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    James Gordon Bennett v. The American Art Union, and others.
    No injunction will be issued, when it appears upon the face of the plaintiff’s complaint, that he has no interest that can be injured or affected by the act which he seeks to restrain, nor will it be issued, when his claim for relief is founded upon a contract which, by his own showing, is illegal.
    The subscribers to the Art Union have no interest, legal or equitable, in the property of the association.
    If the annual distribution of the works of art belonging to the association is a lottery, pi-ohibited by law, each subscriber, by his purchase of a share, becomes a “particeps criminis.”

    Where a statutory forfeiture attaches upon the commission of an offence, the title of the owner of the property is from that time wholly divested.
    If the annual distribution provided for in the constitution of the Art Union is an illegal lottery, the works of art that have been offered for distribution, are now, by force of the statutory forfeiture, the exclusive property of the state.

      Held, that upon the face of his complaint, the plaintiff had no title to relief.
    Temporary injunction dissolved—motion for permanent injunction denied.
    April, 1852.

      The complaint alleged as follows:—
    That by an act of the legislature of the state of New York, passed at a session of the legislature held at Albany, in the state of New York, in the year 1840, entitled “ An Act to incorporate the Apollo Association, for the promotion of the fine arts,” it was enacted that John W. Francis, James Herring, John H. Gourlie, George Bruce, Augustus Guell, John P. Ridner, John P. Nesmith, Thomas N. Campbell, Prosper M. Wet-more, and such other persons as then were, or might thereafter from time to time become, associated with them, were thereby constituted a body corporate by the name of the Apollo Association, for the purpose of the promotion of the fine arts within the United States. That the corporation thereby created might acquire, hold, and purchase real and personal estate, but the whole income of such real and personal estate should not exceed $10,000. That the said association should have power to make, from time to time, such a constitution, by-laws, and regulations, as they should judge proper for the election of officers, for the prescribing their respective functions, and the mode of discharging the same, for the admission of new members into the said association, for the government of the members and officers thereof, for regulating the annual rate of contributions towards the funds thereof, appointing the times and places of meeting for managing the affairs of said association, and for suspending or expelling such officers and members as should neglect or refuse to comply with the constitution, by-laws, and regulations thereof. That the officers of the said association should consist of a president, a corresponding secretary, a recording secretary, a treasurer, a committee of management consisting of fifteen members who were not professional artists, and such other officers as the said" association might deem necessary ; who should be annually chosen, by a plurality of votes, on the third Monday in December ; and if the annual election should not be holden on that day, then it should be lawful to make such election on any other day, on due notice being given to the members, of the intention to hold such election, and there being present, a,t the time and place designated, fifty members of the association ; and in ease a vacancy should take place between the annual meetings, then it should be lawful for such vacancy to be filled by the officers and committee of management, at any regular meeting of said committee ; and the person or persons so chosen should continue in office until the next annual election, or until others were chosen in their places. That that act should continue in force for the period of twenty-one years, subject, however, to amendments, modifications, or repeal, by the legislature. That the said corporation should possess the general powers, and be subject to the restrictions and liabilities prescribed in the third title of the eighteenth chapter of the first part of the revised statutes. That soon after the passing of the said act of incorporation, the individuals in the said act named, or some of them, made a constitution, by-laws, and regulations, for the purpose in the said act named; and afterwards, and on or about the 23d day of December, 1843, amended the said constitution ; and the said constitution, and the amendments thereto, were then adopted, and continued in force thenceforth, and until the 20th day of December, 1847. That by the act incorporating said company, there is no authority or power whatever conferred upon the said association, nor upon the committee of management thereof, to make any distribution of the funds or property of said corporation. That in and by the said constitution, it was, among other things, provided as follows:—
    Art. 1. Every subscriber of five dollars, or more, per annum, shall be á member of this association, and shall be entitled to the privileges-of membership.
    Art. 8. The Committee of Management shall have in charge the general supervision and management of the interests and affairs of the association ; they shall purchase such works of art, executed by artists in the United States, or by American artists abroad, as they may think worthy of selection, and as the state of the treasury shall warrant.
    Art. 9. The fund raised by annual subscriptions shall be appropriated under the direction of the Committee of Management- ; and when by them delegated by the executive committee to defraying the necessary expenses of the association, to the purchasing of the works of art under the eighth article, and to defray the expenses of publishing annually an engraving for distribution among associates.

      Art. 10. At the annual meeting of the association in December, the works of art purchased during the year shall become by lot publicly determined the property of individual members, each member being entitled to one chance of share in such distribution for each five dollars by him subscribed and paid. That, under the tenth article of said constitution, the mode of distribution adopted by the committee of management was this : the works of. art purchased and intended to be distributed by lot were severally numbered, and tickets with numbers representing them were placed in a portable box or wheel; the names of the members of said association, or the numbers on the tickets given to the several members at the time of their subscription, and which were also attached to their names on the books of the association, who had paid their subscriptions, were put upon similar tickets in another box or wheel; each member being entitled to one chance for each five dollars subscribed and paid. Two persons were designated to manage the drawings, one of whom would draw a ticket from the box or wheel of members corresponding with the numbers on the paintings or works of art to be distributed, and the other person would, at the same time, draw a ticket from the box or wheel containing the subscribers’ names, or the numbers of their tickets, placed opposite to their names in the books of said association, and the subscribers whose names or numbers were so drawn from the box or wheel containing the names or numbers of the subscribers, were severally declared to be the owners of the work of art which was marked by the number designated on said ticket as a prize, which was drawn from said box or wheel at the same time that his or her name or number was drawn from the other box or wheel, and said work of art was after-wards delivered to such person, as his or her private property. This process was repeated by drawing a ticket from the box or wheel of tickets containing the numbers of said works of art, and a name from the box of names or numbers of the subscribers, and the results declared, until the tickets were all drawn from said box or wheel which contained the tickets with numbers thereon of the works of art to1 be distributed. That by these means a few of the subscribers to said association obtained all the works of art so distributed, and the large proportion of said subscribers were thereby attempted to be deprived of all their right and interest therein. That such constitution and the proceedings so had under the same, were in express violation of. the statute against raffling and lotteries, and were wholly unauthorized by said act of incorporation. That by another act of the Legislature of the State of New York, passed at a session of the said Legislature, held at Albany, in the State of N. Y., in the year 1844 by a two-third vote, entitled “ An Act to amend the act, to incorporate the Apollo Association for the promotion of the fine arts,” passed May 7th, 1840, it was enacted that the name of the Apollo Association, for the promotion of the fine arts in the United States, was thereby changed to the American Art Union, and that the distribution of the works of art belonging to the said association, provided for in the constitution thereof, and the annual election of officers, should be held on the Friday preceding the 25th day of December in each year, instead of the time stated in the fourth section of the act thereby amended, and that that act shall take effect immediately. The plaintiff shows to the court, upon information and belief, that the constitution of said association, which was in existence at the date of the passage of said act, was the constitution abovementioned, and that the mode of distribution provided for and practised under said constitution, was by lottery, and conducted in the manner hereinbefore set forth in that behalf. That said constitution was not exhibited to the legislature, nor was it in any manner communicated to them, before, or at the time of passing said act, that the mode of distribution, as well as the actual distribution of works of art belonging to said association which were covertly sought to be authorized or sanctioned by said last mentioned act, were to be by lottery, or by means of lot or chance among a few of the members of the said association, at the expense of the large majority of said members. That, as plaintiff is informed and believes, so much of said last mentioned act as provides that the distribution of works of art belonging to said association, provided for in the constitution thereof, should be had on the Friday preceding the 25th day of December in each year, was inoperative and void for uncertainty. That if said provision might be operative, by means of its reference to, and its adoption of the mode of distribution provided in said constitution, then such provision was void, because the constitution of the State of New York, then in force, in the eleventh section of the seventh article thereof, expressly prohibited the legislature from authorizing any lottery in this state, and the act so passed, taken in connexion with the constitution of said association, therein referred to', was an attempt by the legislature to authorize a lottery of works of art within this state. That by another act of the legislature of the State of New York, passed at a session of the legislature held at Albany, in the State of New York, in the year 1847, entitled, “ An Act further to amend the act to incorporate the Apollo Association for the promotion of the fine arts,” passed May 7,1840, it was enacted that the second section of the act entitled “An Act to incorporate the Apollo Association for the promotion of the fine arts,” passed May 7,1840, was thereby amended so as to read as follows : “ Section 2. The corporation hereby created may acquire,' hold, purchase, mortgage, and sell real and personal estate, but the whole income of such real and personal estate shall not exceed $10,000.” That the third section of the said act was thereby amended so as to read as follows :—“ Section 3. The business of the said corporation shall be conducted by a committee of management, to consist of twenty-one members, who are not professional artists, who shall be chosen at the annual meeting of the association, as follows :—At the next annual meeting there shall be chosen twenty-one members of such committee, who shall be immediately divided by lot into three equal classes, and the first class shall hold one year, the second class two years, and the third class three years; and thereafter seven shall be chosen annually, to hold for three years, and until others are chosen to fill their places. The committee of management shall have power to make, from time to time, such a constitution, bylaws, and regulations, as they shall judge proper for the election of officers, for prescribing their respective functions and-the mode of discharging the same, for the admission of new members into .the said association, for the government of the officers and members thereof, for regulating the annual rate of contributions towards the funds thereof, for appointing the times and places of meeting of said association, and of the committee of management, and for suspending and expelling such officers and members as shall neglect or refuse to comply with the constitution, by-laws and regulations.” That the fourth section of the said act was thereby amended so as to read as follows :—“ Section 4. The officers of said association shall be a president, a corresponding secretary, a recording secretary, and a treasurer, who shall be chosen by and from the committee of management, annually, and such other officers and agents as the committee of management may see fit to appoint or employ, and in case a vacancy in the officers or committee of management shall take place between the annual meetings, the same may be filled by the committee of management at any regular meeting of said committee, and the person or persons so chosen shall continue in office, until the next annual election, or until others are chosen in their places,” and that that act should take effect immediately. That the said last mentioned act has never been modified, amended, or repealed by the legislature, and the same from the time of the passage thereof, has always been and still is in full force and effect. That after the passing of the said last .mentioned act, and at the next annual meeting of the said association, held on- the 20th day of December, 1847, a committee of management, consisting of twenty-one members, who were not professional artists, and whose names are to the plaintiff unknown, were duly chosen, and the members of the said committee were immediately divided by lot into three equal classes. That the said committee so chosen as last aforesaid, did,- on the said 20th day- of December, 1847, make a constitution for the purposes in the said last mentioned act. That in and by the constitution so made as last aforesaid, it was and is provided and declared among other things, to the tenor and effect following, that is to say : That every subscriber of five dollars or more per annum should be a member of the said American Art Union, and after the payment thereof should be entitled to all the privileges of membership for the residue of the calendar year, and that there should be a stated meeting of the members on the Friday evening next before Christmas, at such place as the committee of management should direct, to be called the annual meeting of the association, when the distribution of the works of art and the election of the members of the committee of management should take place, and that the committee of management then and there elected, should meet on the Monday evening next after such annual meeting, and then and there choose from their number the officers of the said association for the year then next, and that the real and personal property of the association should be under the care of and subject to the disposal of the committee of management, for the time being, and should be held by such committee for the benefit of the said association, and that the net funds of the said association should be applied first to the purchase or production of fine engravings, or other works of American art annually, which should be distributed equally to all the members for each year, respectively ; and secondly, to the purchase or production of works of American art principally paintings, to be distributed publicly at the annual meeting of the said association, among the members for the current year by lot—that each member should have one share for every sum of five dollars paid by him—and that the purchase, production, and time and mode of distribution of the said works of art, should be under the direction, regulation, and control of the committee of management for the time being— and that the real and personal property of the institution should be under the care and subject to the disposal of the committee of management, for the benefit of the institution, and on any dissolution of the institution after paying all its debts, the whole remaining property should be distributed among the persons who should be members at the time of such dissolution in proportion to the amount theretofore paid by them respectively to the funds of the institution. That afterwards, and on the 22d day of December, 1848, an annual meeting of the said association held at the Tabernacle, in the city of New York, at which said meeting, certain seven persons, whose names are to the plaintiff unknown, all of the said city of New York, and neither of them being a professional artist, were elected members of the committee of management of the said association, for the year then next, in lieu of the seven members of the said committee whose term of office then expired ; and the said persons elected as last aforesaid, respectively assented to such election, and consented to become members of such committee, and they and each of them thence became and were and acted as members of the said committee. That a meeting of the committee of management of the said institution was held on the 25th day of December, 1848, being the Monday after the annual meeting lastmentioned, when and where the said lastmentioned committee chose from their number the officers of the said association for the year then next; but what officers in particular were chosen, or who were such officers, is to the plaintiff unknown. That on the 20th day of December, 1850, being the Friday next before Christmas, in the year last aforesaid, there was an annual meeting of the said association at Tripler Hall, in the city of New York ; and at such meeting, the defendant, the said Abram M. Cozzens, the then president of the said association, announced to the members of the said association, that the term of office of seven of the then members of their committee of management of the said association, then and there expired, and that the seven members whose term of office expired, as last aforesaid, were named William J. Iloppin, Charles P. Daly, Abraham M. Cozzens, John P. Ridner, Marshall 0. Roberts, Nathaniel Jarvis the younger, and Frederick A. Coe, being seven of the defendants in this action ; and the said last named seven persons were then and there re-elected members of the committee of management of the said association, and the said persons so re-elected, severally and respectively, consented to become and act as members of the committee of management of the said association, and they thenceforth became and were, and acted, as members of such committee; and they", together with the other defendants, Robert Kelly, Andrew Warner, Benjamin H. Jarvis, John H. Austin, William II. Appleton, Evert A. Duyckinck, Erastus C. Benedict, Henry J. Raymond, William B. Been, George W. Austin, George Curtis, William A. Butler, Charles H. Russell, and George Treadwell, became and were the committee of management of and for the said association. That the said last named committee of management, on the 23d day of December, 1850, being the Monday next after the said last named annual meeting, held a meeting for the purpose of electing from among their number the officers of the said association for the then next year, and that at such meeting the said defendant, Abraham M. Cozzens, was chosen president, the said George W. Austin was chosen treasurer, and the said defendants, Erastus C. Benedict, William J. Hoppin, Frederick A. Coe, Andrew Warner, and Benjamin H. Jarvis, the executive committee of the said association. That after the said annual meeting last named, it became and was the duty of the said last named committee of management, among other things, to apply the net funds of the said association, first, to the purchase or production of fine engravings or other works of American art, and, secondly, to the purchase or production of works of American art, principally paintings, and to cause an annual meeting of the said association to be held on the 19th day of December, 1851, being the Friday next before the Christmas of that year; that on the said 19th day of December, 1851, the term of office of seven of the individual defendants above named as members of the said committee of management, ceased, and they thenceforth ceased to be members of the said committee of management, but which seven of the members of the said committee is unknown to the plaintiff, save that it is other seven than the seven elected on the 21st day of December, 1849 ; that on the 23d day of December, 1851, being the Monday next after the Friday next before Christmas of that year, the term of• office of the said officers' of the said association, elected on the said 20th day of December, 1850, expired. That the said Robert Kelly, Abraham M. Cozzens, Andrew Warner, Marshall 0. Roberts, Benjamin H. Austin, Frederick A. Coe, John H. Austin, Charles P. Daly, William H. Appleton, William J. Hoppin, Evert A. Duyckinck, Erastus C. Benedict, Henry J. Raymond, William B. Been, George W. Austin, George Curtis, William A. Butler, Charles H. Russell, George Treadwell, JohnP. Ridner, and Nathaniel Jarvis, the younger, while they were the committee of management of the said association, in disregard of their duty in that behalf, did not and would not cause an annual meeting of the said association to be held on the Friday next before the Christmas of the year 1851, and no annual meeting of the said association for the year 1851 has ever been held or attempted to be held, and the beforementioned members of the said committee of management, whose term of office expired on the said Friday next before Christmas, 1851, and the said officers of the said association, whose term of office expired on the Monday next after the Friday next before Christmas of the year 1851, have not, nor have either of them, been re-elected, nor have another or others been elected to fill the places of the said members of the said committee, and the said officers, or any or either of them, and that ever since the said Friday next before Christmas of the year 1851, in violation of the charter and constitution of the said American Art Union, the committee of management of the said association has consisted, and still consists, of fourteen legal members and no more ; and since the Monday next after the Friday, next before Christmas, 1851, there have not been any officers, and are not now any officers of the said association legally qualified to act in the affairs and concerns of the said association. That since the said Friday next before Christmas of 1851, the said seven members of the committee whose term of office expired on that day, notwithstanding their terms of office expired at the time and as aforesaid, have continued and still continue to act as members of the committee of management of the said association, in like manner as though their term of office had not expired. That since the Monday next after the Friday next before Christmas, 1851, notwithstanding their terms of office expired at the time and as aforesaid, the said Abraham M. Cozzens has continued, and still continues, to act as the president of the said association, and the said George W. Austin has continued and still continues, to act as the treasurer of the said association. That on, or soon after the 20th day of December, 1850, the defendants, the said Robert Kelly, Abraham M. Cozzens, Andrew Warner, Marshall 0. Roberts, Benjamin H. Jarvis, Frederick A. Coe, John H. Austin, Charles P. Daly, William H. Appleton, William J. Hoppin, Evert A. Duyckinck, Erastus C. Benedict, Henry J. Raymond, William B. Deen, George W. Austin, George Curtis, William A. Butler, Charles H. Russell, George Treadwell, John P. Ridner, and Nathaniel Jarvis the younger, by virtue and under color of their office, as the committee of management of the said association, possessed themselves of real and personal property of the said American Art Union, to the amount of several thousand dollars, but what amount in particular the plaintiff is unable to state. That since the said 20th day of December, 1850, and until the 20th day of December, 1851, the said last named defendants, as such committee of management, collected and received from the members and the subscribers to the said association, to be applied to the purposes of the said association, the sum of more than $50,000, and that since the said 23d day of December, 1851, the said last named defendants have continued to collect and receive subscriptions for and on account of the- association, to an amount of several hundred dollars. That the said last named defendants have now in their possession, or under their management and control, various sums of money, and real and personal property belonging to the association, to the amount of several thousands of dollars. That between the 20th day of December, 1850, and the 20th* day of December, 1851, the said defendants last named, in disregard of their duties as the committee of management of the said American Art Union, expended, and caused to be expended, various large sums of money, for purposes not warranted by either the charter, constitution, or by-laws of the said association, and for purposes contrary to the constitution and laws of this state, and that the defendants still continue, and threaten to continue to expend the "moneys of the "said association in such illegal manner. That the said last named defendants have unlawfully, in the name of the said association, incurred divers debts, which have become, and are, charges and incumbrances upon and against the property of, or claims against the said association, and which said debts the said last named defendants allege themselves unable to pay, unless supplied by subscribers and members with additional funds for that purpose, and have called upon and requested the members and subscribers to the said association to pay to them, the said last named defendants, the sum of five dollars in addition to the amount already subscribed and paid by the said members or subscribers, to the last named defendants; and that the said last named defendants allege such additional payment to be necessary to enable them to discharge the debts due and owing by the said association, and to enable the said defendants to fulfil the promises by them myde to the members and subscribers to the said association. The plaintiff further shows that yearly, and in the month of December,-in the year 1843, to, and including, the month of December, in the year 1850, the committee of management of said association, without any valid or lawful power or authority so to do, contained in the charter of said association, and in violation of the constitution of this state, and of the statutes thereof, against raffling and lotteries, have put up, to be disposed by lot or chance among the members of said association, a large number of paintings and works of art, the property of said association,- and procured with the funds belonging to the said corporation, and that such lotteries have severally been publicly conducted under the direction of the committee-of management, and the drawings' thereof, respectively, have been made in the manner substantially as hereinbefore stated in that behalf. That the subscribers whose "names or numbers happened to be drawn out of one box or wheel, at the same time that a ticket was drawn out of the other box or wheel, with the number of a picture or work of art written upon it, were declared to have drawn the picture or work so numbered, as prizes, and the same were delivered :by said committee of management, or under their direction, to the persons so favored by fortune, as such prizes, to be held and enjoyed as their separate and individual property. That the members of said association, whose names or numbers: happened not to be drawn out of the wheel or box which contained the names or numbers of members at the same time that tickets were drawn out of the wheel or box containing the tickets, with numbers of works of art marked upon them; were declared to have drawn or taken nothing upon said distribution, and to have thereby forfeited all right to and interest in the property of said association put up at the drawings-of said lotteries respectively. That the committee of management of said association, composed of the said last'named defendants, have publicly announced that it is their intention, and the plaintiff, on his information and belief, alleges that it is the intention, of the last named defendants, unless restrained' by the order of this honorable court, to cause the personal property of the-said association, now in the possession, or under the management and control of the said defendants, or the principal part thereof, to be distributed by lot or chance, and by means of a lottery or game of chance, and in the manner substantially as above described, among the members or subscribers of'the said association, on the 30th day of March, 1852 ; that notice of said intention is posted at the rooms of said association, and a copy thereof is hereto annexed, forming a part hereof. That if the said defendants carry into effect such their intention, the whole of the said personal property of the said association, or the greater part thereof, amounting in value to several thousand dollars, will be and become forfeited, and will be wholly and irretrievably lost to the great majority of the members and subscribers of the said association, who are equally entitled thereto ; that the members or subscribers, or by whatever name the persons who have contributed to the funds of the association, and who are now entitled to participate therein, may be called, exceed in number ten thousand, and that it would be impossible to make them all parties to this action. That some time in the year 1840, one Richard M. Hoe became a member of and subscriber to the said American Art Union, by its then name of the Apollo Association ; that he subscribed thereto for the purpose of promoting the fine arts in the United States, and that he has continued to be such member and subscriber yearly, and every year, for the purpose last mentioned,, thenceforth and during the year 1851, and has, during all the time last aforesaid, duly and regularly in all things conformed to the charter, constitution, by-laws, and regulations of the said association, and has duly and regularly each year, during the period last aforesaid, paid the sum of $5 into the funds of said association, for the sole purpose aforesaid, and in the full belief of the integrity of the said several committees of management of the said association, and that they would faithfully and- in a lawful manner execute the trusts and duties belonging to their oEces as members of such committee, and would not waste or misapply the funds of the said association, or violate the constitution and laws of this state. That said Richard M. Hoe did, on the 28th day of May, 1851, pay and subscribe to the funds of the said association, the sum of $5. That the said'- last named committee of management, and the members thereof, did not faithfully and in a lawful manner execute the trusts and duties belonging to their oEces, as members of such committee, and have wasted and misapplied the funds of the said association, and so acted that the charter of the said association, or their personal representatives or assigns, are entitled, after paymejit of all debts of the said association, to a distribution of the property, real and personal, of the said association, according to the amount paid in by each member into the funds of the said association. The plaintiff further shows that all the matters above.alleged are averred upon the info'rmation and belief of the plaintiff. That by an instrument in writing, under the hand and seal of the said Richard M. Hoe, dated the 20th day of February, 1852, the said Richard M. Hoe assigned to the plaintiff all his right, title and interest, of, in, to, or against, the property and effects of the said association, or the said defendants, in respect of the payments by the said Richard M. Hoe, made to the funds of the said association. That, the plaintiff is now the rightful holder and owner of the interests of the said Richard M. Hoe, which he had on the 20th day of February, 1852, and is entitled to all the rights and privileges in respect of the payments made to the funds of the said association by the said Richard M. Hoe, in as full and beneficial a manner as the said Richard M. Hoe would or might have possessed the same, if the said assignment had not been made by him. The plaintiff further shows that under the provisions of the amended charter of said association the subscribers thereto have no-power to take the property and effects of the said association out of the hands of the said committee of management. That if a meeting of said subscribers and shareholders could be convened for that purpose, they have no power or authority to elect more than seven members of said committee, and fourteen members of the committee of management who have committed, and who have threatened to commit, the waste and misapplication of the funds and property of said corporation, will remain in office under said charter, and will continue to be a majority of said committee; that said committee of management having direction of the affairs of said corporation, will not institute, nor suffer to be instituted, in the name of the said corporation, against themselves or any of them, any action to compel the said committee, or any members thereof, to account for, and make satisfaction to the members of said association, for the funds and property thereof wrongfully, and unauthorizedly, and knowingly, and wilfully wasted or misappropriated, nor for the abuses of the rights and privileges of the shareholders therein ; ■nor to prevent the said committee from making the distribution, by means of a lottery, of the large part of the property of said corporation, which they threaten to make on the said 30th day of March, 1852 ; that the persons who constitute the committee of management, and who are defendants herein, have the control of said corporation; and that no action to correct or to prevent the waste or misapplication of the corporate property or funds can be brought in the name of said corporation: and that the wrongs done, and threatened to be done, can be redressed only by an action by the shareholders in, or members of, said corporation. The plaintiff further shows that he is greatly apprehensive that, the said committee of management of said association will make such illegal and unauthorized distribution of the paintings and works of art belonging to said association, by lot, or by means of a lottery, on the said thirtieth day of March, 1852, or at some time during the pendency' of the action, unless they shall be restrained from so doing by the preliminary injunction order of this court. The plaintiff, therefore, prays judgment that an account may be taken of all moneys received by John P. Ridner, William J. Hoppin, Abraham M. Cozzens, Marshall 0. Roberts, Frederick A. Co'e, Charles P.- Daly, Nathaniel Jarvis, Jr., Robert Kelly, Andrew Warner, Benjamin H. Jarvis, John H. ’Austen, William H. Appleton, Evert A. Duyckinck, George Treadwell, George W. Austen, William A. Butler, Henry J. Raymond, Erastus C. Benedict, William B. Deen, George Curtis, Charles H. Russell, or any of them, or by any agent or agents appointed by them, or appointed by or acting for said association during the time the parties above named have constituted or acted as the committee of management thereof, for the use of the said corporation or association, or which, but for their wilful default, might have been received, and of all expenditures or appropriations made thereof, or any part thereof, That an account of the losses and expenses sustained or incurred by the fund or property of said corporation by, through, or in consequence of any improper or unauthorized and illegal dealings or transactions of the said defendants or any of them in the name of said association, or otherwise, with the moneys, lands, and property of the said corporation may also be taken, and that the said defendants, or such of them, as may be justly liable to make good the same, may be respectively adjudged to pay the amount thereof. That an account may- be taken of all the property and effects of the said corporation, and that a sufficient part of said property, may be applied in liquidating the debts and existing liabilities of said corporation, and the residue secured for its benefit, so as to protect the just rights and interests of the shareholders therein. That for' this purpose, a receiver may be appointed to take possession of, recover and get in the lands, property and effects of the said American Art Unión; and that the defendants above named, and each of thepi, may be ordered by the court to deliver up to such receiver the property and effects of said corporation, and all books of account, deeds, documents, muniments, and vouchers belonging to said corporation. And that the said defendants may be restrained by injunction order from disposing of or putting up in any way or manner to be disposed of, by any lot or chance, any pictures, works of art, or other property belonging to the said: American Art Union, or under their control, and from making distribution on the thirtieth of • March, 1852, as announced or published, until the further rule of the court. That it may be further adjudged that the object and purposes for which the said corporation was ■ established, have failed through the neglect and misconduct of the defendants, and that after the payment of the debts and liabilities properly incurred by the defendants on behalf of the said corporation the property of said corporation may be disposed of under the direction of the court, and its proceeds divided and distributed between the shareholders of said corporation, according to their respective rights and interests therein. And that the defendants may pay the cost's • of this action ; or that the plaintiff may have such other or such further relief as the case may entitle him to, or as to the court shall seem proper.
    A temporary. injunction had been granted by Chief Justice Oakley, restraining the managers and officers of the Art Union from disposing of the works of art and other property of the institution.
    A motion was now made to make the temporary injunction permanent.

      E. Sandford, for plaintiff.

      C. O’Conor, for defendants.
   Duer, J.

I am satisfied, for reasons that I shall proceed to state, that the plaintiff, upon the face of his complaint, has no title to the relief which he seeks, and consequently, that the temporary injunction which has been granted must be dissolved, and the motion for a permanent injunction be denied.

It is true that the learned counsel for the defendants, in the full confidence that the proceedings of the Art Union have been in strict conformity to the constitution and laws of the state, and as such would b'e sustained by the judgment of the court, has expressed his willingness to waive all objections as to the right of the plaintiff to maintain the suit—but in my opinion, the objections cannot be so waived as to deprive the court of the power, or release it from the duty, of considering them. There are numerous cases in which the eyes of a judge are not to be closed because the parties are willing that he should not see. Although in this case there can be no suspicion of a collusion between the parties, yet if the plaintiff must be considered as a stranger, having no interest which the law can recognise and protect, there is in reality no controversy, which the court is bound to determine, and still less can the plaintiff have any right to the decree which he asks, if he seeks to be relieved from the consequences of an agreement which he not only admits, but avers to be unlawful, and, by his own showing, has himself shared in that violation of the law, which, in his complaint, he has charged upon the defendants. A plaintiff is never entitled to an injunction unless it is apparent that he has some interest that may be injuriously affected by the act which he seeks to restrain, and when his claim arises from an illegal contract to which he was a voluntary party, the maxim, “ in pari delicto potior est conditio defendentis,” is the stern reply that dismisses his complaint.

The plaintiff claims as the assignee of the. share and interest of an annual subscriber to the Art Union, and the object of his complaint is to restrain the distribution by lot of the paintings and other works of art which that corporation and its managers have purchased, with the funds of the subscribers, during the past year, in order that this property may be disposed of under the direction of this court, and the proceeds be distributed among the shareholders according to their respective rights and interest. The grounds upon which this relief is sought evidently are, that the subscribers and shareholders in the Art Union, in proportion to the sums which they have contributed, are the true owners of the works of art, to the purchase of which these funds have been applied, and, as such owners, may justly interfere to 'prevent the distribution of their property, in a mode, which it is alleged, that the constitution and laws of the state expressly and strictly prohibit.

I deem it needless to inquire whether the shares of the annual subscribers to the Art Union are, in their nature, transferable, but for the purposes of this opinion shall assume that the plaintiff, as an assignee, is clothed with all the rights and privileges of an original subscriber ; but it is not pretended that he stands in any better situation than such a subscriber, so as to be entitled to a relief that must have been denied to the person from whom he purchased. The simplest mode, therefore, of considering the case is to treat him as a subscriber.

The first question, then, is whether the annual subscribers to the Art Union have any right of property, any interest, legal or equitable, in the paintings or other works of art to the purchase of which a portion of the funds of the society is annually devoted ; and it is manifest, upon a very slight consideration, that this question can only be solved by a resort to the charter of the society; or, if-the charter is silent, to its constitution and by-laws. It is by no means universally true, as was quietly assumed upon the argument, that at common law individual corporators have any personal interest in the property of the corporation of which they are members. Whether they have so or not depends entirely upon the nature of the corporation. As a general rule, the whole title, legal and equitable, is vested in the corporation itself, nor have the individual members any other or greater interest than that which expressly or impliedly is given to them by the provisions of its charter, or of the constitution and by-laws, which, in the proper exercise of its corporate powers, it may have adopted. This is true, even where the corporators are such by a permanent title, and it is emphatically so, when it is only by force of an annual subscription that they are corporators at all, and their rights, as such, expire with the year to which the subscription relates.

The annual subscribers to the Art Unión have presumptively no more right to the corporate property than the annual subscribers to a religious or charitable society—a bible or tract society—a dispensary or hospital. The sums which they subscribe are mere donations to be applied to the purposes for which the society is organized, unless their character as such is essentially altered by the provisions of the charter, or of the constitution, or by special agreement. To such personal benefits as may thus be held out to them as an inducement to subscribe, and in return for their subscriptions, they are doubtless entitled, but they have no proprietary right or interest in the corporate property, merely upon the ground that it was acquired with the funds which they have contributed. If they claim as owners, the charter or constitution must show that they are so.

The act incorporating the Art Union is expressed in very general terms—they authorize the association as a corporation to hold real and personal estate, and they limit the amount of its income, but they give no interest expressly or impliedly, either in the capital or income, to the members of the association.

They empower the society, by its constitution and by-laws, to regulate (inter alia) the admission of members and the annual rate of contribution to its funds, but they neither define the rights of the members to be admitted, nor state the uses to which the funds to be contributed shall be applied. For these details we must look to the constitution. The constitution, confining ourselves to those provisions, which alone have a bearing upon the case, declares that “ every subscriber of five dollars or more per annum shall be a member of the association (A. 1), “ that the funds raised by annual subscriptions shall be appropriated after defraying the necessary expenses of the association to the purchase of works of art by American artists ; and that at each annual meeting of the association the works of art, purchased during the year, shall become by lot publicly determined the property of individual members, each member being entitled to one chance or share in such distribution for each five dollars by him subscribed and paid,” (Art. 8,-9). Certainly there is no recognition here; express or implied, of any proprietary right or interest of the members in the works of art purchased during the year, nor can I perceive any reason for doubting, that they remain the exclusive property of the association, as a corporate body, until this title is divested by their allotment to. individual members in the annual distribution. The contract between the association and the subscribers, as declared by the constitution, is that each of them, in return for each sum of five dollars which he shall have paid, shall acquire a single chance of becoming ultimately the sole owner of some one of the works of art which are to be distributed. It is this chance alone that the association stipulates to give and each subscriber to receive. It is this alone that he purchases, and to this only under the charter and constitution can he be entitled. If the distribution by lot for which the constitution provides is not a lottery within the intent and mischief of the revised statutes (for that it is so within their terms, it is impossible to deny), their the agreement between the association and the subscribers is lawful and valid ; it furnishes to them no ground of complaint, and no court of justice, if no fraud is alleged, can justly interpose to restrain its execution. On- the other hand, if the annual distribution is a lottery, in the full and obnoxious sense of the term, then the agreement is indeed illegal and void, but this illegality, although it may enable the subscribers to reclaim the moneys they have paid, certainly does not render them the owners, as tenants in common, of the works of art that the association may have purchased, nor authorize a court of justice to seize and confiscate the property for their benefit. On the contrary, it is an illegality, which, for such a purpose, they are not permitted to aver. If the distribution is a lottery, every subscriber, by the very act of subscription, violates the prohibition and incurs the penalties of the statute. If not the setter up of-a lottery, he is the purchaser of a ticket, and as a “particeps criminis,” has no right to be heard (Rev. Stat. p. 665, § 23). When a contract is illegal neither party, as a general rule, can invoke the aid of a court of justice, whether to enforce the contract, or to release them from' the consequences of. its entire or partial execution. It is true, that the purchaser of a chance in an illegal lottery, by a special provision in the statute (1 R. S. p. 665, § 25), creating an exception from the general rule, may recover back the sum that he has paid, but it is a novel, a groundless, and an extravagant supposition that such purchasers can follow the property in which the moneys which they have paid may be invested, and require it to be sold under the direction of a court of justice for their common benefit. It is possible, that the shareholders in the Art Union may be entitled to the remedy which the statute gives, but if so, to that remedy they are confined. In a suit like the present, they have not a “ locus standi injudicioThe necessary conclusions are, that if the Art Union distribution is not a lottery within the meaning of the statute, it cannot be enjoined ; if it is, it cannot be enjoined upon the application of all or any of the shareholders.

Nor is it upon these grounds alone that I place my decision. Let it be admitted that the subscribers to the Art Union have, at least, an equitable interest in the works of art that the association may purchase, not only this equitable interest, if the allegations in the complaint are true, but the legal title of the association itself, before this complaint was filed, had ceased to exist. The entire property, if the annual distribution is a noxious lottery, before the complaint was filed, was, in my judgment, vested in the state. It was so vested by force of the forfeiture which the statute declares, of “ all property that shall be offered for sale or distribution contrary to its provisions”— a forfeiture which, by the express words of the law, may attach as well before as after the determination of the chance upon which the distribution depends (Rev. Stat. p. 666, § 31).

It has, indeed, been insisted by the counsel for the plaintiff, that the forfeiture which the statute creates, whatever may be its effect by relation, does not attach, so as to divest the title of the owner, until by a proper judgment in a suit instituted for that purpose, the rights of the state have been established; but although it is undoubtedly true that a forfeiture at common law does not operate to change the property until ..some legal step has been taken by the government for the assertion of its rights, there is a material distinction between a fiommon law and a statutory forfeiture, to which the learned counsel failed to advert. “ When a forfeiture is given by statute (they are the words of Chief Justice Marshall, that I quote), the rules of the common law are dispensed with, and the thing forfeited may either vest immediately or upon the performance of some future act, according to the will of the legislature. "This depends entirely upon the construction of the statute.” (United States v. Grundy, 3 Cranch, 33.)

It was not the habit of Chief Justice Marshall to support the positions which he advanced by a reference to authorities, but there are many decisions in England and in the United States, which establish that where by the words of a statute a forfeiture is attached to the commission of an offence, its immediate operation is to divest wholly the title of the owner, so as to deprive him of the right of maintaining any action or defence, to,which, as owner, he would otherwise be entitled. To a few of these decisions, I shall briefly refer.

In the case of Wilkins v. Despard (5 Term. R. 112) the action was brought by the owner of a vessel and cargo against the governor of an English colony, for seizing and converting the property to his own use. The defence was, that the property before its seizure, by a breach of the navigation act, had become forfeited to the government, but it was not alleged that it had been condemned, nor denied that it had been converted by the defendant to his own use.

To the plea, setting up this defence, there was a general demurrer, which the court of king’s ■ bench overruled, upon the ground, chat by the forfeiture, which the demurrer admitted, the title of the plaintiff was divested, and consequently that it was immaterial whether the conduct of the defendant in not proceeding to a condemnation was justifiable or not. As the plaintiff was not the owner at the time of the seizure, he had sustained no loss that he could be entitled to recover. In giving his judgment in this case, Lord Kenyon referred to a former decision of the king’s bench, in the time of Lord Holt, as a conclusive authority. The case so referred to, is Robert v. Witherhead (Salkeld, 223, S. C. 12, Mod. 92). This was an action of detinue for the recovery of goods alleged to be forfeited by a breach of the revenue laws ; and the question was, whether the action would lie. It was admitted that this action, like that of trover, supposes an antecedent right of property, and it was held, that it would lie, upon the ground that the act inducing the forfeiture made an immediate alteration of the property. The very words of one of the judges are, that “ the property was divested out of the owner by the act of importation.”

I pass now to the cases in our own courts. The earliest, perhaps, is that of The Mars (1 Gallison, 192), in which Judge Story, in a very elaborate opinion, maintained an opposite doctrine to that which I have stated, and in effect determined that the construction even of a statutory forfeiture is governed by the rules of the common law. The views, however, of this learned judge (from which I would otherwise have been reluctant to dissent), were subsequently overruled, and his judgment reversed by the tribunal of paramount authority, of which he was a member. I refer to the decision of the Supreme Court of the United States, in the case of the United States v. 1960 Bags of Coffee (8 Cranch. 398).

The goods were libelled as forfeited to the government by their importation into the United States, contrary to the provisions of the non-intercourse act of 1809, but they had been entered and paid duties at the custom house, and were in the actual possession of a purchaser, in good faith, at the time of the seizure. It was admitted that this purchaser, who was the claimant, was entitled to the restoration of the goods, unless by the acts creating the forfeiture, the title of the original owner was immediately and wholly divested. If a seizure was necessary to vest the property in the United States, the intermediate purchaser was protected. The court held “ that the question rested entirely, not upon the rules of the common law, but upon the words of the act of congress, which expressly declared that the forfeiture should take place upon the commission of the offence ; that it belonged to the legislature alone to determine upon what event the title of the owner should be divested, whether upon the commission of the offence, the seizure, or the condemnation, and in the. case before them the majority of the judges were of opinion that the commission of the offence marked the period of time when the statutory transfer of the right took place.” The goods were accordingly condemned. Mr. Justice Story admitted that by this decision, his own in the case of the Mars was overruled, and his judgment in that case, which was also before the court upon an appeal-, was subsequently reversed without argument.

It may possibly be thought, that, as in the cases I have cited, there was an actual seizure of the forfeited property, the judg-. ment of the court may have proceeded upon the ground that the seizure operated to divest the title of the owner,' by relation, from the time of the commission of the offence. It might be sufficient to reply that this construction is plainly excluded by the language of the judges, who, in none of these cases, make any allusion to the common law doctrine of relation; but it-so happens that there are other cases, and those in the supreme court of our own state,, the direct authority of which -cannot be evaded upon the hypothesis I have stated, nor upon any other.

Fontaine v. Phœnix Insurance Co. (11 John. R. 293), was an action upon a policy of insurance. The insurance was upon a. vessel at and from New York to St. Bartholomew, and back to the United States, with liberty on her outward voyage to touch and trade at Martinique. The vessel upon her outward voyage stopped at Martinique, discharged her cargo and took on board part of another cargo, but before her loading was completed, was cast on shore in a hurricane and totally lost. A verdict had been rendered for the plaintiff, and the case was before the court upon a motion for a new trial. The court held that the question, whether the goods taken on board at Martinique were intended for the United States,.ought to have been distinctly submitted to the jury, since if such was their destination, it was certain that the plaintiff could not be entitled to recover. That the act of taking goods on board with that intent was a violation of the provisions of the non-intercourse act, and worked by force of those provisions an immediate forfeiture of the vessel, and it therefore followed, if that intent was proved, that the plaintiff had no insurable interest when the loss happened ; he had then ceased to be the owner of the vessel, and was no longer the party assured. Upon this ground a new trial was granted, and in the subsequent case of Kennedy v. Strong (14 John. 129), Chief Justice Thompson, referring to this decision, and to the language of Chief Justice Marshall in the. United States v. Grundy, said that the law was settled “ that a statutory forfeiture takes place on the commission of the act prohibited, and that by the forfeiture the property is immediately divested out of the owner, before any seizure or suit.”

It cannot be said that there is any difference between the words of the non-intercourse act and those of our statute in relation to lotteries, that can lead to and justify a different construction. Those of the act of congress are, “ that whenever any articles, the importation of which is prohibited by this act, shall be imported into the United States after the 20th day of May next, all such articles shall be forfeited to the United States.”

Those of the statute, “ all property so offered for sale, distribution or disposition against the provisions of law, shall be forfeited to the people of this state.” The forfeiture, in the first case, attaches upon the importation ; in the second, upon the offer; and if in the first it works an immediate change and transfer of the title, such must be its necessary effect in the latter.

If the intended distribution, which I am asked to enjoin, is, in any criminal sense, a lottery, it is the property of the people of the state that this court is required to take into its possession, and dispose of for the benefit of the shareholders in the Art Union. It is not probable, that we shall soon venture upon such an exercise of our jurisdiction.

In the observations that I have made, I have been careful to abstain from expressing or intimating any opinion upon the main question, lottery or no lottery, which was so ably and zealously debated by the counsel of the parties. I will not say that upon this question the arguments which I have heard, and my own reflections, have not led me to form a definite opinion, but whatever my opinion may be, I am satisfied that, at this time and from this place, it ought not to be declared. I must not attempt as a judge to determine a question which I have shown that the plaintiff, as a suitor, is precluded from raising. As the question is not properly before me, any opinion delivered by me now would be voluntary and extra-judicial.

Although I am convinced that this action cannot be maintained, I have no power at this time to dismiss the complaint. I can do no more than refuse to continue the injunction that has been granted. It is therefore dissolved.


source: Caselaw Access Project

author: Duer, J.

license: Public Domain

text:
    T. F. Beale v. Catharine Hayes.
    It is not a ground of demurrer to a complaint that the plaintiff claims judgment for a larger amount than by his own showing he can be entitled to recover.

    Liquidated damages, in the proper sense of the term, are a positive debt excluding evidence of -actual damage, wherever a breach is proved to which they apply.
    But damages are not always to be considered as liquidated because the parties have declared them to be so.
    Whatever may be the expressions used, they will be construed as a mere penalty: 1st, when the agreement contains various stipulations, differing in importance; and 2d, when they would compel the payment of a larger sum, for a default in the payment of a smaller.
    When construed as a penalty, the damages proved, and- not the amount of the penalty, are the measure of the plaintiff’s recovery.

      Held, to be a penalty in the case before the court.
    Demurrer overruled with costs.
    The complaint alleged that the defendant, on the 30th day of April, 1851, made and entered into a contract with the plaintiff, as follows:
    Mr. Beale agrees to pay Miss Catharine Hayes, for a period of five months, commencing in the month of September next, or so soon after as circumstances will admit, to play in America and Ireland, in the following operas, namely : La Sonnambula, Lucia de Lammermoor, Linda, Lucrezia, Don Pasquale, L’Elisir d’Amore, I Puritani, and Norma, and such other operas as may be agreed on, and to sing at concerts.
    Mr. Beale agrees to pay Miss Catharine Hayes the sum of three thousand two hundred and fifty pounds, by monthly instalments, for her services during such period of five months, and one-sixth part of any profit that may result from this engagement after payment of all expenses, direct or incidental.
    Mr. Beale further agrees to pay all the expenses of living and travelling for Miss Hayes, Mrs. Hayes (her mother) and her attendant, and appropriate dresses for the different characters in which Miss Hayes will appear during the engagement.
    Miss Hayes is never to be called upon to perform in more than four operas or concerts, and a fifth concert during each week, such fifth concert to be at the option of Miss Hayes, but Miss Hayes is not to take any other engagement, or to appear, sing or perform in public otherwise than under this engagement, without the written consent of Mr. Beale or his representative.
    Mr. Beale is to have the option of continuing this agreement for any period beyond the five months, not exceeding twelve months in the whole, on giving to Miss Hayes a written notice of such his intention, one month previous to the expiration of such term of five months.
    The engagement is to be considered as commencing from the date of the first performance, either in Ireland or America, and the time occupied in crossing and recrossing the Atlantic ocean is not to be calculated as part of the engagement.
    In the event of Miss Hayes being at any time incapacitated from performing her part of the engagement in consequence of illness, any loss which may be sustained by such disappointment shall be made good by Miss Hayes in the following manner :— Such loss shall be calculated, and the amount ascertained, and Miss Hayes shall continue her engagement for a period equivalent to make up for the loss, at the rate of six hundred and fifty pounds a month.
    And for the due and punctual performance of every article, clause, and thing, covenanted, stipulated and agreed in this agreement, each of the said parties for himself and herself doth hereby bind himself and herself, and his and her heirs, executors and administrators, to the other his or their heirs, executors and administrators, in the sum of three thousand pounds, to be recovered from the party making default, as and for liquidated damages, and in such case it shall not be necessary in any trial at law or suit in equity to prove the amount of actual damages sustained by any breach of this agreement, but such sum of three thousand pounds shall be deemed and admitted to be the amount of such damages.
    As witness the hands of the parties.
    T. F. Beale,
    Catharine Hayes.
    Witness, John Jay.
    That the said agreement was duly executed by the plaintiff and defendant, and that in accordance with the same, on the 23rd day of September, one thousand eight hundred and fifty-one, the first performance in America took place, and the defendant sung thereat, as by said agreement she was bound to do.
    That the plaintiff has duly performed his part of the said agreement.
    That the defendant, on the 30th day of November, one thousand eight hundred and fifty-one, without the consent of the plaintiff or his representative, or any reasonable cause alleged, refused to sing at a concert which was to have been given in the city of Albany, in this state, although required by the plaintiff so to do, but absented herself from the same.
    That since that day she has persisted-in her refusal to give her professional services for the benefit of the plaintiff, and to perform her part of her said contract with him. That she has since then sung and performed in public, contrary to the terms of her said agreement, and continues so to do, contrary to the desire of the plaintiff, and in violation of her said agreement with him.
    And the plaintiff says that by the non-fulfilment by defendant of her part of the said agreement with the plaintiff, and by her continued refusal to fulfil the same, he is injured, and has sustained damage to the amount of forty thousand dollars.
    The plaintiff therefore prays that the defendant be adjudged to pay to the plaintiff said sum of forty thousand dollars, with the costs of this action.
    DEMURRER TO THE COMPLAINT.
    That the contract set forth’ in said complaint liquidates the damages for the breach thereof at a certain fixed sum, but the complaint, without any sufficient cause shown, claims unliquidated damages for the alleged breach, in a much larger amount.

      Dillon and O’Gorman, for plaintiff.

      Taylor and Booth, for defendant.
   Duer, J.

The only ground of this demurrer is, that although the agreement set forth in the complaint liquidates the damages to be recovered for a breach, at a fixed sum, yet the plaintiff demands judgment for a much larger amount, and it was insisted, that whether the sum mentioned in the agreement be considered as liquidated damages, or as a penalty, the objection is equally fatal.

I am, however, clearly of opinion, that this objection to the plaintiff’s claim, if admitted to be valid, cannot be raised by a demurrer. The only grounds of demurrer to a complaint are those which are enumerated in § 144 of the code, and it is admitted that it is only to the last subdivision in that section that the cause which is here assigned, by any possible construction can be referred. But this construction, if possible, is faiteo refined and strained to be adopted. I cannot say that the complaint does not “ state facts sufficient to constitute a cause of action.” The complaint sets forth a valid agreement and assigns a positive breach, and these are all the facts that are necessary to be proved to entitle the plaintiff to recover. Whether he can be allowed to prove damagés exceeding the sum stipulated in the agreement, it may be admitted is a question of law, but as it is á question which respects the event, and not the cause of the action, it can be raised only upon the trial.

In compliance, however, with the wishes of the counsel I have examined the question, and shall briefly state the conclusions to which I have been led. If the sum mentioned in the agreement must be regarded as liquidated damages, in the proper sense of the term, as distinguished from a .penalty, the plaintiff will be entitled to recover the whole sum, without any other proof than that of the breach which he has assigned, but to that sum- his recovery will be limited. He will not be allowed to give evidence of an actual loss to a larger amount. Liquidated damages, when a breach is proved to which they apply, are a positive debt, and as such, they exclude, on both sides, the consideration and the proof of actual damage. It is not always, however, that damages are to be construed as liquidated, because the parties have declared them to be so. The language of the parties to this agreement is clear and emphatic, that the sum of £3,000 shall be recoverable from the party making default as and for liquidated damages, yet no court of justice, wi thout an entire disregard of prior decisions, can give effect to the apparent intention of the parties, by adopting that construction of their agreement, which the terms they have used so forcibly suggest. The law is settled, that however strong may be the expressions used, liquidated damages must be construed, not as a debt, but as a mere penalty, in all cases where the agreement contains various stipulations, differing in importance, and it is to each an-d all of them that the damages apply ; and in all cases when, if construed as a debt, they would compel the payment of a larger sum for a default in the payment of a smaller. Each of these rules of construction is applicable to the present agreement; construing the sum of £3,000 as a debt necessarily accruing upon a breach, the plaintiff would have been bound to pay that sum for his refusal or neglect to purchase a single dress that the defendant might properly have required, and the defendant would have been liable to the same extent for her refusal to sing at a single concert. When consequences so unreasonable would follow, the law presumes that they must have been overlooked by the parties, and therefore mercifully gives to their'language an interpretation, which excludes them. When it would be plainly unconscientious to exact a large sum for a trivial breach, even a court of law, acting upon a principle of equity, will release the parties from the literal obligation which their language imports. The leading cases are : Astley v. Weldon, 2 Bos. & Pul. 346; Kemble v. Farren, 6 Bing. 141, and Boys v. Ancell, 5 Bing. N. C. 390. Kemble v. Farren was an action by the manager of Drury Lane Theatre, against a celebrated actor, for a breach of his articles of engagement, and the case in all its material circumstances, is not distinguishable from the present.

When liquidated damages must be construed, as a penalty, the consequences are the same as when a penalty is in terms expressed. Before the code, the plaintiff, in these cases, had an election to bring an action of debt for the penalty, or an action of covenant, or, where the agreement was not under seal, of assumpsit, for his damages. In the first case, he could recover no more than the penalty with interest, but in the second, the damages proved, however largely they might exceed the penalty, were those to which he was entitled. In entering judgment the penalty was wholly disregarded (Bird v. Randall, 1 Burr, 373; Wassler v. Trimmer, 1 Black, 395; Harrison v. Wright, 13 East. 343).

As all distinctions resulting merely from the form of the action are now abolished, it appears to be a necessary consequence that, as a general rule, every action for the breach of an executory contract, whether the agreement contains a penalty or not, must be considered as an action for damages, in which the amount of the recovery will be limited only by the proof, and by the sum for which judgment is demanded in the complaint. The only exception will be, when from the nature of the contract, and the terms in which it is expressed, damages, as liquidated by the parties, may be justly treated, not as a penalty, but as a contingent debt, for this is- a distinction in law which the code has not abolished nor affected. It is true, that upon this construction the insertion of a penalty in an agreement is a useless form, but this is no alteration of the law, since, for more than a century past, such has been its real character.

The demurrer is overruled with costs, but the defendant upon payment of costs may withdraw it within twenty days and answer.


author: Bosworth, J.

text:
    Fleury v. Roget.
    In an action upon a promissory note, a denial in the answer, that the plaintiff is the lawful owner and holder, without alleging a title in a third person, will be • struck out as irrelevant and frivolous.
    So it is also a frivolous defence, that when the note was given it was agreed that it should be renewed upon request.
    May 20, 1850.
   Bosworth, J.

The plaintiff moves to strike out defendant's answer, as sham and irrelevant. I think it is such an answer, and that the motion should be granted.

The complaint is upon two promissory notes made by the defendant, payable to the order of, and by him delivered to the plaintiff. The complaint also avers that the plaintiff is “ the real party in interest in this action, and the lawful holder and owner” of the two notes, and of each of them.

The defendant answers that he has no knowledge or information sufficient to form a belief whether the plaintiff is the lawful holder and owner of the two notes : It admits therefore the making and delivery of the notes to the plaintiff, that they are unpaid, that he is the real party in interest in the action, but professes ignorance whether he is the lawful holder and owner. On the facts admitted, he is, in judgment of law, the lawful owner and holder, and on producing the notes at the trial, he is entitled to recover, and the answer contains no allegation of fact, which, if proved, would be a defence.

The answer sets up an agreement contemporaneous with the making of the notes, to renew them, on application, and the refusal by the plaintiff, to renew them. Tnis is clearly irrelevant matter, for whether true or false, it is of no legal importance.

The plaintiff also moves on affidavits, which state that one of the notes was given for moneys advanced, and the other for "goods sold by the plaintiff to the defendant. They deny the making of the alleged agreement to renew the notes, or that the defendant applied to have them renewed, or that he ever said anything to the plaintiff on that subject; and that the plaintiff believes the answer was put in merely for the purpose of delay: these facts except the last are not controverted.

The defendant read an affidavit, stating that the answer was not put in “ merely for delay, but in good faith that he “ believes the plaintiff has parted with all right, title, and ownership in, and to the said notes, and is now suing on the said notes for the benefit of some other and third party.”

It does not state a fact or circumstance, as the basis of such belief. It does not allege that any third party has ever claimed any interest in either of them, or applied for payment of either of them, nor anything elsQ to justify the slightest suspicion that they have not been at all times the property of the party to whom the defendant delivered them. The answer therefore puts in issue an immaterial allegation in the complaint, immaterial in this case, because the complaint would be good without it. The new matter set up must, for the purpose of this motion, be deemed as false in fact, as it is irrelevant in law. The pleadings admit that the party justly owns these notes, and that they were made and delivered to the plaintiff, were made payable to his order, and that he is the real party in interest in this action. The motion must be granted with $10 costs.

Approved by all the judges, upon consultation.


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    Charles A. Williamson & Wife, Rupert J. Cochran & Wife, & others v. Clement C. Moore.
    Where some of several complainants die, and the cause of action does not survive, but continues as to the survivors, the latter cannot be compelled to revive the suit against the representatives of the deceased complainants.
    They have a right to proceed with their suit. The bill may be dismissed for want of prosecution, but not for a neglect to revive it
    It is the privilege of a defendant in such a casé, to have an order, requiring such representatives to show cause why the suit should not stand revived in their names, or that the bill be dismissed so far as their interests are concerned.
    To obtain such an order, a petition must be presented. § 121 of the code does not apply to such a case.
    May, 1852.

      A bill was filed in this suit, anterior to the code, by the plaintiffs, to charge the defendant as trustee under a will. The plaintiffs claim as representatives of the cestui que trusts, and each a separate interest in the trust estate. The plaintiffs, Charles A. Williamson & wife, died in May, 1849 ; Rupert J. Cochran, in July, 1851, and Isabella M., his wife, in September, 1851. The heirs of the deceased complainants were numerous. Several of them were infants, and resided in Europe.
    The defendant on notice and affidavits, stating the facts, moves for an order, requiring the surviving complainants to revive the action within a reasonable time, to be fixed by the court, or that in default thereof, the bill of complaint be dismissed.

      R. Goodman for defendant.
    D. D. Field, for living complainants.
   Bosworth, J.

The causes of action stated in the complaint, do not survive to the survivors, but continue. As I read the statute, the defendant is not entitled to such an order as he seeks. 2 R. S. § 114, [sec. 108] declares that in such a case the suit shall abate only as to the person or persons so dying ; and the surviving parties may proceed without reviving the suit.”

§ 124, [sec. 118] ed. 185, provides that if the surviving complainant refuse or neglect to proceed against the representatives of the deceased complainant, as defendants ; the court on petition of the original defendant, may order such representatives, to show cause, why the suit should not stand revived in their names, or the bill be dismissed, as far as the interests of such representatives are concerned.

Upon proof of the reasonable service of a copy of the order on such representatives, if no cause to the contrary be shown, the court may order the revival of the suit in- their names, or the dismissal of the bill with costs or otherwise. Ed. 125.

The revival or dismissal to be so ordered, is of course one which is only co-extensive with the interests of such representatives, and is as to such interests only.

That is all the court is authorized by § 124, to order, and if the court can dismiss the bill, as to the surviving complainants against their will, and these desire to proceed in the suit, then § 114 is unmeaning.

It seems to me, that the plain meaning of the statute is this : a surviving complainant has an absolute right to proceed in his suit, § 114. He may bring in the representatives of his deceased co-complainant, if he is so disposed, and make them defendants, but is not obliged to do so. § 123.

If the surviving complainant neglect or refuse to do this, he is not to be put out of court for that cause ; but the defendant may have an order, (and serve it on the representatives of the deceased complainant,) requiring such representatives to show cause why the suit should not stand revived in their names, or the bill be dismissed so far as the interests of such representatives are concerned. § 124. The court may order a revival or dismissal as to such interests.

Pells v. Coon, Hop. 450, was decided prior to R. S. of 1830.

In Rogers v. Rogers, 4 Paige, 409, the practice pursued accords with the view of the statute which I have expressed.

The surviving complainant is not at liberty to keep the suit in court, and omit to proceed. His suit may be dismissed for want of prosecution. Whether he should now be permitted, as a matter of right, to discontinue, without payment of costs, or whether it is the right of a defendant to have it disposed of as to him on the merits, it is unnecessary to decide.

I do not deem it proper to make any order on this motion, except one denying it, without costs. If the defendant considers it necessary or expedient to bring the representatives of the deceased complainants into court, to secure a revival of the suit in their names, or a dismissal of the bill of complaint, so far as their interests are concerned, there is an obvious propriety in his prosecuting a petition for an order for that purpose. § 124, ed.

§121 of the code does not seem adapted to the exigencies of the case. Some of the complainants died more than a year since. Their representatives cannot be brought in on motion; a defendant cannot well file a supplemental complaint, and the action does not provide for dismissing a complaint, as to the interests of the representatives of a deceased complainant.

Approved by all the judges upon consultation.


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    Leon Lefevre v. John W. Latson.
    Under § 15*1 of the code, a pleading may he verified during the absence or incapacity of the party by his attorney or other agent, and state only his information and belief

    The nature of this motion sufficiently .appears in the opinion of the court.
   Duer, J.

This is a motion on the part of the defendant to strike out the verification of the complaint as not warranted by the provisions of the code. The motion was heard by me at chambers ; but as it raised a question of some difficulty, and which, it seemed to me, from its practical importance, ought to be definitively settled, I have consulted my brethren, and the opinion which I now give, is to be considered as that of the court.

The complaint is for goods sold and delivered, and the objection to the verification is, that the affidavit is made, not by the plaintiff, but by his attorney, and is founded solely upon his information and belief; and the validity of the objection depends entirely upon the construction to be given to § 157 of the code ; a section which, it must be owned, is not quite so lucidly expressed, as might reasonably be wished.

The first clause of this section, after prescribing the form of the verification, declares that it must be by the affidavit of the party, “or if there be several parties united in interest, and pleading together, by - one at least óf such parties acquainted with the facts, if such party be within the county where the attorney resides, and capable of making the affidavit.”

The words “ if such party be within the county, &c.,” it seems to us, certainly imply, that when the party is absent or incapable, the necessary affidavit may be made by a third person, for unless the words carry with them this implication, they are not merely superfluous, but senseless. They are positively unmeaning, and serve only to perplex the construction, if the intention was that, in all cases, the pleading must be verified by a party, or not be verified at all.

Stopping at this clause, we could not hesitate to say that the intention of the legislature that, during the absence or incapacity of his client, a pleading may be verified by the affidavit of the attorney, stating only his information and belief, although not expressed in terms, is sufficiently manifest, and this intention we are bound to carry into effect, unless it is contradicted and overruled by subsequent provisions.

It is said to be overruled by the clause which immediately follows, and which is thus expressed :—“ The affidavit may also be made by the agent or attorney, if the action or defence be founded upon a written instrument for the payment of money only, and such instrument be in possession of the agent or attorney, or, if all the material allegations of the pleading be within the personal knowledge of the agent or attorney and if this clause must be understood as specifying the only cases, in which a pleading can be verified by the affidavit of, the agent or attorney, it certainly follows, that there is no case in which the affidavit of a third person, founded solely upon information and belief, can be admitted. But such is not the necessary, nor, we are persuaded, the reasonable interpretation of the clause. We think it may well be construed as designed, only, to modify the general rule before declared, by providing that, even where the party is within the county and capable of making the affidavit, it may be made by an agent or attorney, having a personal knowledge of the facts, or the possession of the written instrument upon which the action or defence is founded. The use of the word “ also,” forcibly suggests this, as the true construction, and by adopting it,.the provisions of the section are rendered entirely consistent. The necessary affidavit may be made by a third person, since it is only required to be made by the party, when he is, at the time, within the county, and is capable of making it; and even then, it may also be made, in the special cases that are mentioned, by his agent or attorney.

We are confirmed in the opinion, that this is the true construction, by adverting to the terms of the corresponding clauses in the code of 1849 ; these are as follow :—“ Where a pleading is verified, it shall be by the affidavit of the party, unless he be absent from the county in which the attorney resides, or for some cause unable to verify it, ob the facts abb WITHIN THE KNOWLEDGE OF HIS ATTORNEY OR OTHER PERSON verifying the same,” plainly meaning, that in each of those cases the pleading might be verified by the affidavit of a third person, and not requiring the knowledge of the attorney as a condition of his making it, unless the party was neither absent nor incapable. The disjunctive “ or ” proves this to have been the meaning, as it was the established construction, and, we apprehend, that the only alteration, not merely verbal, made by the present code, is that t'he possession by the agent or attorney of the written instrument, upon which the action or defence is founded, is declared equivalent to his knowledge of the facts ; that is, gives him the same right of verifying the pleading. Again in the code of 1849, the words we have quoted were followed by this clause :—“ Where the pleading is verified by the attorney or any other person except the party, he shall set forth in the affidavit his knowledge or the grounds of his belief upon the subject, and the reasons why it is not made by the party.” This clause (omitting only the words “ the attorney or ” and substituting the word “than” for “except,” changes wholly immaterial), is found in the present code, and we think ought to be construed in the sense in which it was first enacted. So long as the code of 1849 was in force, the necessity of setting forth in the affidavit of any other person than the party “ the grounds of his belief,” could only exist when the pleading was verified, during the absence or inability of the party, and our conviction is that it is for the purpose of meeting the same cases, that the words,' creating the necessity, have- been retained. Indeed, unless the same cases may now occur, and the words in question are thus construed, they are wholly useless.

We add as an additional and very strong reason for rejecting that restricted interpretation of § 157, upon which the defendant has insisted, that its adoption, in practice, would lead in numerous cases to great inconvenience and delay, and might even operate, in some, to defeat wholly the ends of justice. In expounding a statute, the “ argumentum ab inconvenienti ” is always entitled to great weight, since it ought never to be supposed, when the language is doubtful, that the legislature intended consequences, which it was easy to foresee, and most desirable to prevent.

Our conclusion is, that the motion for striking out the verification of the complaint, as a suEcient reason is stated for its not being made by the party, must be denied ; but as the question was new, and the practice unsettled, it is denied without costs. We are aware that in a recent case (Hunt v. Meacham, 6 How. P. C., p. 400), a judge of the supreme court, whose opinions are entitled to great respect, has followed that construction of the code which we have rejected ; but judging from the report, the views, that have governed us, do not seem to have been presented to the mind of the learned judge, and it is due to candor to say, that my first impressions coincided with those to which he has yielded.


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    John C. West v. Alexander G. Fraser.
    Under the code an order for the sequestration of the property of a judgment debtor, no longer necessary.
    August 12th, 1852.
    The defendant, a judgment debtor, was in contempt, for disobedience to an order requiring him to make an assignment of his property to a receiver before appointed, and an application, founded upon the opinion of Chancellor Walworth, in the People v. Rogers, (2 Paige, 104,) was now made for an order of sequestration, and the delivery of the property and effects sequestered to the receiver.
   Duer, J.

It seems to me that this application is quite useless. No assignment is necessary to vest in the receiver all the right and title, legal or equitable, of the debtor, to his property and effects, (except his real estate) within this state, and it is such only that an order of sequestration would embrace. The title of the receiver becomes perfect, when he has given the requisite security, and it then operates, by relation, from the time that the order for his appointment was made. That order is per se le sequestration, and gives to the receiver all the necessary means for enforcing his rights. Where a third person is in possession of property of the debtor, which he refuses to deliver to the receiver, I see no reason why its delivery may not be compelled, under § 294 of the code. The filing of a complaint by the receiver, can only be necessary when a third person sets up an adverse title, and the necessity, in such a case, for the institution of a suit would not be removed by an order of sequestration. (Albany City Bank v. Schumacher, 1 Clarke, 278, 300; Porter v. Williams, 1 Cod. R. U. S. 144; Van Wyck v. Brady, 3 Code Rep. 157.) I decline to make the order.

The chief justice concurred.


author: Duer, J. (Oakley, Ch. J.,

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    John Radway, Jr. v. R. F. Mather.
    The code does not require that facts, not within the personal knowledge of the party, should be averred in a pleading upon information as well as belief; an averment upon belief is sufficient. An averment that material facts are true* as the party believes, is equivalent to an averment of the facts upon belief.
    August 10th, 1852.
    This was a motion for judgment, on the ground that the de murrer to the complaint was frivolous.
    The action was by an endorsee, against the endorser of a pro missory note, and the complaint contained these averments, “ and the plaintiff says that he believes that when the said note became due, and payable, the same was duly presented to the maker thereof, for payment, and payment thereof was demanded of the said maker, who neglected to pay the same, and that due notice thereof was given to the defendant.”
    The causes of demurrer assigned, were: 1st. That the complaint did not allege that when the note became payable, it was duly presented to the maker, for payment; and, 2d. That it did not allege that due notice had been given to the defendant, of the demand and refusal of payment.

      Woodman & Beach, for plaintiff.

      J. Wade Wilson, for defendant.
   Duer, J.

(Oakley, Ch. J.,

concurring.)—This demurrer must, I think, be regarded as frivolous. The objections to the complaint are, that the facts of the dishonor of the note, and of notice to the defendant, are not stated upon information as well as belief, and that it is only the belief of the plaintiff, not the existence of the facts, that is averred. These objections are plainly formal, and had they any force, were not proper to be raised by a demurrer. I am of opinion, however, that they are groundless, and that the complaint is well enough as it stands.

The code does not, in terms, require that matters contained in a pleading, which are not within the personal knowledge of the party, shall be stated upon his information and belief; and by the section which -prescribes the form of the verification, it is only to his belief of such matters that lie swears. (Code, § 157.) It is a reasonable, if not a necessary, inference, that his belief only is requisite to be stated.' The object of the code is, that every suit shall be prosecuted and defended in good faith, and this is secured, if the material allegations in the pleading are' belie'ved by the party to be true. As the averment of his belief is not traversable, a statement of its grounds is immaterial.

It is true, that the form of the verification requires the party to swear to his belief of the matters stated, in the pleading, on information and belief, and hence it is inferred that this statement must be found in the pleading ; but even upon the supposition, which I am far from admitting, that this form of the verification must be literally followed. A statement on belief may be fairly construed as a statement by implication, on information, since, as a general rule, it is on information, that the belief must be founded.

The second objection is answered by the decision of this court in Fry v. Bennett, (1 Code Rep. N. S. 249, ante., p. 54) and by that of Judge Mitchell, in Howell v. Fraser (1 Code R. N. S. 270). It is grammatically true, that the plaintiff has averred only his belief of certain material facts, not that the facts had actually occurred, but in pleadings under the code, such an averment must be construed as an averment upon belief of the truth of the facts. It is to be so construed in all cases, where it is upon the truth of the facts, not upon the sincerity of the belief, that the right of action, or the validity of a defence, depends.

The plaintiff is entitled to judgment, but the defendant is permitted to withdraw the demurrer, and answer the complaint upon filing an affidavit of merits, and the payment of ten dollars costs, and ten days are allowed for that purpose.


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    Anonymous.
    When proceedings have been stayed by an order for twenty days, there can be no further stay without notice to the adverse party.
    August 14, 1852.
    This was an ex parte application for a further stay of proceedings on the expiration of a prior order granting a stay for twenty days.
    The attorney making the motion, relied on the case of Livingston v. Wilkes, 1 Code Rep. N. S., p. 10.
   Duer, J.

I cannot follow the decision that has been cited ; the meaning of the code is, (§ 401,) that there shall be no stay of proceedings beyond twenty days, except upon notice to' the adverse party, and whether a stay exceeding the time limited, be granted, by a single order, or by successive orders, is immaterial. The intent of the provision is as much violated in the one case as in the other, nor do the words force us to adopt a different construction. A second order extending the stay-twenty days beyond the twenty first allowed, is, as truly, an order to stay proceedings for a longer time than the code permits, as a single order for forty days.

Tho application must he denied.

The chief justice concurred.