author: Parker, J.: Yan Brunt, P. J. :

text:
    Henry J. McGuckin, Plaintiff, v. Samuel W. Milbank and Others, as Executors, etc., of William A. Cauldwell, Deceased, Defendants.

      Second mortgage — not cut off by the foreclosure of a prim' mortgage — when a defend-amt is not concluded- in his character as trustee by a judgment in favor of a co-defendant — damages recoverable under a covenant against incumbrances.

    Where a second mortgagee holds the mortgage as trustee, and is not made a party in his official capacity to an action brought to foreclose the prior mortgage, if it does not appear on the face of the complaint, or hy answer, or hy his appearance in the capacity of trustee, that the trust which he represents is intended and understood to he affected hy the suit, the second mortgage remains a lien upon the premises after their sale under the foreclosure of the prior mortgage. Per Parker, J.
    A defendant in an action, who has made default therein, is not concluded by the judgment rendered therein in favor of a co-defendant, if he has not hoen.served with a copy of the co-defendant’s answer pursuant to the provisions of section 521 of the Code of Civil Procedure. Per Parker, J.
    A party who sues on a covenant against incumbrances is entitled, if he has extinguished the incumbrance, to recover the price he has paid for it, but if he has not extinguished it, and it is still an outstanding incumbrance, his damages are hut nominal, for he will not he permitted to realize the value of an incumbrance, on a contingency, where he may never be disturbed by it. Per Parker, J.
    Tinder a covenant against incumbrances, where no fraud is established, the grantee, if an incumbrance exists which there has been no attempt to enforce, can only recover nominal damages unless he has paid the amount- thereof.
    Per Parker, J.

      Semble, that where a second mortgage is given to a party who is therein described, individually only, but the mortgage, hy a clause following the description of the mortgaged premises, states that it is given to such party as trustee for certain other persons, the case does not come within the decision of London v. Townshend (112 N. Y. 93; .129 id. 167), and the fact that such party is made a party individually, and not in the capacity of trustee, to an action for the foreclosure of a prior lien on the mortgaged premises, does not operate to prevent the lien of the second mortgage being' extinguished hy the judgment and sale in such foreclosure suit. Per Van Brunt, P. J., and O’Brien, J.

      Motion by the defendants, Samuel W. Milbank and others, as executors, etc., of William A. Cauldwell, deceased, for a new trial on a case containing exceptions, ordered to be heard at the General Term in the first instance upon the verdict of a jury in favor of the plaintiff rendered by direction of the court after a trial at the New York Circuit on the 11th day of June, 1891.
    This action was brought to recover damages for an alleged breach of a covenant against incumbrances contained in a deed made by the defendants’ testator, William A. Cauldwell, and wife to the plaintiff, covering premises on One Hundred and Twentieth street in the city of New York.
    One Davies, prior to March, 1887, was the owner of lots Nos. 59, 61, 63, 65, 67 and 69 East One Hundred and Twentieth street, New York city.
    March 9, 1887, he executed and delivered to William A. Cauldwell a mortgage on each of said lots, each of whicli was given to secure $5,000, or such part as should be advanced toward improving the premises. June twenty-seventh following, Davies made a further mortgage to George N. Manchester covering the six lots, which mortgage contained a clause immediately following the description of the property, providing that the mortgage was in trust to secure the payment to various individuals, therein named of certain sums aggregating $5,000. Cauldwell subsequently foreclosed his mortgages, and in the actions of foreclosure made George N. Manchester a party, naming him individually and not as trustee. Decrees were entered in all these foreclosure suits; subsequently the properties-were bought by Cauldwell at the foreclosure, who afterwards sold all of the lots to this plaintiff. Plaintiff made no objection to taking-the title on the ground that Manchester had been named individually as a defendant in the foreclosure suits, and it does not appear that either of the parties to the conveyance were aware that there was any basis for a claim that Manchester’s mortgage had not been cut off by the foreclosure.
    After plaintiff had obtained title he made an application to the Metropolitan Life Insurance Company for a loan of $10,500 upon , each of the lots. The loan was made and thereafter plaintiff sold four of the lots, and as to them there is no controversy. In 1890 the Metropolitan Life Insurance Company commenced suite to foreclose its mortgages on Nos. 65 and 67, which, resulted in judgments of foreclosure and sale, bearing date the twenty-eighth day of May of that year, the referee’s report of sale being dated October .20, 1890. It does not appear that at the sales the attention of any one was called to the fact that George N. Manchester was made a party defendant individually, and not as trustee in the Cauldwell foreclosures, and so far as we are advised by the record, it does not appear that such fact was taken into consideration, or that it in any wise affected the bidding for the properties. After the commencement of such foreclosure suits the plaintiff made a contract for the sale of one of the two remaining houses to one "Wittkowski, who subsequently refused performance on the ground that the Davies mortgage was an incumbrance upon the property.
    Subsequent to the sale of the lots, pursuant to the judgment of May 28,1890, by which plaintiff was divested of title, a suit was commenced by George N. Manchester, as trustee, to foreclose the mortgage complained of, in which action all subsequent parties in interest were made defendants, including the plaintiff and each of the persons who were oestuis que trust under the Davies mortgage to Manchester. It resulted in a judgment dismissing the complaint, adjudging that the sale under the six several judgments of foreclosure, obtained on the foreclosure of the Cauldwell mortgages, did actually divest the lien of the mortgage executed by Davies and wife to George N. Manchester, as trustee.
    The court held that the plaintiff was entitled to recover as damages the proportionate part of the face of the mortgage which the two lots should bear, or one-third of $5,000, and in accordance with such holding he directed the jury to find a verdict in favor of plaintiff for $1,666.66.

      Dcmiél P. Mahony, for the plaintiff.

      John L. Gackocdader, for the defendants.
   Parker, J.:

The ruling of the court, that the Manchester mortgage constituted an incumbrance upon the property at the time of the conveyance from Cauldwell to this plaintiff, is in accord with the decision of the Court of Appeals in Landon v. Townshend (112 N. Y. 93 ; 129 id. 169), because Manchester was not made a party in’ his official capacity, nor was it made to appear on the face of the complaint, by answer, or by the appearance of Manchester in the capacity of trustee, that the trust which he represented was intended and understood to be affected by the suit.

The trial court rightly decided, as we think, that the plaintiff was not estopped by the judgment in the suit of Manchester, as trustee, against Davies et ah, from asserting the existence of the incumbrance at the time of the conveyance to him, and its continuance during the period in which he had title to the property. It is true that he was made a party defendant in that suit, as were all the parties interested in any way in the property subsequent to the execution of the Manchester mortgage, including the eestuis que trust thereunder, but he made default, and thereupon, as against him, the plaintiff (Manchester) was at liberty to enter judgment for the relief demanded in the complaint, and to that extent, had judgment been so entered, he would have been concluded. He might have been concluded by the judgment rendered in favor of the defendant Cauldwell, against the plaintiff, had he been served with a copy of Cauldwell’s answer, as directed by section 521 of the Code of Civil Procedure, but that was not done; hence, as between him and his co-defendant, Cauldwell, nothing was determined. (Ostrander v. Hart, 130 N. Y. 406.)

Upon the question of damages we think the plaintiff, under the evidence, was only entitled to recover nominal damages.

The covenant against incumbrances was broken the instant the conveyance was made to him, because the Manchester mortgage constituted an incumbrance, but the plaintiff was not Evicted because of it, nor was any proceeding taken to enforce the incumbrance during the time that the title to the property was vested in him, and he did not pay it or pay anything on account of it, nor was he requested to. Delavergne v. Norris (7 Johns. 358) is a leading case on that question in this State. The premises, which were conveyed by a deed containing a covenant against incumbrances, were covered by several prior mortgages which had been duly recorded, securing in the aggregate the sum of $2,000. The plaintiff paid' mortgages aggregating $1,163.44 prior to the commencement of the action, leaving unpaid the sum of $835.30, and the «jfuestion presented was, whether he was entitled to recover the aggregate sum secured by the mortgages or only the sum which he had paid ? And the court held, that as to the mortgages remaining unpaid, he could only recover nominal damages, as he might never be disturbed by an effort to enforce their collection. The court stated the rule as follows : If the plaintiff when he sues on a covenant against incumbrances has extinguished the incumbrance, he is entitled to recover the price he has paid for it, but if he has not extinguished it, but it is still an outstanding incumbrance, his damages are but nomina], for he ought not to recover the value of an incumbrance on a contingency where he may never be disturbed by it. This is the reasonable rule, for if he was to recover the value of an outstanding mortgage, the mortgagee might still resort to the defendant on his personal obligation and compel him to pay it, and if the purchaser feels the inconvenience of the existing incumbrances and the hazard of waiting until he is evicted, he may go and satisfy the mortgage and then resort to his covenant.”

In Hall v. Dean (13 Johns. 105) the incumbrance was a judgment, which the grantee paid before commencing the action, and the court held, citing Delawergne's case (supra), that the covenant being broken the grantee was only entitled to nominal damages without discharging the incumbrance, but having paid it he was entitled to recover the amount paid. The same rule was asserted in De Forest v. Leete (16 Johns. 123). In Stanard v. Eldridge (16 id. 255) the deed contained a covenant which was held to be in effect a covenant against inciimbrances. The covenant was broken because there was in existence, at the time of the conveyance,'a mortgage which covered the premises with others. At the time of the commencement of the action the plaintiff had not discharged the incumbrance nor had he suffered any disturbance in consequence of it, and the court held, on the authority of Delmergnd s case, that the plaintiff could only recover nominal damages.

In Dimmick v. Lockwood (10 Wend. 142) the court cites with approval Mr. Justice Yan Ness’ statement that the covenant against incumbrances is strictly a covenant of indemnity, and the grantee may recover to the full extent of any incumbrance upon the land which he shall have been compelled to discharge, and no more. The authorities referred to (supra) are also cited with approval, but in that case the grantee was actually evicted by the foreclosure of the incumbrance, and. the measure of damages was held to be the consideration paid by the grantee, with interest. In Grant v. Tallman (20 N. Y. 191) a grantee of land, Mdth covenants against incumbrances, in an action brought to recover the purchase money, alleged as a defense an outstanding incumbrance which his grantor had made a primary charge upon other lands which were of sufficient value to secure its payment. The court said: “ It is, I think, well settled that where the incumbrance has not been paid off by the purchaser of the land, and he has remained in quiet and peaceable possession of the premises, he cannot have relief against his contract to pay the purchase money, or any part of it, on the ground of defect of title. The reason is that the incumbrance may not, if let alone, ever be asserted against the purchaser, as it may be paid off or satisfied in some other way, and then it would be inequitable that any part of the purchase money should be retained.”

In this case it may be remarked in passing that the incumbrance was never asserted against the plaintiff, and the evidence is that since plaintiff was divested of his title through the foreclosure of a mortgage given by him, it has been satisfied in another way than by payment in an action brought to enforce it.

In Soule v. Dixon (1 N. Y. Supp. 697), and Barlow v. St. Nicholas National Bank (63 N. Y. 399), the cases of Delavergne v. Norris and Hall v. Dean (supra) were cited with approval upon the proposition that a covenantee will be restricted to nominal damages, if his possession has not been interfered with, unless he has paid the incumbrance.

To the same effect are Sedgwick on Damages (8th ed.), 976; 2 Sutherland on Damages (2d ed.), § 622, and JKawle on Covenants of Title (4th ed.), 288.

Our attention has not been called to any case in this State in which the authority of the cases we have referred to is questioned, and the .rule which they establish is that, under the covenant against incumbrances, where no fraud intervenes, the grantee, where an incumbrance exists, which no attempt has been made to enforce, can only recover nominal damages unless he shall have paid the amount. This plaintiff did not pay the amount of the incumbrance; his possession was not interfered with because of its existence, and no attempt was ever made to enforce it until after his title and that of his grantee had been divested by the foreclosure of a mortgage given by the plaintiff. The attempt which was then made -to enforce it has resulted in an adverse judgment.

The exceptions should be sustained and a new trial ordered, with costs to the defendants to abide the event.

Yan Brunt, P. J. :

I concur in the result, and in the result only, of the opinion of Mr. Justice Parker in this case. I do not think that the case of Landon v. Townshend (112 N. Y. 93; 129 id. 167) necessarily applies to this case, and the doctrine in that case should' not be extended beyond its actual requirements, as the result must of necessity be the unsettling of titles as to which there has heretofore been no question.

The mortgage of Davies to Manchester was to him individually. He is described as a party individually. It is true that in a subsequent part of the mortgage it is declared that the mortgage is executed and delivered to Manchester as trustee for certain firms, of which Manchester’s firm is one. The habendum clause, however, is: “ To have and to hold the above-granted, bargained and described premises, with the appurtenances, unto the said party of the second part (Manchester), his heirs and assigns, to his and their own proper use, benefit and behoof forever.” The premises were to be held by Manchester, his heirs and assigns — not his successors and assigns. In Landon v. Townshend, Waddell as assignee, virtute officii, took the title, and only in that way — a very different state of the proof from that presented in the case at bar.

O’Brien, J., concurred.

Exceptions sustained, new trial ordered, costs to defendants to abide event.


source: Caselaw Access Project

author: Per Curiam :

license: Public Domain

text:
    John Mason, Appellant, v. Tower Hill Company (Limited), Respondent.

      Negligence — damages for personal injuries — what is a prima facie case.

    It was shown upon the trial of an action, brought to recover damages arising from personal injuries resulting from the defendant’s alleged negligence, that the defendant employed a stevedore, by wfiom the plaintiff was hired, to discharge the cargo of a vessel, and for that purpose furnished and put in place a span, which was fastened to the masts of the vessel by ropes, which had been spliced; that the splice in one of the ropes drew out and the span fell, striking and injuring the plaintiff, who was engaged in operating the fall .attached to the span. Witnesses testified that splices, if well made, would not draw apart.

      jMeld, that the defendant, having undertaken to furnish and put the span in place, was required to exercise reasonable care to furnish one fit for the work for which it was to be used;
    That the undisputed evidence was that the splice was not well made, and' it devolved upon the defendant to show that it was free from negligence, as the plaintiff had made out a prima facie case.
    Appeal by the plaintiff, Jolm Mason, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the cleric of the county of New York on the 1th day of May, 1892, upon the dismissal of the complaint directed by the court after a trial at the New York Circuit before the court and a jury.
    The action was brought to recover damages resulting to the plaintiff, a longshoreman and freight handler, while in the employ of one P. IT. Walsh, a stevedore, by reason of the alleged negligence of the defendant in not furnishing safe machinery and appliances for the hoisting of freight from one of its steamships.

      Geoo'ge E. Ilcort and Nelson S. Oarr, for the appellant.

      John H. V. Arnold, for the respondent.
   Per Curiam :

September 24, 1888, the defendant corporation was the owner of the steamship Tower Hill, which was being unladen at a wharf in the city of Brooklyn by P. H. Walsh, a stevedore, who had contracted with the defendant to discharge the cargo. The plaintiff is by occupation a rigger and longshoreman, and, on the date mentioned, was employed by Walsh to assist in unloading the vessel. The cargo consisted of tin in pigs stowed below decks. A span,” consisting of wire rope at each end and a chain in the middle, was hung between masts about forty-five feet above the deck. To the center of this span a fall was attached by means of which the cargo was drawn on deck and carried to the wharf. The plaintiff was assisting in operating the fall, standing substantially under the span, which gave way, fell upon and injured him. The span was furnished and fastened to the masts by the defendant. The wire rope near where it was attached to the jigger mast had been spliced, and the accident was caused by the drawing out of this splice. Peterson, who was at work on the vessel when the accident occurred, testified: “ I found the splice drawn. * * * The span didn’t carry away, only the splice drawed. In other words, it had pulled out; that is what I mean. I did look at the splice. * * * I examined the ends of it (the span) and saw some splicing. I saw the men belonging to the ship splicing it. I hadn’t seen it when it was originally spliced there. I say I have seen some splicing before that done on other vessels. I saw plenty of splicing. I have done plenty of splicing myself too. There ought to be three turns taken; twice will do, but three ought to be taken — three times to make it safe to work at. Q. You say there was splices there ? A. No; it was taken once. So far as I could see I could tell it on the rope when it came down on deck; when the splicing drawed you could easily tell how many -times it was taken around on each strand. * * * There was nothing that I could see there to show that there was any weakness in the strand, but one of the splices drawed ; that is all. The men were splicing this span next morning when I got there; that was about six o’clock the next morning. "We started then to splice it; this is when we came down.”

The fact that the splice in the rope pulled out is the only evidence of negligence in the case. The defendant having undertaken to furnish and put the span in place, was required to exercise reasonable care to furnish one fit for the work for which it was to be used. "Witnesses testified that splices well made do not draw apart. The undisputed evidence is that this splice was not well made. Under this state of the evidence it devolved on the defendant to show that it was free from negligence if it could. The plaintiff made out a prima facie case.

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

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

■ Judgment reversed, new trial granted, costs to plaintiff to abide event.


author:
Yan Brunt, P. J.:
      0’BeieN, J.

text:
    Aaron S. Bright, Respondent, v. The Canadian International Stock Yard and Abattoir Company (Limited), Appellant.

      Ratification — knowledge of the facts essential to — broker’s comissions, when collect- ■ ‘ ible from a corporation.

    In. order to establish, a ratification it must be shown that the act alleged to constitute it was done with full knowledge of the facts. It is impossible for the directors of a corporation, who knew nothing about an agreement which the president of the company had undertaken to make in their behalf, to ratify it.
    In order that a broker may recover his commissions as against a corporation he is ■ bound to show that he was employed by it to do the thing he did, and it is entirely immaterial that he introduced the parties with whom the’ corporation negotiated and that it completed its negotiations with those parties, if he is unable to show an employment and an agreement to pay for his services. The rule which requires a party to give up those things which he has received under a contract, if he does not desire to be bound by it, has no application to such a case.
    O’Brien, J., dissenting.
    Appeal by the defendant, The Canadian International Stock Yard and Abbatoir Company (Limited), from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 26th day of May, 1894, upon the verdict of a jury rendered after a trial at the New York Circuit, and also from an order entered in said clerk’s office on the 13th day of June, 1894, denying the defendant’s motion for a new trial made upon the minutes.

      J. L. JSishojp, for the appellant.
    . .A. KVmg, for the respondent.
   Yan Brunt, P. J.:

This action was brought to recover a sum alleged to be due from the defendant to the plaintiff upon an alleged contract. It was strictly in, its nature an action by a broker to recover commissions alleged to have been agreed upon.

The contract sued upon was made by one Dodge, as the president ■of the defendant, with the jdaintiff. It was conceded upon the trial, and the court so charged the jury, that the president of the company had no power to make this contract on behalf of the corporation, and that it was necessary in order that the same might be binding upon the corporation that it should have been either directly or indirectly, confirmed by its board of directors; and the jury were further instructed that the directors of the corporation might with full knowledge of the facts ratify the action of the president, which in its inception was not binding upon them, and that if the company received the fruits of any contract obtained through the instrumentality of the plaintiff it was liable whether those fruits turned out to be of value or not.

The defendant raised the point, upon the termination of the plaintiff’s case, and also upon the completion of all the evidence and before the same was submitted to the jury, that there was no evidence showing this contract to be binding upon the company, and that there was no liability upon the part of the defendant to the plaintiff.

As has already been stated, it was conceded that there was no authority upon the part of the president to bind the corporation to such a contract, and the jury must have found its verdict either upon the theory that there was a ratification or that the corporation could not deny the contract because it had entered into agreements with other persons who had been introduced to its officers by the plaintiff.

There was no evidence of ratification, because it was not shown that the board of directors, at the time the corporation entered into the contracts which are claimed to have been brought about by the intervention of the plaintiff, knew of the existence of then alleged contract between the president of the corporation and the plaintiff. One of the principles of ratification is that it must be done with full knowledge of the facts, and if the directors did not know anything about this agreement which the president of the company attempted to make on their behalf it would be impossible for them to ratify.

If the contract is to be supported at all, it must be upon the theory that the defendant has received the fruit of the plaintiff’s labor, and is, consequently, liable in respect to a contract of which it had no knowledge.

The learned court fell into an error and made a misapplication of the principle as to the necessity of a party giving up those things which he has received under a contract if he does not desire to be bound by it. Such rule has no application to the case at bar. In order that the plaintiff in this action should recover as against this defendant he was bound to show that he was employed by it to do the thing which he did do. And it is entirely immaterial that he introduced the parties with whom the defe'ndant negotiated and that it completed its negotiations with these parties, if the plaintiff is unable to show an employment and an agreement to pay. Take the ordinary case of a broker. In order that he should recover he is bound to show employment, and that he was the procuring cause of a sale, if a sale be the subject which is involved. If the broker introduces one party to the other and a sale results, unless he is able to show employment, that fact does not entitle him to compensation. So in the case at bar, unless the plaintiff can show that he was employed to do the things he did, certainly the defendant, in ignorance of any liability arising from his intervention, cannot be held bound to an agreement in respect to which it was absolutely ignorant. The plaintiff has failed to show any employment upon the part of the defendant which was essential to his cause of action. And when it is stated that the defendant has not returned that which it received under its contract with the parties with whom it negotiated and contracted, it is clear that the rule has no application to the facts in the case at bar. How could it return ? In what way could it restore the situation ? That depended upon the will of other parties, and the defendant could be held to its contract by the other parties. It is not like a case where the sole question is as to a contract between two parties, in which one desires to rescind the contract, he keeping that which he has got under it. The defendant got nothing under the contract of the plaintiff with Dodge, and there is nothing that it can return which it has received under that contract. Therefore, it seems to us evident that there was a complete failure of proof when the plaintiff failed to show an original employment upon the part of the defendant or a subsequent promise to pay.

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

Foulett, J., concurred.

0’BeieN, J.

(dissenting):

The plaintiff and the president of the defendant company signed a contract, by the terms of which the plaintiff was to perform certain services, for which he was to receive some stock and money. That plaintiff performed his part of the agreement the testimony tended to show, and were it a contract between individuals, there can be no doubt that a verdict upon such evidence would not be disturbed. The defense is that the president of the defendant corporation had no power to make such a contract, such right being reserved to the board of directors.

The evidence tends to show that the defendant reaped advantage from plaintiff’s work, but though admittedly benefited thereby, it claims to have accepted such benefit without knowledge of plaintiff’s employment by its president. Evidence was also offered to show that in addition to the president, other officers knew of the employment. Apart, therefore, from the original authority, the question was submitted to the jury as to whether there had or had not been a ratification by the defendant, the court saying: “ I have also charged you, gentlemen, that a corporation may ratify a contract which was invalid in its inception, and it may do that in two ways : First, if knowing all the facts, it deliberately, by a vote of the directors, ratifies the transaction; and, secondly, by receiving the fruits which have grown out of the carrying out of the invalid contract.” I think this was a correct statement of law, and the jury having found in plaintiff’s favor upon the question of ratification, the verdict seems to me right and should not be disturbed.

Aside, however, from this, I think there was a question as to whether or not the company was not bound, notwithstanding the provisions of the by-law, by a contract that was made by its chief executive officer, in connection with a matter which presumably was within the scope of his authority, concededly made for the benefit and advantage of the corporation, which the latter reaped and which it holds and this I do not think it should be permitted to do without making just compensation to the plaintiff.

Having concluded that the judgment is right, I dissent from the con-, elusion reached by the majority in reversing it and ordering a new trial.

Judgment and order reversed, new trial ordered, with costs to appellant to abide event.


text:
    Samuel H. Terry, Appellant, v. Leopold Rothschild, Respondent.

      Action against a stockholder ■ — what the plaintiff must show as to the return of an execution.

    Two judgments were recovered by an individual against a corporation by default, and subsequently, after execution bad been issued and returned unsatisfied ^ upon such judgments, be commenced an action against a stockholder of the corporation to recover the amount thereof. Thereafter, and before the trial of the action against the stockholder, the two judgments recovered by default were opened ; trials were had upon the merits, which resulted in a recovery by the plaintiff in each action, in an amount, however, less than the amounts awarded to him by the judgments recovered by default. The plaintiff did not have the first two judgments modified so as to correspond with the recoveries, but instead he entered two new judgments upon which executions had not been issued at the time of tie trial of the action brought by him against the stockholder, nor was it shown upon the trial thereof that such judgments had not been paid.

      Held,, that the actiombrought against the stockholder was not maintainable, as instead of having the two judgments by default modified so as to correspond with the recoveries after the trial upon the merits, the plaintiff elected to enter two new judgments, which became the measure of the liability of the corporation to him;
    That the plaintiff, in order to be entitled to a recovery, against the stockholder, must show the issuance and return unsatisfied of executions, upon the judgments whiph were the foundation of the suit, and the issuance and return unsatisfied of the executions on the prior judgments was not sufficient.
    Appeal by tbe plaintiff, Samuel H. Terry, from a judgment of tbe Supreme Court in favor of tbe defendant, entered in tbe office of tbe clerk of tbe county of New York on tbe 20tli day of December, 1892, upon tbe dismissal of tbe complaint directed by tbe court after a trial before tbe court and a jury at tbe New York Circuit.
    In May, 1887, tbe “I. Herman Manufacturing Comjiany” was incorporated under chapter 40, Laws of 1848 — tbe Manufacturing Act — and tbe acts amendatory thereof, with a share capital of $10,000, divided into 10,000 shares of one dollar each. Tbe corporation was organized “ to manufacture Jersey and band-knit worsted goods, and anything connected therewith,” and was to exist during fifty years. Tbe number of its trustees was fixed at three. Salomon Herman, Leopold Rothschild and Isidor Herman were appointed trustees for the first year. The principal office or place of business of the corporation was located in the city and county of New York. Rothschild remained a. trustee and the president of the corporation until 1890.
    January 14, 1889, the_ plaintiff recovered a judgment by default against the corporation in the City Court of New York for $1,829.52 damages, and $18.55 costs, total, $1,848.07, for six items of indebtedness which the corporation incurred to the plaintiff between November 8, 1888, and December 20, 1888. On the same day (January 14, 1889) the plaintiff recovered a second judgment by default against the corporation in the City Court of New York, for $1,926.32 damages and $18.75 costs, total, $1,945.07, for four items of indebtedness which the corporation incurred to the plaintiff between November 23, 1888, and December 11, 1888. On the 14th of January, 1889, executions wrnre issued on the judgments to the sheriff of the city and county of New York, who returned them March 8, 1889, wholly unsatisfied. On March 9, 1889, this action was begun to charge the defendant as a stockholder, pursuant to section 10 of said act, for the amounts of those judgments. May 10, 1889, the defendant answered herein. September 10, 1889, upon the motion of the defendant, the judgments were vacated, and the corporation was permitted to defend the actions, but, on appeal to the General Term of the City Court, the order was, November S, 1889, modified so as to permit the corporation to defend the actions, and the judgments to stand as security. The actions were subsequently tried on their merits, the plaintiff recovering in the one represented by the judgment first mentioned, $930.35 damages and $262.46 costs, total, $1,192.81, and in the action represented by the second judgment, $1,610.06 damages and $292.39 costs, total, $1,902.45. Judgments on these recoveries were entered December 13, 1889. No executions have been issued on the judgments last rendered, which represent the claims of the plaintiff against the corporation and its stockholders.
    The number of shares of stock owned by the defendant was not shown, but it was shown that he had paid $3,000 into the corporation for shares, and that only $4,000 of the capital fixed at $10,000 had been paid in by the. shareholders. It was also shown that no certificate of the payment of the capital stock had been made and recorded, as required by the eleventh section of the act, and that at some time a receiver had been appointed for the corporation, but for what cause, when he was appointed, or whether the corporation was in the hands of a receiver at the time of the trial was not shown.

      John R. Abney, for the appellant.

      Ma/rh M. Schlesinger, for the respondent.
   Per Curiam :

The judgments recovered January 14, 1889, which this action was brought to enforce against the defendant as a stockholder, were not in existence at the time of the trial of this action (December 13, 1892), but they had been superseded by the two judgments entered December 13, 1889, after a trial of the actions on the merits. By the trial on the merits the damages recovered by the first judgment of January 14, 1889, were diminished by $899.17, and the damages recovered by the second judgment of January 14,1889, were diminished by twenty-three dollars and eighty-seven cents. The plaintiff did not have the first two judgments modified so as to correspond with the recoveries, as he might have done, but instead he elected to enter new judgments, which became the measure of the liability of the corporation to him. The corporation’s liability, by the judgments of December 13, 1889, arose several months after this action was begun, and no executions have been issued on them, nor was it shown that they had not been paid.

Section 24 of the act provides that a stockholder shall not be held personally liable for the debt of the corporation until a judgment has been recovered thereon and an execution shall have been returned unsatisfied in whole or in part. The issuance and return unsatisfied of an execution on some other judgment does not satisfy the statute; it must be on the judgment which is the foundation of the plaintiff’s suit.

The judgment should be affirmed, with costs.

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

Judgment affirmed, with costs.


author: Yan Brunt, P. J.:

text:
    Lawrence J. O’Connor, Respondent, v. Horace Waldo, Individually and as Administrator, etc., of Francis W. Waldo, Deceased, and Another, Appellants, Impleaded with Others.

      Trustees — power to alienate the trust estate.

    A trustee has no general power of disposition of a trust estate, but must derive such power from the instrument creating the trust, or, under special circumstances, such power may be implied; but where there is in the instrument creating the trust a designation of the method in which the trust estate is to be sold, if at all, the trustee cannot convey any title except in the manner thus specified in the trust deed. The existence of provisions of the trust deed, designating a certain method for the sale of the trust property, necessarily excludes all other powers in respect to the alienation of the trust estate by the trustees.
    Appeal by the defendants, Hoi’aee Waldo, individually and as administrator, etc., of Francis W. Waldo, deceased, and another, from a judgment of the Supreme Court ,in favor of the plaintiff, entered in the office of the clerk of the county of New Y ork on the 20th day of March, 1893, upon the decision of the court rendered after a trial at the New York Special Term.

      Ghas. E. Miller, for the appellant Waldo individually and as administrator.

      John A. Deacky, guardian ad litem of Rhinelander Waldo, appellant.

      J. R. Abney, for the respondent. ■
   Yan Brunt, P. J.:

This action was brought against Horace Waldo individually as one of the devisees of Sarah C. H. Waldo, deceased, and as administrator of Francis W. Waldo, deceased, and against Rhinelander Waldo individually as one of the heirs of a devisee of Sarah C. H. Waldo, deceased, to collect out of real property in the city of New York a certain debt claimed to have been due by said Sarah C. H. Waldo at her death. The action was brought upon a bond alleged to have been executed in South Carolina on the 27th of April, 1870, by Sarah C. H. Waldo and delivered to Martin L. Wilkins as special commissioner appointed by the Court of Common Pleas for Charleston County, S. C. Wilkins is alleged to have assigned this bond to Elizabeth II. Jervey, guardian of Hannah II. Trapier, on the 16th of January, 1871. The said bond fell due on the 12th of January, 1873. It is further claimed that under a marriage settlement dated February 11, 1878, the bond was assigned to Theodore D. Jervey as trustee. On the 10th of April, 1884, it is claimed that Theodore D. Jervey as trustee assigned the bond to the plaintiff, and this action was commenced upon said bond in July, 1884.

Various questions have been presented upon this appeal, which it is not necessary to consider. The only one which it is proper to discuss is that challenging the title of the plaintiff. It is claimed that the assignor of the plaintiff being a trustee, had no power to assign the bond in question to the plaintiff in the manner attempted to be done by him. The said trustee acquired his title, if any, by reason of a marriage settlement entered into between Arthur P. Jervey of the first part, Elizabeth II. Jervey and Hannah II. Trapier of the second part and Theodore D. Jervey of the third part. This settlement, after reciting that a marriage was shortly to be solemnized between Arthur P. Jervey and said Hannah H. Trapier, with the consent and approbation of said Elizabeth II. Jervey, the parent and guardian of said Hannah H. Trapier, who were the parties of the second part, and that it was agreed that the property of the said Hannah H. Trapier should be conveyed and settled, in trust, in the manner thereinafter provided, conveyed, in consideration of said agreement and of said intended marriage, certain property, including the bond in question, to Theodore D. Jervey, the party of the third part, in trust to permit and suffer the said Hannah H. Trapier, for and during the term of her natural life, to hold the said property to her own separate use, and if her said proposed husband should survive her, then in trust to permit and suffer the said Arthur P. Jervey to take and receive the income and profits thereof during the term of his natural life, and from and after the death of both making other disposition of the property. The deed further provided that if, at any time thereafter, the said Arthur P. and Hannah II., his intended wife, during their joint lives, or the said Hannah, in case she survived, should be minded to dispose of the said property, or any part thereof, for the purpose of changing the investment, it should be lawful for said Theodore D. Jervey, his heirs or assigns, upon the written request of the said Arthur and Hannah, or of the said Hannah, the survivor, to sell and dispose of said property, or any part thereof; provided, however, that the net proceeds of such sale should be invested forthwith by said Theodore D. Jervey, his heirs or assigns, in his or their names as trustees, etc.

It seems to be apparent, upon a consideration of this trust deed, that the trustee had no power to make any conveyance of this trust property, except upon the consent of his eestui que trust. In the case at bar it is not claimed that any such consent was obtained. All that the record discloses is a simple assignment executed by the trustee. The rule has been too well established to need the citation of authorities here that a trustee has no general power of disposition of a trust estate, but must derive such power from the instrument creating the trust, or in special circumstances it has been held that such power might h# implied. But where there is a designation of the method in which the trust estate is to be sold, if at all, there can be no question but that the trustee cannot convey any title except in the manner provided for by the trust deed. The provision in the deed necessarily excludes all other powers. At the trial, when this assignment from the trustee was offered in evidence, it was objected to as being immaterial, incompetent and irrelevant. It was clearly incompetent, under the provisions of the trust deed, to prove a conveyance of any title to the plaintiff of the bond in question.

Without discussing the other points raised it would seem that this objection is fatal to the judgment appealed from, and that the same should be reversed and a new trial ordered, with costs to the appellants to abide the event.

O’Brien and Parker, JJ., concurred.

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


text:
    William M. Patterson, Appellant, v. Samuel T. Knapp, Respondent.

      Sixty days prescribed of Code of Oiril Procedure, § 1019, for the making of a decision— effect of astipulation, extending the time — oral agreements, not considered by the court — rule 11.
    The object of section 1019 of the Code of Civil Procedure is to induce the early decision of cases by referees, and" to put it within the power of litigants to compel referees to decide promptly cases submitted to them; and an extension of the time within which a referee may decide the issues before him, for a definite period, does not operate to extend the time indefinitely, or to put it beyond the power of either party to terminate the reference in case the Teferee fails to decide within the time stipulated.
    The object of rule 11 of the General Rules of Practice is to relieve courts from deciding the disputes arising between attorneys, as to whether or not a particular agreement was entered into in respect to the conduct of cases, and courts will not, as a rule, undertake to decide whether or not an oral agreement was entered into between the attorneys of the parties to an action.
    Appeal by the plaintiff, "William M. Patterson, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 10th day of December, 1894, vacating and setting aside the report of a referee and the judgment entered thereon against the defendant.
    On the 4th of January, 1890, by an order duly made and entered, the issues in this action were referred to a referee to hear and determine. January 30, 1892, the trial was begun and was continued from time to time until. October 12, 1893, when the case was finally submitted to the referee for decision. On November 15, 1893, the attorneys for the parties, by a written stipulation, extended the time in which the decision might be made for sixty days from December 1, 1893, and thereafter by a like stipulation the referee’s time was extended for thirty days from January 30, 1894; and on March 28, 1894, by a like stipulation his time was again extended for thirty days from that date, which extended time expired April 27, 1894, since when no extension of time, oral or written, has been given. On the 18th of September, 1894, defendant’s attorneys served a written notice on the plaintiff’s attorney and on the referee, terminating the reference, pursuant to section 1019 of the Code of Civil Procedure. On October 8, 1894, the referee made his report, which was served on the defendant’s attorney on the next day, and November 16, 1894, judgment thereon was entered in favor of the plaintiff for $5,354.66 damages and costs.

      E. H. Benn, for the appellant.
    AC B. Scmborn, for the respondent.
   Per Curiam :

Section 1019 of the Code of Civil Procedure provides: “ Upon the trial by a referee of an issue of fact or an issue of law, or where a reference is made as prescribed in section one thousand and fifteen of this act, the referee’s written report must be either filed with the clerk, or delivered to the attorney for one of the parties, within sixty days from the time when the cause or matter is finally submitted; otherwise, either party may, before it is filed or delivered, serve a notice upon the attorney for the adverse party that he elects to end the reference. In such a case the action must thenceforth proceed as if the reference had not been directed; and the referee is not entitled to any fees.”

It is urged in behalf of the appellant that the time given the referee by statute in which to make his report having béen extended, the parties lost their right to terminate the reference by notice, and Thiesselin v. Rossett (3 Abb. [N. S.] 54) is cited in support of the proposition. It was so held at Special Term; but the General Term in considering the case sought other grounds for its affirmance of the order; and in so far as the case holds that an extension of time to a referee suspends forever the operation of the section it is overruled. The object of the section was to faciltate the early decision of references, and to put it within the power of litigants to compel referees promptly to decide cases submitted to them; and an extension of the referee’s time for a definite period does not operate to extend the time indefinitely or put it beyond the power of either party to terminate the reference in case the referee fails to decide within the time stipulated. The rule contended for would be wholly inconsistent with the terms of the written agreement entered into between the attorneys and violative of the purposes of the section.

The attorney for the plaintiff and the referee assert that when the case was submitted it was agreed between the attorneys that the referee might have all the time he desired in which to decide the case. No memorandum of any such agreement was entered in the minutes of the referee, and the attorney for the defendant and his clerks deny that such an agreement was made. The object of rule 11 of the Supreme Court is to relieve courts from deciding the disputes arising between attorneys as to whether or hot a particular agreement was entered into in respect to the conduct of the case, and we shall not undertake to decide in this case whether or not an oral agreement was entered into between the attorneys.

The order is affirmed, with ten dollars costs and disbursements.

Present — YaN BetjNt, P. J., O’BbieN and Follett, JJ.

Order affirmed, with ten dollars costs and disbursements.


author: PARKER, J.:

text:
    Frank E. Kinsman, Appellant, v. Harvey Edward Fisk and Others, Respondents.

      Pledge by a corporation to a director — ratification by a corporation of the canceling .of a trust of which it is the beneficiary • — ■ estopped from denying its ownership of stock — a consenting stockholder of the corporation also estopped.

    While the law looks with disfavor upon contracts made between a director or officer of a corporation and the corporation, because it cannot accurately measure the influence of a trustee with his associates, a pledge by a corporation as collateral for a loan actually made by an officer or director thereof to the corporation, is not void by reason of the relation of the parties. If the pledge would be valid if made to an outsider, it is none the less valid because made to a firm of which a director of a corporation is a member.
    Although a corporation, the beneficiary named in a trust agreement, was not a • formal party to an agreement canceling such trust agreement, yet if, so far as it was possible for it to do so, the corporation confirmed and ratified the canceling agreement, its acquiesence in and ratification of the same is as effectual as if it had been a formal party to the contract.
    If a cestui que trust accepts stock from its trustees, holds out the same as its own, and requests a loan thereon for its benefit, it cannot allege in defense .of a demand for the payment of such loan that the stock did not belong to it. If the cestui que trust is a corporation, a stockholder thereof is not in any better position than the corporation if he was a consenting party to the transaction through all of its stages.
    Appeal by the plaintiff, Frank E. Kinsman, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the county of New York on the 17th •day of August, 1894,- denying the plaintiffs motion made upon the return of an order to show cause why the temporary injunction granted in the action should not be continued, and vacating and dissolving the same in all respects.

      JEclmtmd Luis Mooney, for the appellant.

      Charles Steele and Edward C. Perkvns, for the respondents.
   PARKER, J.:

The plaintiff sues as a stockholder in behalf of the defendant cbmpany, claiming that an application to the directors to sue would be unavailing.

His motion for an injunction pendente lite having been denied, he .seeks a review of the decision on this appeal. The defendant, the Kinsman Block System Company, in ’December, 1893, Vas without funds to carry on its business, and had incurred obligations amounting to about $4,000. It had no resources except its treasury stock, which was unsalable, and it became imperatively necessary that money should be raised in some manner or else the company must fail. Accordingly, at a meeting of the board of directors held December 21, 1893, it was resolved that the company should ■endeavor to borrow money on the pledge of its treasury stock, and the following resolution was passed:

“ Whereas, In view of the fact that the Company has no money in its treasury, and is in immediate need of $4,000 to meet current bills and settlements;

, “ And whereas, In order to prosecute its work the company will be in need of further, advances from time to time, until some paying ■contracts can be secured :

“ Therefore, be it resolved, That the president and treasurer are hereby authorized to pledge all or any part of the treasury stock for moneys which they may need to borrow for company purposes from time to time, and that they be and hereby are authorized to give the notes of the company for such advances, and to sign such- notes and authenticate them with the official seal.”

As the invention had not proved a success which the corporation was formed to put on the market, and it had no property whatever, except the patents, and bad already expended a large sum of money, its stock bad no market value, and little if any real value. It was only possible, therefore, to obtain a loan from Harvey Fisk & Sons, who were interested because they had already invested a considerable amount of money in the corporation. They loaned the money on the company’s demand notes secured by a pledge of treasury stock.

"When the $4,000 had been used more was needed to conduct the experiments, and more was furnished under like conditions until $21,500 had been loaned.

After a time the loan was called, but the company could not pay it, although several extensions were given it for the purpose.

That Harvey Fisk & Sons were then and still are willing to take the money due to them, and surrender the stock is unquestioned.

The appellant urges in the first place that the pledge was void because a director of the defendant company who participated in the meeting at which the resolution was passed, and was influential in procuring Harvey Fisk & Sons to make the loan, was a member of that firm.

While the law looks with disfavor upon contracts made between a director or officer of a corporation and the corporation, because it cannot accurately measure the influence of a trustee with his associates, no case has been brought to our attention which goes so far as to hold that a pledge as collateral for a loan actually made by an officer or director to the corporation is void.

The authorities cited by the appellant (Munson v. Syracuse, G. & C. R. R. Co., 103 N. Y. 59, and Hoyle v. Plattsburgh & Montreal R. R. Co., 54 id. 314) certainly do not support his contention.

As appears from the resolution which we have quoted, the directors resolved to pledge as collateral for loans to be made its treasury stock.

Harvey Fisk & Sons made the loan and accepted the pledge. The corporation needed the money and used it. The pledgees have asked merely that the loan be paid. They seek no advantage by the contract of pledge but simply such protection as it affords. They have, on several occasions, extended the time ot payment, and it appears that they are ready and willing to return the stock if the loan made be paid.

It is conceded that the pledge would be valid if made to an outsider ; it is none the less valid because a director of the corporation induced his firm to mate a loan which no one else would make. (Duncomb v. N. Y., H. & N. R. R. Co., 88 N. Y. 1.) It is further urged that the pledge was invalid because contrary to a certain trust agreement which the parties attempted, but unsuccessfully, as appellant contends, to terminate. It appears that prior to 1892, the plaintiff being the patentee of certain electrical inventions and owner of the patents issued therefor, sought the assistance of Harvey Fisk & Sons in their exploitation.

The plaintiff having represented that the sum of $20,000 would be ample to demonstrate the practicability and usefulness óf his invention, Fisk & Sons, on the faith of such representation, agreed to provide that amount by a nominal subscription, at par, for 200 shares of the new company’s stock.

The plaintiff was anxious that the Fisks should agree to sell enough of the company’s stock to raise $100,000, but they refused to do so, on the ground that they could not offer such stock to their customers until its value had been practically demonstrated. They accordingly declined to, and did not assume any obligation whatever, except to advance the sum of $20,000, which the plaintiff had represented was sufficient to demonstrate the value of his patents and make the company’s stock marketable.

The original negotiation contemplated that a certain amount of the new company’s stock should be left in its treasury for working capital, but when the agreement was - actually formulated it was deemed best, instead of returning such stock directly into the company’s treasury, to place it in the name of trustees, so that no question might be raised as to the stock being full paid, and also in order that the plaintiff and the Fisks might obtain a commission on future sales of such stock.

Accordingly, the agreement provided for the transfer to this plaintiff and Pliny Fisk, as trustees, of 6,940 shares of the stock of the company upon the following trusts: “ One thousand shares thereof shall be offered for sale by the parties of the second part (Harvey Fisk and Sons) at par, and each subscriber thereto shall receive, as a bonus out of the said 6,940 shares, one other share of stock for each share which he may purchase; ten per cent of the proceeds of such sales shall be paid as received to the party of the first part, and five per cent thereof may be retained by or paid to the parties of the second part as a commission upon such sales; the balance shall be paid over by the said trustees to the treasurer of the corporation for its own use.

“ All stock in the hands of the trustees not sold or disposed of, as aforesaid, shall be held by the trustees for the use of the said corporation, and from and after the sale of the said thousand shares such remaining stock shall be sold by the trustees in such amounts as may be directed by the said corporation; five per cent upon the par value of said shares so sold shall be paid as received to the party of the first part; the parties of the second part shall receive a commission of five per cent upon the par value of the stock so sold, and the balance of the proceeds shall be paid over to the treasurer of the said company for the use thereof, excepting, however, two hundred and fifty shares, etc. * * * The said trustees shall not vote upon the said stock either personally or by proxy.

“ The said trustees are to receive no compensation for their services as such. In case, by death or otherwise, either of them, or any successor to the said trust, shall cease to be a trustee a successor may be appointed, in writing, by the said company.”

The company was duly organized with the plaintiff as president. Harvey Fisk & Sons paid the incorporation tax, paid'the subscription of the several original subscribers to the stock, and also paid into the treasury $20,000, less the agreed commissions, as a nominal subscription for 200 shares of stock at par. An opportunity was obtained to place the experimental plant upon the Evanstown division of the St. Paul railroad. The plaintiff undertook the management of the business, but after spending a great deal of time and a large portion of the company’s funds on the plant the work resulted unsuccessfully. The Fisks thereupon entered into negotiations with •the plaintiff, looking either to his or their withdrawal from the •company, in the course of which they offered to sell their stock for the amount of money actually advanced by them to the'conxpany.

This was not accomplished, but finally an arrangement was made by which the Fisks bought from the plaintiff for cash a sufficient amount of his stock to give them a majority of the outstanding stock of the company, and plaintiff in turn agreed to resign from the presidency and accept the place of vice-president or consulting engineer with a salary of $5,000 per year. One of the objects of the new arrangement was the cancellation of the contract of January 14, 1892, which contained the provision relating to the so-called trust stock, which we have quoted, and the new agreement accordingly provided that the old contract should be canceled and terminated, except as to the provision reserving foreign rights of patents to the plaintiff. The new contract was fully consummated, and as a part of it, and for the purpose of putting an end to the trust stock provision, a certificate for such shares, which had previously stood in the name of the plaintiff and one of the Fisks as trustees, was indorsed by both of them and transferred to the company, and was by the plaintiff himself surrendered to the company for cancellation, a new certificate being issued in the name of the company and placed in the company’s treasury. If it be assumed that the agreement of January 14, 1892, constituted a valid trust, it was terminated on October 11, 1893, by the consent of all parties concerned, the beneficial interest of the company in the stock held by the trustees becoming merged in its legal title, which was acquired by the transfer of the stock.

It was a trust which could be terminated by the combined action of the parties creating it, the trustees and the cestui que trust, if the result aimed at was, as in this case, for the benefit of the cestui que trust. To accomplish that purpose the parties to the original contract relinquished their right to commissions, the attempted limitations imposed were withdrawn, and so much of the stock as remained passed into the possession and control of the company by transfers duly made.

All parties interested acquiesced, and the company proceeded to make use of the stock to meet its necessities.

It is true that the-company, the beneficiary, was not a formal party to the canceling agreement, but so far as .it was possible for it to do so, it confirmed and ratified the agreement by accepting the surrender of the old trust certificate and issuing a new one in its own name, and its acts of acquiescence and ratification were as effectual as if it had been a formal party to the contract. (Butterfield v. Cowing, 112 N. Y. 486-491.)

But if it should be assumed that, as between the trustees and the cestui que trust, the trust agreement was not terminated, and the title to the trust stock vested in the cestui que trusty as we have held, still the cestui que trust, having accepted the stock from the trustees as its own, held it out to another as such, and requested a loan thereon for its benefit, it cannot allege in defense of a demand for payment that the stock does not belong to it, nor is the plaintiff, who was a consenting party to the transaction through every stage of it, in any better position than the ■ company, because he happens to be one of its stockholders.

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

VAN BeuNT, P. L, and 0’BkieN, L, concurred.

Order affirmed, with ten dollars costs and disbursements.


author: Parrer, J.:

text:
    Esther Lea Davis, Appellant, v. Simon Davis, Respondent.

      Punishment for contempt — not dependent upon the legal service of the order disobeyed— motion denied solely on the ground of want of power.

    While the general rute is that the court will not punish a party for contempt of court in refusing to obey its order, until after an order has been personally served upon him, the court has power to do so, provided that it is made to appear that the party had knowledge of the making, and of the terms, of the order disobeyed.
    In an action for divorce, brought by a wife against her husband, which was commenced by the personal service of the summons and complaint and an order of arrest upon the defendant, who, having been held in bail subsequently, after appearing and answering, departed from the State and continued to reside in another State, the defendant is liable to be punished for contempt in failing to obey an order directing the payment by him of alimony, where he had knowledge of the existence of such order, and it had been personally served upon him in the State where he was residing.
    The court has power to proceed to punish as for a contempt a party who, white not legally served with a copy of the order disregarded or violated by him, proceeds in such violation of it with full knowledge of its existence, and if a motion to punish such person for contempt is denied, solely on the ground of want of power to make the same, the order denying the motion will be reversed upon appeal.
    Appeal by tlie plaintiff, Esther Lea Davis, from an order of the Supreme Court, made at the New York Special Term and entered in. the office of tbe clerk of the county of New York on the 28th day of May, 1894, denying the plaintiff’s motion to punish the defendant for contempt of court.

      Damid May, for the appellant.

      John G. Ola/rTi, for the respondent.
   Parrer, J.:

The Special Term denied plaintiff’s motion to punish the defendant as and for a contempt of court, because of his refusal to pay alimony awarded by an order of the court, on the ground that such order had not been served upon him within this State.

The suit was for a divorce, and was commenced by personal service of the summons and complaint and order of arrest on defendant, who was held to bail in the sum of $1,000. Subsequently he appeared and answered, after which he departed from this State and has since continued to reside in the State of Massachusetts.

The question is, whether the court, having acquired jurisdiction of the defendant in this action, is nevertheless powerless to proceed against him for his alleged contempt in violating an order of the court, because by absenting himself lie has rendered it impossible to serve the order upon him within this State.

That lie had knowledge of the existence of the order of the court requiring him to pay alimony is clearly established.

It was personally served upon him in the State where he is at present residing, after which he made payment of the sum awarded to the plaintiff for costs, and also of a weekly allowance for alimony for a period of about eleven months when he refused to make further payment.

"While the general rule is that the court will not punish a party for a contempt of court in refusing to obey its order until after the order has been personally served upon him, the power of the court to do so is established, provided it shall be made to appear that the party had knowledge of the making and the terms of the order disobeyed. (People ex rel. Platt v. Rice et ad., 80 Hun, 441; affd.. 144 N. Y. 249.)

In that case an order was made that,a mandamus issue, but none was, in fact, issued, nor was the order ever served upon the parties proceeded against as for a contempt for a failure to obey it, but, it appearing that they bad knowledge of the order, it was held that they could nevertheless be punished for contempt because of their refusal to obey it. The General Term in the prevailing opinion, after discussing a number of cases, said:

“ It is true that these cases I have referred to are all cases of violations of injunctions, but I can see no difference in principlek between the violation of an injunction, or of an order for an injunction, and the violation of an order for a writ of mandamus; the principle is the same; it is the order of the court that has been disobeyed, and it has been brought equally into contempt, whether that order be for an injunction, mandamus, writ of prohibition, or any other writ or order which the court has power to grant or issue.”

As this case established the authority of the court to proceed against a party, as and for contempt, who, while not legally served with a copy of the order, proceeds in violation of it with full knowledge of its existence, and the court having denied this motion solely on the ground of want of power, it follows that the order must 'be reversed.

In Fairchild v. Fairchild (11 Cent. Rep. 150) the court reached a like conclusion, and we deem it not out of place to extract from the very satisfactory opinion of Vice-Chancellor Bird, the following:

“ The order issued requiring the defendant to show cause ^vhy he should not be attached as for contempt in not paying the alimony and counsel fee which he had been directed to pay by the former order, which had been served on the solicitor of the defendant, but not on the defendant personally because of his absence from the State. The question is whether under the rules and practice of the court it can proceed in the matter or not.

"While the practice is to take no steps in such cases, without a personal service, when that can be had, yet, if the defendant absents himself and renders such service impossible, the court will not be balked in its proceedings and pi’evented from making a final order or decree in case service be made upon the solicitor of the defendant who has appeared in the case and represented him, or, in case there be no solicitor, the order or notice be left with the clerk of the court. Such has been the established practice, I infer, for a long period of time. (Rider v. Kidder and De Manneville v. De Manneville, 12 Ves. 202, 203.)

"While in sucli case the court is solicitous in protecting every right of the defendant, and also to avoid the commission of any wrong against him, yet, when the defendant puts it beyond the power of the court to make further inquiry, the end of such solicitude has been answered, and every principle which either equity or justice demands, satisfied.”

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

YaN BeüNT, P. J., and O’BeieN, J., concurred.

Order reversed, with ten dollars costs and disbursements.


author: 0’BbieN, J.:

text:
    James Smith, Appellant, v. Philip G. Hubert and Another, Respondents.

      Set-off of an assigned claim for rent against a claim for boa/rd — construction, of a contract.

    The plaintiff, in an action brought to recover an amount that the defendant agreed to pay for hoard furnished to him and to others at his request, was liable for rent which had accrued under a lease to a third person -who had assigned her claim therefor to the defendant in the action prior to the commencement thereof.

      Held, that the amounts due the respective parties could be set off respectively against each other, apart from the question whether there was an agreement that the plaintiff’s claim should be applied on account of the rent due from the plaintiff.
    In construing a contract in order to determine whether the word “proceeds” is to he construed the same as "net profits” or “receipts” or “gross receipts” resort must be had to the contract itself for the purpose of determining the meaning which the parties themselves intended should be given thereto.
    Appeal by the plaintiff, James Smith, from a judgment of the Supreme Court in favor of the defendants, entered in the office of the clerk of the county of New York on the 29th day of May, 1894, upon the verdict of a jury rendered by direction of the court after a trial at the New York Circuit.

      Albridge O. Smith, for the appellant.

      Clifford W. Harbridge, for the respondents.
   0’BbieN, J.:

On April 1, 1890, the defendant Hubert leased to one Eva Brumfield a hotel at Stamford, Conn., known as the Hamilton House, for three years from April 1, 1889, at the yearly rent of $2,200. The lessee also agreed to furnish board to the lessor, his family or friends, occupying the second floor of the Swiss cottage, at the rate of five dollars per week for each person. On May 6, 1890, Eva Brumfield, the above-named lessee, entered into an agreement with the plaintiff in terms as follows:

“This agreement, made this sixth day of May,.1890, between James Smith, of the city, county and State of New York, of the first part, and Eva Brumfield, of the same residence, of the second part:

“ Witnesseth, that the said party of the first part agrees to devote his entire time and attention from the opening of the summer season until the close thereof, in running as a hotel the premises known as The Hamilton House and Cottage,’ at Stamford, Conn.; that he will, prior to the opening thereof, fully atid properly stock said house out of his own funds and keep the same invested during the entire season, and oversee and attend to the improvements and repairs to be made thereon, viz., the outside of said house and stable shall be painted, and a fireplace constructed in the hall of the main hotel, and such other necessary repairs and improvements as may be deemed advisable to make by the. parties hereto, the same not to cost a sum exceeding five hundred dollars, which said improvements and repairs shall be paid for out of the gross proceeds arising from the business conducted at the said premises, and all of the said expenses shall be paid on or before the first day of August, 1890.

“ And the party of the first part further agrees to furnish to the party of the second part a suitable room and board from the opening until the said house shall be closed; and the said party of the first part further agrees to pay out of the proceeds of said house the sum of two thousand two hundred dollars as rent therefor during said season, in three equal payments on the 1st and 15th of July and the 30th day of August, 1890 ; and at the close of said season to pay to the said second party one-third of the net profits derived from such business; and the said second party shall have the right, at all proper times, to examine the books, accounts, etc., kept in such business, so that she may at all times be advised concerning the same.

And the party of the first part further agrees that Messrs. Hubert and Frohman shall retain the entire second floor of the cottage above mentioned, and shall have board for the period of twelve weeks for four persons at the rate of five dollars per week for each person.

“ And the party of the second part, for and in consideration of the covenants and agreements hereinbefore specified on the part of the party of the first part, agrees to and with said first party that she will permit him to have possession of said premises, and the control thereof for the purposes above mentioned, and will accept and receive the performance of the first party’s covenants in full and complete payment for the same, and will by her influence in all manner aid in the success of the business so to be conducted.

“ And, whereas, it is expected that certain lots and portions of said premises may be sold by the said second party during the- continuation of this agreement, in case said sales are effected, the said -second party agrees to pay to the said first party one-half of the net commissions made by her on such sale.

“ It is further agreed that the party of the first part shall have the right to continue the terms and conditions of this agreement for a period covering the summer season of 1891 and 1892. He shall, however, make his election so to continue this contract on or before the first day of November, 1890.

“ In witness whereof the said parties have hereunto set their hands and seals the day and year first above written.

“JAMES SMITH,

“EYA BRUMFIELD.”

During the summer season Hubert and Frohman, and the latter’s wife, child and maid, occupied the cottage and took their meals at the hotel. In addition a number of actors and actresses brought by Erohman also boarded, at the liotel, for whom it was alleged and decided that defendants were liable, so that at the end of the season the total account against the defendants was $807.50, to recover which the present action was brought.

The answer set up two defenses: First, that whatever plaintiff furnished to defendants and other persons at defendants’ request should be applied on the rent due during the season of 1890 from Eva Brumfield to defendant Hubert, and that the rent accruing was more than enough to pay the indebtedness alleged in the complaint; second, that by virtue of the agreement between the plaintiff and Miss Brumfield, the former became responsible to pay the rent to the latter out of the proceeds, and that all her interest in that contract she has assigned to the defendants, and they counterclaimed the $2,200, the amount of the rent, against the plaintiff’s claim and demand. The plaintiff’s reply denied the agreement as to the set-off of board against rent, and also denied that there were any proceeds from the season’s business applicable to rent.

At the close of the case the court directed a verdict for the difference between the $2,200, amount of rent due, and the plaintiff’s claim.

There is no appeal from any order denying a motion for a new trial, but, upon the exception to the direction of a verdict, the legal question is presented as to whether or not the construction given by the court to the contract between the plaintiff and Miss Brumfield was correct, and if so, whether the defendants, by virtue of the assignment to them of Miss Brumfield’s rights thereunder, are entitled to counterclaim against him, and obtain an affirmative judgment for the difference. We say these are the real questions upon this appeal, for though there was a controversy in regard to whether or not plaintiff’s claim was to be applied on the rent due from Miss Brumfield to Mr. Hubert, there being upon this point a conflict of evidence, it would have been necessary, if this entered into a determination of the rights of the parties, to submit it as a question of fact to the jury. If, however, the plaintiff was liable to Miss Brumfield for the $2,200 rent, and she assigned her claim to the defendants prior to the commencement of the action, then, under well-settled principles of law, apart from the question whether plaintiff’s claim was to be applied on the rent due from Miss Brumfield to Mr. Hubert, tbe court was justified in directing a verdict for tbe defendants for the difference between the respective claims.

The plaintiff insists that he was entitled to go to the jury upon the question of whether or not the counterclaim had been assigned to the defendants before the bringing of this action; and he refers to the testimony of one of the defendants (Hubert) who at first testified that it was, delivered immediately after this suit was begun,” but who subsequently modified this by saying he did not know whether the suit was begun or not when the assignment was made; and then when his attention was called to the date of the assignment, which was November 1, 1890, he stated positively that it was executed on that day. The summons in this action is dated December 18, 1890; and while Miss Brumfield said she did not know whether the suit was begun or not when the assignment was made, there is nothing in the record that contradicts or destroys the effect of the instrument itself, or the positive statement of Hubert that it was executed upon the day it bears date, which was concededly prior to the commencement of the suit.

Under the agreement the question is whether the plaintiff and Miss Brumfield were partners in the venture, or whether the plaintiff leased the Hamilton House from her. This consideration, together with the meaning of the word proceeds,” as used in that portion of the agreement providing that the rent was to be paid out of the proceeds of said house,” must determine its true construction.

A reference to the first clause might furnish an argument in favor of the contention that they entered into the enterprise as a joint venture, and being interested in its profits, might be regarded as partners; but the absence of any covenant upon the part of Miss 'Brumfield to share losses, together with the fact that all the covenants are affirmative ones on the part of the plaintiff, strengthens the construction which is enforced by the latter part of the agreement, that the arrangement was one by which, upon certain conditions, he obtained the lease of the premises from her. Thus it reads that she “ will permit him to have possession of said premises and the control thereof for the purposes above mentioned, and will accept and receive the performance of the first party’s covenants in full and complete payment for the same, and will, by her influence, in all manner aid in the success of the business so to be conducted.”

Our construction of this agreement, therefore, is that it was a lease from Miss Brumfield to the plaintiff, and that the consideration therefor contains, among other things, an agreement on the part of the plaintiff that he will “ pay out of the proceeds of said house the sum of two thousand two hundred dollars as rent therefor. * * * ”

It appears that the receipts of the house — or the proceeds, if that word is used synonymously with receipts — were more than sufficient to pay. the rent, although it likewise appears that there were no profits in the business, the expenses being more than the receipts. Upon this last is placed appellant’s contention that he was not liable for the rent except in the event that there were profits out of which the rent would be payable. In determining the question whether the word “ proceeds ” is to be construed the same as “ net profits,” or as “ receipts,” or “ gross receipts,” resort must be had to the contract itself for the meaning which the parties themselves intended should be given thereto.

It will be noticed that in regard to the improvements and repairs that were to be made by the plaintiff, the provision is that they were to be paid for out of the “ gross proceeds arising from the business conducted at the said premises; ” and further, that at the close of said season the plaintiff was to pay to Miss Brumfield one-third of the net profits derived from such business.” If the rent was payable out of profits only, why were. not apt words used ? ¥e thinfc it was intended to use the word “ proceeds,” out of which thesrent was to be paid, as equivalent to “ receipts ” or gross proceeds; ” and in this we are confirmed, no.t only by the fact that when net profits were intended those specific words were used, but also by the attitude of the parties with respect to the property itself. ¥e are of opinion that the construction given by the court was the correct one; and it appearing that, by virtue of the assignment of such contract from Miss Brumfield to the defendants, by which they secured a claim against plaintiff for $2,200 before this action was brought, they were entitled to counterclaim this sum, and were entitled to judgment therefor, less the amount of plaintiff’s claim.

The judgment accordingly should be affirmed, with costs.

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

Judgment affirmed, with costs.


author: O’Brien, J.:

text:
    Heinrich Michelsen, Respondent, v. Amelia L. Spies, as Executrix, etc., of Francis Spies, Deceased, Appellant.

      Adjournment of the trial of an action• — what is a legal excuse for a party’s absence — action, on a promissory note — an insufficient allegation as to payment.

    'Where a material issue is raised by the defendant in an action, she is entitled to present her side of the case; and if she is not present, but offers a legal excuse for the absence from the trial, the cause should be adjourned.
    A physician’s affidavit to the effect that a serious operation prevents the defendant’s presence at the trial, and her testifying thereat, supplemented by the affidavit of the defendant’s counsel that the defendant is the sole witness to a certain transaction or agreement relied upon to prove an affirmative defense alleged, and is a material witness as to the same (if none of the statements contained in .the affidavits are controverted by the plaintiff, and it does not appear that he would be in any way injured by the delay), furnish a legal excuse entitling the defendant to an adjournment of the trial.

      Semble, that in an action brought upon a promissory note made by the defendant’s testator, an allegation of the answer that a certain sum was paid thereon, as an advance on any amount of pro rata dividend that might become due and payable to the payee on a final distribution of the testator’s estate, is not equivalent to an allegation that such sum had been paid on the note. In case the estate is insolvent, the sum thus paid is to be credited upon and in reduction of any pro rata dividend, which dividend is to be computed upon the entire original claim and not upon the balance thereof remaining after deducting such advance.
    Appeal by tbe defendant, Amelia L. Spies, as executrix, etc., of Francis Spies, deceased, from an order of tbe Supreme Court, made at tbe New York Special Term and entered 'in tbe office of tbe clerk of tbe county of New York on the 10th day of December, 1894:, denying tbe defendant’s motion to open tbe default and set aside tbe inquest taken in tbe action.

      Jamies N. Warner, for tbe appellant.

      Jlamüton M. Squier, for the respondent. 1

   O’Brien, J.:

Tbe action is brought upon a demand promissory note for $12,000 made by defendant’s testator to one Ferrand, transferred to plaintiff after maturity. Tbe defendant admits the making of tbe note, but claims that she advanced and paid to Ferrand for tbe estate of tbe testator the sum of $600, which payment was made at the request of said Ferrand as an advance on any amount of pro rata, dividend that might become due and payable to said Ferrand upon the note on a final distribution of the property in the hands of the defendant as executrix under the will of the testator.

Upon the cause being reached for trial, the defendant presented a physician’s affidavit to the effect that a serious operation would prevent her presence at the trial and testifying, which was supplemented by that of the defendant’s counsel, that the defendant was the sole witness to the transaction or agreement between her and Ferrand regarding the payment of the $600, and was a material witness to prove such affirmative defense of payment. None of the statements contained in these affidavits was controverted by plaintiff, nor does it appear that he would have been in any way injured by the delay. Upon these affidavits a motion for an adjournment was made until defendant could testify, which motion was denied. Subsequently a motion was made before the trial judge to have the default opened and a new trial granted, which was likewise denied, upon the ground that plaintiff offered to admit the payment of $600 if pleaded. The affidavits furnished a legal excuse entitling the defendant to an adjournment if her testimony was material and necessary to an issue in the case.

The issue raised was, whether the $600 was a payment on the note, or a pro rata, dividend on the debt. That these are not the same thing is evident from a consideration of the effect of such payment if we assume that the estate of the testator was insolvent and unable to pay the debt in full. In one event it would be but a payment on the indebtedness, leaving the balance upon which the creditor could obtain a dividend out of the estate; while, on the other hand, if the entire debt were presented and allowed, and a dividend less than the whole amount were to be applied upon plaintiff’s claim, then the defendant would be entitled to a credit upon such dividend for the $600 already paid. This issue being raised, and it being a material issue, the defendant was entitled to present her side upon the trial. Not, however, being present, but offering a legal excuse, the cause should have been adjourned.

If the plaintiff is entitled to any benefit obtained contrary to the legal right which the defendant had to an adjournment, it should only be upon tlie assumption that she could maintain her defense that the $600 was not a payment on the note, but was a pro rata dividend on the debt.

The order should be reversed, with ten dollars costs and disbursements, and the motion granted, with ten dollars costs, unless the plaintiff stipulates to enter a judgment for the amount of the note, with interest thereon, without costs, and thereupon to indorse as a payment thereon a sum equal to $600, with interest from October 13, 1893, in which case the order is affirmed, without costs to either party.

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

So ordered.


author: O’Brien, J.: Parker, J.:

text:
    Franklin Bank Note Company, Plaintiff, v. Charles W. Mackey, Defendant.

      Agency — evidence admissible to establish it — if the facts are undisputed a question for the court — if disputed, one for the jury.

    It is impossible to lay down, any inflexible rule by wbicb it can be determined wbat evidence is sufficient to establish an agency in any given case; but it may be said in general terms that whatever evidence has a tendency to prove the agency is admissible, even though it be not full and satisfactory, in which case it becomes the province of the jury to pass upon it.
    "Where the facts are undisputed the court, upon the trial of an action in which the question of agency is involved, will determine as a matter of law whether they create an agency; otherwise the question of agency is one of fact for the determination of the jury.
    Motion by the plaintiff, the Franklin Bank Note Company, for a new trial on a case containing exceptions, ordered to be heard at the General Term in the first instance, upon the verdict of a jury in favor of the defendant, rendered by direction of the court after a trial at the New York Circuit on the 5th day of October, 1893.

      William J. Gibson, for the plaintiff.

      Henry I. Burnett, for the defendant.
   O’Brien, J.:

This action was tried at Circuit and a verdict directed for defendant, and the exceptions were ordered to be heard in the first instance at General Term. The action was for work, labor and services in engraving and printing railway bonds and stock certificates for a corporation, the defendant having guaranteed payment. The defendant admitted the agreement and guaranty, but claimed that the work was not to be proceeded with until orders to that effect were given, which was never done, and that, therefore, no liability was created.

The plaintiff was a corporation engaged in the business of engraving and printing, and the defendant was interested in the formation of a railway corporation. In May, 1887, a man by the name of Hall, a stranger to plaintiff, applied to it about furnishing the bonds and stock certificates, stating that he had a bond to engrave and wanted to' know the price for which plaintiff would do it. After several visits, plaintiff gave a price, but Hall was informed that plaintiff would not go on with the work without a guaranty; and Hall subsequently having proposed defendant as guarantor, the plaintiff’s manage]’ prepared in writing a proposal and guaranty, which was signed by such manager and the defendant. "When models were selected, they -were taken by Hall to defendant and by him brought back to the plaintiff with a request to its manager to “ go on with the work, except the rate of interest.” According to defendant’s version, when the proposal or guaranty was signed, defendant fully explained to’ Hall the condition of the company, that it might go through and it might not, and that it was to be understood that no work was to be done until the defendant was ready. This, defendant states, was again repeated to Hall when the models were brought for approval, and it was with this understanding, that plaintiff would do no work until further orders, that he indorsed upon the models, “ Model approved, May 24, 1887, as far as it goes.”

It will be seen, therefore, that the work for which suit is brought was done contrary to the express direction of the defendant to Hall, who, instead of delivering his message to plaintiff, told the latter to go on with the work. Plaintiff proceeded with the work and engraved so much of the plates and stock certificates as it was then able, and sent proofs of the same to defendant, which were never returned; and it is for the value of the work done between the submitting of the models and the sending of the proofs that the action is brought.

The right to recover is dependent upon the solution of the question as to which of the parties Hail represented as agent in the transaction, the undisputed testimony of plaintiff’s manager being that Hall brought the models back from the defendant and told him to go ahead, engrave and print the bonds and stock certificates, except the rate of interest; while the defendant and Mr. Barnes testified without contradiction that the defendant told Hall that he did not want any work done until the plaintiff received further orders. This Hall never communicated to plaintiff.

The court directed a verdict upon the ground that, as a matter of law upon the evidence, Hall was the agent of the plaintiff; and whether this conclusion was justified and the rulings upon evidence were correct, are the questions presented upon this appeal.

The plaintiff or its manager had never seen Mr. Hall until he called about the bonds, and never had any dealings with him before or since, and never expressly authorized him to represent the plaintiff. On the other hand, the defendant had known Hall since he was a boy, knew his father, and Hall had introduced defendant to Mr. Barnes, who was to be the chief engineer of the road, and with whom defendant had his office. The defendant does not appear, however, to have had any relation with Hall beyond such acquaintance, nor does it appear that he authorized Hall to represent the company or himself in the dealings with the plaintiff; but both plaintiff and defendant understood that Hall was engaged in arranging for the engraving of the bonds, for which he was to receive a commission from plaintiff. This latter fact — who was to pay the commisssion — is significant, but by no means conclusive, and it will be noticed upon the evidence as it stood that the question whether Hall was the agent of the plaintiff or the defendant, or of both, was a close one (and one which we do not think could be determined as a matter of law, presenting as we think it did a disputed question of fact). As said in Mechem oh Agency (§ 105): “ Where the facts are undisputed the court must determine whether they create an agency. * * * ” (§ 106): It is impossible to lay down any inflexible rule by which it can be determined what evidence shall be sufficient to establish an agency in any given case; but it may be said in general terms that whatever evidence has a tendency te prove the agency is admissible, even though it be not full and satisfactory, as it is the province of the jury to pass upon it.” It was important to both parties to be permitted to introduce all competent evidence that they might have which would tend to clear up the disputed question as to whether Hall was the agent of the plaintiff or of the defendant.

Hpon the examination of plaintiff’s manager, who it is admitted was the person principally representing the plaintiff in the transaction, these questions were asked him : “ Hid you ever give Mr. Hall any authority to represent the company ? ” “ Q. Did Mr. Hall ever bring any other matter to your company ? ” “ Q. Has he ever brought any other work or job since this work % ” These were objected to and the objections sustained, and exceptions taken.

When the defendant was examined the following questions were put to him: “ Q. Did he (Mr. Hall) make known to you at that time whether or not he was authorized by this Franklin Bank Note Company to submit propositions ? ” “ Q. State what took place at that time when he (Mr. Hall) submitted these other propositions, as to what information you gave him about the ■condition of the enterprise,” etc. Though these questions were ■objected to, the defendant was permitted to answer, going fully into what Hall had stated to him as to his being authorized, and also as to all the conversations that had taken place between the defendant and Hall in the absence of the plaintiff. And such rulings were accentuated when upon the examination of defendant’s witness, Barnes, he was asked to tell what was said by Mr. Hall and Col. Mackey in his presence, though as he stated he could not recollect whether any one was present from the plaintiff company or not. This was objected to but was also answered.

These rulings we regard as inconsistent. It may have been a good objection to the first question presented to plaintiff’s manager, as to whether he had ever given Mr. Hall any authority, that this called for a conclusion; but the same objection did not apply to the other questions, which sought to elicit information as to what dealings were had between Hall and the plaintiff, and what his relation was to the company. If the answers to these were to be excluded, then certainly the defendant should not have been permitted to answer the question as to statements of Hall in regard to his being authorized to act for the plaintiff, or to go fully into the conversations had between them in the absence of the plaintiff. We do not hold that permitting the defendant and his witness to give such testimony was error, but we think that granting leave to present such testimony on defendant’s part was clearly inconsistent with the ruling made which excluded the plaintiff from giving similar evidence. If it had been established, when the objections to plaintiff’s questions were sustained, that Hall was the agent of the plaintiff, then what occurred or was said between the plaintiff and its agent would not be binding upon the defendant, and would be competent to show what occurred between plaintiff’s' agent and the defendant even though the plaintiff was not present. But when the rulings excluding plaintiff’s testimony were made it had noi been established that Hall was plaintiff’s agent, the questions being directed to that very point of agency, and, therefore, the inconsistency appearing in the rulings cannot be reconciled.

We think for the errbrs committed in these rulings the exceptions should be sustained and the motion for a new trial granted, with costs to plaintiff to abide the event.

Parker, J.:

Plaintiff and defendant each claim to have regarded Hall as the agent of the other. And the case turned on the question whether he was the agent of the one or the other.

On this question plaintiff offered material evidence, which it was entitled to have considered with the other facts proved, which was excluded.

I agree that for this error a new trial should be ordered.

Yak Brunt, P. J., concurred.

Exceptions sustained, new trial ordered, with costs to plaintiff to abide event.