text:
    WALTER MURPHY, Respondent, v. THE CENTRAL PARK, NORTH AND EAST RIVER R. R. Co., Appellant.

      Common carriers—liability for tortious acts of servants—punitive or exemplary damages against master for tortious act of servant.

    In an action against a street railroad company for the wrongful ejection of plaintiff from one of its cars, the plaintiff’s evidence showing that he was thrown therefrom by the conductor against the hub of a wagon, and that the conductor’s conduct therein was brutal and wanton—whether plaintiff was a passenger or a trespasser, a refusal to charge that “if the jury believe that the defendant acted wilfully, and for personal motives committed an assault upon the plaintiff, the verdict must be for defendant,” is error, the court having theretofore correctly charged that the employer was liable for reckless, wanton or willful acts, within the scope of employment, etc., but not having defined what willful acts were not, as matter of law, within the scope of employment.
    To charge a principal with exemplary damages for the wrongful act of his servant, it must appear either that he authorized the commission of the wrong, or participated therein* or ratified it, or that he had notice of the bad habits of the servant, or that he left an inexperienced servant without supervision, etc.
    Before Freedman and Russell, JJ.

      Decided February 6, 1882.
    Appeal by defendant from judgment of $674.17, entered upon the verdict of a jury, and from order denying motion for new trial.
    The facts appear in the opinion.

      Vanderpoel, Green & Cuming, attorneys, and Almon Goodwin, of counsel, of appellant.

      Baker & Smith, for respondent.
   By the Court.—Freedman, J.

The defendant is a common carrier of passengers for hire. The action is for the wrongful ejection of the plaintiff from one of the cars of the defendant. The defense is in substance a general denial. At the trial, the plaintiff, who, at the time of the occurrence was a boy of about twelve years -of age, showed that he got on the car in Fifty-ninth street, between Seventh and Eighth avenues, and remained on the rear platform, and then and there paid to the conductor the customary fare of five cents ; that. when the car reached "a certain point in said street, between First and Second avenues, the conductor again -demanded fare ; that the plaintiff informed him that he had paid it; that in said statement he, the plaintiff, was corroborated by a friend who stood near him ; but that the conductor claimed that the statement was untrue, and that the fare had not been paid; and that, upon the refusal of the plaintiff to pay again, the conductor threw both the plaintiff and his friend off, while the car was in motion. The conductor testified in - substance that plaintiff had not paid his fare; that he ran after the car for some distance, evidently intending to steal a ride ; that he boarded it between First and Second avenues ; that, upon fare being demanded, plaintiff refused to pay; that he was then ordered off, and left without having been touched by the conductor. If the jury had believed this version of the conductor, their verdict would have of necessity been for the defendant. But, as they found for the plaintiff, they must have disregarded it, and upon plaintiff’s testimony found either that plaintiff paid his fare, and that consequently the conductor had no cause whatever, or else, that having cause, in consequence of non-payment, the conductor acted with unnecessary violence. It becomes important, therefore, to consider whether the jury were properly instructed.

Upon looking at the exceptions taken by the defendant to the charge and refusals to charge, two important questions present themselves—the first relating to the question of willfulness, and the second to the question of damages.

Upon the first, the learned judge who presided at the trial, charged:

“ I charge you, gentlemen of the jury, that the defendant is responsible for the acts of its servants, within the general scope of the servant’s employment, while engaged in defendant’s business, if such acts are done with a view to the furtherance of that business and of the defendant’s interests, even if they are done negligently, wantonly or willfully, and although the servant departed from the private instructions of the master, abused his authority, and was reckless in the performance of the duty; it is for you, however, to say whether these acts were within the general scope of the employment of the conductor. ”

This, though excepted to, was proper enough,as far as it went, but it did not enlighten the jury as to what willful acts were, as matter of law, not within the scope of employment. To obviate the omission, the defendant’s counsel requested the court to charge:

“If the jury believe that the conductor acted willfully, and for personal motives committed an assault upon the plaintiff, the verdict must be for the defendant. ”

The court refused so to charge, to which refusal the defendant duly excepted.

This exception is well taken; for although a principal is always held liable for the acts, willful as well as negligent or reckless, of his servants, if done or committed in the course of their employment and within the scope of their authority, although without orders, he is not liable for such of their acts as are committed clearly outside of such employment and authority. (Isaacs v. Third Ave. R. R. Co., 47 N. Y. 122; Mott v. Consumer’s Ice Co., 73 Id. 543 ; Hughes v. New York and New Haven R. R. Co., 36 Super. Ct. 222).

If the plaintiff was thrown from the car against the hub of a wheel of a coal-wagon, while the car was in motion, as claimed by him, it was a tortious act on the part of the conductor, whether plaintiff was a passenger or a trespasser, for, though he may have been a trespasser, the conductor had no right to eject him under circumstances and in a manner which involved a risk of life or limb. In either aspect, the conduct of the conductor was brutal and wanton. Although, therefore, the conductor may be assumed to have had implied authority to remove trespassers in a lawful manner, and although the defendant, as matter of law, is liable for any abuse of that authority, if committed in its services through the commission involved a breach of duty which the conductor owed to the defendant, yet, as matter of fact, the conductor may have used this authority as a mere cover for accomplishing an independent and wrongful purpose of his own. Hence this was a question to be determined by the jury (Rounds v. Delaware, L. & W. R. R. Co., Ct. of Appeals, Nov. 22, 1881). The defendant, therefore, had a right to insist that the jury should consider the question whether, under the circumstances of this case, the conductor did not go outside of his employment, and, without regard to his service, act maliciously or to effect some purpose of his own.

The refusal to charge as requested consequently constituted error, and this error does not appear to have been cured or obviated by other parts of the charge.

Upon the question of damages the jury were properly instructed as to the elements constituting compensatory damage, but as to exemplary damages they were charged that if they found that the conductor acted with a reckless disregard for human ¡life, they were at liberty to find a verdict for such an amount, up to the amount claimed, which was $5,000, as would punish the defendant and act as a deterrent for such acts in the future. This instruction would have been appropriate if the action had been against the conductor (though even he, under the decision of the court of appeals in Hamilton v. Third Ave. R. R. Co., 53 N. Y. 25, would not have been liable to' that extent, if in fact he committed no intentional offense); but as against the defendant it was erroneous. True, a corporation is no more exempt from exemplary or punitive damages in a proper case than any other principal (Caldwell v. New Jersey Steamboat Co., 47 N. Y. 282). But a principal is not liable to that extent in every case in which the agent or servant is. The question of liability in exemplary damages, it is now well understood, turns largely on the motives and the moral culpability of the wrongdoer, and before such damages can be inflicted upon the principal, in addition to compensatory damages, it must appear affirmatively, either that he authorized the commission of the wrong or participated therein or ratified it, or that he had reasonable notice of the bad habits of the servant, or that he left an inexperienced servant without control or supervision when he could and should have exercised a personal control and supervision (Caldwell v. New Jersey Steamboat Co., 47, N. Y. 282; Field on Damages, § 85, and cases there cited).

None of these qualifications were made by the learned judge below : nor was there any evidence which authorized the submission of the question of exemplary damages to the jury. ' It may be suggested that the verdict is so small that after all the jury may be assumed to have given only compensatory damages. This is by no means clear. At any rate, as the error first above stated calls for a new trial, it would serve no useful purpose to determine with precision whether the defendant was not prejudiced by the second.

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

Russell, J., concurred.


source: Caselaw Access Project

author: By the Court.—Freedman, J.

license: Public Domain

text:
    JAMES L. SHARP, Respondent, v. DAVID J. HUTCHINSON, Impleaded, &c., Appellant.

      Examination, before trial of party in default.

    One who has by failure to answer made default in an action, cannot, under section 870, Code of Civil Procedure, be examined before trial as a party, in behalf of plaintiff land against his co-defendant; his examination can only be taken, like that of other witnesses, for special and sufficient cause.
    Before Freedman and Arnoux, JJ.

      Decided February 6, 1882.
    Appeal by defendant Hutchitison from order denying his motion to vacate an order for the examination of the defendant Hogg.

      George H. Forster, for appellant.
    Robertsons, Harmon & Cuppia, for respondent.
   By the Court.—Freedman, J.

The action was brought against the defendants Hogg, Patterson and Hutchinson to recover for goods sold to them as co-partners. They all appeared. Hogg and Patterson failed to answer, but Hutchinson by answer denied the allegations of the complaint, and alleged that the partnership was special and that he was the special partner. Upon an affidavit showing, among other things, these facts, and claiming that the testimony of Hogg was material and necessary to enable the plaintiff to proceed to trial and that by such testimony the plaintiff expected to show that Hutchinson never paid in the amount of his special capital as required by law,' and that for that reason the partnership was general and not special, an order was made for Hogg’s examination on behalf of the plaintiff as a party before trial. In pursuance of the service of the order, Hogg appeared ready and willing to be examined, but Hutchinson moved that, so far as he was concerned, the order should be vacated, for the following reasons: (1) because no copy of the order had been served on him or his attorney; (2) because the notice served on his attorney was not a compliance with section 875 of the Code; and (3) because Hogg, having made default, could not be examined as a party on behalf of the plaintiff against his co-defendant Hutchinson. The motion was denied, and the appeal is from the order of denial.

It is conceded that Hogg’s examination, even if he had not been in default, could only have been taken on notice to Hutchinson, as prescribed by section 875. It is claimed, however, that the requirements of that section were waived. The affidavits read on both sides leave it doubtful whether there was such waiver, and it is not necessary for present purposes to determine the question, inasmuch as, in view of all the facts disclosed, the order should have been vacated as against Hutchinson under the third objection. True, a mere literal reading of section 870 seems to sanction the examination of any party on proper papers, but that is not its true meaning. It contemplates a party contesting or intending to make a contest. A party who stands upon the record as having given up the contest, is no longer a party litigant. Such a party could not have been examined against a co-defendant under the former practice under a bill of discovery for which the examination of a party under the Code is a substitute, nor is his examination as against a co-defendant within the spirit of the Code. The reason which led to the substitution was to exempt the rest of the community from attendance as witnesses to prove facts which the parties respectively know and ought never to dispute, and would not dispute, if they were put on their oaths (Rep. of Com. on Pr. & Pl. 244). By his-failure to answer Hogg ended the dispute as to himself, and ceased to be a party to the contest which remained between the plaintiff and Hutchinson. In the course of that contest his examination on behalf of either as against the other before trial, can only be taken, like that of any other witness, for special and sufficient cause. No such cause having been shown in this case, the order appealed from should be reversed, with costs and disbursements, and the motion to vacate granted.

Arnoux, J., concurred.


text:
    WILLIAM A. HAVEMEYER, et al., Adm’rs, &c., Appellants, v. JOHN C. HAVEMEYER, et al., Respondents.

      Amendment of answer—payment of costs as condition—effect upon recovery of costs theretofore allowed.
    Where the court at general term reversed the judgment in favor of plaintiffs, with costs to defendant to abide the event, and subsequently, and before the new trial, defendant obtained leave to amend his answer upon “ payment of costs of the action to the present time, not including allowance,”—Held, that such order does not deprive defendant of his contingent right to costs under the decision of the appeal, nor is it to be construed as depriving him of the accrued costs of the action to the date of the order, in case he is successful therein; that the order contemplated only a compensation to the plaintiff for the amendment, to be measured by the taxable costs to the time of its entry.

      It seems, that the court granting such an order is at liberty and has the power to put its own construction thereon.
    Before Freedman and Arnoux, JJ.

      Decided February 6, 1882.
    Appeal by plaintiffs from an order affirming the clerk’s taxation of costs, and denying a motion for re-taxation.
    The facts appear in the opinion.

      J. Hampden Dougherty, attorney, and Henry H. Man, of counsel, for appellants.

      C. W. Bangs, attorney, and Francis S. Bangs, of counsel, for respondents.
   By the Court.—Freedman, J.

The question presented depends upon the construction to be given to the order of June 4, 1878.

Under the decisions of the court of appeals in Union Trust Co. v. Whiton (78 N. Y. 491, sustaining the supreme court in the construction of its order, in 17 Hun, 593), and First National Bank of Meadville, Pa. v. Fourth National Bank of N. Y. (1 Civ. Proc. R. 317, reversing the supreme court for having undertaken, in 22 Ilun, 563, to construe an order of the court of appeals as it had construed its own order in the case first referred to), it seems clear that this court possesses the power and is at liberty to put its own construction upon the order of June 4, 1878, especially as that order was a discretionary one.

The order, after the défendants had procured as matter of strict right a reversal of the judgment, and while the issues were pending to be re-tried, granted to the defendants leave to amend the answer upon payment “of the costs of the action to the present time, not including allowance.’ ’ This language did not expressly nor by necessary implication deprive the defendants of their contingent right to the costs awarded by the order of the general term in March, 1878, reversing the judgment and granting a new trial, with costs to the defendants to abide the event, or to the costs as now taxed, to which, under the decisions of Howell v. Van Siclen (8 Hun, 524) and Isaacs v. N. Y. Plaster Mills (43 Super. Ct. 397), the defendants are entitled, provided the order of June 4, 1878, did not cut off such right. To hold now that the last-named order had that effect, would be to put a strained and unnecessarily harsh construction upon i t, and one which is contrary to the interpretation already put upon it by this court; for in 44 Super. Ct. 171, the general term, upon defendants’ appeal, defined the meaning of the order to be “ such costs of the trial as would go to the plaintiffs in case there had been a termination favorable to them at the time of the order giving leave to amend.” The condition was not, as the plaintiffs now claim, that the defendants should pay the plaintiffs’ costs and, in addition, submit to the loss of their own and to the loss of their disbursements, though they should finally succeed in the action. Language very different from that which was used, would be required to maintain this proposition. Nor can I perceive that the imposition of the condition was in legal effect a final disposition of the costs of the whole litigation on both sides, up to that time. The order having been made during the pendency of the issues and in the exercise of the discretion of the court, and in respect to a matter of pleading merely, it contemplated not a final and complete disposition of all costs that had accrued up to that time as such, but a compensation to the plaintiffs for the amendment, to be measured by the taxable costs to which they would have been entitled in case then and there they had succeeded. The same ruling was made by the special term of this court in Donovan v. Board of Education (1 Civ. Proc. Rep. 311).

The foregoing considerations distinguish the case at bar from Provost v. Farrell (13 Hun, 303). In that case the issues had been disposed of, and the judgment under which a right to costs had accrued, was set aside and the controversy re-opened as matter of favor, on the ground of newly-discovered evidence, on payment “ of $150.61, costs and disbursements of this action, and $10, costs of this motion.” At any rate, the supreme court had a perfect right to construe its order under the circumstances as it did, while our right to construe the order of June 4, 1878, in accordance with the views above expressed, as called for by the justice of the case, is equally clear. According to the final determinal ion of the case at bar the plaintiffs never had a case, and consequently they were not only not harmed by the amendment, but sufficiently well compensated, for technical reasons, for its allowance, without subjecting the defendants to the additional loss of their costs and disbursements. Under all the circumstances substantial justice requires that the taxation should be sustained.

No discrimination can be made between costs as snch and disbursements.

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

Arnoux, J., concurred.


author: By the Court.—Horace Russell, J.

text:
    GERTRUDE E. ARMITAGE, Respondent, v. DANIEL MACE, Appellant.

      Gift—what constitutes delivei'y—wife may take title by from husband.— Stable-keeper's lien.

    A wife may take title to a chattel by gift from her husband.
    It is a sufficient delivery of a horse as a gift by the husband to his wife, to say in her immediate presence, in response to a request that he give her the animal, “I will give her to you; she shall be yours,” both parties at the time, being in the stable immediately beside the animal, and the circumstances surrounding the transactions showing that the language used was intended to characterize a present act.
    One who desires to assert his right to the possession of a horse by virtue of a stable-keeper’s lien, must ascertain the real owner, and serve notice of his lien upon such person, as required by the statute.
    Before Freedman and Russell, JJ

      Decided February 6, 1882.
    This case comes before the court upon exceptions, directed to be heard in the first instance at general term.
    The action was claim and delivery, to recover the possession of a mare and her paraphernalia.
    The defense was that the mare belonged, not to the plaintiff, but to her husband, Thomas B. Armitage, and that the defendant had a lien upon the animal under the stable-keeper’s act. The mare was purchased by Thomas B. Armitage and owned by him up to June, 1873, when the plaintiff claims he gave the mare to her. This action was begun in November, 1877.
    The facts appear in the opinion.

      Peter Mitchell, for appellant.

      Edwin Kempton, for respondent.
   By the Court.—Horace Russell, J.

The learned judge who presided at the trial of this case submitted it to the jury upon the sole question, whether the plaintiff became the owner of the property in question by gift from her husband. The jury found that she did. All intendments must be taken in favor of the verdict; if there is evidence to support it, it must stand.

The objections taken to the plaintiff’s title were, (1) that a wife cannot take a chattel by gift from her husband, and (2) that there was no such delivery and continued change of possession of the mare, as to constitute a valid gift. The decision here involves not only these questions, but the further question whether the defendant was in such position, as a lien creditor of the husband, as to permit him to dispute the validity of the plaintiff’s title.

At common law the chattels of the wife belonged to the husband, and if a chattel was given to her, it at once became his property. She could not take by gift directly from him (Bishop on Married Women, §§ 64, 66 and 87, note).

In equity, the wife might take by gift from her husband, and the gift would be sustained unless made in fraud of creditors (Orphan Asylum v. Strain, 2 Brad. [Surr.] 34 ; Bond v. Conway, 11 Md. 512 ; Poor v. Hazleton, 15 N. H. 564; Graham v. Londonderry, 3 Atk. 393 ; Deming a. Williams 26 Conn. 296: Borst v. Spelman, 4 N. Y. 284; Neufville v. Thompson, 3 Edw. Ch. 92; Mews v. Mews, 21 Eng. L. & Eq. 556). The act of 1848, chap. 200, § 3, as amended by the act of 1849, chap. 371, § 1 (3 P. 8. 6 ed. 160, § 77) provides that a “married female may take by inheritance, or by gift, grant, devise, or bequest, from any person other than her husband&c. In none of the subsequent acts relating to the rights and liabilities of married women (1860 and 1862) is the above provision restricted or extended.

From this it would seem, at first glance, that it was the intention of the legislature that a wife should not be permitted to take by gift directly from her husband. But inasmuch as before the statutes a gift to the wife would be upheld in equity (Wilbur v. Fradenburgh 62 Barb. 474), the tendency of the later decisions has been to hold that the effect of the statutes has been, if not to convert the wife’s equitable title into a legal one, at least to clothe it with all the incidents of a legal title (Earl, Com. in Rawson v. Pa. R. R. Co., 48 N. Y. 216). In the case last, cited a judgment in favor of a married woman, in a suit brought in hei own name for a loss of wearing apparel given her by her husband, was sustained. In Savage v. O’Neill (44 N. Y. 298), a wife recovered judgment in trespass against a constable who seized a stock of goods, transferred to her by her husband, in payment of loans of money theretofore made by her to him. In Thompson v. Commissioners (79 N. Y. 54) a wife brought her action to redeem certain mortgaged premises, of which, at the time the mortgage was given, she owned one-third in fee, her husband having subsequently conveyed the other two-thirds to her by deed. It was held that the defendants were not in position to question the plaintiff’s title. In Meeker v. Wright (76 N. Y. 262), Judge Dareorth reviews the decisions on the subject, and holds a direct conveyance from husband to wife of an interest in lands, good. In Seymour v. Fellows (77 N. Y. 178), a wife sued in her own name upon a claim for work and labor, assigned to her by her husband, and her judgment recovered thereon was upheld.

It would seem from these cases that the unity of husband and wife as to property rights, has been practically destroyed, and that they may have business dealings with each other, to most intents and purposes, like any other persons (See Mack v. Mack, 3 Hun, 323). If that be so, then the marital relation existing between donor and donee in this case, did not, as a matter pf law, invalidate the gift.

Was there such a delivery as to render the gift valid ?

The plaintiff testified: “I had often expressed a wish to own her, and had often asked my husband to give the mare to me. On this occasion (June, 1873) we had just returned from the depot, and I asked my husband again to give me the mare, and he replied, ‘ Very well, you like her so much, I will give her to you. She shall be your property.’ We were at the stable at this time, and right by the mare. I. thanked him for the present.”

The husband’s testimony was: “After coming from the steamboat, and after putting the mare in the stable, my wife and 1 were standing by her side in .the stall and I gave her to her then. She asked me for her then, and I said, ‘ Ton can have her ; she shall be yours,’ or words to that effect: and I called the man that was taking care of her and told him that after that the previous orders that I had given him about the use of the horses were changed, and that after this he was to deliver the mare to my wife, as she wanted her, as I had given her to her. My wife thanked me for the gift, and I believe went to .the extreme of kissing me for it, putting her arms around my neck.” Upon returning to the house plaintiff’s husband said to her mother, “Ma, I have given ‘Lady’ to Gertie.” The plaintiff further testified that whereas she had never before the gift given orders to the stableman in regard to “Lady,” or driven her “without the presence of her husband,” she did thereafter. About two years after the gift, the animal having developed speed, she was put in training, with a view to sale, first,, with a Mr. Patterson for about a year, then with a Mr.. Doty, and then, in January, 1877, with the defendant; the arrangement with whom was made by the husband, without any intimation that his wife was the owner. After the gift the mare remained in the husband’s stable, and was kept at his expense, until put in training, and after that the bills for keeping, &c., were always paid by the husband, and rendered to him, in his own name.

In January, 1877, Mr. Armitage took the animal to the defendant, with whom he made an agreement to keep her for $30 per month. In May an agreement, not important here to state in detail, was made that the defendant should drive her in races in various parts of the country.

To constitute a valid gift there must undoubtedly be a delivery, and at the time of the gift. But the difficulty is, there is no settled rule as to what shall constitute a delivery. Perhaps in the nature of things there cannot be. The difficulty is enhanced where, after an alleged gift, the property remains in the custody of the giver, and is controlled by Mm much the same as before. The older cases are more strict than the modern ones. ' They demand an actual manual or symbolical delivery, as of a part for a whole, or a key, or some other badge of control. Of course, whether certain acts constitute a delivery, is greatly dependent on the nature of the property intended to be transferred. In the case at bar, if the mare had been led out of the stall, and her halter placed in the hand of the donee, with the words of gift testified to, it would have been a sufficient delivery to satisfy all the ceremonial requirements of the old English cases. Within the modern cases, I think the ceremony was unnecessary, and that it was a sufficient delivery to say, in her immediatepresence, “ I will give her to you ; she shall be yours.” While the words employed, strictly construed, seem to relate to a future intention rather than a present one, the surrounding facts sufficiently indicate that only a common inaccuracy of language was employed, really intended, however, to characterize a present act. Allen v. Cowan (28 Barb. 99 ; reversed, 23 N. Y. 502), was, as to this point, very much like the case at bar. A., being the owner of certain household furniture, executed a chattel mortgage upon it to his daughter, to secure a loan theretofore made by her to him. The mortgage was foreclosed, and at the sale the property was bought in by L., a nephew. He removed none of the property, but immediately after the sale took his aunt, A.’s wife, into the parlor, and pointing out a portion of the property, told her he gave her that and all the rest of the property purchased that day. The furniture continued to be used by A.’s family precisely as it had been before. It was subsequently seized on execution against A., whereupon A.’s wife brought suit for its recovery. She was nonsuited at the trial, and the nonsuit was sustained at general term, on the ground that there was no sufficient delivery. The court of appeals reversed, and ordered a new trial, holding the delivery sufficient. To the same effect are: Penfield v. Public Administrator (2 E. D. S. 305); Grangiac v. Arden (10 Johns. 293); Mack v. Mack (3 Hun, 323); Stevens v. Stevens (2 Hun, 470); Cooper v. Burr (45 Barb. 9, 33); Trow v. Shannon (78 N. Y. 446). The case of Brewer v. Harvey (72 N. C. 177), relied on by the appellant, is in conflict with the current of authority in this State.

The plaintiff’s title to the property in suit, was, then, entirely valid unless the gift was made in fraud of creditors. The defendant was not a creditor at the time the gift was made, and there was no attempt on the trial to prove that the plaintiff’s husband was insolvent at the time he made the gift, or has become so since. •

As the lien which the defendant asserts is purely .statutory, it was for him to comply with all the conditions precedent which the statute requires ; and if he wishes to assert that statutory right, the duty was upon him to ascertain who was the real owner of the property, and serve notice of his lien upon that person. The plaintiff was undoubtedly bound by the acts of her husband as her agent. Had the notice of lien been -served upon her, and had the lien under the circumstances of this case been a valid one (as to which we express no opinion), his statutory rights would have been perfectly protected. As the notice was directed to, and served upon, a person who was not the owner, it was a nullity as against the person who was.

The other exceptions do not demand discussion.

The exceptions should be overruled and judgment ordered for plaintiff on the verdict, with costs.

Freedman, J., concurred.


text:
    GEORGE W. TOMPKINS, Appellant, v. ALFRED S. SMITH, et al., Respondents.

      Arrest—defendant in action to recover money lost at gaming ca/nnot be arrested—conditions upon vacating order arrest.—Betting and gaming— nature of action under statute.

    In an action under the Revised Statutes to recover moneys lost in gaming, the defendant cannot be arrested, either under the statute or under subdivision 2 of section 549 of the Code of Civil Procedure.

      It seems, that such an action sounds neither in contract nor in tort, but is wholly statutory.
    When the defendant is entitled as a matter of right to have an order of arrest vacated, the court has not power to impose as a condition that he stipulate not to bring an action for false imprisonment.
    Before Freedman, Russell and Arnoux, JJ.

      Decided February 6, 1882.

      Appeal from an order of the special term, vacating an order of arrest.
    The action was to recover the sum of $31,030, alleged to have been lost in gaming.
    Upon the complaint and an affidavit reciting the loss and payment of sums amounting in the aggregate to the sum claimed, at the game of faro, an order of arrest was granted, which was afterwards, upon motion, and upon the same papers upon which he had granted it, vacated by the same judge.
    Chittenden, Townsend & Chittenden, attorneys, and L. E. Chittenden, of counsel, for appellant.

      Douglass Campbell, for respondent.
   By the Court.—Horace Russell, J.

The order of arrest was vacated on the theory that the law does not authorize an arrest in such a case as this.

It was claimed on the argument by the appellant that the order of arrest ought to have been maintained, because the retention by the defendants of the moneys sued for brought the case within the second subdivision of section 549 of the Code of Civil Procedure, which gives to a plaintiff a right to arrest a defendant, where the action is for “ an injury to property, including the wrongful taking, detention, or conversion of personal property.” The appellant’s contention was that the action sounded in tort; the respondents contended that it sounded only in contract, raised or implied by the statute, which gives the right of action.

There can be no doubt that no right of action existed at common law to recover back moneys lost in gaming. The extent to which the courts went was to hold that the law would not enforce such contracts. The action is solely a creature of statute.

Our first statute on this subject was the act of 1801 (1 R. L. 1813, 153, chap. 46), which, following the statute of Anne, gave an action of debt, “as for money-had and received,” to recover back moneys lost at play. This was followed by the provision of the Revised Statutes (§ 14, art. 3, ch. 22, part 1), which is : “Every person who shall, by playing at any game, or by betting on the sides or hands of such as do play, lose at any time or sitting the sum or value of twenty-five dollars or upwards, and shall pay or deliver the same, or any part thereof, may, within three calendar months after such payment, or delivery, sue for and recover the money or value of the things so lost, or paid, or delivered, from the winner thereof.”

Were the act of 1801 still in force, it would be quite clear that the appellant’s contention could not be sustained, because that act. distinctly says the action should be “of debt, as for money had and received.” But the appellant claims that, inasmuch as the Revised Statutes have omitted the words ‘ ‘ an action for debt, &c,” that the nature of the action has been changed by statute, or may be changed at the option of the plaintiff ; and that while he may still sue as for money had and received, he may also sue in tort and insist that his action should be regarded as for the tortious detention of personal property.

It is of some significance against this contention that it is novel, and that the form of the actions reported in the books since the Revised Statutes were adopted, has remained the same as it was before, at any rate until the adoption of the Code of Procedure, since which time it has become customary to state the cause of action according to the facts rather than according to the old forms of pleadings.

An examination of all the authorities cited on the argument, and a somewhat extended research on our own part, have not enabled us to find a single case in which a plaintiff claimed the right of arrest, and none before the Code of Procedure was adopted, in which the form of the action was other than that of debt, for money had and received. From this it would seem to have been the theory of the • counsel who drew the pleadings in all these cases, that while the words “action of debt, &c.” had been omitted from the Revised Statutes, they had been so omitted rather because they were no longer regarded as necessary than because there was a design, on the part' of the legislature, to alter the form of the action”or the rights and remedies of the parties under it. All these cases, on the part of both counsel and court, seem to have proceeded upon the theory that the law created an implied contract on the part of the person receiving money lost at gaming to return the money to the person who had lost it; or that, as the money was received without consideration, the statute had removed the bar to the loser’s recovery, theretofore existing, because the loser was in pari, delietu (Meech v. Stoner, 19 N. Y. 26 ; Caussidiere Beers, 2 Keyes, 198; Morgan v. Groff, 4 Barb. 524; Like v. Thompson, 9 Barb. 315 ; Fowler v. Van Surdam, 1 Den. 557 ; Stannard v. Eytinge, 5 Robt. 90 ; Betts v. Hillman, 15 Abb. Pr. 184; Moran v. Morrissey, 18 Abb. Pr. 131; Betts v. Bache, 23 How. Pr. 197; Collins v. Ragrew, 15 Johns. 5).

Without the statute, the loser would have no remedy whatever, and as the statute gives him whatever rights he has, its construction ought not to be forced or extended beyond its natural effect; more especially is this the case when to so extend it would be in conflict with the whole tendency of our decisions which insist upon strict construction of laws which imperil or in any way interfere with the liberty of the citizen.

Courts ought not to feel at liberty to legislate into statutory actions rights and remedies not clearly contemplated by the statute itself. Indeed, the Code expressly says (§548), “A person shall not be arrested in a civil action or special proceeding except as prescribed by statute.”

If"we should consider this question so far as it is influenced by analogy to other actions given by statute, we think a most careful examination will fail to find any case where a statute gives a right of action, not otherwise existing, in which the extraordinary remedy of arrest is permitted, unless it is given by clear enactment. Whenever it is the intention of the legislature to give a right to an extraordinary remedy, that intention is either clearly expressed in the statute itself or in the Code of Civil Procedure. For instance, in all those cases where a statute imposes a penalty, to be sued for in a civil action, it is expressly provided in the Code (§ 549, subd. 1) that an order of arrest may issue.

That there is nowhere any express provision of the statute authorizing an order of arrest in an action to recover moneys lost at play, is, we think, almost conclusive of this controversy. That the forms of pleading have been altered by the Code, does not affect the question.

The weight of authority is in favor of regarding the action as one of contract rather than of tort. But if we regard it, as we may, as sounding neither in contract nor in tort, but simply statutory, then, as the statute does not expressly give the right of arrest to enforce it, we think it would be a forced and improper construction of the section of the Code of Civil Procedure above quoted, to hold that this case comes within its. provisions.

We agree with the learned judge at special term that, inasmuch as it was not a matter of favor to the defendant, but of strict right under the law, that the order of arrest should be vacated, the court had not the power to impose as a condition that the defendant should stipulate not to bring an action for false imprisonment.

The order should be affirmed with costs.

Freedman and Arnoux, JJ., concurred.


text:
    JOHN J. JONES, et al., as Ex’rs, &c., Respondents, v. JESSE HOYT, et al., Appellants.

      Open commission—when granted—discretion as to.

    The granting of a open commission to take testimony without the State, under section 894 of the Code, is a matter of discretion, the exercise of which, though it may be the subject of an appeal, ought not to be disturbed unless it is quite clear to the appellate court that the discretion was unwisely exercised. Where the action charged fraud, and the witnesses sought to be examined are stated to be unwilling witnesses from having long-continued business relations with defendant’s firm, the judge at special term is justified in granting the order, though such relations have terminated, and defendants deny knowledge of any facts which would render the witnesses reluctant.
    Before Freedman, Russell and Arnoux, JJ.

      Decided February 6, 1882.
    Appeal from an order granting an open commission to take testimony without the State.
    The action was for breach of warranty, and false representation upon a sale by the defendants to the plaintiffs’ testator, of a quantity of barley, in November, 1878.
    The plaintiffs’ affidavits allege that the barley in question was obtained by the defendants at the city of Milwaukee, Wisconsin, and that the witnesses to prove its identity and quality, some of whom are named and some not, reside in that city.
    • One of the affidavits submitted alleges that the deponent therein had visited the city of Milwaukee for the purpose of making inquiries in regard to the matter, and that the witnesses named were “unwilling witnesses for the plaintiffs and are very reluctant to state the facts within their knowledge on the issues in this action. ” One reason suggested for their reluctance was long continued business relations with the defendants’ firm.
    The defendants allege that their firm had recently dissolved, and deny any knowledge on their part of any facts and circumstances which would render the witnesses unwilling or reluctant to testify according to the fact.

      Stephen A. Walker, for appellants.

      Martin J. Keogh, for respondents.
   By the Court.—Horace Russell, J.

Section 394 of the Code has made an innovation upon the former practice. It provides: “Where an issue of fact, joined in an action, is pending in either of the courts specified in the last section, the parties may stipulate, in writing, or the court, or judge thereof, may in its or his discretion, upon the application of either party, and upon satisfactory proof, by affidavit, that one or more witnesses not within the State, are material and necessary in the prosecution or defense of the action, make an order upon such terms as it or he deems proper, directing that an open commission issue, or that depositions be taken as prescribed in the following sections of this article.”

This section gives a very large discretion to the judge to whom such an application is presented. While the exercise of such discretion may be the subject of an appeal, it ought not to be disturbed unless it is quite clear to the appellate court that the discretion was unwisely exercised.

We do not think that is shown in this case.

The nature of the action charging fraud was such, that witnesses who might be entirely willing in an ordinary action ex contractu, would be unwilling where' their testimony might be injurious to a friend.

While it is claimed, on the part of the appellants, that the business relations of all the witnesses alluded to but one, with the defendants’ firm, have terminated, it may very well be that from a long business intercourse, supplemented by more or less of personal intercourse and friendship, the witnesses would not be disposed to go beyond the strict letter of their compulsory duty in giving testimony in aid of a stranger, as against' their friends.

At any rate, there was enough in the suggestion to justify the judge at special term in deciding that this, was a proper case for the issuing of an open commission.

No question was made upon the argument, or could, have been made, as to the materiality of the witnesses. It was simply a question'whether the witnesses should be examined by the somewhat clumsy methods of a sealed commission, with its interrogatories and cross-interrogatories, or by oral examination, such as is had. of witnesses who present themselves in court. That the latter is the more reliable way in which to arrive at the truth, all will agree.

There is not much force in the suggestion made, that an open commission will tend to transfer the trial of' this action to another State. That would be as true if a sealed rather than an open commission were to issue, and the question presented to the judge was whether that trial, or so much of it as it should be necessary tO' have in a foreign jurisdiction, should, under the circumstances, be conducted in one or another manner, as best calculated to elicit the truth. We do not think he erred in his judgment.

The order should be affirmed, with costs and disbursements.

Freedman and Abnoux, JJ., concurred.


author: By the Court.—Horace Russell, J. Arnoux, J.

text:
    JOHN GRAY, Respondent, v. THE DELAWARE, LACKAWANNA & WESTERN R. R. Co., Appellant.

      Sale—removal of merchandise within specified time, when condition precedent, when waived.—Forfeiture.

    Plaintiff bought at auction of defendant five hundred tons of coal under terms of sale requiring a deposit of fifty cents per ton, and providing that the coal should be taken during October, 1876, and that, if not so taken, the company might “at their option at any time thereafter discontinue further deliveries and retain the fifty cents per ton deposited on the day of sale.” Defendant made deliveries, for cash, up to February following, when plaintiff demanded the balance of the coal, claiming a credit of $250, the amount of . the deposit. Delivery was refused, and plaintiff brought this action to recover the said sum.

      Meld, that though removal in October was a condition precedent, yet, defendant having made subsequent deliveries and having failed, on its refusal to deliver balance, to claim a forfeiture, whatever right of forfeiture it may have had was thereby waived. But, it seems, that there was no such right; that the deposit was to secure defendant against loss by fall in price, and was a severable and not a gross sum; and that in no event could defendant retain more than fifty cents for each ton undelivered.
    Before Russell and Arnoux, JJ.

      Decided February 6, 1882.
    Appeal from a judgment entered on the verdict of a jury.
    The action was for the recovery of the sum of $250, alleged to have been deposited by the plaintiff, as security for the x>erformance of his contract, upon a purchase of five hundred tons of coal from the defendant, at auction, on September 27, 1876.

      The undisputed facts were as follows : The plaintiff purchased the coal, on the day named, at the agreed price of $2.9734 per ton, on the following terms :
    “ Fifty cents per ton, in city bankable funds, to be deposited on the day of sale, as a security for the fulfillment of the contract by the purchaser, and the balance to be paid within ten days thereafter, at the office of the company, when the order for the delivery of the coal will be given on their agent in Hoboken. The coal to be taken away during the month of October, .1876. Should the purchaser fail to take it away within the month, the company may, at their option, at any time thereafter, discontinue further deliveries, and retain the fifty cents per ton deposited on the day of sale, or should the company elect so to do, they may resell the coal, either at public sale or otherwise for account of such defaulting purchaser, who shall pay to the company any deficiency caused by the coal being sold at a price less than that originally agreed to be paid.”
    The next day, a memorandum, of which the following is a copy, was left at the plaintiff’s place of business:
    “Memorandum of Scranton coal, sold at auction on the 27th day of September, 1876, by the Delaware, Lackawanna and Western Railroad Company to Mr. John Gray (38 Dey St.), deliverable at Hoboken, N. J., during the month of October, 1876, according to the terms and conditions read by the auctioneer at the said auction. Grate, 500 tons at 2.97 1-2. Total tons, 500. Received, as a deposit on the above, according to the terms and conditions of sale, the sum of $250.
    “--, For Treasurer.”
    On October 14, one hundred and fifty tons of the coal were delivered to the plaintiff; on November 4, one hundred and fifty tons more were delivered ; and on February 20, one hundred tons were delivered. All the coal delivered was paid for in full at the time of delivery. When the plaintiff received coal on February 20, the dispute ending in this action arose. The plaintiff asked for two hundred tons, the whole amount of coal remaining undelivered, on his contract, and claimed he should be credited with $250, deposit paid on the day following the auction sale. The defendant denied that he had made the deposit claimed, and refused to deliver coal unless it was paid for in full.
    The disputed questions of fact were, first, whether the plaintiff made the deposit as alleged, and, second, whether the defendant, by its agent, had extended, by express words, the time for the performance of his contract until such time as it should notify him to take the coal away.

      Hamilton Odell, for appellant.

      Jacob F. Miller, for respondent.
   By the Court.—Horace Russell, J.

[After stating the facts as above.]—On the argument of this appeal, two questions were presented by the appellant as grounds for reversal. It was claimed, first, that the court below erred in denying the defendant’s motion for a nonsuit, made on the ground that the moneys claimed were, by the terms of the agreement between the parties, forfeited to the defendant, by reason of the plaintiff’s failure to take away the coal purchased, during the month of October ; and, second, that the verdict was against the weight of evidence.

It was undoubtedly an express condition of the contract between the parties that the coal purchased should be removed during the month of October. This was a condition precedent, upon which the defendant would have had a right to insist, had it chosen at the proper time to assert it (Higgins v. D. L. & W. Co., 60 N. Y. 557). But it was not bound to insist upon this condition precedent. It had the power and the right to waive it, if it chose. Without considering whether there was or was not an express waiver—as to which there was a conflict of testimony—we think that the subsequent acts of the defendant in delivering coal in November and February, constituted a waiver of the condition precedent.

Indeed, it was held in Simpson v. Crippen (L. R. 8 Q. B. 14), where the defendants had agreed to supply the plaintiff with six to eight thousand tons of coal, to be delivered in the plaintiff’s wagons at the defendant’s colliery, “in equal monthly quantities during the period of twelve months from the first of July next,” and during the month of July the plaintiff sent wagons for only one hundred and fifty-eight tons, whereupon, on August 1, the defendants wrote that the contract was canceled on account of the plaintiff’s failure to send for the full monthly quantity in the preceding month, that, although the plaintiff had committed a breach of the contract by failing to send- wagons in sufficient number the first month, the breach was a good ground for compensation, but did not justify the defendant in rescinding the contract. To the same effect is Haines v. Tupper (50 N. H. 307). It would seem to be the theory of these cases that a part performance of such a contract, entire in its nature, so far satisfied the condition precedent as to take away the right of a party to rescind, and left him only to his damages for non-performance (See also Sumner v. Parker, 36 N. H. 449, and Dwinelle v. Howe, 30 Me. 258). We are not required to go as far as the court went in those cases.

The defendant here had a right of election in the matter, after breach of the condition precedent, but having-exerciSed that right by electing to consider the contract as still binding and in full force, they could not recall their election and adopt a different view (Quick v. Wheeler, 78 N. Y. 300, and cases below). That the coal delivered in November and February ought to be regarded, as a delivery upon the contract, McKnight v. Dunlop (1 Seld. 537) is a sufficient authority. If it be said that the waiver was without consideration and, therefore, liable to be recalled at any time, it may be said in reply that the acceptance of coal by the plaintiff after the waiver, when coal had decreased in price, was a sufficient consideration to require that the waiver of performance within the time fixed should be upheld (Gallagher v. Nichols, 60 N. Y. 448; Clark v. Jones, 1 Den. 516; Platt N. Y. Co. Ins. Co., 55 N. Y. 505).

There was at no time, on the part of the defendant, an assertion of the right of forfeiture until the answer was interposed in this action. They placed themselves upon the sole ground that the deposit had not in fact-been paid. This ground of objection to the judgment, then, must fail.

As to the second ground on which a reversal is claimed—that the verdict was against the weight of evidence—while we may go the length of saying we should have been better satisfied with a verdict for the defendant, in view of the facts tending to impeach the plaintiff’s recollection, still, there was a direct conflict of testimony, which made the case one peculiarly for a jury. The Credibility of conflicting witnesses was the main thing to be determined. In such a case the verdict of a jury ought not to be upset, unless the court can clearly see that they were influenced by passion, prejudice, mistake or corruption, or was so against a striking preponderance of evidence, that a common exercise of judgment demands its reversal (Morss v. Sherrill, 63 Barb. 21 ; Roosa v. Smith, 17 Hun, 138).

There is nothing in this case to lead us to suppose that the jury were influenced by any improper considerations, and we cannot say that their verdict was so clearly against the weight of evidence as to justify us in disturbing it.

The result is, the judgment must be affirmed with costs.

Arnoux, J.

[Concurring.]—From an examination of the evidence my individual opinion is that the payment alleged by plaintiff, as matter of fact was never made; but the law wisely places the decision of matters of fact exclusively in the province of the jury, with such control by the court as shall prevent a miscarriage of justice. Unless the jury have unmistakably and palpably decided against the weight of evidence we should not and cannot interfere. That they had not' so done was the determination of the trial judge, who had the opportunity of seeing and hearing the witnesses, which is denied to ns, and we must defer to his more enlightened judgment.

•The defendant can only succeed, if at all, by the plea of forfeiture.

In September, 1876, plaintiff bought at auction of defendant five hundred tons of coal, under certain terms of sale, which required a payment of fifty cents per ton, and which further provided: “ The coal to be taken away during the month of October, 1876. Should the purchaser fail to take it away during the month, the company may at their option, at any time thereafter, discontinue further deliveries and retain the fifty cents per ton deposited on the day of sale.’ ’ Defendant delivered to plaintiff on said purchase three hundred tons in October and November, and one hundred tons in February following, and plaintiff in said last month demanded the balance, on which he claimed a credit for said $250. The demand was refused, and the payment, as matter of fact, denied. This was the only ground of refusal. If the company had had a right of forfeiture, as claimed by its counsel, it was waived by the subsequent delivery, and by failure to assign that reason. But they had no such right. The moneys paid on account were so paid to secure the company against loss by fall in the future market price, and they were limited to the amount specified—fifty cents per ton. This was a severable, and not a gross sum. The company, under the express terms of this contract, might have delivered to defendant one hundred tons in October, November, December, and January each, and have refused in February to deliver the remaining one hundred tons. In such case, as each lot was delivered the purchaser had a right to a credit of $50, and the company could only hold the last $50 for the remaining one hundred tons.

If the company had refused to deliver this last lot of coal on the ground that under their option they chose to discontinue further deliveries, and had retained so much of the deposit as related to that portion of the coal, a question would have been presented that might have availed defendant in this action; but we can only affirm the judgment and order appealed from.


author: By the Court.—Arnoux, J.

text:
    EWEN McINTYRE, Respondent, v. WILLIAM E. STRONG, Appellant.

      Limited liability companies—liability of stockholders for rent due under lease.—Lease—presumption as to delivery.

    Section 37 of chapter 611 of Laws of 1875, is to be read subject to section 25, and consequently the liability of stockholders of limited liability companies formed thereunder, for debts of the corporation, the Capital stock not being paid in, is limited to debts “to be paid within two years from the time the debt is contracted.”
    In case of a lease to the corporation for a term of years, one who is a stockholder at the time of the delivery of the lease is liable for the rent payable thereunder within two years from the time of the execution of the lease and the delivery of the premises.
    The presumption as to the execution of a lease afforded by the date of the instrument, is’ overthrown by the certificate of acknowledgment before the subscribing witness, at a later date.
    Before Russell and Arnoux, JJ.

      Decided February 6, 1882.
    Appeal from a judgment entered on the verdict of a jury, and from an order denying a new trial.
    The facts are stated in the opinion.

      Adolphus D. Pape and Henry S. Bennett, for appellant.
    The debt was not to be paid within two years from the time it was contracted. The lease created but one debt, not several distinct debts. The argument that because portions of the rent agreed to be paid, were to be paid within two years, and other portions were not to be paid within three and five years, therefore, the statute is operative as to the former, but inoperative as to the latter, involves the assumption that the lease is not one entire contract, but several separate and independent contracts—which is clearly erroneous. Provisions were made in the lease to reduce the debt within two years, but not to extinguish it until after five years. The liability sought here to be enforced is not an original or a common-law liability, but a statutory one. The real contracting debtor was the corporation (Lindsley v. Simmonds, 2 Abb. Pr. N. S. 74; Jessup v. Carnegie, 80 N. Y. 441). The liability of the stockholder is only such as the statute in express terms measures it. This liability cannot be extended by implication, nor can the principles of law or equity be invoked to vary or enlarge it (Lowery v. Inman, 46 N. Y. 127).

      William J. Gibson, for respondent.
   By the Court.—Arnoux, J.

This action was brought against a stockholder of the Excelsior Grain Binder Company Limited, a corporation organized under the act passed June 31,1875 (Laws 1875, ch. 611, p.755), for the default of the company in payment of rent for five quarters from the first day of February, 1877, to the first day of May, 1878, at the rate of $1,000 per annum. Plaintiff, by lease under seal, dated January 1, 1876, acknowledged before the subscribing witness January 26, 1876, let to said corporation certain premises in the city of New York for the term of four years and four months from date, and the corporation entered into possession thereof.

The defendant pleaded (1) surrender, (2) that he was not a stockholder when the liability was assumed, and (3) that under section 7 of the statute he is not liable.

1st. It must be admitted that upon the printed case ■submitted to the court defendant made a strong case of surrender. The impecunious condition of the corporation, the conversation, as stated by the president and corrobrated by the secretary of said corporation, the delivery of the key, the letter of August 18, 1877, in which the alleged agreement to surrender, made in said conversation, is stated, and to which plaintiff never replied, tended to prove this. On the other hand, the corporation remained in possession after the. delivery of the key, and plaintiff denied making the agreement to cancel the lease. This presented a sharp conflict of evidence, which was submitted to the jury .by the learned judge who tried the cause, and whose charge was lucid and comprehensive, and not excepted to. The jury, having the advantage of seeing the witnesses, decided for plaintiff, and we do not deem that there was such a weight of evidence in favor of defendant as would warrant a reversal on that ground (Westerlo v. De Witt, 36 N. Y. 340; Crane v. Baudouine, 55 Id. 256; East River Nat. Bk. v. Grove, 57 Id. 598 ; Roosa v. Smith, 17 Hun, 138).

2nd. It appears from the evidence that in or about October, 1875, defendant subscribed for stock in said corporation, and on January 21, 1876, he received a certificate for one hundred shares, for which he then or previously paid the par value thereof. If we were governed by the date of the lease, it might become important to determine the status of defendant in relation to said corporation on the first day of January, 1876, but the date is only a formal part of the instrument, and the presumption which it affords of delivery is overthrown by the fact that the copy thereof produced by plaintiff was acknowledged before the subscribing witness on January 26, five days after defendant confessedly became a stockholder in said corporation.

3rd. A more important and difficult question arises on the third defense, .that is as to" the liability of a stockholder on the lease in question under section 25 of said act, which provides that, “ no stockholder shall be personally liable for the payment of any debt contracted by any corporation founded under this act, which is not to be paid within two years from the time the debt is contracted

The great and constantly increasing number of companies, incorporated under the general laws of the State of New York relating to corporations, including almost the entire community, either as stockholders or creditors, and give to questions of this character a general interest, and consequently such questions demand the most careful consideration. The law has imposed burdens upon individual stockholders until the capital is duly furnished (which has not been done in this case) to protect creditors who trust the corporation on the faith of a paid-up capital; but on the other hand, it protects such stockholders against the unqualified, unlimited and prolonged liability of a general partnership. Counsel for plaintiff claims that defend-antis liable under section 37 of said act:—“ In limited liability companies all the stockholders shall be severally, individually liable to the creditors of the company in which they are stockholders, to an amount equal to the amount of stock held by them respectively, for all debts and contracts made by such company until the whole amount of capital stock fixed and limited by such company has been paid in,” etc.

These two provisions, as they stand are inconsistent, and one or the other must yield. Following the rule of construction laid down in respect to wills, we are of the opinion that section 37 must be read subject to section 25. If it were otherwise, so much of section 25 as is quoted above, would be meaningless ; for when the whole capital stock of a limited liability company is paid in, and the conditions of the law complied with, then there is no liability whatever upon the individual stockholder, however brief the credit given to the corporation may be. So that section 25 must govern this case. We then recur to the question, was the debt in question to be paid within two years from the time it was contracted? The defendant’s counsel declares that, as the lease is for five years, no liability whatever is imposed upon the stockholder. Plaintiff’s counsel contends that each quarter is a new contract, and that no part of the lease is beyond the statutory limitation. To support his view he cites Grarrison v. Howe (17 N. Y. 465). That was an action brought to recover against a trustee for failure to report. Plaintiff had made a contract to deliver certain chattels from time to time, and the company on their receipt were to give time obligations. When the report was due, the company did not owe plaintiff anything under the contract. Subsequently he made a delivery for which the company failed to pay. There is a broad distinction between that case and the case at bar. There the contract was executory on the part of the plaintiff, here it is executed. The defendant’s counsel contends that as the lease was for five years, it is wholly beyond the statute ; this view is equally fallacious. The true rule lies between these extremes. The rent payable within two years from the time of executing the lease and delivering the premises is recoverable in this action ; the rent accruing beyond that time is not a liability that can be enforced against the individual stockholder. What constitutes a debt within the meaning of the various manufacturing acts has had many and contradictory decisions (see Thompson’s Liability of Stockholders, §§ 57, 58), but when a debt is contracted has been, so far as we have ascertained, only adjudicated in Garrison v. Howe (supra), which does not apply, and Lewis v. Ryder (18 Abb. 1), which throws no light upon the question. The judgment and order should be reversed and a new trial granted, with costs to the appellant to abide the event, unless the plaintiff within ten days after the entry of an order herein stipulates to reduce the judgment to $750 with costs, interest and proper allowance, in which case the judgment and order are affirmed without costs to either party.

Russell, J., concurred.

       See Vernon, v. Palmer, p. 231.


author: By the Court.—-Arnoux, J.

text:
    ALBERT SCHULTE, et al., Appellants, v. JAMES ANDERSON, Respondent.

      Contempt proceedings—payment by pa/rtyy to receiver, when cannot be enforced by.—Code Civ. Pro. §§ 14, 1241.
    The receiver of the assets of a copartnership, appointed in an action for dissolution, accounting, etc., paid to defendant’s attorney on recovery of judgment, a certain sum on account thereof, out of the assets in his hands, and afterwards, on a new trial, plaintiff recovered judgment directing the repayment of said sum by defendant to the receiver, aud by the receiver to plaintiff, and that plaintiff have execution for the full amount of his judgment, which included said sum received by defendant.

      Held, that the payment of said sum by defendant to the receiver could not be enforced by contempt proceedings, under subdivision 3, of section 14 and subdivision 2 and 4 of section 1241 of the Code of Civil Procedure. Further held,—it appearing that said sum was not actually received by defendant, but was expended by his attorney for disbursements in the action—that the denial of the motion, if made in the exercise of discretion, should not be disturbed.
    Before Freedman, Russell and Arnoux, JJ.

      Decided February 6, 1882.
    Appeal from an order denying a motion to punish defendant for contempt. The facts are stated in the opinion.

      E. P. Wilder, for appellants.

      L. B. Bunnell, for respondent.
   By the Court.—-Arnoux, J.

This action was originally brought to dissolve a partnership and for an accounting. Under »n order in the action Isaac Newton was appointed receiver, and as such collected certain moneys.. Upon the first trial defendant recovered judgment, and thereupon said receiver, out of said moneys, paid $81.07 to defendant’s attorney. ■ The general term of this court, upon appeal, reversed said judgment, and on the second trial judgment was pronounced in plaintiff’s favor. By this judgment it appears that the receiver had a balance in hand, after the payment of his fees, of $47, which sum with said $81.07, with interest, (which defendant was to repay) the receiver was directed to pay plaintiffs, and that plaintiffs should have judgment against defendant for the sum of $4,296.77, and have execution therefor.

This motion was made upon defendant’s failure to pay said moneys to said receiver, under the new Code, § 14, subd. 3, and § 1241, subd. 2 and 4, on the ground that by a final judgment defendant was adjudged to pay to an officer of the court a sum of money for the collection of which an execution could not be awarded, and which sum was not awarded in enforcing a contract or for the breach of a contract. The motion was opposed on affidavits that showed that defendant in fact did not receive the money, but that his attorney did, and he expended it for disbursements in the action; that this amount was included in the amount of the judgment in favor of plaintiffs for which execution was directed against defendant; and that defendant was unable to repay said moneys. The motion was denied.

In law the defendant received this money and is legally liable to repay the same.

The provisions of the Code above cited do not interfere with the issuing of an execution against defendant to recover back moneys paid on a judgment which has been reversed, for such moneys were received under an obligation to repay if the judgment were reversed, and, therefore, the above cited provisions of the code do not apply. It appears from the uncontroverted evidence of defendant’s attorney that plaintiffs have, as matter of fact, the right to issue execution therefor. To allow the punitive process of this court to be used to enforce the collection of a simple contract debt would be against that spirit of modern legislation and enlightened public sentiment that has abolished imprisonment for debt, and would convert this process from a punishment of wrong into an instrument for the collection of money.

Besides this, the application was addressed to the discretion of the court. The defendant’s excuse for failing to obey the order commended itself, we must presume, to the favorable consideration of the court. If the order were denied on that ground this court will not disturb it. •

The order appealed from must be affirmed with ten dollars costs.

Freedman and Russell, JJ., concurred.


author: By the Court.—Sedgwick, Ch.J.

text:
    CASPAR SPIESS, Appellant, v. CONSTANTINE ROSSWOGG, et al., Respondents.

      Partnership—when former partner deemed, trustee for firm, of renewal of firm lease to him individually.

    Where the members of a firm, upon its dissolution, agree to carry on the liquidation of the business together, in the premises occupied by the firm, and thereupon one of the members and a third party, having knowledge of the facts, take, in their own names, renewals of the unexpired firm leases of the premises, without the consent of the other partners, such lessees hold said leases as trustees for the firm; this, though the original leases contained no covenants of renewal.
    Before Sedgwick, Ch. J., and Freedman, JJ.

      Decided April 3, 1882.
    Appeal by plaintiff from judgment dismissing complaint, entered upon decision of a judge at special term.
    The action was for judgment that the defendants should be declared to hold as trustee for a firm certain leases obtained by them in their own name.
    The plaintiff and one of the defendants, viz. : Constantin Eosswog, were copartners in business under the firm-name of Spiess & Eosswog. The firm held leases to end May 1, 1881, of the premises in part of which the firm business was done. On December 31, 1880, the partnership was dissolved, as the judge found. On January 3, 1881, the partners agreed to carry on the liquidation of the business together, upon the premises occupied by the firm, to work up the old stock and dispose of it. On January 14, 1881, the defendant Constantin Eosswog, and his son, the co-defendant, who had knowledge of the circumstances, procured new leases of the premises for three years from May 1, 1881. The complaint was dismissed.

      G. H. Kracht and D. M. Porter, for appellant.
    A lease taken by one partner in his own name inure» to the benefit of the firm, and the partner in whose name it is taken can be required to account to his copartners for its value ; and this is so, though the lease be obtained for a term to commence after the partnership, by its own limitation, is to terminate (Clegg v. Edmonson, 8 De G. McN. & G. 787 ; Mitchell v. Read, 61 N. Y. 132; Holridge v. Gillespie, 2 Johns. Ch. 30 ; Phyfe v. Wardell, 5 Paige, 268 ; Gibbs v. Jenkins, 3 Sandf. Ch. 131; Struthers v. Pearce, 51 N. Y. 357; Moody v. Mathews, 17 Ves. 185; Clements v. Hall, 2 De Gex & J. 173; Keeck v. Sanford, 2 Eq. Cases Abr. 741, and notes to the latter case in 1 Leading Cases in Equity, 32; Smith v. Day, 2 M. & W. 684 ; 2 Platt on Leases, 60 ; Feathersborough v. Fenwick, 17 Ves. 298). On principle, in many cases it is of little consequence whether the partnership is dissolved or not before the renewal, if the former partners become tenants in common, the result is the same ; or there may be other reasons, of a fiduciary nature, why the transaction cannot be entered into (Mitchell v. Reed, 61 N. Y. 123).

      Stephen H. Olin, for respondent.
   By the Court.—Sedgwick, Ch.J.

The fact in this case which the learned counsel for the respondent argues distinguishes it from those cases in which the partner taking a renewal of partnership leases has been held a trustee for the firm, is, that the defendant Constantin Rosswog obtained them after the firm was dissolved.

This dissolution did not annul or change those relations between the parties which are the basis of the obligation in such cases. After the dissolution, the original leases remained partnership property, for the purpose of liquidation. The obligation of each partner to deal with them, not for his individual benefit, but for the common or joint interest, remained. The trust, as to the use of partnership property, remained. Attached to these leases, as a part of their value, was the so-called expectation of renewal. This is deemed so actual and vital, that when a new lease is had, it is considered to be a graft upon the old. If there had been in the old lease a covenant in renewal, the defendant could not defend his taking the benefit of that individually, any more after, than before dissolution, while it remained the subject of division or disposition between the parties.

The parties were not mere tenants in common, when, sometimes, each may act for himself. As it has been pointed out, there were mutual obligations, extrinsic of the mere nature of the tenancy. Indeed, in looking at the case, it appears, that the title to the term of the lease, was not nominally in the individuals, but in the firm of Spiess & Rosswog.

The inference from this becomes stronger, when the relation of the firm leases to the good-will of the business is considered. The good-will was an asset of the firm and to be disposed of for the common benefit of the partners. It substantially was the probability, that the customers of the old firm would resort to the suecessors of that firm. The value of the good-will would be materially affected by the successors of the firm being able, or not being able, to do business in the same premises. It is proper, then, that the expectation of renewal should remain, with the power of disposition of the good will-, and that neither party should sever them, for his own interest, or if he do obtain the new lease, he should hold it for the firm, that the two may be disposed of together.

On the argument, nothing was placed on the fact, that the new leases were to the son of Constantin Ross-wog and the latter. The rights of the parties were not affected by that.

For these reasons, I am of opinion that the 3 udgment should be reversed and new trial ordered, with costs of appeal to the appellant to abide event.

Freedman, J., concurred.


author: By the Court.—Sedgwick, Ch. J.

text:
    GEORGE W. DOW, et al., Appellants, v. JAMES DARRAGH, Respondent.

      Contract for purchase of merchandise and for subsequent sale on joint account of original vendor and vendee—construction of—profits under— good-will.

    Plaintiffs and defendant entered into an agreement in writing, providing that defendant should continue to manufacture mattings at their factory at Allepy, and forward to plaintiffs exclusively, or as they might otherwise direct, by way of Calcutta to Now York, plaintiffs to assume the “ responsibility ” of the goods at and from Calcutta, and of their sale in New York, and to keep, or cause to be kept, banker’s credit in Calcutta sufficient to pay in advance for the matting there assent forward from the-factory, according to invoice price (to be ascertained by a factory account), besides freight, insurance, &c., to Calcutta, “ the matting to be sent forward for the joint account both in profit and loss of the parties, half and half to each party.” Plaintiffs arranged with A. & B. to place the credits in Calcutta, and for this, agreed that A. & B. should have one-fourth of the profits under the contract, and appointed them agents for the sale of the matting in New York, authorizing them to retain such proportion out of the proceeds.

      Held, in an action for an accounting, &c., that as between the parties, it is immaterial whether or not the contract constituted a partnership; that as to them, the profits, of which defendant was entitled to one-half, consisted of the difference between the proceeds of sales in New York, and the sum of the invoice price, expenses to Calcutta and New York, and expenses of sale, if any there were; that plaintiffs were bound to place credits in Calcutta at their personal expense and therefore the proportion allowed A. & B. should not be charged to “joint account.”

      Further held, that under such a contract, there was no good-will to be disposed of for the benefit of the parties.
    Before Sedgwick, Ch. J., and Russell, J.

      Decided April 3, 1881.
    Appeal from judgment in favor of defendant, entered upon report of referee.
    The action was brought for a partnership accounting, to open and correct accounts that had been stated and then to state the account generally.
    The facts are stated in the opinion.

      Stanley & Clark, for appellants.

      Blanchard & Miller, attorneys, and E. L. Fancher and Theodore F. Miller, of counsel, for respondents.
   By the Court.—Sedgwick, Ch. J.

It is not important—it might mislead—to try to find a name among the terms of the law, that would denote the relations of the parties and would imply the whole of their obligation. The issues are confined to the relations of the parties between themselves. There is no inquiry as to the rights of third parties. The written contract is the summary of all they were to do or omit to do. If that discloses partnership relations in some respects, it is such a partnership as the writing describes. It may be limited by conjunction with obligations that specifically are characteristic of a sale or joint adventure. The point to be reached is the intention of the parties, as manifested by their written agreement. Of course the situation of the parties.and the nature of the business, may properly be looked at for the purposes of construction. But first let the writing be considered. The order of the clauses is not important, compared with the natural order of the facts they refer to.

In the first place, the defendant was to manufacture the mattings in his Allepy factory. Then he was to send them forward to New York, shipping them at Allepy or Cochin. Invoices were to be made, to accompany them. On these invoices the price of the matting was to be specified. The agreement stated what the prices should be at the beginning of the shipments, but provided for their being changed in the future. To these prices, nothing, down to the shipment at Allepy or Cochin, should be added. The prices “are to be free on board at Allepy. ’ ’ But to these invoice prices, were to be added subsequent expenses of freight, insurance and the like, down to the shipping of the matting on board of the vessel for America. The responsibility of the' plaintiffs commenced at the time of the shipment on the vessel for America. All the matting made by the defendant was to be forwarded to the plaintiffs, or as they might otherwise direct. The plaintiffs, by a necessary implication from the specific terms of the agreement, were to sell the matting after -their arrival here. Thfey might have agents for sale, but they were responsible for the sale and its proceeds.

In fact they did sell, through Archer & Bull, by such an arrangement that Archer & Bull acquired a right, as to plaintiffs, to be their agents for sale. Nevertheless, all this was in fact consistent with the duty of the plaintiffs, established incontrovertibly by the written contract, that they should be responsible for the sale of the matting. In distributing the rights of the parties the facts must be looked at as if the proceeds were in the hands of the plaintiffs.

If the agreement made no special reference to the reimbursement to the defendant for the mattings he had shipped, the law would imply that the parties intended it should be made. The quantum of reimbursement would be fixed by the contract in its reference to the price in the invoice, to which, nothing in his favor should be added, down to shipment at Allepy. Reimbursement would also be made to him or to plaintiffs, of such subsequent expenses as each paid. The agreement, however, has special clauses which substitute another, for this method of preventing the defendant from parting with matting for no compensation. The agreement provides that the defendant is to be paid for his matting in India, in advance, “as it may be sent forward from his factory.” In fact that was done. If nothing were said, as to who should pay, the plaintiffs, who were to get the goods and the proceeds, and were the contractors, would be intended as the persons. The word “pay,” in the contract, does not imply that the plaintiffs were not to be reimbursed the amount they paid, but it has peculiar significance as to the dispute, which will be noticed hereafter.

The contract declares that the matting is to be sent forward for the joint account, both in profits and losses, of the parties, “ half and half to each party.”

If there were nothing more in the agreement, it could be said, without argument, that the profits would be the difference between the proceeds of the sale on one side and on the other side the invoice price, and the subsequent expenses from Allepy to Calcutta, then to America, and of the sales. There might be a loss, of course. That would be ascertained in a like manner.

The learned counsel for the appellant argues that the clause, in which provision for payment to defendant occurs, calls for a different construction. One is, the plaintiffs “ are to keep or cause to be kept good banker’s credit at Calcutta, India, at all times, sufficient to pay for the matting there, as it may be sent forward from the factory.”

The practical importance of the matter now to be considered is, that the plaintiffs did keep or cause to be kept good banker’s credit as provided. To secure the necessary remittances the plaintiffs made an agreement with the persons who in fact established the credit in Calcutta for them. If they had bought bills of exchange or paid contemporaneously the compensation, the real nature of the transaction would have had nothing to obscure its significance, and the present controversy would not have been possible. It would have been clear, that this clause described what the plaintiffs were bound to do, in consideration of which they were to receive a specified part of the profits. But the parties here, with whom the plaintiffs made the arrangements for placing the credits in Calcutta were Archer & Bull. For this, the plaintiffs agreed that they should receive, as a compensation, a certain portion of the profits which would be made under the contract in this case. Archer & Bull were to be the agents to sell, and out of the proceeds of the matting they were to take their compensation. Archer & Bull, in making out the account of sale, first stated the profits, as we have said they should be ascertained, then deducted and retained one-quarter of these profits, as their compensation. After this, the plaintiffs credited defendant with two-fourths of the profits, and continued so to do. They now say that there was a mistake, and that, in order to ascertain the profits, the one-fourth belonging to Archer & Bull should have been deducted before declaring the profits. As Archer & Bull were to have one-fourth of the profits referred to in the written contract, it does not seem to be a possible reckoning to find' the profits as between plaintiffs and defendant by first deducting Archer & Bull’s one-quarter. The case must be looked at as if the paying the compensation was a transaction by itself.

The argument is, that the compensation paid was an expense of the joint account, and should be charged to it. When did the joint account begin ? As I have said, this and all other particulars are to be found in the written contract. Because that written contract has for its object a joint account, it does not follow that covenants in it made by the parties individually, are to be performed on the joint account. Every partnership agreement shows this. In the nature of the case, each individual who contributes capital, though that capital will be used in the future for the joint interest, does it in performance of his promise, and of course at his own expense. The money does not reach the condition of being capital, until it is given in, and up to that point the expenses attendant upon obtaining it are personal. In this case, it was an individual promise of the plaintiffs to place the credits in Calcutta. Until, at least, they were so placed, the joint account had no benefit from them. It may be questioned, whether at that particular point, they were there finally at the risk of the plaintiffs. At least, there is an intimation as to this in the provision that the responsibility of the plaintiffs commenced with the shipment on board the vessel for America. The plaintiffs were bound to perform this promise at their own expense. The use of the words “ sufficient to pay for the mattings ” is decisive on this point. If one-half of what was paid by plaintiffs, in order to procure these credits should be charged against defendant, the credit would not be sufficient to pay. That would plainly be so if he paid the expense at the time he used the credit. It is the same when charged to him afterwards. If the provision for this kind of payment to him had not been made, he would have received the invoice price out of the proceeds. It was not the in tention of the agreement, that he should get less under the operation of an individual promise by the plaintiffs to advance to him enough to pay for the mattings.

There was another provision that respected the change that might be made in the invoice price. The defendant was to keep a factory account. That account was to be made in a way particularly described. On one side was to be the full quantity of the matting made, to be entered at the invoice prices, and all items for which the factory should have credit. If the result showed that there was a credit sufficiently large to justify the reduction of the invoice prices, then they should be reduced, or if the balance were the other way, the invoice price was to be raised. This provision had importance in ascertaining the invoice price, or what for the purpose of the agreement would be considered cost price, and in showing how many mat-tings were manufactured, but has no tendency to induce a construction of the plaintiffs’ obligation to advance the credit, different from the one that has been given. It would not be correct to say that because the defendants were paid for the expense of making their mattings, therefore the plaintiff should be paid for the expense of obtaining the credits, which he caused to be advanced. On this point, many things arising from the nature of the business might be said. It may be sufficient to advert to the particular intention, already noticed, of the contract. The defendant was to be reimbursed these expenses only, however, through the operation of the fixing of a cost price. The agreement particularly says, these expenses, through the price for the matting, shall be paid by these credits, or, in other words, by these plaintiffs. The expenses of obtaining the credit cannot be shifted on to the goods.

If there were any ambiguity in the language of the ■contract, the accounts between the plaintiffs and Archer & Bull, and the contemporaneous dealings and declarations, lead to the conclusion that we have announced from the face of the writing. For this reason, the disposition below of the sixth claim by plaintiffs was correct.

If there were any doubt on the facts as to whether there was any good-will of a business which should be ■disposed of for the parties interested in the business, the terms of the contract made a conclusive reference to the matter. So far as the factory was concerned, the contract gives to the plaintiffs a right to a refusal ■of it, at a price which the defendant might fix as he pleased, and nothing more. Only, he could not sell it to a third party for a sum whicli the plaintiffs would be willing to give. He could keep it for himself as long as he. pleased. Good-will is based upon the likelihood of a business retaining its former customers.

As to defendant, this business had but one ■customer—that was the firm of the plaintiffs. The plaintiffs, through Archer & Bull and their other agents,, had perhaps, in a sense, certain customers. The conduct of the defendant has not disturbed the relation ■of the customer to plaintiffs. The defendant was not bound to continue shipping mattings for the customers to buy.

The so-called trade-marks were not in any aspect partnership or joint assets, under this agreement. The plaintiff’s claim, on the evidence, is, that these trade-marks were their exclusive property. They, on-the contract, permitted the defendant to use them on the mattings. It was this use, and not a title to the trade-marks, that was joint property in a sense most favorable to plaintiffs. If, when the joint business was ended, the defendant continued to use the trademarks unlawfully, the plaintiffs would have an equitable cause of action, but it would not be within the .scope of the present action, which concerns partnership dealings only. A decision as to whether the figures and letters were trade-marks, does not seem to be called for.

The amount that the plaintiffs, acting for themselves and defendant received by way of sale of scrip, &c., in reality reduced the amount of premium that one of the plaintiffs, acting for them all, paid for insurance of the mattings to New York. They should be credited for the amount they actually paid Archer & Bull, who retained part of the proceeds of the scrip, and were the plaintiffs’ agents. The arrangement on this point between them, did not bind the defendants.

It is impossible to say, that the referee’s exercise of discretion, in refusing to allow the plaintiffs, on the rebutting case, to interpose other claims, was not justified by the facts.

The same should be said of the allowance granted. The plaintiffs made claims of a specific nature, sufficient in amount to uphold the allowance. It was an unusual and difficult case. The order must be affirmed.

Judgment affirmed, with costs.

Russell, J., concurred.