costs, a different justice sitting at Special Term could not grant an extra allowance, for there can be no extra allowance, unless the party asking for it is entitled to costs either by virtue of statute or the decision of the court.

Had there been a legal basis for the granting of an extra allowance, we think the motion should have been denied. The evidence relating to the merits of the controversy was not of such a character as to support the relief asked for in the complaint; it should, however, have the effect of persuading the court that in this suit, if ever, costs should be denied the prevailing party.

The judgment should be modified by striking out the provision awarding costs; the order granting the extra allowance should be reversed, with ten dollars costs and printing disbursements, and the motion denied, with ten dollars costs.

Present — -Yan Brunt, P. J., Follett and Parker, JJ.

Judgment modified by striking out the provision awarding costs, and order granting extra állowance reversed, with ten dollars costs and disbursements, and motion denied, with ten dollars costs.


author: Van Brunt, P. J.:

text:
    Adolph Friedman, Respondent, v. Jacob Rose and Others, Appellants.

      Bill of sale and chattel mortgage executed' together — a bill of sale void as to creditors is not necessarily fraudulent — objection that the mortgagor has the right to sell and retain the proceeds of the property, first raised on appeal.

    Where the owner of personal property executed, at the same time to the same person, a chattel mortgage thereon and a bill of sale thereof, and the bill of sale is tainted with actual fraud, both the bill of sale and the mortgage, having been executed together, must fall.
    A bill of sale is absolutely void against the creditors of the vendor where there is no change in the possession of the property described therein, and where it is taken as additional security to a chattel mortgage upon the same property and is not filed. The fact, however, that the bill of sale is void under the statute as to the creditors of the vendor, does not make it fraudulent, so as to taint ■with fraud other acts done in connection therewith.
    Non-compliance with a statute may make an act void, but does not make it fraudulent.
    Upon an appeal from a judgment, recovered in an action wherein the title to personal property was involved, it is too late to raise the objection for the first time on the appeal that a chattel mortgage upon such property was void, because it covered the stock in trade in actual use in the store of the mortgagor, of which the mortgagor was allowed to sell and retain the proceeds resulting from sales.

      Appeal by the 'defendants, Jacob Rose and others, from a judgment of the Supreme Court in favor of the plaintiff, dated the 1st day of May, 1893, and entered in the office of the clerk of the county of New York upon the verdict of a jury, rendered after a trial at the New York Circuit, adjudging that the plaintiff recover the possession of certain personal property, and also from an order made at the New York Special Term on the 27th day of April, 1893, and entered in said clerk’s office, denying the defendants’ motion for a new trial.

      John Fennel, for the appellants.

      P. P. Fays and Samuel Greenbcmm, for the respondent.
   Van Brunt, P. J.:

This action was brought to recover certain chattels specified in the comjdaint, by the plaintiff, as owner thereof, against the sheriff of New York; and the present defendants, the sheriff’s indemnitors, were, by an order of the court, substituted as defendants in the place of the sheriff. The answer denied all the allegations of the complaint, and set up as an affirmative defense that the property was attached by the sheriff under a warrant of attachment against the property of one John Haut, who was the owner thereof or had an interest' therein liable to attachment; and that the title of'the plaintiff was fraudulent and the transfer to him made for the purpose of cheating and defrauding the creditors of John Haut.

Hpon the trial it appeared that the plaintiff was an auctioneer and the cousin of said John Haut, who was engaged in the cigar business in this city up to and after April 16, 1891; and that on the 16th of April, 1891, and for some time prior thereto, Haut was indebted to Jacob Rose in the sum of $439.18 for merchandise sold. On the 22d of April, 1891, Rose brought suit against Haut to recover that sum and procured a warrant of attachment against the latter’s property, which was levied on April twenty-third. Judgment was subsequently entered in the attachment suit by default. On the 6th of June, 1891, an execution thereon was issued to the sheriff, who returned it wholly unsatisfied, and the creditor’s claim now remains unpaid.

On the 16th of April, 1891, Haut, being indebted to the plaintiff, gave a chattel mortgage upon all his stock, fixtures and other goods and chattels then in the store where he had been conducting business, to secure the payment of said indebtedness on demand. Upon the same day he gave to the plaintiff a bill of sale, absolute in its terms, covering the stock and fixtures in said cigar store, both instruments covering the same property. The chattel mortgage was filed in the register’s office on the day it was given, but the bill of sale was not filed.

It is claimed upon the part of the defendants that the bill of sale was made to cheat Idaut’s creditors, and that the same was confessed by the plaintiff. This claim is based upon the evidence of the plaintiff that he took the bill of sale for further security, so that if a creditor or somebody should attack the chattel mortgage, he would have the bill of sale to show that he,was the owner of the goods. And the plaintiff’s attorney who drew the paper also testified that he thought it would obviate any question if he, the plaintiff, got a bill of sale of all the stock there was in the place.; and further, that he supposed the idea was that if there was any question about the stock being covered, he wanted to be sure of the stock, because he considered the stock liad value and he wanted to make sure he would get the stock. On the twenty-third of April the mortgage was foreclosed, the marshal assuming to act only under the chattel mortgage.

There was no evidence tending to show that there was any change of possession after the making of the bill of sale and chattel mortgage.

It is now claimed that the bill of sale was void because there was no immediate change of possession; and that the chattel mortgage was also void inasmuch as it covered the stock in trade in actual use in the store. If, as is claimed upon the part of the defendants, the bill of sale was tainted with actual fraud, then the bill of sale and mortgage having been executed together, both must fall. But the evidence in the case does not necessarily support the claim that this bill of sale was fraudulent in its nature. This question was submitted to the jury and they have found against the defendants upon this issue; and we see no reason to disturb the conclusion of the jury in that regard. It is undoubtedly true that the bill of sale was .absolutely void as against the creditors, because there was no change of possession, and it was taken as additional security to the chattel mortgage and it was not filed. But being void under the statute does not make it fraudulent so as to taint other acts done in connection therewith. Non-compliance with a statute may make an act void, but does not make it fraudulent. Therefore, when the jury found that these papers were taken in good faith, the plaintiff had a right to rely upon the title which he had acquired by means of the mortgage which it is conceded was filed and complied with the law.

This, however, does not dispose of the objection which is now urged upon us, that the chattel mortgage was void because it covered the stock in trade in actual use in the store, from which the mortgagor was allowed to' sell and put money in his pocket. If any such question had been raised upon the trial it probably would have been an exceedingly serious one. But we have examined this record in vain for any such point raised below. The defendants moved to dismiss the complaint upon the ground that the giving of the bill of sale and the chattel mortgage were part and parcel of the same transaction; and that the bill of sale, absolute on its face, was not an absolute sale, but a mere further security, and, therefore, fraudulent and void in law as to creditors then existing (which was not a good proposition of law), and that if the transaction was fraudulent as to the bill of sale the entire transaction was fraudulent, and nO' part of it can stand. We have already seen that this point was not well taken.

The defendant moved to dismiss upon the further ground that the bill of sale and mortgage were void because the plaintiff did not take possession of the property, and that there was no continuous change of possession such as the statute required. But no suggestion whatever was made that the mortgage covered stock in trade which was in actual use, and was, therefore, void. It is too late to raise this point upon appeal.

We see no reason, therefore, for interfering with the judgment, and such judgment and the order appealed from should be affirmed, with costs.

Follett and Parker, JJ., concurred.

Judgment and order affirmed, with costs.


author: Follbtt, J.:

text:
    Thomas F. Mason, as Receiver of The Widows and Orphans' Benefit Life Insurance Company, Respondent, v. Lydia Delphine Henry and Another, Executors, etc., of John F. Henry, Deceased, Appellants.

      Receive?' of a?i insolvent corporation — his legal and his equitable ?'emedy against its directors who have wasted its assets— by what Statute of Limitations bari'ed.

    A receiver of an insolvent corporation may maintain a legal action against the directors or trustees of the corporation to recover damages resulting from their wasting its assets.

      It seems, that a shareholder of an insolvent corporation has not concurrent remedies at law and in equity against the directors of the corporation for mismanaging their trust; that his remedy must besought in a court of equity, and that the ten years’ Statute of Limitation applies.
    An action brought by the receiver of an insolvent corporation against one of its trustees for the recovery of damages for alleged misconduct in office (unless it is found by the court that the defendant’s misconduct was not discovered until within six years before the commencement of the action) falls within, the six years’ Statute of Limitations, and where the cause of action accrued inNovember, 1871, and the action was commenced in April, 1879, the action is barred.
    ¡Such action is not excepted from the Statute of Limitations by section 3 of title 4 of chapter 18 of part 1 of the Revised Statutes.
    Appeal by the defendants, Lydia Delphine Henry and another, executors, etc., of John F. Henry, deceased, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 10th day of April, 1894, upon the decision of the court rendered after a trial at the New York Special Term.
    This action was begun in April, 1819, against John F. Henry and others, trustees of the Widows and Orphans’ Benefit Life Insurance Company, to recover the value of assets belonging to the corporation and alleged to have been wasted by the trustees. This company was incorporated in 1864, and the Mutual Protection Assurance Society was incorporated in 1868, both pursuant to chapter 463, Laws of 1853, an act entitled “An act to provide for the incorporation of life and health insurance companies, and in relation to agencies of such companies.”
    The first-mentioned corporation had a capital of $200,000, divided into shares of $100 each, and the last-mentioned corporation had a capital of $100,000, divided into shares of $25 each.
    October 19, 1871, defendants’ testator became a trustee of the Widows and Orphans’ Benefit Life Insurance Oompany, being at that time one of the trustees of the Mutual Protection Assurance Society. November 10, 1871, the last-mentioned corporation was insolvent, and between that date and June 18, 1872, pursuant to a plan of the trustees of the two corporations, the assets of the Widows and Orphans’ Benefit Life Insurance Oompany, of the value of $1,487,714, were transferred to the Mutual Protection Assurance Society.
    February 13, 1872, the name of the Mutual Protection Life Assurance Society was changed, by chapter 36 of the laws of that year, to the “ Beserve Mutual Life Insurance Company.”
    On the 18th of June, 1872, the Widows and Orphans’ Benefit Life Insurance Company ceased to do business. March 8, 1877, the Widows and Orphans’ Benefit Life Insurance Company having ’ become insolvent, Henry B. Pierson was duly appointed its receiver, and he having died January 1, 1890, Thomas F. Mason was, February 28, 1890, duly appointed receiver of said corporation and also of the Beserve Mutual Life Insurance Company, which was also insolvent.
    May 25, 1893, John F. Henry died, leaving a last will and testament, which was probated, and letters testamentary were issued thereon to the defendants.
    July 6, 1893, an order was entered permitting the plaintiff to sever the action and to revive and continue it against the executors of John F. Henry, after which a supplemental summons and pleadings were served. Hpon the trial the sum of $189,123.04, with interest from March 8, 1877, was found to be due to the policyholders and creditors of the Widows and Orphans’ Benefit Life Insurance Oompany. The court also made the following findings:
    “ Thirty-second. Subsequent to October 19, 1871, the said defendants’ intestate and his associates, being and acting as trustees of the Widows and Orphans’ Benefit Life Insurance Oompany, wasted, diverted and misapplied, and suffered to be wasted, diverted and misapplied, the moneys, assets, property and effects of said Widows and Orphans’ Benefit Life Insurance Oompany, to the damage and injury of the policyholders and creditors of that com pany, in the sum of upwards of $275,000.”

      “ Thirty-sixth. The misappropriation of funds and the acts which constitute the cause of action herein occurred in November, 1871.” ; “ Thirty-seventh. This action was instituted in April, 1879.”
    “ Thirty-nimth. The cause of action herein existed to same extent that it existed at beginning of this action against said Henry in 1878, and at all times previous thereto and after 1873.”
    A judgment was ordered for the amount due the policyholders and creditors of the Widows and Orphans’ Benefit Life Insurance Company, with interest from March 8, 1877. From this judgment the defendants appeal.

      Thorndike Saunders, for the appellants.

      William O. Trull and Bayyhael J. Moses, for the respondent.
   Follbtt, J.:

The defendants insist that the plaintiff had concurrent remedies at law and in equity, the legal remedy being as effectual as the one in equity; and, therefore, the cause of action was barred six years after it accrued. If the premise of this proposition is sound, the conclusion follows (Butler v. Johnson, 111 N. Y. 204), unless the case is within some statutory excej>tion. This action was begun in April, 1879, the precise date not appearing. The court found that the assets were misappropriated and the acts constituting the cause of action performed in November, 1871. Chapter 4 of the Code of Civil Procedure, entitled Limitation of the time of enforcing a civil remedy;” did not take effect until September 1,1877 (Code Civ. Proc. § 3356), and by subdivision 3 of section 414 of that Code the Statute of Limitations therein prescribed is not applicable to causes of action existing September 1, 1877, upon which suits were begun before September 1, 1879. As before stated, this cause of action accrued before September 1, 1877, and this action was begun before September 1, 1879, and so the limitations prescribed by the old Code are applicable to this action. (Viets v. The Union National Bank, 101 N. Y. 563 ; Clark v. Lake Shore & Michigan Southern Ry. Co., 94 id. 217; Goillotel v. Mayor of New York, 87 id. 441.) Sections 91 and 97 of the old Code provided :

“ § 91. Within six years :

“ 1. An action upon a contract, obligation or liability, express or implied, excepting those mentioned in section 90 * * *

6. An action for relief on the ground of fraud in cases which heretofore were solely cognizable by the Court of Chancery, the cause of action in such case not to be deemed to have accrued until the discovery of the aggrieved party of the facts constituting the fraud.”

§ 97. An action for relief, not hereinbefore provided for, must be commenced within ten years after the cause of action shall have accrued.”

By the fifth subdivision of section 382 of the Code of Civil Procedure the provisions of subdivision 6 of section 91 of the old Code are changed. Under the present Code the judgment sought must be other than for a sum of money,” which provision was not in the old Code.

It must be borne in mind that this is not an action by a shareholder, or by a creditor of the insolvent corporation, but is an action brought by its receiver.

Hun v. Cary (59 How. 426; affd., 82 N. Y. 65) was an action at law, brought by a receiver of an insolvent savings bank against its trustees, to recover damages for wasting its assets, in which it was distinctly held by the Court of Appeals that an action at law could be maintained by a receiver; or, in other words, tljat he had a legal remedy.

O'Brien v. Fitzgerald (61 N. Y. St. Repr. 472; rev., 143 N. Y. 377) was an action at law, brought by a receiver of an insolvent State bank against its directors, to recover damages for wasting its assets, and it was again held that an action at law could be maintained. In discussing the question it was said: “ In support of that idea the case of Brinckerhoff v. Bostwick (105 N. Y. 567) is pressed upon our attention as indicating that the present action must be regarded as of an equitable character. But there is a wide and vital difference between the two cases. In this the action is by the corporation against its delinquent directors; in the other it was by a stockholder, who could not sue at law, but was compelled to go into equity to obtain his relief, and whose right of action was wholly and purely of an equitable character.

“ It may be, nevertheless, that a corporation may sue its directors in equity to recover losses sustained, for there seem to be some cases in which the remedy has been allowed. Granting that, and granting also what I am not now ready to admit as the law of this State, that the facts pleaded in the present case are sufficient to support the action as an equitable one, we are left by the pleader in a doubt, which can only be solved by recurring to the demand for relief.”

This is the last expression of the Court of Appeals on this question, and it holds that a receiver may maintain a legal action againstk the directors or trustees of an insolvent corporation for wasting its assets. The case at bar was decided at Special Term upon the supposed authority of Brinckerhoff v. Bostwick (88 N. Y. 52; 99 id. 185; 105 id. 567). That was an action in equity, brought by a shareholder of an insolvent National bank (which was in the hands of a receiver appointed by the Comptroller of the Currency), in behalf of himself and the other shareholders, against the directors, to compel them to account for damages sustained by the bank because of their misconduct. The receiver and the corporation were joined with the directors as defendants. On the three occasions when this case wras before the Court of Appeals it was held that a shareholder could maintain an action in equity. On the second review of this case by the Court of Appeals it was said :

What limitation of time then was applicable to this action ? We think the limitation is regulated by chapter 4 of the Code of Civil Procedure. Section 414 provides that the provisions of that chapter shall apply and constitute the only rule of limitation applicable to a civil action or special proceeding, except as mentioned in that section, and this action does not come within any of the exceptions. It does not come within subdivision 3 of that section, because it was not commenced within two years after the Code took effect.

“We think the limitation applicable to this action is ten years, that which is prescribed by section 388 of the Code. This is unquestionably an equitable action, and the plaintiffs stand in the place of the receiver, and if he had prosecuted the action he would have stood in the place of the bank, and had the same rights which it would have had if plaintiff. So this action, for the purpose of determining the limitation of time applicable to it, must be governed by the same law which would have been applicable if the action had been brought by the bank. The action is against the directors as trustees to call them to account for the manner in which they discharged their trust, and is one of which courts of equity always have jurisdiction. (Angell & Ames on Corp. §§. 312, 314 ; Robinson v. Smith, 3 Paige, 222; Heath v. Erie R. Co., 8 Blatchf. C. C. 347; Brinckerhoff v. Bostwick, 88 N. Y. 52.) In the latter case Rapallo, <L, said: £ The liability of the directors of corporations for violations of their duty or breaches of the trust committed to them, and the jurisdiction of courts of equity to afford redress to the corporation, and in proper cases to its shareholders, for such wrongs exist independently of any statute.’ There is no doubt, therefore, that as to the original plaintiff in this action the proof of violations of duty and breaches of trust by the defendants could range through ten years prior to the commencement of the action.”

This in effect seems to hold that a shareholder has not concurrent remedies at law and in equity against the directors of a corporation for mismanaging their trust, but that his remedy must be sought in a court of equity. The holding that the ten years’ Statute of Limitations was applicable, was, in effect, a holding that there is no legal remedy. (Butler v. Johnson, supra)

In O’Brien v. Fitzgerald (supra) Brinckerhoff v. Bostwick is discussed, and it is there said that a shareholder cannot sue at law, but must seek his remedy in equity.

In Brinckerhoff v. Bostwick (99 N. Y. 185) the judgment reported in 34 Hun, 352, was reversed, and a new trial granted. Afterwards the case was noticed by the defendant for trial at a Circuit, and placed on the calendar, whereupon the plaintiff moved at Special Term that it be stricken from the calendar and tried as a suit in equity, which motion was granted. On an appeal from this order it was reversed at General Term (43 Hun, 458), but on an appeal to the Court of Appeals the order of the General Term was reversed, the court reiterating its former decisions that the action was an equitable one. (105 N. Y. 567.) This case is not in point, and does not sustain the judgment of the Special Term.

It is not alleged in the complaint that it is necessary to set aside conveyances for the purpose of reaching assets, and, indeed, the action is not for the purpose of reaching specific assets wrongfully disposed of by the defendants’ testator, but for the recovery of damages, nor is it found by the court that the defendants’ testator’s misconduct was not discovered until wdthin six years before the com-men cement of the action. We see no reason why the plaintiff’s legal remedy was not as effectual as the one in equity, and so, whether the case be regarded as a suit in equity or as an action at law, it falls within the six years’ statute, and is barred unless saved by some statute. Pierson v. Morgan (20 Abb. N. C. 428) and Pierson v. Cronk (26 id. 25; S. C., 13 N. Y. Supp. 845) are overruled.

It is insisted that this action is excepted from the Statute of Limitations by section 2 of title 4 of chapter 18 of part 1 of the Revised Statutes, which provides: “And no Statute of Limitations shall be a bar to any suit at law or in equity, against such directors, for any sums for which they are made liable by this section.” Assuming that chapter 18 is applicable to these insurance corporations, this action was not brought to recover sums for which directors are made liable by section 2. The cause of action is set out in the complaint as follows :

“XVI. The plaintiff further shows that, subsequent to said election of said 19th of October, 1811, the said Henry and his associates suffered and permitted the assets, property and effects of the said £ Widows and Orphans ’ to be wasted and misapplied, and the policyholders to be plundered, cheated and defrauded.

“ That the said assets were so wasted and the said policyholders were so plundered, and that the sum of $63,000 and upwards was paid to the said Sanford, Morgan, Freeman and others, out of said assets, fpr their services in wrecking and ruining said ‘Widows and Orphans.’

“ That since the said 10th day of November, 1811, a large number of the policies of said ‘ Widows and Orphans ’ have been canceled, lapsed and surrendered and twisted, upon which large profits were realized, and which profits the said ITenry and his associates have suffered and permitted to be diverted from the said ‘ Widows and Orphans ’ and applied to the benefit of the policyholders, stockholders and trustees and officers of said Mutual Protection and others.”

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

Van Brunt, P. J., and Parker, J., concurred.

Judgment reversed, new trial ordered, costs to appellants to abide event.


author: Per Curiam :

text:
    Sarah Lazarus and Others, Respondents, v. The Metropolitan Elevated Railway Company and Another, Appellants.

      Mndings made by request — statutory change in practice after the submission of a cause to a referee.

    Section 1023 of the Code of Civil Procedure does not relate to the substantive law of the State, hut prescribes a rule of procedure.
    ’The practice of the court may he changed by statutory enactment so as to affect pending actions, and in case a statute, taking effect after a cause has been sub- ■ mitted to a referee for decision, requires his report to he made in a particular form, or to he filed within a given time, it will control the practice of the case so situated.
    ’The repeal of section 1023 of the Code of Civil Procedure by chapter 688 of the Laws of 1894, and the amendment of section 1022 thereof by the third section of that act subsequent to the submission of a case to a referee for his decision, if such repeal or amendment takes effect prior to the making of his decision by the referee, changes the rule as to such cause in respect to the duty of the referee to determine specific questions of fact and law at the request of the parties.
    Appeal by' tbe defendants, Tbe Metropolitan Elevated Railway Company and another, from an order of tbe Supreme Court, made at tbe New York Special Term and entered in tbe office of tbe clerk of tbe county of New York on tbe 9tb day of November, 1894, denying tbe defendants’ motion for an order sending back tbe ■decision or report of tbe referee or for an order vacating and setting aside tbe same.

      Julien T. Davies and J. G. Thomson, for tbe appellants.

      Nelson S. Spencer, for tbe respondents.
   Per Curiam :

May 27, 1893, tbis action was referred to a referee to bear and determine, and on March 22, 1894, it was finally submitted to him for decision, and by written stipulations between tbe attorneys bis ■time to decide tbe cause was extended until October 27, 1894. On May 12,1894, chapter 688 of tbe laws of that year was enacted, to take effect June 1, 1894, repealing section 1023 of the Code of Civil Procedure, which authorized either party to a litigation to request -.the court or referee to determine all of tbe issues of fact and law deemed, to have been involved in the action. Section 1023 was. repealed after this action was submitted to the referee, but the repeal took effect before he made his decision.

The attorneys for the defendants, believing that fifty-eight issues of fact and twenty-two issues of law were involved in the action on the 22d of March, 1893, requested the referee to pass on that number of issues of fact and law. Upon the decision of the case the referee did not note on the margin of the various propositions of fact and law how he had disposed of them, but instead stated concisely the facts found and his conclusions of law in the form prescribed by section 1022 of the Code of Civil Procedure, as amended by the third section of chapter 688 of the Laws of 1894.

At the date of the decision of this case there was no statute which required the referee to determine the various propositions of law and fact requested by either litigant, and there is no provision in the statute excepting from its operation cases pending at the time of its passage. Section 1023 did not relate to the substantive law of the State, but prescribed a rule of procedure; and it is too well settled to require the citation of authority that the practice of the court may be changed so as to affect pending actions. The referee,, so far as the procedure was concerned, had the right to adopt the form of decision authorized at the time he rendered his decision. In case a statute taking effect after a cause has been submitted to a. referee should require the report to be made in a particular form, or that it should be filed within a given time, we have no doubt that it would control the practice of a case so situated. By the Code of 1848, and again by the Code of Civil Procedure, the practice of the courts was radically changed, and the new practice has been held, applicable to pending cases, and that a step in procedure is to be taken according to the rule in existence when the prescribed step is. taken.

We think that neither party had the right to require the referee to. pass upon the requests pursuant to the repealed section of the Code.

The order should be affirmed, with ten dollars costs and disbursements.

Present — Van Brunt, P. J., O’Brien and Eollett, JJ.

Order affirmed, with ten dollars costs and disbursements.