text:
    William H. Hills, Respondent, v. The Peekskill Savings Bank et al., Appellants.
    In an action by a tax payer of- the town of A., to have certain bonds issued by said town adjudged illegal and void, it appeared that the town, acting • in supposed accordance with statutory-provisions (Chap. 907, Laws of 1869, as amended by chap. 925, Laws of 1871) issued its bonds to pay for stock of a railroad corporation, which passed into the hands of innocent holders. The bonds were claimed by the town to have been illegally issued, and so invalid. While suits were pending to enforce them, said town, under the act of 1880 (Chap. 146, Laws of 1880), authorizing it “ to issue new bonds pursuant to the provisions of chapter 75, Laws of 1878,” and its amendments, to the amount and extent of its bonded indebtedness, issued the bonds in question in exchange for, and to retire the outstanding'bonds, the new bonds drawing a lower rate of interest than the old ones. Said town at the time had no other “ bonded indebtedness ” than the original bonds issued as above stated. 'Held, that the action was not maintainable ; that the town having elected to compromise rather than to contest the validity of the old bonds, was estopped from thereafter questioning it.
    The words “ bonded indebtedness,” as used in said acts of 1878 and 1880, are not limited to bonds in all respects legal and valid, but the acts authorize the refunding of “ all municipal bonds save such as ” have been adjudged invalid by the final determination of a competent court which are excluded from their operation by chapter 317, Laws of 1878.
    The act of 1878 first mentioned, as thus construed, is not violative of the constitutional provision (State Const., art. 8, § 11), prohibiting municipal corporations from incurring indebtedness for other than “ county, city, town or. village purposes.”' The said act does not authorize the incurring of an indebtedness, but the payment of an acknowledged debt, and the constitutional provision does not deprive such corporations of the right to compromise claims which they dispute.
    The defect alleged in the proceedings under which the original bonds were issued was that to the averment in the petition, that “ the signers were a majority of the tax payers of the town, was not added the words ‘ not including those taxed for dogs or highway tax only.’ ” Held, that the defect did not render the bonds so absolutely void as matter of law, but that there might be reasonable question pending an adjudication; enough of doubt to j ustify the legislature in authorizing, and the town in effecting an amicable settlement.

      People, ex reí. Oreen, v. Smith (55 N. Y. 135), Metzger v. A. & A. R. R. Oo. (79 id. 171), distinguished.
    (Argued January 27, 1886;
    decided March 2, 1886.)
    Appeal from judgment of the General Term of the Supreme Court in the fourth judicial department, entered upon an order made October 19, 1883, which affirmed a judgment in favor of plaintiff, entered upon a decision of the court on trial at Special Term.
    This action was brought by plaintiff as a tax payer of the town of Attica, to have certain bonds issued by said town and held by the bank, defendant, adjudged to be void, and to require the said bank to surrender up the same to be canceled, and to restrain said bank from selling or disposing of said bonds, and the defendant Farnham, supervisor of said town, from taking any proceedings to levy a tax to pay interest on said bonds.
    The bonds in question were issued and delivered in exchange for, and to retire other bonds issued by said town to pay for its subscription for stock of the Attica and Arcade ¡Railroad Company.

      L. W. Thayer & Samuel Hand for appellant.
    Although the petition did not in express language state that those taxed for dogs and highway faxes only were not included, the language employed does necessarily exclude them, and it is in compliance with the statute in force at the time it was made. (Laws 1869, chap. 907; Laws 1871, chap. 925, § 1.) An assessment made by town commissioners for the performance of highway labor is not a tax, and no person thus assessed can be a tax payer whether he performs the labor or not. (Sharp v. Spier, 4 Hill, 82.) The legislature had the power to authorize the new bonds to be issued to pay or return the old ones, and the former were invalid. (Williams v. Town of Duanesburgh, 66 N. Y. 129; Bk. of Rome v. Village of Rome, 18 id. 38; Duanesburgh v. Jenkins, 57 id. 177; People v. Mitchell, 35 id. 551.) The plaintiff, as tax payer, cannot maintain the action against the Peekskill Savings Bank. (Hill v. Peekskill Savings Bank, 26 Hun, 164.) This action cannot be maintained by the plaintiff against either of the defendants, becatise before the trial the act uuder which it was brought, and the only law under which it could be maintained, if at all; had been absolutely repealed. (Chegary v. Jenkins, 5 N. Y. 379; Lenhard v. Lynch, 62 How. 56; Kuller v. Palmer, 1 Hill, 324; People v. Livingston, 6 Wend. 526; Curtis v.
      Leavitt, 15 N. Y. 1; Washburn v. Franklin, 35 Barr. 599.) This action cannot be maintained in a court of equity against the bank defendant under any statute or authority. (Town of Venice v. Woodruff 62 N. Y. 466; Ayers v. Lawrence, 50 id, 192.) A void contract if fully performed and its benefits received, cannot be questioned by the party receiving such benefits. (Woodruff v. Erie R. Co., 93 N. Y. 609; Bissell v. M. S. & N. I. R. R. Co., 22 id. 258; Whitney Arms Co. v. Barlow, 63 id. 62.)

      I. Sam Johnson for Reuben IT. Farnham appellant.
    The plaintiff could not maintain this action against the Peekskill Savings Bank. (Town of Mentz v. Cook, 22 N. Y. Weekly Dig. 476; 3 Pom. Eq., § 1399; 2 Story Eq. Jur., § 700; 87 N. Y. 452; 81 id. 156, 474; 77 id. 542; 92 id. 465; 75 id. 397; 98 id. 222; id. 239.)

      William Nath’l Cogswell for respondent.
    As the petition in this case did not show that the petitioners were a majority of the tax payers of the town, excluding those taxed for dogs and highway taxes only, the county judge acquired no jurisdiction of the proceedings. (People v. Spencer, 55 N. Y. 1; People v. Hughitt, 5 Lans. 89; People v. Van Valkenburgh, 63 Barb. 105; People v. Smith, 55 N. Y. 135) As there was no power to create the bonds, so there was no power to ratify the same. (Weismer v. Village of Douglass, 64 N. Y. 91.) The bonds originally issued in aid of the railroad company being absolutely void, create no indebtedness against the town, and therefore there was no authority to issue the bonds now held by the Peekskill bank. The statute gives authority only to pay the bonded indebtedness by issuing new bonds. (Laws of 1878, chaps. 75, 317; Laws of 1880, chap. 146.) The town was not a necessary party. (Ayers v. Lawrence, 59 N. Y. 192; Metzger v. A. & A. R. R. Co., 79 id. 171.) The action was well brought and has not been affected by any of the various repealing acts passed since it was commenced. (Butler v. Palmer, 1 Hill, 324, 330; Ayers v. Lawrence, 59 N. Y. 192; Metzger v. A. & A. R. R. Co., 79 id. 179; Osterhoudt v. Rigney, 98 id. 222.) It was the intent' of the legislature to pass an act authorizing towns to issue valid bonds for void bonds, and thus to create a bonded indebtedness when there had been theretofore none; such an act would be utterly unconstitutional and void. (Weismer v. Village of Douglass, 64 N. Y. 91; Const., § 11, art. 8.) The Peekskill Savings Bank was not only a proper party to the suit, but was a necessary party. It was the claimant to a part of these funds that Farnham had threatened to have raised by tax. It was necessary that it should be brought into court so that it could assert its rights and the validity of the tax. (Osterhoudt v. Board of Supervisors of Ulster, 98 N. Y. 239; Metzger v. A. & A. R. R. Co., 79 id. 171.)
   Finch, J.

The whole argument of the courts below, ending in a cancellation of the bonds in controversy, rests upon the assumption that the original bonds of the town of Attica, which served as the cause and consideration of the refunding issue, were absolutely void as matter of law, although their invalidity had never been adjudged. The argument takes no note of the fact that there might be reasonable question about that, pending an adjudication, and that enough of doubt attended the ultimate result to justify the legislature in authorizing, and the town in effecting, an amicable settlement and compromise, of which the new bonds were the fruit. There was debate and litigation over the validity of the original issue. Those bonds followed a proceeding initiated by a petition to the Supreme Court, drawn in supposed accordance with the provisions of the act of 1869 (Chap. 907), as amended by the act of 1871 (Chap. 925). That petition averred that its signers were a majority of the tax payers of the town, but did not add the explanatory clause, “not including those taxed for dogs or highway tax only.” The existence of this defect, it is said, we are bound by a precedent of our own making to declare, stripped the proceeding in the Supreme Court of jurisdiction, and left it absolutely void. (People, ex rel. Green, v. Smith, 55 N. Y. 135.) That was a case in which the county judge to whom the petition had been presented, refused the application, and the appeal reached this court in the proceeding itself; and there appears not to have been presented to the mind of the court a provision of the act of 1869, now brought to our attention, which bears strongly upon the inquiry involved. It is not necessary to say whether to that new consideration there is or is not a satisfactory answer. It is quite enough that the validity of the original bonds of the town of Attica has never been passed upon by this court, and its ultimate action was an event unsolved, when the legislature and the town chose to avoid such solution, and act without dependence upon it. It is true that the bonds of another town in the county of Wyoming came before this court (Metzger v. Attica & Arcade R. R. Co., 79 N. Y. 171), but our determination went upon a concession not here existing, and settled only that, upon the admissions made of the invalidity of the bonds, the action was properly brought and the relief justly granted. We are referred to a suit commenced in the United States Circuit Court upon coupons of the original Attica bonds, in which the holders recovered, and the court adjudged on a motion for a new trial, largely influenced by the new consideration now pressed upon us, that the tax payers’ petition was sufficient to confer jurisdiction and the bonds were valid. While that decision does not bind us, the circumstance shows that, at least, there was room for a difference of» judicial opinion upon the question of the sufficiency of the petition, and that in good faith the ultimate result might be deemed uncertain, and the controversy be settled by an amicable adjustment. In 1879, an action was begun in the Federal court against the town by a holder of the original bonds which has been tried, but in which judgment has not been rendered. That action was pending while the act of 1878, which authorized municipal corporations to refund their bonded indebtedness, was in force, but since it did not cover items of accrued and unpaid interest, a special act was passed in 1880 authorizing the towns of Attica and Java “ to issue new bonds pursuant to the provisions of chapter 74 of the Laws of 1878” and its amendments “to the amount and. extent of the bonded indebtedness as provided in said act, including interest accrued and unpaid.” The town'of Attica had no “bonded indebtedness,” except the original bonds whose validity is now questioned. The defendants offered to prove that while the action' last above referred to was pending it was compromised by an agreement to substitute the new bonds drawing a lower rate of interest for the bonds then in suit. This offer was refused by the court and an exception taken. The situation on both sides is thus apparent. The town of Attica, acting in supposed accordance with a statutory authority, had issued its bonds which had passed into the hands of innocent holders. Controversy arose as to their validity. The holders insisted upon that validity and brought suits to enforce them in the United States courts, and both parties thus stood upon their precise legal rights. Before an adjudication and while its result was unknown and uncertain, the legislature by a general act authorized municipal corporations to refund their “ bonded indebtedness ” at lower rates of interest, and the first' question presented is the meaning of that phrase.

The respondents construe it to mean a legal and valid bonded indebtedness in which there are no flaws, and which could be enforced by the courts, and insist that where there was a defect of jurisdiction which made the bonds void, that there was no “ bonded indebtedness ” existing. That the legislature had no such meaning is apparent from the explanatory amendment passed a few weeks later than the original act. (Laws of 1878, chap. 317.) That was intended to make clear and certain the construction intended. It declared “ this act shall not be so construed as to authorize the issue of new bonds to supersede or pay existing bonds which have been adjudged invalid by the final determination of a competent court.” The enactment was superfluous and an absurdity upon the theory of the respondent. If the original act meant by “ bonded indebtedness ” only that which was impregnable against assault in the courts, the explanatory act was not only useless, but worse than that, for, under pretense of explanation, it made what was clear before, at once ambiguous and uncertain ; since the exclusion of bonds adjudged to be void, inevitably draws with it the inference that all other bonds issued in behalf of a town were included in the act, whether, in fact, legal and valid or not. Hot only that, but the construction here asserted involves the legislature in a measure either utterly absurd and ineffective, or becoming operative and having force only through a planned and meditated deception. If the enactment had said in plain words that municipal bonds in all respects valid and legal, and those only, may be refunded at lower rates of interest, none would have been refunded. The holders of town bonds drawing seven per cent interest would have no motive to exchange them for bonds drawing a lower rate, if the latter involved every opportunity for defense which existed against the former. Investors would shun them for precisely the same reason, and, if willing to face all possible legal questions, would prefer to buy the old bonds with the higher rate of interest. The legislature did not say that. It used a plain and unambiguous form of expression, naturally meaning that all existing municipal bonds might be refunded, save only those which had been adjudged invalid. In using that language, it invited an exchange by holders of old bonds and investments by those having capital to employ, on a basis of safety which made the new issue independent of defects in the old; and if it did not mean that, it simply so phrased the law as to make it hold out a deceptive and fraudulent lure; effective only upon condition that its real meaning should be deftly concealed. And what also shall we say of the further enactment relating specifically to the town of Attica ? That town had no bonded indebtedness at all if the respondent’s contention be sound, and the legislature passed not only an idle and superfluous act, but one whose direct tendency would be to mislead and deceive. We have not the least doubt of the meaning and intent of the statute. Three kinds or descriptions of “ bonded indebtedness,” properly so called, existed when the laws of 1878 were passed. There were, perhaps, municipal bonds as to which no question had ever been raised, and probably secure against legal assault; bonds which had been questioned, and occasionally even resisted, and which might or might not prove valid, according as one court or another should conclude; and bonds which by some competent court had been adjudged invalid. The first two classes were covered and intended to be covered by the terms of the Funding Act, and the last only was excluded. This construction fully protects every right of the municipal corporations affected by the act. It takes from them no privilege of resistance to unauthorized proceedings ; it leaves them to determine whether they will stand upon the law and take its award at the end; or whether, doubtful of the legal result, and unwilling to face its peril, of impressed with the justice and wisdom of preserving untainted the municipal credit, they will avail themselves of the statutory provision, and by a convenient compromise, lessen the interest burden, and perhaps extend the period of credit. They cannot do both. The statute never contemplated both a compromise and a fight. Ho town could accept the provision without a consequent admission involved in the acceptance, that the old bonds were valid, for the new are permitted to be issued only to pay the old; and the fact of their issue by the town, admits that liability when it provides for it. It was to this class of cases especially that the statute could have its intended and effective operation. Undisputed bonds, drawing high rates of interest, and having long time to run, would be held firmly, since no possible motive could exist for their surrender. As to these, the statute would be ineffective until their maturity. But bonds questioned, and over whose ultimate validity there hung a doubt, would be readily surrendered in a way of compromise under the statutory permission. To hold with the respondent would violate the language of the enactment, and its natural and obvious intent, and pervert it from a purpose of peace and justice to one of litigation and artifice.

The further objection that the act of 1878 is unconstitutional upon the construction thus adopted, because it authorizes municipalities to “incur” an indebtedness for something other than “county, city, town or village purposes” (Art. 8, § 11), is answered by adding that the act did not authorize the incurring of an indebtedness, but the payment of an acknowledged debt. The Constitution does not deprive municipalities of the right to compromise a claim which they dispute, but which in the end they deem it wise and prudent to acknowledge in part and pay as acknowledged; and which might, by judicial decision, but for the compromise, become a charge upon them to its full extent,

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

All concur.

Judgment reversed.


source: Caselaw Access Project

author: Rttgeb, Oh. J.

license: Public Domain

text:
    Joseph Martin et al., Appellant, v. The Tradesmen's Insurance Company, Respondent.
    Where an insurance company in issuing a policy deals with a party who remains in possession of it after execution, and is alone entitled to receive the amount thereof in case of loss, it is authorized to assume that such party has power to consent to such changes in it before breach, as will inure to the benefit of the insured. This is especially the case when the proposed alteration can neither injuriously affect the right of enforcing the contract or change the application of the moneys collectible thereon.
    An alteration of a contract made by one of the parties, or a third person without the consent of the other party, and while the contract is out of his hands, has no effect as to him, and the contract remains as it was originally, provided that the nature and extent of the alteration can be clearly ascertained, and it can be seen what the contract was at the time it was executed.
    At the request of an insurance broker, apparently acting on behalf of mortgagees, defendant issued and delivered to the broker a policy of marine insurance upon the mortgaged property, which stated that it was issued on account of plaintiffs, loss, if any, to be paid to the mortgagees, and thereafter at the request of some one presumably representing the mortgagees, and upon the statement that G. owned the property, plaintiffs’ names were erased by drawing a line through them, leaving them, however, perfectly legible, and the name of G. was interlined above them, and after the names of the mortgagees was inserted ‘ ‘ to the extent of their interest, and balance, if any, to John Butler.” The interest of the mortgagees was the full amount insured. G. in fact had the legal title to the property, he holding it in trust however for plaintiffs and Butler. Held, that a,n action for a destruction or conversion of the policy was not maintainable, as the alteration was not tortious, and plaintiffs suffered no damage therefrom.
    (Argued February 4, 1886;
    decided March 2, 1886.)

      Appeal from judgment of the General Term of the Superior Court of the city of New York, in favor of defendant, entered upon an order made December 19, 1883, which overruled plaintiffs’ exceptions and directed judgment on an order dismissing the complaint on trial. • (Reported below, 17 J. & S. 416.)
    This action was brought to recover damages for the alleged conversion or destruction of a policy of insurance.
    The material facts are stated in the opinion.

      W. JET. Mg Doug all for appellants.
    The policy was absolutely canceled or destroyed by the defendant, and the act constituted a conversion of the policy for which the defendant is liable in this action. (Pars, on Ins. 138; Fanshaw v. Chabert, 6 Moore, 386; Campbell v. Christie, 2 Stark. 57; Chesley v. Frost, 1 N. H. 145; Outhouse v. Outhouse, 13 Hun, 130; Murray v. Burling, 10 Johns. 172; Marsh, on Ins. 245-6.) The destruction or cancellation of the policy, if only partial, gave the plaintiffs a right of action for conversion or damages. (Waterman on Trespass, 12.) The policy of insurance issued by the defendant and paid for by the plaintiffs became the absolute property of the plaintiffs the moment it was signed by the proper officers. (Marsh. on Ins. 210; Whitaker v. Farmers' Union Ins. Co., 29 Barb. 312.) The policy of insurance was completely canceled as to the plaintiffs. (Masters v. Miller, 4 T. R. 32.) The measure of damages in this case was per se the amount insured, the plaintiffs having shown that they had an insurable interest. (McLeod v. McGhie, 2 Scott's N. R. 604; Outhouse v. Outhouse, 13 Hun, 130; Thayer v. Manly, 73 N. Y 305.)

      Joseph A, Shoudy for respondent.
   Rttgeb, Oh. J.

The evidence at the close of plaintiffs’ case tended to show the following facts: At the solicitation of an insurance broker, apparently acting in behalf of mortgagees, on May 22, 1880, the defendant issued and delivered an insurance policy to such broker reading, so far as the part material to this discussion is concerned, as follows: “ Tradesmen’s Insurance Company of Hew York on account of Martin and Kaskell, in case of loss to be paid in funds current in the city of Hew York to the Harlan & Hollingsworth Co., of Wilmington, Del., do make insurance and cause $5,000, to be insured upon the body, tackle, apparel and other furniture of the steam-boat Adelaide,” etc. On June eighteenth, thereafter, some one also presumably representing the mortgagees, presented the policy to the defendant, and requested it to erase the names of Martin and Kaskell, and insert that of John Garvey in place thereof, upon the ground that Garvey was the owner of the steamer when insured, and such alteration seemed necessary to validate the policy. The defendant thereupon drew a line with. a pen through the words “ Martin and Kaskell,” and interlined above them the words John Garvey,” and at the same time also inserted the words ‘ ‘ to the extent of their interest, and balance, if any, to John Butler,” after the words Wilming-, ton, Del.,” leaving, however, the original language of the policy as legible as before the alteration. It was then re-delivered to the person producing it, and returned to the Harlan & Hollingsworth Company, who, from its original execution to the time of the trial, presumptively retained its possession. It further appears that the boat was purchased in May, 1879, of the Harlan & Hollingsworth Company by Martin, Kaskell and one Butler, but for certain reasons it being desirable to conceal Butler’s interest in the transaction, the bill of sale was taken in the name of Martin and Kaskell alone, one-half to each. Subsequently and in Hovember, 1879, Butler becoming desirous of having his interest in the boat protected by some written evidence, requested Martin and Kaskell to convey it to J ohn Garvey in trust for the then owners; and thereupon a bill of sale of the boat was executed by Martin and Kaskell to Garvey and was delivered to some one for him, and he, so far as appears, retained it until the time of the trial. After the purchase of the boat in 1879, the plaintiffs took possession and employed it in running between Long Branch and Hew York, in the transportation of passengers until June 19, 1880, when it was sunk and lost, in the Hudson river through a collision with another boat. It also appeared that the plaintiffs advanced from the earnings of the boat to the Harlan & Hollingsworth Co., part of the premiums required to procure $20,000 insurance, and the same was' effected in equal amounts of $5,000 each, in the defendant’s and three other companies, and that the Harlan & Hollingsworth Co. was, at that time, and until after the loss of the boat continued to be, the holders of mortgages thereon, executed by Martin and Kaskell to the amount of the entire insurance. It also appeared that the Harlan & Hollingsworth Co received from the respective insurance companies after the loss, upon the several insurance policies referred to seventy five per cent of the gross amount thereby insured, and applied the same upon their mortgages, leaving due thereon the sum of $5,000, that being precisely the amount remaining unpaid upon such policies.

On this state of facts the plaintiffs claimed to recover upon the ground that the act of the defendant in erasing the name of “ Martin and Kaskell,” from the policy, and inserting in place thereof that of “ John Garvey,” constituted a conversion of the policy as against them, rendering the defendant liable to the plaintiffs for the amount thereof, or such other amount as might represent their interest therein.

Upon the trial the complaint was dismissed upon the ground that there was no proof of any damages, sustained by the plaintiffs from the alteration of the policy. The judgment of the trial court was affirmed on appeal, and from such affirmance this appeal was taken.

We are of opinion that these judgments should for several reasons be affirmed. The form of the policy as originally drawn was somewhat peculiar, and was not probably such .as would have been adopted by the parties, had they been well advised. Although the interest of Martin and Kaskell alone is insured, they were not then legal owners, and were never in equity, sole owners of the boat, and the policy does not provide for any recovery by them of the amount ’ of the Insurance. The plaintiffs probably had an insurable interest in the boat, but serious questions exist as to the value and extent of such interest, and the rights of Butler their co-tenant in the proceeds of the policy.

Inasmuch as all of the interests, both legal and equitable, had been united in John Garvey, as a trustee for all parties before the execution of the policy, it would obviously have been the safer plan to have named his, as the insurable interest in the original instrument. As the policy was drawn, it was undoubtedly the interest of Martin and Kaskell alone that was insured, yet in case of loss the amount thereof was required- to be paid unconditionally to the Harlan & Hollingsworth Company, and it was apparently the sole beneficiary of the contract. Its right of recovery thereon in case of loss would undoubtedly be defeated, by the want of an insurable interest in Martin and Kaskell, -or any violation by them of the conditions of the policy, but the Harlan & Hollingsworth Company having paid a portion of the premium required, and having authority to effect insurance for their own benefit, and receiving and holding the policy issued for that purpose, with an interest therein covering the entire amount of the insurance, had for the purpose of protecting such interest, apparent authority to procure such an alteration of the policy as would promote the object intended in effecting it. So far as the defendants knew they were the parties solely interested in the transaction, and until after notice of the rights or claims of other persons, could safely deal with the parties procuring the insurance, in reference to any change or modification of its terms. If the mortgagees were in fact the agents of the plaintiffs in procuring such insurance and violated their instructions either in procuring it, or changing its terms afterwards to the prejudice of "their principal, it would render them liable for any damages resulting therefrom. When, however, the insurer in issuing a policy deals with a party who remains in possession of the instrument after execution, and is alone entitled to recover the amount thereof, in case of loss, he is authorized to assume that such party has power to consent to such changes in it before breach as will inure to the benefit of the insured, and tend to perfect the validity of the contract.

This would seem to be especially the case, when the proposed alteration could neither injuriously affect the right of enforcing it, or change the application of the moneys collectible thereon. Under both forms of the contract, the moneys in this case were recoverable only by the Harlan & Hollingsworth Company, and would be, when received, applicable only to the satisfaction or reduction of the plaintiffs’ indebtedness to them.

Thus in any event the plaintiffs would, under either form of the policy, receive what they contracted for, and as it turned out, have no cause of complaint, whatever might have been the case under a different state of circumstances.

The legal title of the boat was unquestionably in John Garvey, and he held it as trustee for Martin, Haskell and Butler. The change made in the policy simply affected the form of the contract, and not the equitable rights of the parties, and seems to have been made in good faith simply for the purpose of validating it. (Myer v. Heneke, 55 N. Y. 412.)

There was obviously no intent on the part of either of the parties to the transaction, to effect a destruction or cancellation of the instrument by its alteration, but it was made with intent solely to remedy a real or supposed defect, which threatened its validity. Ho interest which the plaintiffs might have in the contract was impaired by the erasure complained of, for if it was made by their authority, they had no right to complain, and if not, and such authority was necessary to be obtained, the alteration did not vitiate their contract, or impair their right to enforce it. The rule is well established that an alteration of a contract under which a plaintiff claims, made by a defendant or some third party, without the plaintiff’s consent, and while the contract is out of plaintiff’s hands, has no effect, and the contract will remain as it originally stood, provided the- nature and extent of the alteration can be clearly ascertained, and it can be seen what the contract was at the time it was executed. (Addison’s Law of Cont. 286, and authorities cited; Nichols v. Johnson, 10 Conn. 192; Phillips on Ins., §§ 114, 115; Van Brunt v. Eoff, 35 Barb. 501.)

We are, therefore, of the opinion that the alteration in question was not a tortious act on the part of the defendants, and did not constitute a conversion of the policy. We are also of the opinion that the plaintiffs have suffered no damage from the act complained of.

At the time of the destruction of the Adelaide they had no interest in the contract, except to have the moneys recoverable thereon collected and applied in reduction of their indebtedness to the mortgagees, and for the purpose of effecting this object, the mortgagees were their agents, and responsible to them for the manner in which that right was enforced. (Cone v. Niagara Ins. Co., 60 N. Y. 619.)

The whole insurance moneys were no more than sufficient to pay the mortgage and would in no event afford a surplus recoverable, by the owners of the property. But however this may be, we have seen that the plaintiffs’ remedies upon the policy were not impaired by the alteration made in it, and, therefore, they cannot have suffered damages by reason thereof.

The judgments of the courts below should be affirmed.

All concur.

Judgment affirmed.


author: Miller, J.

text:
    Royer Wheel Company, Respondent, v. Robert W. Fielding et al., Appellants.
    The General Assignment Act of 1877 (Chap. 466, Laws of 1877) does not include or apply to a specific assignment by a debtor for the benefit of one or a portion of his creditors, and such an assignment is not void because not executed in compliance with the provisions of said act.
    The provision of the Revised Statutes (1 R. S. 678, § 55), providing for express trusts to sell lands for the benefit of creditors, does not prohibit the grantee of an insolvent debtor from executing a mortgage to secure the payment of specific debts of the grantor in pursuance of a prior oral understanding entered into at the time of the execution of the conveyance.
    A mortgage so executed is not rendered void by a provision therein requiring any surplus arising on foreclosure sale to be paid over to the mortgagor.
    A member of a firm may appropriate his individual property to the payment of the firm debts, and where the firm has made a general assignment for the benefit of its creditors a conveyance by -one of its members of his individual property to the assignee, to be disposed of and applied in accordance with the terms of the assignment to the payment of the partnership debts, is not per se fraudulent or unlawful and void. It is not essential that such a conveyance should be executed in accordance with the requirement of the General Assignment Act.

      Roger Wheel (Jo. v. Melding (31 Hun, 374), reversed.
    (Argued February 4, 1886;
    decided March 2, 1886.)
    Appeal from judgment of the General Term of the Supreme Court, in the first judicial department, entered upon an order made October 9, 1883, which affirmed, so far as appealed from, a judgment in favor of plaintiff, entered upon a decision of the court on trial at Special Term. (Reported below, 31 Hun, 274.)
    The nature of the action and the material facts are stated in the opinion.

      Joseph A. Shoudy for appellants.
    The complaint should have been dismissed upon the defendant’s motion, on the ground that the plaintiff had no standing in court to maintain a creditor’s suit. (Pardee v. De Cala, 7 Paige, 132; McElwain v. Willis, 9 Wend. 560, 561; Crippen v. Hudson, 13 N. Y. 166; Shaw v. Dwight, 27 id. 244; Mech. & T. Bk. v. Dakin, 51 id. 522; Fox v. Moyer, 54 id. 125; Geery v. Geery, 63 id. 252, 256; Adsit v. Butler, 87 id. 585, 587.) The property conveyed to the appellant, James E. Fielding, was the individual property of one of the copartners, and before it could be reached for the payment of copartnership debts, an execution must have been issued and returned unsatisfied as to the copartnership property. (Beardsley S. Co. v. Foster, 36 N. Y. 565; Lewisahn v. Drew, 15 Hun, 468.) Copartnership debts are primarily chargeable upon copartnership property. (Wilson v. Robertson, 21 N. Y. 592; Collomb v. Caldwell, 16 id. 484.) The conveyances by George Fielding to his son under the agreement, though voluntary, created a trust which was capable of being enforced, and which was in-part performed by the subsequent execution of the mortgage in which both the grantor and grantee joined to secure the payment of the same creditors. (Leitch v. Hollister, 4 N. Y. 213.) There was a misjoinder of causes of action in the complaint in this action. (Code of Civ. Pro., § 484.)

      Wilson M. Powell for respondent.
    As to the real estate it mattered not as to plaintiffs’ lien whether the execution was in the sheriff’s hands or not, and it mattered not where the execution was, so long as it had been issued and was unsatisfied. (Geery v. Geery, 63 N. Y. 252; Payne v. Sheldon, 63 Barb. 170; Buswell v. Lincks, 8 Daly, 518; Adsit v. Butler, 87 N. Y. 585; 3 R. S. [6th ed.] 590, § 55; Code, § 1871; McElwain v. Willis, 9 Wend. 549, 561; Mech. Bk. v. Dakin, 51 N. Y. 519, 522; Nat. Bk. v. Mead, 18 Hun, 303; Shaw v. Dwight, 27 N. Y. 244; Fox v. Moyer, 54 id. 125; Pardee v. DeCala, 7 Paige, 132.) The evidence showed an actual fraudulent intent. (Edgell v. Hart, 9 N. Y. 218; Seymour v. Wilson, 14 id. 569; Southard v. Benner, 72 id. 431; Ford v. Williams, id. 364; Gardner v. McEwan, 19 id. 125.) It can make no difference that some of the property was owned by George and Robert Fielding together; all the transfers being tainted with the fraud of one or the other, or both, can be set aside in one action, there being but one cause of action. (Reed v. Stryker, 12 Abb. 47; Fellows v. Fellows, 4 Cow. 682; Morton v. Weil, 33 Barb. 30; Boyd v. Hoyt, 5 Paige, 77; Newbold v. Warrin, 14 Abb. 80; Coleman v. Phelps, 57 How. Pr. 393.) The fact that the conveyances to James E. Fielding were fraudulent is shdwn by the insolvency of the grantor and that the consideration is nominal. (Morgan v. Potter, 17 Hun, 403; Babcock v. Eckler, 24 N. Y. 632; Carpenter v. Roe, 10 id. 230; Cole v. Tyler, 65 id. 77.) The statute allows express trusts “ to sell lands for the benefit of creditors,” not to mortgage them for that purpose. (2 R. S. [6th ed.] 1106.) The mortgage is void for the reason that it contains a provision to render the overplus, if any there shall be, unto the said parties of the first part. (Goodrich v. Downs, 6 Hill, 438; Strong v. Skinner, 4 Barb. 546; Barney v. Griffin, 4 N. Y. 365; Leitch v. Holister, id. 211.)
   Miller, J.

This action is in the nature of a creditor’s bill, and was commenced to set aside as fraudulent:

First. A general assignment for the benefit of creditors, made by the firm of Fielding Brothers, consisting of George and Robert Fielding, to the defendant Robert W. Fielding, dated ¡November 6, 1880.

Second. Two conveyances of two separate pieces of land, made by George Fielding in his life-time, to his son James E. Fielding, dated ¡November 3, 1880, for the nominal consideration expressed in the deeds of one dollar.

Third. A conveyance of certain real estate, dated ¡November 15, 1880, from Robert Fielding to Robert W. Fielding as assignee for the benefit of creditors, to bo held and disposed of according to the provisions of the general assignment made to him by Fielding Brothers, the consideration named in the deed being one dollar.

The court held that the general assignment was not made with intent to defraud creditors, and was valid and should be upheld. It also held that the two conveyances from George to James E. Fielding, and the one from Robert to Robert W. Fielding as assignee, were fraudulent and void, and should be set aside.

The first question that arises is as to the validity of the two deeds from George Fielding to James E. Fielding, bearing date November 3, 1880. It appears that only a nominal consideration is named in these conveyances, and that at the time of their execution, the grantor was insolvent. It is not shown that any property was retained by the grantor for the payment of his own debts, and from the facts, it is to be presumed that such was not the case. Although the property belonged to the grantor individually, and the plaintiff’s judgment was against the firm of which he was a member, such judgment was a lien upon the grantor’s real estate which could be enforced. The grantor and his partner were totally insolvent, and unable to pay their debts and had no other property, individually, except the three parcels of land conveyed, two to James E. Fielding, and the other to Robert W. Fielding, as assignee. The deeds showing a want of consideration, and the evidence proving the insolvency of the grantors beyond any question, ynder such cir-cu instances the presumption is prima facie that the deeds were fraudulent. (Erickson v. Quinn, 47 N. Y. 410.)

It is claimed, however, by counsel for the appellants, that the two conveyances from George to James E. Fielding were made, and the title vested in the grantee, not to avoid the payment of his debts, but that the property might be appropriated for that purpose for the benefit of certain of his creditors, named at the time, whom the grantor supposed were entitled to a preference.

The testimony of the attorney who drew the conveyances and attended to their execution shows that such was the intention, and it is insisted that these conveyances created a trust in the grantee which could legally be enforced, and was subsequently performed in part, on the sixteenth of November, by the execution of a mortgage by the grantor and grantee, covering the real estate embraced in both deeds, to Margaret H. Frost, a creditor, for the benefit of herself and the other creditors who had been specified at the time of the execution of the deeds. This mortgage provided that after payment to the creditors named therein, on a foreclosure sale of the premises being had, the overplus, if any, should be paid to the mortgagors.

As a general rule a debtor has the right to convey property to his creditors in payment of debts which he owes, and had the deeds been directly to his (George Fielding’s) creditors no valid reason exists against the legality of the mortgage. Nor do we think the fact that the mortgage was executed after the deeds to secure these creditors, in pursuance of an arrangement made at the time the deeds were executed, renders the transaction unlawful and of no effect. It is urged that it was a conveyance for the benefit of creditors made in a manner which was illegal and void and in contravention of the provision of section 2, chapter 466, Laws of 1877, which declares: “ Every conveyance or assignment made by a debtor of his estate, real or personal, or both, to an assignee for the creditors of such debtor, shall be in writing, and shall be duly acknowledged before an officer authorized to take the acknowledgment of deeds, and every such conveyance or assignment shall be recorded in the county clerk’s office of the county where such debtor resided or carried on his business, at the date thereof. * * * The assent of the assignee, subscribed and acknowledged by him, shall appear in writing, embraced in or at the end of or indorsed upon the assignment before the same is recorded, and if separate from the assignment shall be duly acknowledged.”

If we were confined in the interpretation of the act referred to, to this second section, it might, perhaps, be said, that it was applicable to any conveyance or assignment made by a debtor for the benefit of creditors, but this construction is too restricted if the whole act be taken and considered together. The act relates to the assignment of debtors for the benefit of creditors ; the first section provides that it may be cited for all purposes as the General Assignment Act of 1877, and the third section for the making of schedules in reference to the property assigned.

Considering the act as a general act enacted for the specific purpose named we think it must be held to relate to a general assignment for the benefit of creditors and not to a specific assignment for the benefit of one or a limited number of creditors. It does not relate to a specific conveyance of the character of the one here presented, which is not a general assignment but a transfer of specific pieces of property in payment of certain creditors particularly named. . Such a conveyance cannot be regarded as coming within the meaning and scope of the provisions of the General Assignment Act referred to, and is not void for not conforming to its provisions. Eor was the transaction void on the ground that it was in conflict with section 55 (1 R. S. 678), which provides for express trusts to sell lands for the benefit of creditors. While this statute does not authorize the mortgaging of lands by an assignee to raise money to pay creditors, it contains nothing which prevents a debtor or the grantee of a debtor, in pursuance of a prior oral understanding, entered into at the time of the execution of the conveyance to him, from executing a mortgage to secure the payment of specific debts. Eo trust was created by the conveyances and the mortgage for any such purpose, and hence the statute in question was not violated thereby.

Nor was the mortgage void because of the provision in the same that upon a foreclosure sale the overplus, if any, should be rendered to the parties of the first part. This is the usual clause in every mortgage upon real estate, and as here employed cannot be regarded as of the same character as if used in ■ an assignment of property for the benefit of creditors specially preferred, in which case it would render the assignment inoperative and void. So far as the grantor, George Fielding, is concerned it may be said that when the mortgage was executed he had no interest in the premises, having conveyed the same to James E. Fielding. It was not necessary that he should execute it, and it would have been sufficient if executed by James alone. In view of the fact that George had no interest in the premises such a provision as to him was of no consequence. So far as James is concerned, he merely acted as a trustee under the conveyance to him, and he, therefore, would have no claim to the overplus, and it would necessarily pass to the creditors of George, if any there were, individually, or of the firm of which he was a member.

W e are also of the opinion that the deed from Robert Fielding to Robert W. Fielding, assignee, was valid and effectual for the purposes therein named. As we have seen, the act of 1877 relates to general assignments and not to conveyances of specific property. It does not include a transfer of individual property for the benefit of the creditors of the assignor. No reason exists why a member of a firm cannot appropriate his individual property to the payment of the debts of the firm, of which he is a member, in accordance with the provisions of the general assignment law for the benefit of creditors. The grantor here had a right to retain his individual property and it did not pass by the general assignment of the firm. No one could object to the transfer of the same to the assignee except individual creditors, and it cannot be said that such a transfer, of itself, is fraudulent and void. The assignee under the general assignment had a perfect right to receive any property which might be conveyed or assigned to him belonging to either of the partners, and in accepting such a transfer it was not essential that the provisions of the act of 1877 should be complied with. In fact such a proceeding as making the inventory required by section 3 of said act would be entirely impracticable under such a transfer, as it may be assumed that the debtor had no other property of his own to transfer. Whether he had or not was no objection to the assignee’s receiving and accepting such property as he chose to convey or pass over to him without complying with the forms required under the General Assignment Act.

We do not think the objection that the execution was not outstanding available.

Eo actual fraud was found by the judge upon the trial and for the reasons stated, we are of the opinion that the judgment was erroneous.

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

All concur.

Judgment reversed.


author: Daneobth, J.

text:
    Elias Bach et al., Respondents, v. David Levy et al., Appellants.
    Defendants contracted to sell and deliver to plaintiffs one hundred and seventy-five cases Connecticut tobacco, guaranteed “ to be like samples. ” On receipt of bill plaintiffs paid for the purchase, by giving their promissory note for the amount. The tobacco delivered proved to be Massachusetts tobacco, which was of less value than the Connecticut ; some of the cases were also inferior to the samples. Defendants were notified of the defects, and requested to return the note and take back the tobacco, but refused so to do ; it was then, upon notice to defendants, sold at auction, in one lump. In an action to recover damages for breach of the contract, held, that plaintiffs’ sale of the tobacco in a lump did not defeat their right to recover; that the measure of damages was the difference in value of the tobacco as warranted, and that actually delivered ; and, to ascertain the latter, in the absence of other testimony, the amount received at the auction sale was properly resorted to.
    Also held, the fact that a note was given for the purchase-price, which it did not appear had been paid, did not defeat a recovery; that, under the circumstances, plaintiffs’ liability on the note must be deemed the equivalent for cash.
    (Argued February 5, 1886;
    decided March 2, 1886.)
    Appeal from judgment of the General Term of the Superior Court of the city of New York, entered upon an order made April 8,1884, which affirmed a judgment in favor of plaintiffs, entered upon a verdict. (Mem. of decision below, 18 J. & S. 519.)
    This action was brought to recover damages for alleged breach of a contract for the sale of a quantity of tobacco.
    The contract and the material facts are set forth in the opinion.

      Lewis Sanders for appellants.
    A mere liability to pay is not sufficient to maintain an action. (Southwick v. First Nat. Bk., 84 N. Y. 432; O'Brien v. Jones, 91 id. 197, 198; Burt v. Dewey, 40 id. 285.) The warranty having been reduced to writing it became the exclusive test of what the warranty was, and evidence outside of it was inadmissible. (Gaylord Manuf. Co. v. Allen, 53 N. Y. 519; Joyce v. Adams, 8 id. 296; Eighmie v. Taylor, 98 id. 294; Dutchess Co. v. Harding, 49 id. 321; McCormick v. Sarson, 45 id. 265; Reed v. Randall, 29 id. 358; White v. Miller, 71 id. 130.) Expert testimony was improperly received. (Van Zandt v. Mut. B. Ins. Co., 55 N. Y. 179; Ferguson v. Hubbell, 97 id. 513.)

      B. F. Einstein for -respondents.
    The plaintiffs’ right to recover damages for breach of warranty was not affected by their acceptance of the goods, assuming the contract to be executory. (Briggs v. Hilton, 99 N. Y. 517; Hawkins v. Pemberton, 51 id. 198; Dounce v. Dow, 64 id. 411; Van Wyck v. Allen, 69 id. 61; White v. Miller, 71 id. 118.) A sale at auction, fairly conducted, is a proper way to determine the value of property. (Muller v. Eno, 14 N. Y. 597; Pallin v. Le Roy, 30 id. 549.) The defendants having requested to go to the jury upon any question of fact, and having rested upon the plaintiffs’ case, their' motion for a direction was, therefore, upon the whole case, and they thereby submitted all questions of fact to the court to decide. (Thompson v. Liverpool, etc., Steam Co., 44 N. Y. Super. Ct. 407; Appleby v. Astor Fire Ins. Co., 54 N. Y. 253; Winchell v. Hicks. 18 id. 558.)
   Daneobth, J.

The plaintiffs compose the firm of Elias Bach & Son, and the defendants are copartners under the name of L>. Levy & Son. A contract was made between them by S. Wollenberg, a broker who delivered bought and sold notes, in these words:

“Yew Yobk, April 19, 1883.
“ Sold to Messrs. Elias Bach & Son, for account of Messrs. D. Levy & Son (175) one hundred and seventy-five Conn, seconds L. tobacco, crop 1882, by Packer’s samples. Mess. D. Levy & Son guarantee the tobacco to be like samples, and sound until after stripped sampling, July 1st, 1883.
“ Price 10¿ c., marked weight. Insurance guaranteed and storage free.
“ Terms, five months’ note.
“ S. WOLLEYBERG-.”

Within a day or two thereafter, the defendants billed the tobacco to the plaintiffs, and the amount, $6,993.88, was settled by their note. The tobacco was received about July first, and proved to be Massachusetts and not Connecticut tobacco. It was for that reason of less value, and some of the cases were also inferior to the samples. The defendants were notified of these defects, and requested to return the note and take back the tobacco, but refused to do so. It was then, upon notice to defendants, sold at auction in one lump, and this action was brought to recover damages for breach of the undertaking contained in the bought-and-sold notes. Yo evidence was given by the defendants, but at the close of the plaintiffs’ case, their counsel requested the court to direct a verdict for the defendants upon the grounds: First that “ the warranty was a separate waranty of each case, and that the plaintiffs, by selling the whole cases in one lamp, over seventy of which corresponded with the samples, have not presented any measure of damages for the eases proved to be different from the samples. Second. That the warranty as to each case being separate, the plaintiffs had no right to deal with the goods in one lump ; but could only sue for and recover for a breach of the particular warranty of each case.”

Failing in that, defendants’ counsel asked the court to dismiss the complaint, upon the ground that at the time the action was brought the plaintiffs had suffered no damage, not having paid for the tobacco in question.

The applications were denied, and a verdict directed for the plaintiffs for $2,626.06, as the difference between the value of the tobacco as warranted, and the tobacco actually delivered, which was fixed at the sum obtained on the sale.

We are of opinion that the decision of the trial judge was right.

First. The pleadings admit that the tobacco was paid for. That this payment was by note is immaterial, for the allegation and admission is that the note was given in pursuance of the agreement, and taken in payment of the debt. The evidence also is that the defendants refused to return it. Under these circumstances, the plaintiffs’ liability on the note must be deemed the equivalent for cash.

Second. The promise expressed in' the broker’s notes and counted on in the complaint related not only to the quality of the tobacco as compared with the samples, but to the place of production. It was described as “ Connecticut tobacco,” that is, as explained in evidence, tobacco grown in Connecticut. There was in these words a representation of a fact material to the contract, and to the truth of which the vendor was, therefore, bound. The plaintiffs acted upon it, and suffered by reason of its not being true. Such representation, whether strictly a warranty or not, was part of the agreement, and it was broken because the tobacco actually delivered did not answer the. description of it contained in the contract. (Hawkins v. Pemberton, 51 N. Y. 198.) This, also, meets the defendants’ other objection, that part of the tobacco corresponded in quality with the samples. The purchaser was not only entitled to tobacco of like grade with that sampled, but of the kind he contracted for. The tobacco delivered was not at all within the description of the article sold, and it is enough that this objection applies to the whole quantity.

Third. It was for the plaintiffs to show the market value of the tobacco delivered by the defendants. For that purpose a sale at auction was properly resorted to, and its result was some evidence of the fact in question, not conclusive, but quite satisfactory in the absence of explanation or testimony from the 'defendants. (Muller v. Eno, 14 N. Y. 597.) Some other propositions are presented by the appellants’ argument. They have been examined and found to disclose no error at the trial, nor any reason for the reversal of the judgment of the General Term.

It should, therefore, be affirmed.

All concur.

Judgment affirmed.


author: Andrews, J.

text:
    George Jackson et al., Respondents, v. Horace D. Tupper et al., Appellants.
    A payment, to take an oral contract for the sale of goods, for the price of $50 or more, out of the statute of frauds, must he made at the time of the contract. (3 K. S. 136, § 3.) A payment subsequently made, although conforming to the oral agreement, is insufficient of itself to make the prior agreement valid; there must be additional proof sufficient to show that at the time of the payment, the terms of the prior oral contract were in the minds of the parties and were re-affirmed by them. In which case a cause of action arises not on the prior oral contract, but on the new agreement.
    Such a prior void contract, however, may be validated by a subsequent receipt and acceptance, pursuant thereto, by the buyer, of the goods or a portion of them.
    (Argued February 5, 1886;
    decided March 2, 1886.)

      Appeal from judgment of the General Term of the Supreme Court, in the third judicial department, entered upon an order made May 31,1884, which denied a motion for a new trial, and directed judgment on a verdict.
    This action was brought to recover damages for an alleged breach of warranty in a contract of sale.
    The facts are stated in the case as follows :
    The defendants, at West Troy, 1ST. Y., on the 28th day of February, 1880, orally sold to the plaintiffs about eight hundred tons of ice, which was being cut at Round pond, near Glens Falls, hf. Y., and agreed to place the same in a house which they warranted should be a good, substantial house, which should stand a year. The plaintiffs orally agreed to pay for said ice the sum of eighty cents a ton. FTo memorandum was made in writing of this contract, and no money was paid at that time. Sometime after this, said ice was received and accepted by the plaintiffs in said house built by the defendants. After this, about May 1, 1880, the plaintiffs gave the defendants $615, in full for said ice, by crediting said amount on an account Wight had against Tupper. When said credit was given nothing was said by either party about said contract or its terms. About May 10,1880, the house fell. It was not properly constructed ; it was neither good nor substantial; its defects were latent. They were not discovered by the plaintiffs before said house fell, and could not have been discovered by an inspection of the building before it fell. Its defects were known to the defendants. The plaintiffs suffered damages to the amount of $4,131. The complaint was ordered amended to demand as damages the amount proved. The defendants on the trial introduced no evidence.
    At the close of the plaintiffs’ case the defendants’ counsel moved for a nonsuit on the following grounds:

      First. That the contract,' which the evidence proves the plaintiffs and defendants entered into on the 28th day of February, 1880, was for the sale of chattels of the value of more than $50, and not being in writing, the defendants are in no way liable for any breach of the terms of said contract.

      Second. That the only binding contract of sale which was made of this ice was on the 1st day of May, 1880; up to that time there was no sale. Plaintiffs were not bound to accept and pay for the ice, and the defendants not bound to deliver it.

      Third. That at the time of the sale, May 1, 1880, nothing was said as to the condition of the ice or house; and no guarantee as to the length of time the house would stand was made by the defendants.

      Fourth. That when said sale was made, defendants had been to see the ice, accepted and paid for it the sum of $615, and nothing was said by either party.

      Fifth. When a payment, made after the contract is made, is relied on-to take the contract out of the statute of frauds, the terms of the contract must be talked over or restated.
    The motion was denied and the court directed a verdict for the plaintiffs for $4,131, subject to the opinion of the General Term; a verdict was rendered accordingly.

      N. P. Ilinman for appellants.
    The contract of February 28, 1880, was a contract of sale and not one of services. (Smith v. N. Y. C. R. R. Co., 4 Keyes, 180; Devens v. Rose, 23 Wend. 270; Allen v. Aquine, 5 N. Y. Leg. Obs. 380; Sprague v. Blackie, 20 Wend. 61; Brabin v. Hyde, 32 N. Y. 519; Church, Ch. J., 45 id. 148, 149; Hunter v. Wetsell, 57 id. 375; S. C., 549, 533; Hollenbeck v. Cochran, 20 Hun, 416.) As a legal proposition, the intent of the parties who attempt to make a contract is immaterial, and cannot be given in evidence or inferred unless communicated. (Madden v. Benedict, 20 N. Y. Weekly Dig. 30.) An acceptance to take a contract out of the statute of frauds must be in pursuance of the contract of sale, and with intent to take possession under it as owner. (Brabin v. Hyde, 32 N. Y. 519; Cunningham v. Arkbrook, 22 Mo. 354, 361; Rickey v. Tenbroeck, 63 id. 563; Davis v. Eastman, 1 Allen, 422, Atherton v. Newhall, 12 Mass. 141; Van Woert v. A. & S. R. R., 67 N. Y. 538; McKnight v. Dunlop, 5 id. 537; Stone v. Browning, 68 id. 598; Marsh v. Rowe, 44 id. 643; Shindler v. Houston, 1 id. 261; Caulkins v. Hellman,
      47 id. 449; Townsend v. Hargraves, 118 Mass. 333; Alger v. Johnson, 4 Hun, 412; Hunter v. Wetsell, 57 N. Y. 375; Morrell v. Cooper, 65, Barb. 516; Harris v. Knickerbocker, 5 Wend. 638; Jervis v. Smith, Hoff. Ch. 470; Haight v. Childs, 34 Barb. 186.) It is-not necessary to plead the statute ; the defendants can avail themselves of such a defense in any case where the facts proved by the plaintiffs warrant it. (Livingston v. Smith, 14 How. Pr. 490; Alger v. Johnson, 4 Hun, 412; Blank v. Little, 10 N. Y. Weekly Dig. 254; 4 E. D. Smith, 390.)

      G. B. Wellington for respondents.
    The contract was taken out of the operation of the statute of frauds by the acceptance and receipt of the ice. (1 Stat. Law of N. Y. [Diossy’s ed.] 607; McKnight v. Dunlop, 5 N. Y. 542; Cross v. O'Donnell, 44 id. 664; Fitzimmons v. Woodruff, 74 id. 621.) The delivery and the acceptance of the ice in the building, taking the contract out of the operation of the statute, rendered the whole of the original contract valid and binding, including the warranty, “ this must then be treated as an executed sale with warranty.” (McKenzie v. Farrell, 4 Bosw. 202; Oneida Bk. v. Ontario Bk., 21 N. Y. 503; Foot v. Bently, 44 id. 171; Day v. Pool, 52 id. 416; Conor v. Dempsey, 49 id. 665.) Where a contract is admitted by an answer, its invalidity by reason of the statute of frauds must be pleaded. In this case it could not consistently be even pleaded, for delivery and acceptance are admitted. (Marston v. Swett, 66 N. Y. 206; Duffy v. O’Donovan, 46 id. 226; Chapin v. Dobson, 78 id. 82.) If it be found that a collateral agreement adds something to a contract of sale, and is, in fact, a collateral agreement, it may then be an express warranty, and thus survive delivery and acceptance. (Gaylord Mfg. Co. v. Allen, 53 N. Y. 519; Reed v. Randall, 29 id. 362.)
   Andrews, J.

It is conceded that the oral contract of I'ebriv ary 28, 1880, for the sale and storage of the ice was when made, void under the statute of frauds. It must also be conceded under the decisions in this State, that it was'not validated by the payment made in May, 1880. By our statute, payment operates to take an oral contract for the sale of goods for the price of $50 or more out of the statute, only when it is made at the time of the contract. (2 R. S. 136, § 3.) The decisions have construed this provision of the statute with great strictness. (Hunter v. Wetsell, 57 N. Y. 375; S. C., 84 id. 549; Allis v. Read, 45 id. 142.) It is in substance held that payment subsequently made, although conforming to the oral agreement, is insufficient of itself to make the prior oral agreement valid. There must be enough in addition to the act of payment to show, that the terms of the prior oral contract were then in the minds of the parties, and were reaffirmed by them, and this being shown, a cause of action arises, not on the prior oral contract but on the new contract made at the time of the payment. The plaintiffs did not bring their case within this principle. There was no restatement of the terms of the prior oral agreement when the payment of May 1,1880, was made, and no express recognition thereof, nor was the payment made for the avowed purpose of binding the prior bargain. It is expressly found that nothing was said at the time by either party about the contract of February 28, 1880, or its terms. But a prior void* contract may be validated by a subsequent receipt and acceptance by the buyer, pursuant thereto, of the goods, or part of them, which are the subject of the contract. (2 R. S. 136, § 3; McKnight v. Dunlop, 5 N. Y. 537.) Where this has been done the cause of action arises on the original oral agreement authenticated by the act of acceptance. There is no statute difficulty, as in the case of a subsequent payment, because the statute does not, as in that case, require that the acceptance must be at the time of the making of the oral agreement. It was found in this case that after the oral agreement of February 28, 1880, was made, the said ice was received and accepted by the plaintiffs.” It is impossible to construe the finding, except as referring to the ice which was the subject of the oral agreement of that date, and as referring to an acceptance thereunder. This relieved the contract from the ban of the statute. Ro question is presented as to the right of the plaintiffs to the'judgment recovered, assuming that the contract of February 28, 1880, was validated.

The judgment should .be affirmed.

All concur.

Judgment affirmed.


author: Danforth, J.

text:
    John Sweeney, Respondent, v. Berlin and Jones Envelope Company, Appellant.
    A servant accepts the service, subject to the risks incident to it; and where, when he enters into the employment, the machinery and implements used in the master’s business are of a certain kind or condition, and the servant knows it, he voluntarily takes the risk resulting from their use, and can make no claim upon the master to furnish other or different safeguards.
    A master may carry on his business with an old machine not provided with all the safeguards attached to newer machines; he may discharge a servant employed to run it, who refuses to perform his stipulated service, and a threat to do so is not coercion, which will make the master liable for injuries to the servant resulting from the use of the machine.
    (Argued February 5, 1886;
    decided March 2, 1886.)
    Appeal from judgment of the General Term of the Court of Common Pleas in and for the city and county of New York, entered upon an order made May 23, 1884, which affirmed a judgment in favor of plaintiff entered upon a verdict.
    This action was brought to recover damages for injuries alleged to have been caused by defendant’s negligence. Plaintiff was a printer and embosser in defendant’s employ, and the negligence complained of was the omission to furnish suitable and safe machinery for the work.
    The material facts are stated in the opinion.

      John L. Logan for appellant.
    The defendant was not required to provide additional apparatus "for greater safety. (Gibson v. E. R. Co., 63 N. Y. 452; DeForest v. Jewell, 88 id. 264.) Plaintiff having worked upon this machine for six years without injury, and if the treadle had worn smooth the plaintiff must have,known it, and having failed to call the attention of any officers of the company to the fact he cannot recover. (Warner v. E. R. R. Co., 39 N. Y. 468; Painton v. The N. C. R. R., 83 id. 7; Parodi v. R. R. Co., 15 Rep. 353; Hough v. R. R. Co., 100 U. S. 213, 225.) The complaint should have been dismissed upon the ground that the plaintiff was guilty of negligence, and that his injuries were sustained purely by his own negligence. (Hart v. H. R. Bridge Co., 80 N. Y. 622; Painton v. The N. C. R. R. Co., 83 id. 7.) It was wholly immaterial whether any “ clutch brake” had been placed on the machine or not. ' (Gibson v. Erie R. Co., 63 N. Y. 452; DeForest v. Jewett, 88 id. 264.)

      Albertus Perry for respondent.
    The defendant was bound to exercise due care in furnishing a suitable and safe machine for the use of the plaintiff and keeping it in repair. (Cone v D., L. & W. R. R. Co., 81 N. Y. 206; Wright v. N. Y. C. R. R. Co., 25 id. 562; Laning v. N. Y. C. R. R. Co., 49 id. 521; Flike v. B. & A. R. R. Co., 53 id. 549; Corcoran v. Holbrook, 59 id. 510; Cooley on Torts, 559.) The plaintiff was not guilty of contributory negligence. (Cooley on Torts, 559; Marsh v. Chickering, 25 Hun, 405; Laning v. N. Y. C. R. R. Co., 49 N. Y. 521, 534.) By the threats of discharge the plaintiff “ urged on or coerced ” the plaintiff to use the machine, and therefore the plaintiff cannot be regarded as having voluntarily incurred the risk. (Gibson v. Erie R. R. Co., 63 N. Y. 449, 453; Hawley v. N. C. R. R. Co., 82 id. 370; Kain v. Smith, 25 Hun, 146; 89 N. Y. 375.) There was no undisputed fact in the case upon which the court could adjudge as matter of .law that the 'plaintiff was guilty of contributory negligence. (Stackus v. N. Y. C. & H. R. R. R. Co., 79 N. Y. 464; Kain v. Smith, 25 Hun, 146; 89 N. Y. 375; Hawley v. N. C. R. R. Co., 82 id. 370; Marsh v. Chickering, 25 Hun, 405.)
   Danforth, J.

A motion by defendant for a nonsuit was denied, and the plaintiff had a verdict after instructions to the jury, to which, as the case states, no exception was taken by either party. We have therefore 'only to inquire whether the evidence justified its submission to the jury, as sufficient in any reasonable view to warrant a recovery. (Burke v. Witherbee, 98 N. Y. 562.) The machine by which the plaintiff was injured was moved by steam over which he had no control, but when necessary, its operations could be held in cheek by the pressure of his foot upon a pedal. The process of embossing-required that the plate and die should register, or coincide. To effect that he necessarily placed his hands between them, but. before doing so, put his foot upon the pedal and stopped the press; then “ all of a sudden,” he says, “ the cam came around and jolted a little harder than it usually does, and my foot slipped,” the machine started, he got one hand out, but the other was caught between the plates and crushed : hence the injury complained of. By a timely removal of the belt through which power was communicated to the. machinery, he could have avoided all danger. Whether under the circumstances he should have done so, was for the jury to say, and their verdict must be deemed conclusive in his favor upon that point.

To sustain the judgment in other respects the plaintiff alleges negligence on the part of the defendant in not providing a “clutch” or some contrivance other than the pedal to prevent motion in the machine while the operator’s hands were exposed to danger. It is important to notice that no fault was found with the condition of the pedal, or other contrivances, or the management of the engine. It may very well be that had the surface of the pedal been cut or roughened like a file or rasp, its holding power would have been greater, but there is no evidence that it was ever in that condition, nor but that its surface was smooth or slippery "when the plaintiff, five or six years before, entered the employment of the defendant and began to use the machine. The complaint to the superintendent was not as to the condition or any imperfection of the pedal, but as to its sufficiency. The plaintiff testified : “ 1 stated ” to him “that the only means of throwing this machine out of gear or stopping it was by putting the foot on that little treadle; then that could not be done unless the cam had got around it; the cam would have to clutch it before you could do that.”

So the pleading, and the plaintiff’s evidence show that he was directed “to use and operate £the Isaac Adams press,’ which was an old embossing press, having no late or modern improvements for using or operating the same in safety that he entered upon the work in question upon belief that it was safe, “ but at the same time told the defendant that he thought it required and ought to have an additional apparatus to stop the same and render it perfectly safe and secure, but he was required to proceed with the work without any such change or improvement, although he requested the same to be furnished.”

It must be conceded in favor of the plaintiff that the jury would have been authorized to find these facts, and although the complaint does not allege it, there is testimony tending to show that what the plaintiff asked was that a “ clutch” be attached to the machine, and that the superintendent referred him to the machinist, who promised to attend to it as soon as he had time. All this, however, was before the work was undertaken, in doing which the accident happened. Upon that occasion the plaintiff says : “ I told him it was an ugly job to work on, and he told me to go ahead with it and be careful, and if I did not care about doing it, I could get out; that there were plenty of other people waiting for employment; that there were men coming in there every day looking for it; I asked him at different times to have it improved. I asked him if he would not have the press improved by having a brake put on it. He told me to go on, and if I did not, that there were plenty'waiting for the job; I believe then I asked him about having the press repaired, having the improvements put on it, and he referred me to the machinist; I went to the machinist and he said that he would do all this that I explained to him about having the press improved, that he would do it when he had time.”

It is evident that this is not a case where the machine by means of which the business was carried on was temporarily out of repair, as in Clarke v. Holmes (7 Hurl. & N. 937), or Kain v. Smith (89 N. Y. 375), or where the defect exposed the servant to any latent extraordinary danger, but at most one where the employer failed to discard a machine, or part of a machine, and supply its place with something different, and, in the opinion of the plaintiff, something safer. He was under no obligation to do so. The machine was safe in any view of the evidence, so long as the pedal was pressed by the operator. It was not automatic; neither was the proposed substitute. Each' required the attention of an intelligent actor, and the real condition and efficacy of the one in use was not concealed from or unknown to the servant. He knew as much about it, and the risk attending its use as the master. The defendant could not be required to provide himself with other machinery or with new appliances, nor to elect between the expense of so doing, and the imposition of damages for injuries resulting to servants from the mere use of an older or different pattern. In the absence of defective construction, or of negligence or want of care in the reparation of machinery furnished by him, the master incurs no liability for injuries arising from its use. The general rule is that the servant accepts the service, subject to the risks incidental to it, and where the machinery and implements of the employer’s business are at that time of a certain kind or condition, and the servant knows it, he can make no claim upon the master to furnish other or different safeguards ; De Forest v. Jewett (88 N. Y. 264), where a car-coupler stepped into a sluice in defendant’s yard and was run over; Hayden v. Smithville Manfg. Co. (29 Conn. 548), where an employe m a mill received an injury to his hand by being caught in the gearing of a spring frame. In Gibson v. Erie Railway Co. (63 N. Y. 449), the last case is cited with approval, and the rule applied where an employe was killed by a projecting roof. Under such circumstances, the servant is regarded as voluntarily taking the risks resulting from the use of the machinery, unless, as is said, the master, by urging on the servant, or coercing him into danger, or in some other way, directly contributes to the injury, or assumes the risk. Kain v. Smith (supra), and Hawley v. Northern Central Railway Co. (82 N. Y. 370), cited by respondent, went upon that ground, and although in one the tool was defective, and in the other, the road-bed out of repair, negligence was not imputed to the servant. This exception is relied upon by the respondent. We think the evidence does not bring the defendant within it. If the defect had been in the pedal and a promise made to repair that, and yet directions given for its use, it might be otherwise, -but here the promise, if there was any, concerned a new appliance, not attached to that particular machine, nor to any machines of that make. The “ Adams machines,” as the plaintiff’s witnesses proved, were uniformly furnished with the pedal. A clutch had never been seen on one. They were for different purposes. The pedal was to stop the machine ; the clutch was to put the machine in motion. But we think there was no promise made to the plaintiff, nor inducement offered him to take the risk. It cannot be said that there was any connection between the conversations above set forth, and the continuance of the plaintiff in the defendant’s employment. Nor does the complaint allege any. On the contrary, it alleges a simple request that the change or improvement be made,” not a promise or suggestion that it should be. There was no direction by the master, nor reliance upon the judgment of a superior officer. It is plain that the danger, to the knowledge of the plaintiff, was inherent in the use of the machine, and to the work itself; the peril did not grow out of extrinsic causes or circumstances which could not be discovered by the use of ordinary precaution, nor to a condition of things different from those existing at the beginning of the service. It was part of the plaintiff’s engagement that the master’s work should be performed in the usual course and way of business. The work which the servant was called upon to do at the time in question, was not of a different character from that which he originally undertook; and the machine upon which it was to be done was one then in use. No new duty or species of labor was imposed upon him, nor was he required to work a machine with which he was not familiar. He was simply called upon to do that for which he was engaged, and the doing of which formed the consideration of his employment. • To say that the master shall be liable to the servant in such a -case is to say that he shall not have the benefit of the labor for which he contracted. Such is not the law. The defendant might, if he chose, carry on his business with an old, rather than a new machine, and could not be required to keep in his employ a servant who would not run it. He might, therefore, call upon the servant to perform his stipulated service, and discharge him if it was withheld. A threat to do so is not coercion. Here there was nothing more. Under such circumstances, there is no ground for charging the defendant with negligence, or throwing upon it a risk assumed by the plaintiff when he took employment. While it is difficult to see how the accident could have occurred, except from the inattention of the plaintiff, that question was for the jury, but because the evidence in no aspect discloses negligence or failure of duty on the part of the defendant, we think the case was improperly submitted to them as one in which the plaintiff might recover.

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

All concur.

Judgment reversed.