author: By the Court. Slosson, J.

text:
    Michael Lacour v. The Mayor, &c., of the City of New York.
    A municipal corporation is liable in damages to any person who may sustain injury from an improper, negligent, or wrongful exercise of its legitimate powers, when those powers .become ministerial
    Every corporation, in the exercise of its powers over its own property, is as much bound so to manage and use its property as not to produce injury to others, as an individual owner.

      Held, therefore, that the defendants were bound to make good to the plaintiff the damages which his property had sustained from an excavation on Thirty-second street, in the city of Hew York—it being proved-that the excavation was ordered by the defendants, and that the damages were the necessary result of the performance of the work at the time and in the manner which they had directed.

      Held, also, that the plaintiff was entitled to a compensation for the loss of profits, during the suspension of his business as a manufacturer, it being proved that the suspension was a necessary consequence of the injuries to his property for which the defendants were liable, and that the profits claimed would certainly have been realized.
    Judgment for plaintiff, with costs.
    (Before Dues, Boswobth, and Siosson, J.J.)
    May 15;
    May 27, 1854.
    Ttttr was au action brought to recover damages for the injuries which a factory and other buildings belonging to the plaintiff, situate at the corner of the Second avenue and Thirtieth street in the city of New York, were alleged to have sustained in consequence of an excavation in Thirtieth street which the defendants, it was charged, had wrongfully and unlawfully directed to be made. The plaintiff also claimed to recover damages for the loss of profits in his business resulting from the unlawful conduct and acts of the defendants.
    The defence substantially was, that the excavation in Thir- • tieth street had been directed and made by the defendants in the lawful exercise of their corporate powers, and was directed to be made, and was in fact made, with all proper care, diligence, and skill.
    The cause was tried upon the issues made by the pleadings before Duer, J., and a jury, in Rovember, 1853.
    The following are the material facts presented upon the trial:—
    On the 26th of March, 1850, the defendants entered into a written contract with one Terence Keon, binding him to furnish the labor and materials for grading Thirtieth street, and setting the curb and gutter stones therein, from the Second to the Third avenues. The work was to be completed on or before the 27th of May, 1850. It was not in fact completed until August or September, 1851.
    On the 1st of February, 1851, the defendants contracted with one Daniel Gallagher, to furnish the materials and labor to regulate and grade Second avenue, from Twenty-eighth street to the northerly line of Fifty-third street, and to re-set curb and gutter stones therein from Twenty-eighth street to Forty-second street, and to re-lay the flagging on the easterly side-walk of the avenue between Twenty-eighth and Thirty-first streets.
    The work to be commenced without delay, and to be completed on or before'the 1st of Rovember, 1851.
    The work, in both instances, was to be done in conformity with the established grade, and to be under the inspection of the surveyor, or such person as might be appointed by the Street Commissioner, and to be conformed to such directions as should be given by that officer, and the whole to be approved by the Street Commissioner, Superintendent of Pavements, or such person as should be appointed to superintend the work.
    Both contracts were made in pursuance of ordinances of the Common Council; that for regulating and grading Thirtieth street, having been passed December 1, 1849, and that for regulating and grading Second avenue, September 30th, 1850.

      Edwin Smith, City Surveyor, had charge of the grading of Thirtieth street, under the defendants’ appointment, and the work was done by Keon, in conformity with his directions, and he accepted the work for the defendants, and certified to them its completion.
    After Keon commenced his work, the grade of Thirtieth street was changed. When he commenced, the grade was a straight line, descending from Second avenue to Third avenue, which would have caused the water to flow from the Second to the Third avenue. It was then altered, by making the crown of the street midway between the two avenues, thus turning the water from that point towards Second avenue. When the street was completed, there was an embankment of eight or ten feet at Second avenue, and a similar one at the north side of the street.
    The Second avenue was not graded till after Thirtieth street was completed.
    The plaintiff was owner of several lots at the south-westerly corner of Second avenue and Thirtieth streets, on which was erected an extensive establishment for the manufacture of matches—the corner building being partly occupied as a dwelling-house. A large number of employees were engaged under him in the business.
    The plaintiff’s wall, on Thirtieth street, was commenced in January, 1851, and finished in the middle of the following March, and while the street was being excavated.
    It was proved, that by the excavation a large amount of water was collected in the street, against the plaintiff’s wall, which so injured it as to crack it inside and out, and cause it to bulge and tip over, so that the work in the factory had to be suspended for twelve or fourteen days, to afford time to repair the wall, and re-set the steam boilers used in the building for the purposes of the plaintiff’s business, and which rested against this wall.
    The plaintiff’s witnesses all agreed that a drain or culvert made from the end of Thirtieth street to the sewer in Second avenue would have drawn off the water, and that such a drain could easily have been made. This testimony was not contradicted.

      It was proved by Mr. Dodge, formerly Street Commissioner, that if Second avenue had been cut down in the same proportion with Thirtieth street, or had it been graded at the same time, the difficulty would not have' arisen. The deepest excavation required to bring Second avenue to the amended grade, was at Thirtieth street.
    On the question of the amount of damages which the plaintiff sustained, there was much contradictory testimony.
    When the testimony was closed, and the counsel had summed up, the judge charged the jury, that if they believed the injury to the plaintiff’s wall was caused by the standing of the water in Thirtieth street, against the wall of the plaintiff, and that such water would not have stood there had Second avenue been excavated cotemporaneously with Thirtieth street, or had a drain been made to carry off the water from the excavation in Thirtieth street, then the defendants were liable, and the plaintiff entitled to recover.
    That the excavation in Thirtieth street, and that in Second avenue necessary to be made, to bring the street and avenue to grade, were to be considered as one work or act, and that it was, as matter of law, negligence for the defendants to contract the grading of Thirtieth street, to be completed before the completion of Second avenue adjoining to Thirtieth street; when, from the situation of the ground, the result must be to make a deep excavation in Thirtieth street, into which water must flow without any possibility of escape.
    The court also charged, that the plaintiff was entitled to recover as part of his damages, the loss of profits during the suspension of his business to repair.
    The defendants’ counsel duly excepted to the charge of the judge, and to each and every part thereof.
    The counsel for the defendants requested the court to charge the jury, that if they believed the excavation in Thirtieth street, and the bringing the same to the grade fixed by the proper department, was done in a proper and skilful manner, and that the standing of the water in the excavation thus made, must of necessity result from the doing of the work, the plaintiff could not recover of the defendants for injury resulting therefrom.

      That the defendants had the right to select their own time for the grading of Second avenue, and that if such grading was properly done, the inevitable injury resulting from the 'doing of that work would not entitle the plaintiff to recover.
    That the jury should consider only the work in Thirtieth street, for which negligence is charged to the plaintiff, and not couple together the work in Thirtieth street with that in Second avenue.
    That the profits, as such, of the plaintiff during the suspension of the work, could not constitute' an item of damages for which the plaintiff could recover.
    The court declined to charge otherwise than as above set forth, and the counsel for the defendants duly excepted to the refusal.
    The court directed the jury to find, specially, how much profit it was proved the defendants would have made during the suspension of the work.
    The jury found a verdict for the plaintiff, and assessed the damages at §1,276.
    In answer to the question: What portion of the sum of damages so found is profit? the jury said $200.
    The court thereupon ordered the verdict to be entered, subject to the opinion of the court, upon the exceptions of law, to be heard in the first instance at the general term.
    The cause was now heard upon a case containing the proceedings had and the exceptions taken on the trial.

      A. J. Willard, in moving for judgment upon,the verdict for plaintiff, relied upon the following points and authorities.
    I. The jury have found that the defendants have been guilty of negligence in causing Thirtieth street to be excavated in such a manner, that water flowing in the street, having no outlet, gathered in the vicinity of the plaintiff’s premises, and stood against his walls and buildings, doing damage thereto. This presents a clear case of liability. (Furze v. The Mayor, &c., of N. Y., 3 Hill, 612; Bailey v. The Mayor, &c., of N. Y., 3 Hill, 531; Adsit v. Brady, 4 Hill, 630; Hutson v. Mayor, &c., 5 Sand. S. C. R. 289.)

      II. The court and jury having viewed the premises, the verdict cannot be disturbed for any misdirection in regard to the admission or rejection of evidence describing the nature and extent of the injury done.
    m. The wrongful acts of the defendants having occasioned the suspension of plaintiff’s business, he is entitled to claim for the profits of Ms business lost, especially where his expenses continued during the period of interruption. ( White v. Mosley, 8 Pick. 356.)

      R. J. Dillon, for defendants, made and argued the following points.
    I. The court erred in instructing the jury: “That, if they believed the injury to the plaintiff’s wall was caxxsed by the standing of the water in Thirtieth street, against the wall of the plaintiff, and that such water would not have stood there had Second avenue been excavated cotemporaneously with Thirtieth street, or had a drain been made to carry off the water from the excavation in Thirtieth street, then the defendants are liable, and the plaintiff entitled to recover.” And for the reason stated in the second division of the first point; and also, because the defendants are not liable for omitting to construct a drain. (Rochester White Lead v. City of Rochester, 3 Comst. 463.)
    II. The court erred in charging the jury: That the excavation in Thirtieth street, and that in Second avenue, necessary to be made, to bring the sti’eet and avenue to gx-ade, were to be considered as one work or act, and that it is, as matter of law, negligence for the defendants to contract the grading of Thirtieth street, to be completed before the completion of Second avenue adjoining to Thirtieth street, when, from the situation of the ground, the result must be to make a deep excavation in Thirtieth street, into which water must flow without any possibility of escape. 1. Because the negligence charged by the Court, as matter of law, is made to consist in the terms .of the contract which the defendants made to grade Thirtieth street and Second avenue. The terms of the contracts, and the time when the respective works should be completed, are purely discretionary, and cannot constitute negligence “ as matter of law.” Legal negligence cannot be predicated of the exercise of a discretionary or judicial power. 2. Because the injury which the plaintiff necessarily sustained from the doing of the work (viz. the excavation in Thirtieth street), in pursuance of a contract which the defendants had a right to make," gives no right of action : it is damnum absque vnjuriá. (Radcliffe v. Mayor, &c., 4 Comst. 195; Wilson v. Mayor, &c., 1 Denio, 595 ; 5 Barb. S. C. 79 ; Sedgwick on Damages, p. 31, p. 111, note.)
    IH. The court erred in charging that the plaintiff was entitled, as part of his damages, to the loss of his profits, during the suspension of his business to repair. Prospective profits, as such, cannot be recovered as part of the damages in this action. (Vide cases vnfra.)

    IV. The court erred in overruling the objection to the question, “ What was the amount paid to the hands employed in the factory during the period of stoppage ?” Because it was incompetent for the plaintiff to recover, as part of his damages, the wages he paid his hands during the suspension, or the loss he sustained by keeping them at unprofitable labor, as there is no proof that the plaintiff was under obligation to continue them in his employ, during the discontinuance to repair. Whether or not the hands would have found other permanent employ, and refused to return to the plaintiff, and whether the plaintiff could have found other hands, in case they did not, are questions too speculative to constitute a proper foundation for damages. (Sedgwick on Damages, 68 et seq., 79 et seq.; Giles v. O'Toole, 4 Barb. S. C. 261.)
    V. The court erred in refusing to charge as requested by the defendants’ counsel.
   By the Court. Slosson, J.

The defendants object to the plaintiff’s right of recovery mainly on two grounds :

1st. That the work of regulating and grading the street and avenue was a public work, lawfully undertaken by the defendants, at the solicitation and for the benefit of persons hiring and owning property on the line of the street and avenue, as well for the plaintiff as for the public generally, and under the authority vested in them by the laws of the State; and that the whole subject of the grading of the street, both as to the time when it should be done or contracted for, and whether with or independently of the grading of Second avenue, including also the terms of the contract, and the grade itself, was among the discretionary and legislative powers of the Corporation of the city; and that the defendants were not liable for the manner in which they exercised such powers.

2nd. That Keon and Gallagher, in the performance of their contracts, were in the exercise of an independent employment, and that they, and not the defendants, employed the workmen; and that the plaintiff’s remedy, if any, must be against them. Tills latter ground of defence was not, however, pressed on the argument. Nor do we think, under the facts of the case, and the authority of the cases hereafter cited, that it could have been urged successfully. The grading of the streets was done under the direction of the surveyor, Smith, acting under an appointment from the defendants, and the work was done by Keon in conformity with his directions, and he accepted the work for the defendants, and this power of supervision was reserved in the contract itself. Besides, it has been expressly held that the contractor stands in these cases in the relation of agent to the Corporation (Delmonico v. The Mayor, &c., 1 Sandford’s S. C. R. 222).

The defendants also insist that they are not liable for the loss of plaintiff’s profits during the period occupied in repairing his wall.

The court charged the jury, “ that if they believed that the injury to the plaintiff’s wall was caused by the standing of the water in Thirtieth street, and that such water would not have stood there, had Second avenue been excavated cotemporaneously with the street, or had a drain been made to carry off the water from the excavation in the street, then the defendants were liable, and the plaintiff entitled to recoverand further, “ that the excavation in Thirtieth street and that in Second avenue, necessary to be made to bring the street and avenue to a grade, were to be considered as one work or act, and that it was, as matter of law, negligence for the defendants to contract the grading of Thirtieth street to be completed before the completion of Second avenue, adjoining to Thirtieth street, when from the situation of the ground, the result must be to make a deep excavation in Thirtieth street, into which water must flow without any possibility of escape.”

The court also charged, that the plaintiff was entitled to recover, as part of his damages, the loss of profits during the suspension of his business to repair.

1. That a municipal corporation, though clothed with many of the attributes of sovereignty, may be made liable, ci/oiliter, in damages, to any person who may sustain injury from an improper, negligent, or wrongful exercise of its legitimate powers, cannot be doubted, at least since the decision of our court of highest resort, in The Mayor of New York v. Bailey, 2 Denio, 433 ; The Rochester White Lead Company v. The City of Rochester, 3 Coms. 463 ; and Radcliff's Executors v. The Mayor of Brooklyn, 4 Coms. 195. See also the case of Delmonico v. The Mayor of New York, 1 Sand. S. C. R. 222.

The case of Wilson v. The Mayor of New York, 1 Denio, 595, is in reality not in conflict with the cases above cited, the action being in that case for damages, for not constructing a sewer to draw off the water from plaintiff’s lot, upon which it was caused to flow by the grading of the street and avenue, effected by the defendants.

The question of negligence in effecting the grading itself, did not arise, but the action was founded upon the theory, that the Corporation was civilly liable in damages for not exercising one of their admitted powers, that of constructing sewers. The court held in that case, that for the omission or refusal to exercise a purely discretionary or judicial power, no civil action would lie against a public officer, even though the duty be an imperative one, though he might be liable to an indictment for a wilful violation of the duty; but the case expressly admits, that where the duty is a, ministerial one, though cast upon an officer whose chief functions are judicial, he is civilly amenable for the improper exercise of the power.

The point involved in the present case was expressly decided in the case of the Rochester White Lead Company, above cited, in which the distinction between judicial or discretionary duties, and those purely ministerial, was clearly taken. Up to the point at which a duty ceases to be one of the former description, a public officer is not amenable to an individual in a civil action for the exercise, or the refusal or neglect to exercise the duty, but the moment the duty ceases to be of this character, which it does when the election to perform it, is made, this immunity also ceases. The execution of the work itself is purely ministerial, and thenceforth the public officer becomes subject to the same rules which govern the liabilities of private individuals, and, like them, is liable in damages for the improper or negligent exercise of the duty. Thus, the ordinance of a city or municipal corporation, directing a public improvement to be made, is the exercise of a purely, judicial or discretionary function, and for such exercise, the corporation is not liable in a civil action; but the prosecution of the work itself, the carrying of the improvement into execution, is ministerial in its character, and the corporation are bound to see that it is done in a proper manner, or, like an individual, they will be responsible in damages.

We think this principle too clearly settled for doubt, and applying it to the case before us, there can be no question that the defendants derive no exemption from responsibility, for the manner in which they have performed or carried out the improvement or grading of Second avenue and Thirtieth street, by reason of their possessing, in respect to the improvement itself, a discretionary or judicial power; such discretion ceased to act as a shield of protection, when it reached its own limit, which was, at the passage of the ordinance for the improvement ; all, after that, was ministerial, and the only question is, whether they have so negligently performed the latter duty, as to work an injury to the plaintiff’s premises.

There is another principle which has been directly applied to municipal corporations possessing, like that of the city of New York, in respect to the public streets, a property in the subject of the improvement. In such cases, the sovereign character is lost in that of the individual owner, and the corporation is held liable, as any other owner of lands improved for the owner’s benefit, for the manner in which the improvement is effected. “ By the general principles of the common law,” says the Chancellor, in Bailey v. The Mayor, &c., 2 Denio, above cited at p. 445, “ the owner or occupier of premises was liable for any nuisances, on the ground that he was bound to control the use of his property, and to use it in such a manner, as not to produce injury to others,” and he placed his vote in favor of the affirmance of the judgment of the court below, expressly on the ground, “ that the dam was the property of the corporation, and that the corporation was bound to see that its corporate property was not used by any one, so as to become noxious to the occupiers of property, on the river below.”

The court instructed the jury, that it was, as matter of law, negligence in the defendants to contract for the grading of Thirtieth street, to be completed before the completion of Second avenue, adjoining that street, if the result was necessarily to cause the excavation in the street to be filled with water, without any possibility of escape, and that the excavation or grading of the street and avenue was to be considered as one work.

In this, we think the learned judge who tried the cause ruled correctly.

Although the defendants may have a discretionary power as to the time when a public improvement shall be effected, it is hardly sensible to say that they are at liberty to divide up the improvement, after- it is determined upon, into parcels, and to order one part to be effected at one time, and another at another, if the inevitable effect of such a parcelling out of the work, will be to work damage and injury to the adjoining property.

The grading of the street and avenue were necessarily cornponent parts of one and the same improvement, since neither would have been complete without the other, but on the contrary, either, finished before the other, would have rendered nugatory the improvement as far as it had gone, and would have converted it, as was abundantly shown in the present case, into a nuisance. It was therefore one work, one improvement, and to contract for a part to be finished before the other, or without reference to the other, if thereby inevitable injury would be caused, is as much negligence, as it would be so to contract for the performance of the entire work, as to render it, when completed, a necessary source of injury and damage to surrounding owners.

Such a contract would be, in itself, conclusive evidence of negligence, assuming, as the proposition does, that its execution would be productive of inevitable injury. The question of whether such injury did in fact follow, may be a question for the jury (and in the present case was, in effect, submitted to them), but that fact once found or admitted, and the law affixes to the contract itself, the character of negligence, as a necessary consequence..

The contract for the street was, by its terms, to be completed on or before the 27th of May, while that for the avenue was not made until February following, and was not to be completed until the November succeeding its date; thus, by the very terms of the two, interposing an interval of eighteen months between the completion of the two works.

But if the learned judge was wrong in this ruling, which we think he was not, and if the two are to be considered as separate and independent improvements, he was clearly right in submitting to the jury the question, whether a drain might not have been constructed to carry off the water from the excavation in Thirtieth street; and in his ruling, that if they found that question affirmatively, the plaintiff was entitled to recover; and in his refusal to charge, as requested, that if the jury believed that the excavation in Thirtieth street, and bringing the same to a proper grade, was done in a proper and skilful manner, and that the standing of the water in the excavation thus made, must of necessity result from the doing of the work, the plaintiff could not recover of the defendants, for injury resulting therefrom.

When the question was put to the witness, whether it was possible to have constructed a drain to take the water off, the question was objected to, on the part of the defendants, on the ground that it was not incumbent upon the defendants to make drains.

The construction of drains and seiners, as an independent work, is one of the discretionary duties of the Common Council, for the exercise of which, or the omission or refusal to exercise which, they are not responsible; but the construction of a drain, as a part of the general plan or method of effecting a grading in a street, and as auxiliary to the principal work, is another thing, and its necessity or propriety, equally with that of any other portion or detail of the work, is properly to be taken into consideration in determining the question of negligence, as applicable to the manner in which the principal job is done.

Even if the two improvements (the grading of the street and avenue) are to be considered as separate undertakings, and not as one work, we hold that the- Corporation were bound to see that each was done properly,, and' in a way to prevent mischief; and that all precautions which could have been, should have been taken, against the danger- ©f damage to adjoining owners. The evidence is explicit, that a drain could have been constructed into the Second avenue- sewer, or by cutting through the avenue, by which the water would have been drawn off, and thus .all injury to the plaintiff’s premises prevented.

The true rule on this subject is-laid down in the case of The Rochester White Lead Company,, above cited: “ In the construction of a work like this (the construction of a eulvert), they (the Corporation of-the city of Rochester) were bound to exercise that care and prudence,, which a discreet and- cautious individual would or ought to use, if the whole loss or-risk were to be his alone.” And again, in the case of Bailey v. The Mayor, &c.: “ The degree of care- and foresight which it is necessary to use in cases of this description, must always be in proportion to the nature and magnitude of the injury that will be likely to result from the occurrence, which is to be anticipated and guarded against.”

Any other rule, would put it in the power of the Corporation, so to conduct .public improvements,, as to- ruin the citizen and leave him remediless. If it was no part of the duty of the defendants, in effecting the grading of Thirtieth street, to have taken precautions against the accumulation of water in the excavation, for which no outlet existed, then, if the grading of Second avenue was an independent matter, and they were not bound to order it, except at their own pleasure, this mischief might have been perpetual. Such a doctrine finds no support in reason or common sense. The true rule, we apprehend, is that laid down by the judge at the trial, that the two improvements are to be considered as one work or act; but in either aspect of the improvement, we think the plaintiff entitled to recover ; in the one, it was negligence in law, to have contracted as the defendants did contract, and in the other it was negligence in fact in the execution of the work, to have omitted the drain in question ; and to this latter conclusion the case of the Rochester White Lead Company is an authority in point.

2. The only remaining question is, whether the judge erred in charging the jury that the plaintiff was entitled to recover as part of his damages, the loss of profits, during the suspension - of his business, while the repairs were being made to his wall."

These were specially found by the jury to be $200.

The jury do not appear to have taken into account, the amount paid the workmen, during the suspension of the plaintiff’s business. The proof was positive, that at the time of stoppage, and on the resumption of the work, the plaintiff was making a profit of from $25 to $30 a day.

The price of matches was fixed at a certain per cent, advance upon the cost of manufacture, depending on the-quality, and the plaintiff was manufacturing, at the time- the- work was stopped, from 350 to 400 gross of boxes of matches per day, and had continued to manufacture at that rate,, when at work, down to the time of trial. The time during which the work was suspended, was from twelve to fourteen: daysthe amount of the verdict is, therefore, less than,, at the lowest computation, the plaintiff would have made, had there- been no-suspension of his business.

The question of,, how far profits-may be recovered,,as part of the damages, on the breach of an executory contract, is- one of very considerable difficulty- It is not contended that remote, or speculative, or merely contingent profits, would: form a proper element of damage, such as would- be the profits of a collateral speculation, or such as were the profits claimed in the case of Giles v. O'Toole, 4 Barb. S. C. 261, to wit: the profits which the plaintiff might have made in carrying on his business on the premises which he had leased, had the lessor not refused to give him possession; and especially where such profits are established only by the opinion of witnesses; but profits which are the direct fruits of the contract, stand upon a different footing.

In Masterton v. The Mayor of Brooklyn, 7 Hill, 61, it was held, that the plaintiff was entitled to recover the difference between the contract price and what it would have cost him to furnish the marble according to the contract, taking into consideration, in determining such cost, the outlays and trouble, and the contingencies and risk, inseparable from the execution of the contract. Such difference would have been his certain profit, had the agreement been fulfilled.

In the case of Waters et al. v. Powers and Shirley, 20 Law and Eq. Rep. 410, the court held, that in an action for the nonfulfilment of a contract to furnish certain machinery, within a certain time, the plaintiffs were entitled to recover, as part of their damages, the profits which they would have made (had the machinery been furnished) from a contract which they had made with a third party, to supply him with so many gross-of bobbins per week, the supply of which was interrupted for 20 weeks by the defendant’s failure to furnish the machinery. The amount of such profits was agreed at a certain sum.

The same objection was taken-in that case as in this, that the damages were too remote; but the court said: “ The defendants undertook to perform a contract within a reasonable time, and failed to do so—the plaintiffs say, we should have made certain profits had the contract been performed—the jury are not bound to adopt any specific contract that may have been made; but if reasonable evidence is given that the amount of profit would have been made, as claimed, the damages may be assessed accordingly.” • ;

Applying the principle of these cases to that now before us, we think the profits, lost by the suspension of the plaintiff’s works, in consequence of the damage resulting from the negligence of the defendants, constituted a proper item of damage. They were a direct consequence of the injury. They were proved to as approximate a certainty, as any future event could be proved. They were profits in the principal business which was suspended by the injury, and not those resulting from some collateral or independent transaction, and they were proved, not by the opinion of outside witnesses, but by the positive testimony-of the plaintiff’s own foreman, who established conclusively a uniform daily profit of from $25 to $30, upon a fixed price for the matches, and that the amount manufactured was at the same rate, before and after the repair of the injury, down to the very day of the trial.

We think, on the whole case, that the judgment should be for the plaintiff.


source: Caselaw Access Project

author: By the Court. Hoffman, J.

license: Public Domain

text:
    Peter D. Muller v. Amos R. Eno and Others.
    lie purchasers of goods, sold and delivered under a warranty of soundness, are hound to make a prompt examination into their actual condition, and when ■ they retain them for some weeks without any offer to return them, or any complaint of damage, and especially where it is proved that some of the packages were opened and sales made during this period, they are estopped from showing that the goods were damaged when delivered, and from claiming, on that ground, any deduction from the stipulated price.
    Judgment for plaintiff affirmed with costs.
    (Before Ddek, Campbell, and Hoffman, J.J.)
    June 5;

    June 17, 1854.
    This was an action to recover the price of fourteen hundred pieces of printed lawns, which the complaint alleged that the plaintiff had sold and delivered to the defendants, upon a credit of eight months, in February, 1849. The price agreed to be paid was averred to be $3,343, for which sum, with interest from the time that the credit expired, judgment was demanded., The answer admitted the sale, delivery, and price of the-goods, and set up as the only defence, that, at the time of the sale, the plaintiff warranted them to be sound, but that they were then, in fact, greatly damaged, and claimed upon that? ground a deduction of $1,700 from the stipulated price.
    The cause was heard before Duer, J., and a jury, in January, 1852.
    All the material facts proved upon the trial, having, a- bearing upon the question, upon which alone the judgment of the-court was founded, are fully stated in the opinion of the court.. The jury found that the goods were sold under a warranty of soundness, and were probably damaged, and upon that ground • deducted the sum of $197.89 from the amount the plaintiff would otherwise have been entitled to recover. Making this deduction, they rendered, a verdict for the plaintiff for $4,013 _83 10 0*
    Upon the trial many exceptions were taken by the counsel for the defendants to the ruling of the judge upon questions of evidence, and also to the instructions given by him to the jury, but, as these exceptions were not passed upon by the court, it is deemed unnecessary to state them.
    The defendants appealed from the judgment entered upon the verdict, and the cause was heard upon the bill of exceptions attached to the record.

      H. F. Clark, for the defendants,
    in moving for a reversal, rested his argument chiefly upon the exceptions, of which the statement has been omitted. He also insisted that the defendants had not been guilty of any laches' that could bar the defence upon which they relied. Upon the question of the proper rule of damages he cited Voorhies v. Earl, 2 Hill, 288; and Cary v. Gruman, 4 Hill, 525.

      F. J. Betts, for the plaintiff,
    denied that any of the exceptions 'taken on the trial were valid, and also insisted that the defendants having accepted and retained the goods, and made sales after full opportunity and reasonable time to inspect, were precluded from claiming that they did not correspond with the samples by which, it was alleged, they had been sold. In support of this position he cited Hargous v. Stone, 1 Seld. 88; Hart v. Wright, 17 Wend. 267; S. C. 18 Wend. 449; Salisbury v. Steiner, 19 Wend. 160 ; Hyatt v. Boyle, 5 Gill. & John. 110; Carnochan v. Gould, 1 Bailey, 179.
   By the Court. Hoffman, J.

On the 20th of February} 1849, the defendant sold to the plaintiff fourteen hundred pieces •of lawns, each piece containing twenty-four, yards or there¡abouts, making in all thirty-three thousand six hundred yards, :at the price of eleven cents a yard, amounting to the sum of t$3,396. The sum of $53 was admitted as a proper deduction. The lawns were packed in fourteen bales. The sale was upon eight months’ credit. The action is for the price of the goods.

The defence was that the goods were sold by samples, the defendants representing such samples to be fair specimens of the fourteen bales, and upon the faith of such statements the purchase was made. That the bales were not exhibited, nor were they accessible for examination. That- the samples and representations were of sound, merchantable lawns; and that when examined subsequently to the delivery, they were found to be tender, rotten, and decayed, and that by reason thereof they were worth the sum of $1,700 less than they would have; been worth if they had corresponded with the samples. This sum was claimed as a deduction from the price.

The goods arrived in Kew York in January, 1849. The invoice was of twenty-five bales. Two or three bales were taken, to the plaintiff’s, store, and the rest sent to the United States Bonded "Warehouse. The samples were not taken from the-bales, but came out separately in the vessel, or a previous steamer. Eno, one of the defendants, saw the two bales at the store, and also the samples on the 19th of February, 1849. On the 20th the sale was completed, and the fourteen bales sent to the defendants’ store on that day. They came in the original packages, covered with canvas, perhaps with iron bands.

The defendants’ witnesses prove that it was four or five weeks after the delivery that the goods were discovered to be tender; that after the discovery of the damage the defendants went on selling the goods at private sale. The residue of the goods were sold at auction. It is not precisely ascertained how many went to auction, nor, of course, what were sold at private sale. One of the witnesses says, perhaps a third, perhaps more or less. The bales were opened as they wanted them to sell, and were sold by the piece. The most distinct and certain of the testimony to this point is that of Peck, who states, that, on the 10th of April, there were eight or ten bales at the store of the defendants.

The parcel which was sent to auction produced eight and a half to eight and three-quarter cents a yard. This was on the 20th of April. There is testimony to show that the value of the. sound article, at that time, was from nine to nine and a half cents. The jury made an allowance for damage, which seems to have been founded upon this basis. The amount deducted was $197.87, and the most plausible theory is that it was arrived at upon this view of the case.

The verdict, then, was upon the ground that the sale by sample was accompanied with such circumstances as amounted to an implied warranty that the goods corresponded with the samples. There is no objection to the ruling of the judge on this point, and the principle of the case, in the Court of Appeals, of Hargous v. Stone (1 Seld. 13), and Reine v. Dodd (Ib. 98), is satisfied. The jury were left to find, and have found, that the parties mutually understood that they were dealing with the sample, as an agreement or understanding, that the bulk of the commodity corresponded with it; that the sale was intend? ed, as matter of fact, to be a sale by sample.

This being established, the principal remaining questions are, first, whether the defendants had not, in fact, waived a right to claim a deduction for damages; and next, what was the amount of the damages sustained, and what was the true rule for estimating them.

On the latter question the ruling of the court has been made the subject of numerous exceptions, and as to one of them, viz. the exclusion of an estimate made by Peck & Chambers of the damage, upon a partial inspection, from the consideration of the jury, some doubt is entertained by one of the court. But the view of the case, in which we concur, dispenses with the decision of this exception.

We consider the point taken by the plaintiff, that there had been such an acceptance and retainer of the goods, as to waive this claim, as decisive of the case. The judgment for the whole amount of the contract price, without even the deduction which the jury made, could have been securely placed upon this ground. The defendants have furnished the testimony to establish it, and it is wholly immaterial whether any or what errors were committed by the judge upon other points. Ho new trial, ordered by reason of any such errors, can result, upon legal principles applied to ascertained facts, in a different verdict ; or rather must result in a verdict less favorable to the defendants.

The defendants received the goods into their own store on the 20th of February, 1849. They proceeded to sell them in pieces, opening the bales as a demand arose. It was about the 20th of March, when, as they state, they discovered the damage. They continued still to sell at private sale. About the 5th of April, they, for the first time, took the ground of the damage being such as to require that the plaintiff should take back the unsold goods, and make an allowance for the damages which the purchasers might claim from them, and they be bound to make good. This is the position assumed in their letter of the 6th of April, 1849.

Whether the rule adopted in the Superior Court, and borrowed from the civil law, or that of the Court of Appeals, is the one best founded in mercantile policy, and high-toned equity, cannot vary this question now raised. Whether the implied warranty arises from the sample alone, or from the sample strengthened by evidence, to show the intent of the parties to make it the absolute representation of eorrresponding quality, the rule must be the same, which requires a prompt examination after delivery of the articles, and a prompt announcement of the ground which the purchaser means to assume.

In a mercantile community nothing can be more essential for the liquidation of accounts, the preservation of evidence, and the facility of adjudication, than that any implication of warranty, attached to a purchase of goods, should endure no longer than is reasonably necessary for the examination of the articles. It is upon this principle, that it has been decided in England, that a warranty ceases if the purchaser has shipped the goods out of the realm. This proposition is recognised in Vanderhost v. McTaggart (1 Br. R. 269). It is a result which follows from the cases of Salisbury v. Steiner (19 Wend. 160), and Sprague v. Blade (20 Wend. 60). If the opportunity to inspect goods before a sale is completed nullifies the implication of a warranty arising upon sample or otherwise, certainly the full opportunity of examining them after delivery, and after an actual sale of a part, must discharge the implied warranty.

It is certainly true that the observations of Chancellor Wal worth in Waring v. Mason (18 Wend. 435) as to the unreasonableness of requiring an examination of bales of cotton purchased here, but for shipment abroad, are striking and just. But that reasoning wholly fails in its application to the present case. The article, in question, was to be used and sold here, and some bales were actually opened as the sales proceeded.

To the authorities above referred to may be added Hyatt v. Boyle (5 Gill. J. 110), Carnochan v. Gould (1 Bail. 179).

The only answer which can be given to this view of the case arises from the alleged consent of the plaintiff, through Heilburth, as Ms agent, to a valuation and admission of a liability for a loss. The testimony, however, establishes merely, that Heilburth was sent by Muller to ascertain on what ground the defendants complained ; that he examined a few pieces, and admitted there was some damage done. But he did not unite. in any estimate, and insisted that too much time had elapsed; a position which neither he nor the plaintiff has ever abandoned.

One other point in the cause requires notice. The evidence of any complaint from any one of the purchasers as to the quality of the goods is very slight. There is none whatever of a demand persisted in for an abatement of the price; much less of any payment. The case, on the ground of reclamations, entirely fails..

There must be a judgment for plaintiff with costs.


author: By the Court. Duer, J.

text:
    De Forest Manice v. The Hudson River Railroad Company.

      In September, 1846, it was agreed, between the subscribers to the capital stock of the Hudson River Railroad Company and the Company, that an application should be made to the Legislature, at its then next session, to authorize the issue of a limited number of shares of the capital stock'of the Company, to be applied to the payment of interest on the instalments paid in by the subscribers on the capital stock subscribed for by them respectively, until income should be realized from the road. The Legislature passed an act authorizing the Company to issue so many additional shares, not exceeding 10 per cent, of its original capital, “ as might be necessary to enable the Company to provide for, and pay, interest on the instalments paid in for the construction of the road until it should be completed and put in operation.”

      Held, that, by the reasonable construction of the agreement, the additional shares to be issued by the Company were to be converted into money, and the stipulated payments of interest to be made to the subscribers in cash, and not by a transfer of shares.

      Held, further, that the meaning of the parties was that interest should continue to be paid to the subscribers until an income should be realized from the road as an entirety—i. e. until the completion of the whole road.

      Held, further, that the ambiguities in the agreement, if any, were removed by the act of the Legislature, which was explicit in its terms, and, by its acceptance, concluded the defendants.
    (Before Dijer, Campbell, and Hoffman, J.J.)
    June 8; 17, 1854.
    This case came before the court upon an appeal by the defendants from a judgment for the plaintiff at Special Term upon demurrers to portions of the complaint and to the answer. In order that the questions discussed may be clearly understood, it is deemed necessary to state the pleadings m extenso. They are as follow.
    The complaint of the plaintiff in this action shows, that heretofore, and on or about the first day of September, one thousand eight hundred and forty-six, he subscribed for fifty shares of the capital stock of the said Eailroad Company, and that he shortly thereafterwards acquired by purchase twenty-five other shares of said capital stock, of which seventy-five shares he is still the owner.
    That by the terms of subscription, it was agreed, between the said company and the subscribers to said capital stock, that application should be made to the Legislature of the State of Hew York, at its then next session, to authorize the issue of a limited number of shares of the capital stock of said company, to be applied to the payment of interest on the instalments paid in by the subscribers on the capital stock subscribed for by them respectively, until income should be realized from the road; and it was further agreed that such interest should be at the rate of seven per cent, per annum, and be allowed on all payments from the day the same were made.
    And it was further agreed, that the first payment of interest should be made on the fifteenth of Hovember, one thousand eight hundred and forty-seven, and semi-annually thereafter.

      And it was further agreed, that if such authority to issue ■ shares should not be given by the said Legislature, then that the interest on such instalment should be paid from the first clear earnings of the company, and that no general dividend should be made on the capital stock until all such interest should be fully paid.
    That afterwards, and on the twentieth of March, one thousand eight hundred and forty-seven, the said Legislature of the said state of Hew York, by an act passed upon the application of the defendant, on said day last named, entitled, “An act to amend an act entitled, ‘ an act to authorize the construction of a Bailroad from Hew York to Albany,’ passed May 12th, 1846,' authorized the said company to issue, in addition to the capital stock of the company, authorized by the original act of incorporation, as many shares of stock of one hundred dollars each, not exceeding in the whole ten per cent, of the capital, as might be necessary to enable the company to provide for and pay interest on the instalments paid in for the construction of the road until it should be completed and put in operation.
    That the capital stock of said company, authorized by the original act, was five millions of dollars.
    That the whole amount paid upon the stock subscribed for and purchased by the plaintiff, was seven thousand five hundred dollars, and that the last instalment, which completed that sum, was paid prior to the fifteenth day of Hovember, one thousand eight hundred and forty-eight.
    That the said company, after the said twentieth of March, one thousand eight hundred and forty-seven, issued shares of stock only to the amount of four per cent, on the said capital, and sold and disposed of the same, and applied a portion of the proceeds thereof to the payment of interest on the instalments paid by the plaintiff on the said stock, subscribed for and purchased by him as aforesaid, and a portion of the proceeds thereof to the payment of interest on the instalments paid by other subscribers to the said original stock.
    That the last payment of interest which was made by said company to the plaintiff, on the instalments paid by him, was made on the twentieth day of Hovember, one thousand eight hundred and forty-nine, and was the sum of two hundred and sixty-two dollars and fifty cents, being six months’ interest on said sum of seven thousand five hundred dollars from the fifteenth day of May, one thousand eight hundred and forty-nine, to the fifteenth of Hovember, one thousand eight hundred and forty-nine.
    That after making the said last payment of interest to the plaintiff, and a similar payment to the other holders of the capital stock of said company, there was a balance of twenty thousand dollars or thereabouts to the credit of the account of stock issued as aforesaid, and which was a portion of the proceeds of the said stock issued as aforesaid for the purpose of paying the interest on said instalments, which said sum of twenty thousand dollars was applied to the general purposes and expenditures of the company, and no part thereof applied to the payment of interest on said instalments.
    That all the holders of the capital stock of said company, other than the plaintifij have consented to receive, and have received, capital stock of the said company, as and for the payment of the interest due on their said respective instalments after the said fifteenth day of Hovember, one thousand eight hundred and forty-nine, up to and including the fifteenth day of Hovember, one thousand eight hundred and fifty-one.
    That no income, within the intent and meaning of the said articles of subscription, has yet been realized from the said railroad. That the road of the said defendant was completed and put in operation on the twenty-ninth day of October, one thousand eight hundred and fifty-one.
    And the said plaintiff further shows, that heretofore and on or about the first day of September, one thousand eight hundred and forty-six, he subscribed for other fifty shares of the capital stock of the said railroad company, and that he shortly tliereafterwards acquired by purchase other twenty-five shares of said capital stock, of which seventy-five shares he is still the owner.
    That by the terms of subscription, it was agreed between the said company and the subscribers to said capital stock, that application should be made to the Legislature of the state of Hew York, at its then next session, to authorize the issue of a limited number of shares of the capital stock of said company, to be applied to the payment of interest on the instalments paid in by the subscribers, on the capital stock subscribed for by them respectively, until income should be realized from the road. And it was further agreed, that such interest should be at the rate of seven per cent, per annum, and be allowed on all payments from the day the same were made.
    And it was further agreed, that the first payment of interest should be made on the fifteenth of Hovember, one thousand eight hundred and forty-seven, and semi-annually thereafter.
    And it was further agreed, that if such authority to issue shares should not be given by the said Legislature, then that the interest on such instalments should be paid from the first clear earnings of the company, and that no general dividend should be made on the capital stock until all such interest should be fully paid.
    That afterwards, and on the twentieth of March, one thousand eight hundred and forty-seven, the said Legislature of the said state of Hew York, by an act passed on said day last named, entitled, “ An act to amend an act entitled, ‘ an act to authorize the construction of a Railroad from Hew York to Albany,’ passed May 12th, 1846,” authorized the said company to issue, in addition to the capital of the company, authorized by the original act of incorporation, as many shares of stock of one hundred dollars each, not exceeding in the whole ten per cent, of the capital stock, as might be necessary to enable the company to provide for and pay interest on the instalments paid in for the construction of the road, until it should be completed and put in operation.
    That the capital stock of said company, authorized by the original act, was five millions of dollars.
    That the whole amount paid upon the stock, as last aforesaid, subscribed for and purchased by the plaintiff, was seven thousand five hundred dollars, and that the last instalment which completed that sum was paid prior to the fifteenth day of Hovember, one thousand eight hundred and forty-eight.
    That the said company, after the said twentieth of March, one thousand eight hundred and forty-seven, issued shares of stock only to the amount of four per cent, on the said capital, and sold and disposed of the same, and applied a portion of the proceeds thereof to the payment of interest on the instalments paid by the plaintiff on the said stock subscribed for and purchased by him as aforesaid, and a portion of the proceeds thereof to the payment of interest on the instalments paid by other subscribers to the said original stock.
    That the last payment of interest which was made by said company to the plaintiff on the instalments paid by him on the stock, in this count referred to, as being subscribed for and purchased by him, was made on the twentieth day of November, one thousand eight hundred and forty-nine, and was the sum of two hundred and sixty-two dollars and fifty cents, being six months’ interest on said sum of seven thousand five hundred dollars from the fifteenth day of May, one thousand eight hundred and forty-nine, to the fifteenth of November, one thousand eight hundred and forty-nine.
    That after making the said last payment of interest to the plaintiff, and a similar payment upon the other capital stock' of said company, there was a balance of twenty thousand dollars or thereabouts to the credit of the account of stock issued as aforesaid, and which was a portion of the proceeds of the said stock issued as aforesaid for the purpose of paying the interest on said instalments, which said sum of twenty thousand dollars was applied- to the general purposes and expenditures of the company, and no part thereof applied to the payment of interest on said instalments.
    That all the holders of the capital stock of said company, other than the plaintiff, have consented to receive, and have received, capital stock of the said company as and for the payment of the interest due on their said respective instalments, after the said fifteenth day of November, one thousand eight hundred and forty-nine, up to and including the fifteenth day of November, one thousand eight hundred and fifty-one.
    That the road of the said defendant was completed and put in operation on the twenty-ninth day of October, one thousand eight hundred and fifty-one.
    That by the operation of the said road, since its completion on the twenty-ninth day of October, one thousand eight hundred and fifty-one, the said company has received from time to time more money, over and above the costs of working the said road and the interest on its debt to others than its subscribers, than is sufficient to pay to the plaintiff and the other stockholders the interest on their respective instalments; but that instead of applying the same to the payment of such interest, the said net earnings have been applied to the general expenditures of the road—for construction, hiring and purchasing steamboats not necessary for the operation of the said road, and for buying off steamboat opposition to said road.
    Wherefore, the plaintiff claims judgment for the sum of' $1,312.50, with interest on $262.50 from the 15th day of May, 1850 ; and interest on $262.50 from the 15th day of November, 1850; and interest on $262.50 from the 15th day of May, 1851; and interest on $262.50 from the 15th day of November, 1851; and interest on $262.50 from the 15th day of May, 1852; besides the costs of this action.
    The defendant, the Hudson Eiver Eailroad Company, answers the second count or cause of action in the plaintiff’s amended complaint, as follows:
    1. The defendant denies each and' every allegation contained therein.
    2. The defendant farther answers and says, that the facts set forth therein do not constitute a cause of action.
    3. The defendant further answering, alleges that it has paid to the plaintiff the interest on the several amounts, alleged in the complaint to have been paid in by him on his said subscriptions to the stock of the said defendant, to which the plaintiff was entitled, or the defendant bound to pay the plaintiff.
    4. That the defendant is a corporation, duly organized under and by virtue of the laws of the State of New York, and that all its affairs are, and were at the several times mentioned in the plaintiff’s complaint, managed and governed by a board of directors, duly chosen and elected; and the stockholders thereof, and subscribers for stock, are and were at the time aforesaid bound and concluded by the action of said Board of Directors, in all things reláting to the business and affairs of said corporation.
    5. That on the 26th day of March, in the year 1850, the said board of directors, at a regular meeting thereof, determined by a valid vote of its body, and according to the by-laws thereof, thereafter not to pay interest to subscribers for stock of said defendant, or to its stockholders, in cash, but resolved and determined to pay such interest in the stock of the said Hudson River Railroad Company.
    6. That after the passage of said resolutions, and in conformity thereto, the defendant offered and tendered to the plaintiff the stock of the defendant in payment of all such sums as were then due and owing the plaintiff for such interest, and that the plaintiff refused to accept or receive the same, or any part thereof. The defendant further alleges that the act of the defendant, determining to pay the interest on its stock in the stock of the company, was a valid act, and binding on the plaintiff, being a stockholder, and concludes him from demanding the interest which may have fallen due on the stock held by him in cash.
    The defendant demurs to that part of the plaintiff’s amended complaint in the above action, which sets forth the first cause of action mentioned therein, and specifies the following causes of demurrer:
    1. That it does not state facts sufficient to constitute a cause of action.
    2. That it appears from the facts stated in setting forth the said second cause of action, that the plaintiff is a stockholder of the defendant, and therefore cannot maintain an action for the recovery of the said interest against the defendant.
    3. It does not appear that the stock mentioned therein belonged to the plaintiff on or after the 20th day of November, in the year 1849.
    4. It does not appear that the interest claimed therein has not been paid.
    5. It appears affirmatively therein that said interest is payable in the stock of the company, and not in cash.
    6. It does not appear that the contingency, upon the happening of which the payment of the interest claimed was to cease, did not happen previous to the accruing of any portion of the claim, set forth in the second count or cause of action in said complaint.
    Wherefore the defendant claims judgment, that the amended complaint in this action be dismissed with costs to the defendant,

      The plaintiff demurs to the defence contained in the third division of the defendant’s answer to the second cause of action stated in the complaint, and for cause of demurrer, shows that the same does not state facts sufficient to constitute a defence to the said second cause of action.
    The plaintiff also demurs to the defence contained in the fourth, fifth, sixth, and seventh divisions of the defendant’s answer to the second cause of action stated in the complaint, and, for cause of demurrer, shows that the same does not state facts sufficient to constitute a defence to the said second cause of action.
    It is hereby stipulated and agreed that the question of the sufficiency of the defendant’s answer to the second cause of action in the complaint shall be argued on the foregoing demurrer, in connexion with the argument of the defendant’s demurrer to the first cause of action in said complaint, and that judgment may be given by the court upon said demurrer, with the usual leave to amend, with like effect as if a demurrer to an answer were allowed by the code of procedure. Dated Hew York, Feb. 12,1854.
    At a special term of the Superior Court of the City of Hew York, held at the City Hall in the city of Hew York, on the 28th day of February, 1854, present, Hon. Murray Hoffman, Justice.
    De Forest Manice v. The Hudson River Railroad Company :—This cause having been brought to trial on. the issues of law therein, and having been argued by Mr. Larocque, of counsel for the plaintiff, and by Mr. Fullerton, of counsel for the defendant, and due deliberation having been had, it is ordered and adjudged that the defendant’s demurrer to the first cause of action stated in the complaint, and also the demurrer contained in his answer to the second cause of action stated in said complaint, be and the same are hereby severally overruled, and that the plaintiff’s demurrers to the defences contained in the third, fourth, fifth, sixth, and seventh divisions of the defendant’s answer to the said second cause of action stated in said complaint, be and the same are hereby allowed, and judgment for the plaintiff upon all said demurrers, with liberty to defendants to amend their answer within ten days after notice hereof, upon payment of $23 costs to the plaintiff.
    (A Copy.) Geo. H. E. Lynch, Clerk.

    At a special term of the Superior Court of the City of Hew York, held at the City Hall in said city, on the 17th day of April, A.D. 1854, present, the Hon. Murray Hoffman, Justice.
    . De Forest Manice v. The Hudson River Railroad Company :—This cause having come on to be heard on the demurrer of the defendant to part of the complaint, and on the demurrer of the plaintiff to a portion of the defendant’s answer, and the court having ordered judgment for the plaintiff on all said demurrers, with liberty to the defendants to amend their answer within ten days after notice of such order, on payment of costs to the plaintiff, on reading and filing the pleadings herein, and proof of due service of a copy of said order for judgment; also affidavit that no copy of any amended answer has been served upon the attorney for the plaintiff, and that no costs have been paid the plaintiff, as provided by said order, and on motion of Larocque & Barlow, attorneys for plaintiffOrdered judgment in favor of said plaintiff against said defendants for the sum of $1,497.50, being the amount demanded in the complaint, and also for the plaintiff’s costs herein adjusted at the sum of $212.98, together amounting to the sum of $1,710.58.
    Geo. H. E. Lynch, Clerk.

    The following opinion was delivered by the judge at special term.
    Hoffman, J.—The correct interpretation of the contract and engagements of the defendants, se't out in the complaint, with the act of the Legislature referred to, will determine nearly every question raised upon the pleadings.
    It is stated, that by the terms of subscription, it was agreed between the Company and the subscribers to the stock, that application should be made to the Legislature to authorize the issue of a limited number of shares of the capital stock of the said Company, to be applied to the payment of interest on the instalments paid in by the subscribers on the capital stock subscribed by them respectively, until income should be realized from the road. That such interest should be at the rate of seven per cent., and be allowed on all payments from the day they were made.
    The first payment was to begin on the 15th November, 1847, and be made semi-annually thereafter.
    If no such -law should be procured, then the interest was to be paid from the first clear earnings of the road, and no dividend was to be made until all such interest was fully paid.
    The act contemplated was passed on the 20th of March, 1847, and empowered the Company to issue as many shares of stock of $100 each, and not exceeding ten per cent, of the capital, as might be necessary to enable the Company to provide for and pay interest on the instalments paid in for the construction of the road, until it should be completed and put in operation.
    ' The plaintiff subscribed $7,500, and paid his last instalment prior to November 15,1848. The last payment of interest to him was on the 20th of November, 1849.
    The Company issued stock to the amount of four per cent, on the capital to meet this interest, and continued for some time to sell the same at a loss, and pay such interest subsequently ; but, on the 20th of March, 1850, the directors resolved not to pay the interest any longer in cash, but iii stock of the Company.
    This raised the main question in the cause, viz. whether the interest should be payable in cash or stock. I think that the act of the Legislature may be used to assist the interpretation of the agreement between the stockholders and the Company; and these, together with the terms of the contract, in the event of failure to obtain an act, satisfy me that the construction rendered it obligatory on the defendants to pay the interest in cash. The Legislature permitted the issue of stock to enable them to effect it; but it is not a just conclusion from any of the proceedings, that the subscribers were compellable to accept stock in payment.
    It is not stated whether the stock was to be transferred at par, or at its current value. But even if the latter was the case, I consider that the contract obliged the Company to bear the expense and trouble of turning it into money.
    The terms of the act were, that such interest should continue to be paid until the road should be completed and put in operation, and this is stated to have been on the 29th of October, 1851. The claim of the plaintiff is for interest down to, and including that falling due, the 15th of May, 1852.
    For the interest down to the 15th November, 1851, the Company would be responsible, on the view taken, disregarding the seventeen days from October 29th.
    But I apprehend, that when the road was in operation, the common or partnership rights arose, and the subscribers had to look to profits, whatsoever they might be, in lieu of interest. But as the complaint rests upon the agreement for a claim beyond this period, and avers that no income has been received, within the conditions and terms, so as to stop interest, it will not be proper to decide that point now.
    There are a few other points to be disposed of.
    The third clause of the answer is nothing but the defendants’ assumption of what they are bound to pay, and is properly demurred to.
    The fourth clause raises the question, whether the plaintiff, being a stockholder, can sue the Company. I cannot doubt his right to do so, upon the agreement set forth.
    The fifth, sixth, and seventh clauses depend upon the question of the right to pay in stock, which I have before passed upon.
    The result is, that the plaintiff’s demurrer to the third, fourth, fifth, sixth, and seventh clauses, or divisions of the answer to the second cause of action in the complaint, must be allowed.
    The defendants’ demurrer to the first cause of action in the complaint, raises, in the first, second, and fifth clauses, the same questions as those upon the answer. The third, fourth, and sixth causes of demurrer are different; but each of them appears untenable.
    The contingency, in the view I have taken—that is, the road going into operation—is stated, so as to show that it did not happen until a part of the claim accrued.

      I think this demurrer to the complaint must be wholly overruled.
    The demurrer which accompanied the answer to the second cause of action, must be disposed of in the same manner.

      W. Fullerton, for the defendant, appellant,
    insisted that the interest was payable in the stock of the Company, and not in cash ; that the suit could not be maintained, because there did not appear to have been any stock issued with which to pay the interest; and that there was no sufficient allegation that there was no income realized from the road; and upon these grounds argued that the judgment ought to be reversed, and judgment be given for the defendant.

      J. Larocque, for the plaintiff, respondent, claimed an affirmance of the judgment upon the following points and authorities.
    I. The objection that the plaintiff, being a corporator, cannot sue the corporation for the interest demanded, is untenable (Scott v. Eagle Fire Ins. Co., 1 Paige, 198 ; Gray v. The Portland Bank, 3 Mass. R. 364 ; Stockdale v. The South Sea Co., 2 Atk. 141; Titcomb v. Union Marine Fire Ins. Co., 8 Mass. R. 326).
    H. The objection that it does not appear that the interest has not been paid, is untenable. If it has been paid, that is a fact for the defendant, and not for the plaintiff, to establish.
    IH. The Company , is bound to pay the interest in money, and has no right to require the plaintiff to accept stock in lieu of money. 1. The language of the subscription contract manifestly contemplates payment in money. 2. The language of the act passed by the Legislature on the application of the defendants, pursuant to the subscription contract, is to the same effect. 3." The practice of the Company, under the subscription contract and act of the Legislature, is shown by the complaint to have been to pay in money, and not in stock, thus recognising their obligation to do so. 4. A resolution of the board of directors was considered necessary to change this practice. 5. The complaint shows that the Company has converted stock issued for the purpose of paying the interest into money, and has received from its proceeds a balance of twenty thousand dollars more than has been applied to the purpose.
    IY. The objection that it does not appear from the complaint that the contingency upon the happening of which the payment of the interest claimed was to cease, did not happen previous to the accruing of the plaintiff’s demand, is also untenable. 1. The interest claimed is that accruing from November 15th, 1849. 2. The contingency referred to in the articles of subscription, for the cessation of interest, is that “ income should be realized from the road.” 3. The first count in the complaint expressly negatives the occurrence of that contingency. 4. The contingency provided for in the act of the Legislature, authorizing the issue of stock, to raise money to pay the interest, is, that the road should be completed and put in operation. 5. Both counts in the complaint show, that this was accomplished only on the 29th October, 1851. 6. The “income” contemplated by the subscription articles, to stop the running of interest, was income from the entire road, not from a mere portion of it. The intention was, that interest should cease when the Company came into the possession of other means to pay interest or dividends; and if income from a part of the road were to have the effect of stopping interest, it would have stopped as soon as cars were running to Manhattanville, which would be absurd. 7. The act of the Legislature, which expressly provides for the payment of the interest until the road should be completed, was passed on the application of the Company, gives their interpretation of the meaning of the subscription articles, and binds them.
    Y. The allegation of payment, in the defendant’s answer, is entirely insufficient to bar the action. 1. The answer does not allege or pretend payment of the instalments of interest claimed in the complaint. 2. Answering payment of that “ to which the plaintiff was entitled, or the defendant bound to pay the plaintiff,” is no allegation of fact, but a mere legal dogma.
    YI. The other facts stated in the defendant’s answer constitute no defence. 1. The plaintiff’s claim rests upon an express contract with the corporation. 2. This contract is valid and binding, and beyond the power of the directors to abrogate or vary without the plaintiff’s consent. 3. Ho facts are stated in the answer, by virtue of which this power, forbidden to the Legislature of the State by the constitution of the Union, is claimed for the directors of a railroad corporation. '4. The contract, therefore, remains binding, as originally made, notwithstanding the resolution of the directors (cases above cited, and also, Angell & Ames on Corporations, 281 ; Revere v. Boston Copper Co., 15 Pick. 363 ; First Presb. Cong. v. Quackenbush, 10 Johns. 217; Middlesex Turnp. Corp. v. Swan, 10 Mass. 384; Same v. Locke, 8 Ibid. 268 ; Franklin Glass Co. v. Alexander, 2 N. H. R. 380; Taunton Turnpike v. Whiting, 10 Mass. 327; Union Locks & Canals v. Towne, 1 N. H. R. 44; Amer. Bank v. Baker, 4 Met. R. 164; Vestry of St. Luke’s Church v. Matthews, 4 Desausure, 585 ; Mayor of Hudson v. Thorne, 7 Paige, 261).
    VH. The judgment should be affirmed, with, costs.
   By the Court. Duer, J.

The pleadings in this case are singularly constructed, and we should be unwilling to say that any of them, complaint, answer, or demurrers, are framed in entire conformity to the provisions of the Code. That, in some respects, they are at variance with its spirit and meaning, we do not doubt.

But the points, upon which alone the case has been argued, imply a waiver of all special exceptions, and we understand it to be agreed that the question, whether the judgment appealed from shall be affirmed or reversed, depends wholly upon the construction that we shall give to the agreement between the original subscribers to the stock, and the Company, and upon the operation of the act of the Legislature, which, in order to carry the agreement into effect, was subsequently passed.

If the controversy turned upon no other hinge than the terms of the original agreement, we should be compelled to say, that, in their fair and reasonable interpretation, they establish the right of the plaintiff to recover.

We cannot believe that it was the intention óf the parties that the additional shares of stock to "be issued should be applied to the payment of interest to the subscribers by a direct transfer, for the plain reason, that it must have been foreseen by the parties, that, in a vast majority of cases, a payment, by a mere transfer, would be impracticable. It could only be practicable in the cases of an exact correspondence between the amount of the interest to be paid, and the nominal value of the shares to be transferred. Hor can we believe that it was intended that the payments of interest should be made partly in cash and partly in shares, or to some of the subscribers wholly in cash, and to others wholly in shares. The subscribers, under the agreement, had equal rights, and were meant to be placed on the same footing, and, we think, could never have contemplated a mode of payment which would necessarily produce great inequality, and from the discretion it would imply, be liable to great abuse. We are, therefore, satisfied that it was the intention of all that the stipulated payments of interest should be made in money out of the proceeds of the shares to be issued, and not by their immediate transfer. The stockholders might indeed elect to take shares and set off the interest due to them against the price, but the corporation had no election to pay them in cash, or force shares upon their acceptance. The term “payment,” in its legal import, means the full satisfaction of a debt by money, not by an exchange or compromise, or an accord and satisfaction, and it is only where the words used in connexion with it plainly manifest a different intention that the legal import of the term can be rejected. The words of the agreement in this case are, perhaps, ambiguous, but that they are inconsistent with the usual and legal meaning of “ payment ” cannot be pretended.

The stockholders, under the agreement, were to receive interest on the instalments paid by them “ until income should be realized from the road,” and the construction of these words is next to be determined. It is insisted, for the defendants, that the event happened, to which they refer, as soon as any part of the line of the road, however trifling in extent, was completed and used—that is, as soon as upon any portion of the road cars were run, and fare received, and consequently that from this time the right of the stockholders to demand the payment of interest ceased.

That the words in question, literally construed, may bear this meaning, it is unnecessary to deny, but we are satisfied that it is not in this sense that we, in order to carry into effect the real intention of the parties, are bound to understand them. We think the manifest intention of the parties was that interest should be continued to be paid to the stockholders until an income should be realized from the road, that, if exceeding its expenses, would be applicable to the payment of dividends—not until an income should be realized in which they would have no possible right to share. The subscribers could never have meant that it should be in the power of the directors of the Company to stop the payment of the interest, for which they had stipulated, by running cars on a mile or two of railroad in the city of Eew York; núr, unless a decep ' tion was intended, could this have been the meaning of those who acted for the Company in making the arrangement. The word “ road” in the clause, “ until an income shall be realized from the road,” means the road as an entirety, and the realization of an income from it as such, is the event to which the clause refers. . "

We have, perhaps, dwelt longer than was necessary upon the construction of the agreement, since no more can be said on behalf of the defendants than that its terms are ambiguous, and are fairly susceptible of the interpretation for which they contend; but to every argument that has been urged in support of that interpretation it seems to us a conclusive reply, that whatever ambiguity may exist in the terms of the agreement, there is none whatever in those of the act of the Legislature, which was passed for the sole purpose of enabling the Company to carry the agreement into execution. The terms of the law are explicit; they declare that so many shares of stock shall be issued, “ as shall enable the Company to provide for, and pay interest, on the instalments paid in for the construction of the road until it shall be completed and put in operation,” thus plainly settling in favor of the plaintiff, the only question that, upon the face of the agreement, could be regarded as doubtful.

It is said, however, that it is upon the original agreement alone that this action is founded, or can be maintained, and that a subsequent act of the Legislature cannot be permitted to vary its legal construction; and there would, perhaps, be some force in this observation, if the terms of the agreement and of the law were plainly inconsistent, but that there is no such inconsistency we have already shown, and we, therefore, do not doubt that the act of the Legislature truly declares and carries out the intentions which the parties, in the agreement, designed to express. But we go further. Upon the averments in the complaint, not denied in the answer, we must regard it as certain, that the act of the Legislature is the very act for which the parties agreed that application should be made, and as it has been accepted by the Company, and both the Company and its stockholders have acted under it, both, we conceive, are bound by its provisions. Keither, it seems to us, can now be permitted to allege that there is any discrepancy between its provisions and their agreement.

We must, therefore, hold that, until the road was completed and put in operation, the plaintiff was entitled to demand from the Company the payment in money of interest, semi-annually, upon the instalments paid in upon the shares of stock which he holds, and it is scarcely necessary to add that his rights, in this respect, have not been, and could not be, varied by the subsequent resolution of the board of directors, nor by the arrangement which the Company has fortunately been able to make with its other stockholders. Without his individual consent the Company, in respect to his claims, could not be released from the obligations which the agreement and the act of the Legislature created.

The allegation that it does not appear from the pleadings that the Company has issued and sold any shares of stock, from the proceeds of which the demands of the plaintiff may be satisfied, is certainly groundless.

The complaint distinctly avers that the Company has issued and sold a number of shares of stock, under the authority given by the Legislature, and that the proceeds, after the payment of various sums of interest to the plaintiff and other stockholders, left a balance applicable to future payments of interest of about twenty thousand dollars ; and we think that the answer, in admitting that interest for a time was paid to the subscribers in cash, admits, by implication, the truth of these averments.

This balance of $20,000 is the fund out of which the claims of the plaintiff ought to be satisfied, and as the claims of all the other stockholders have been put at rest by an accord and satisfaction, it is far more than sufficient for the purpose. It cannot be pretended that the subsequent misapplication of the fund by the Company has created a bar to his recovery.

The conduct of the plaintiff, in refusing to accede to the mode of settlement which has been deemed satisfactory by all the other shareholders, may be thought unreasonable, but he chooses to stand upon his legal rights, and it is those alone that we, in passing upon his claims, as a court of justice, are at liberty to consider.

We must, therefore, affirm the judgment that he has obtained, but not for the whole amount for which it has been rendered.

The complaint avers that the road was completed and put in operation on the 29th of October, 1851. On that day, therefore, the right of the plaintiff to demand the. payment of interest from the Company wholly ceased. In the judgment as given, however, he has been allowed an excess of interest from the 29th of October to the 15th of November, 1851; and the sum of $262.50 as the semi-annual interest due on the 1st of May, 1852. These sums with interest, as erroneously included, must be deducted from the judgment.

(The plaintiff’s counsel consenting to the deduction, the judgment, so modified, was affirmed with costs.)