author:
Daniels, J.:
      Brady, J.

text:
    FREDERICK ALMY and Others, Respondents, v. MICHAELIS SIMONSON and THEODORE WEISS, Appellants.

      Auction sale —■ evidence of the value of the goods sold, — sale within a reasonable time.

    The court will take judicial notice of the fact that a sale at auction, in the course of the mercantile affairs of a large city, is the most conformable to usage and the method best adapted to determine the market-price for which goods at the time can be sold.
    In an action to recover the difference between the contract-price at which the defendants had agreed to purchase certain goods of the plaintiffs and the amount obtained therefor at auction, after a tender of the goods to the defendants, which was refused by them, and, after a notice that they would be so sold at auction, giving the time and place of such sale, and stating that the defendants would be held liable to the plaintiffs for the expenses of the sale and the deficiency arising thereon, the price received upon such auction sale is binding upon the defendants. (Brady, J., dissenting upon the ground that the sale was not made within a reasonable time)
    The question whether the sale was made within a reasonable time is to be determined by the facts and circumstances of each particular case; and where the party making the sale acts in good faith, to the best of his judgment, without any unnecessary delay, the price obtained at the sale will be aecepted by the court as the actual value of the goods thus sold. (Brady, J., doubting.)
    Appeal by the defendants from a judgment, entered upon the verdict of a jury rendered at the New York Circuit in favor of the plaintiffs, which judgment was entered in the office of the clerk of the county of New York on the 31st day of May, 1888, and also from an order denying the defendants’ motion to set aside the verdict of the jury and for a new trial, which was entered in the said clerk’s office on the same day.

      Bwmtel J. Orool&s, for the appellants.

      Frelirng II. Smith, for the respondents.
   Daniels, J.:

The verdict was recovered for the difference between the amount obtained upon a sale at auction of cloakings, contracted to be sold by the plaintiffs to the defendants, and the price for which they were to be received. For a quantity of the cloakings it was held ¡by the court that the plaintiffs were not entitled to recover, for the reason that the contract of sale for that quantity was within the statute of frauds. As to other quantities they were received and paid for by the defendants, but the .residue, included within the contracts of sale, was refused, although they were offered and tendered to the defendants during the month of October, 1886. The bills it was agreed should be dated on the first of October of that year, although the contracts for the sales were previously made and entered into, and the indebtedness was finally to become due in sixty days from the 1st of October, 1886. After the goods, which were refused, were, in this manner, tendered to the defendants, about the middle of October, 1886, and on the second of the following month of December, the plaintiffs gave a written notice to the defendants that they would be sold at auction, at noon, on the seventh day of the month at No. 9 Greene street, in this city, at the store of Underhill & Scudder, and that the defendants would be held for the expenses and the deficiency. After this notice was served the goods were advertised in two public newspapers; and the sale took place, the defendants not being present, and giving it no attention. And at the trial it was held that the prices produced by this sale were to be accepted and acted upon by the jury as the amount, after deducting expenses, to be credited upon the purchase-price, and that the defendants werejto be held liable for the residue. There is no question, neither was there any made at the trial, but that the sale was regularly made in good faith. But the court was asked to direct the jury that there was no evidence warranting the sale of the goods at public auction in the manner in which it was done and detailed in the evidence. This was declined, and tho defendants excepted.

The court was also asked to direct the jury that they could not estimate the damages, if they came to the conclusion that the defendants were liable in any form, or arrive at a verdict, based upon the result of that sale. This was also declined, and. the defendants excepted. That there was any irregularity whatever in the sale was not insisted upon, or suggested, by either of these requests. Neither was it suggested that the sale had not been made as expeditiously as, under the circumstances, the defendants had the right to expect it would take place. But what seems to have been intended, although it was most obscurely expressed, if, indeed, it was expressed at all, was that the sale of the goods at auction was not binding upon the defendants, and afforded no criterion by which the amount for which the verdict might be rendered could be gauged. It is true that it was held in Pollen v. Le Roy (30 N. Y., 549), that the sale should be made according to the usages of the trade. But it was not assumed or intimated that the ordinary usages of trade for the sale of merchandise would not justify a sale at auction. The defendants themselves intimated no objection to the right to sell in that manner, or to the justice of the sale itself, in the way of ascertaining the market-value of the goods.

And in Sands v. Taylor (5 Johns., 395), on the authority of which this latter case was substantially decided, the sale was made at auction, and it was held by the court to furnish the criterion by which the amount of the verdict might legally be regulated. In Fisher v. Libby (2 Sup. Ct. [T. & C.], 672), the direct question was presented whether a sale of goods made at auction would bind the vendee as to the amount he should pay by way of damages for the non-performance of the contract of purchase, and it was decided that it would. And no authority appears to have arisen at variance with the correctness of this conclusion. The court may well take notice, as the fact is one generally known and accepted in trade, that a sale at auction in the course of the mercantile affairs of a large city will be the most conformable to usage, and the best adapted to determine the market-price for which the goods at the time could be sold. It is true that the sale to bind the vendee for the difference should be made within a reasonable time. And that was generally held to be the law in Smith v. Pettee (70 N. Y., 13), and it was so acted upon in Hayden v. Demetz (53 id., 426.) But what shall be considered a reasonable time has never been certainly fixed by the authorities. That is to be judged and ascertained by circumstances; and where the party making the sale acts in good faith and to the best of his judgment, without any unnecessary delay, the price obtained at the sale will be accepted by the court as the value of the goods then sold. (Lewis v. Greider, 51 N. Y., 251; Dustan, v. McAndrew, 44 id., 72.) In the case of Samds v. Taylor a longer delay intervened than that between the tender of these goods and the time when the auction actually took place. And in Lewis v. Greider (supra) the barley was sent from the interior of the State to the city of New York, and there sold after quite a long period of delay, and the sale was held to be binding and operative upon the defaulting vendee.

There was evidence upon the trial that the market for the goods had a downward tendency from about the fifteenth of November. But it was not proved that any substantial depreciation took place in their value between the middle of November, at which date the defendants were chargeable with no unreasonable delay, and the time when'the sale was made. If there had been a substantial depreciation after the refusal of the defendants to receive and pay for the goods before the sale was made, that should have been definitely proved upon the trial, and upon that proof the defendants might then have raised the question whether the loss, in that manner accruing, should be borne by themselves or the plaintiffs. As the case was tried, no such question was raised. Neither were there any grounds upon which the position could be successfully taken. Beyond that, the plaintiffs appear to have acted on the supposition that they had no right to sell the goods on the responsibility of the defendants until the time for the payment of their purchase-price had expired. "Whether this would have been a legal excuse for the delay before or after the middle of November, and up to the seventh of December, if the price had fallen in that time, was an objection not made at the trial nor presented by the requests to charge. If it had been, the point, as a question of fact, would, no doubt, have been submitted to the decision of the jury. As the case was disposed of, no injustice whatever has been done to the defendants. They failed to fulfill their agreement for the purchase of these goods, and refused to receive them, and became liable for whatever difference there was between the price they were to pay and the market-price at the time when the goods were offered to them. Up to that time a depreciation had taken place. "Whether it increased in any sensible degree, after that and before the sale, was not proven. By the sale the extent of the liability of the defendants was exhibited, and no more than that was secured to the plaintiffs through the verdict..

The judgment and order should be affirmed, with costs.

Yan Brunt, P. J"., concurred.

Brady, J.

(dissenting):

It appears that on the 16th of June, 1886, and on July nineteenth of the same year, the plaintiff sold to the defendants certain pieces of merchandise at prices agreed upon, which were to be delivered as called for by the defendants, and to.be paid for sixty days from October 1, 1886, less five per cent. It also appeared that the entire purchase of June sixteenth was delivered and paid for, excepting twenty-seven of one lot, and of the purchase of the nineteenth of July, all were delivered excepting seventy-two pieces, which the defendants declined to receive upon the ground that they were too late for their business. On the eighteenth of October the bills for the goods not delivered were inclosed in a letter from the plaintiffs, and were dated October 1, 1886, payable at sixty days, but were returned by the defendants to the plaintiffs on the same day, accompanied by this statement in writing: “We return these bills with thanks, but cannot accept them, goods coming too late now.” On the second of December, the term of credit having expired, the plaintiffs wrote defendants that unless they paid the 'balance due they should, at a stated time and place, sell the goods at auction for their account. No payment having been made the goods were advertised and sold at auction December 7, 1886, of which the defendants had due notice, and the amount realized on such sale was credited on their account. The defendants admitted upon the trial that the purchases of June sixteenth, and a part of the alleged purchases on July nineteenth, were made, claiming, however, that the purchases of the sixteenth of June were conditional, namely, that they were hound to pay only for those pieces for which they sent. The issues created by these conflicting statements of the transactions were submitted to the jury, who found in favor of the plaintiffs for the difference between the prices of the pieces that were absolutely sold to the defendants and the amount realized at the auction sale thereof, with interest. The amount claimed by the plaintiffs was reduced, in consequence of the ruling of the court, as to thirty pieces of merchandise ordered upon July nineteenth, for which the plaintiffs could not recover as the purchase was within the statute of frauds.

It may be said, m Umine, that upon the dispute as to the character of the contract, in relation to the goods, whether ordered conditionally or otherwise, the verdict of the jury is conclusive, there being-no such preponderance of evidence in favor of the defendants’ version as would justify the court in disturbing the verdict. The only question of import, therefore, presented for our consideration, arises upon an exception to the charge made by the learned judge below. It appears, from the evidence given on behalf of the plaintiffs by their salesman, resulting from his redirect-examination, that the market-price for the goods, which the defendants declined to accept, had fallen off in price in the month of October, and that it was difficult to effect sales at that time; and to a question asked by the court, namely, “ What was the market-price % ” answered, “ In the vicinity of a dollar for what we call the 1 browns,’ and eighty-five cents for the ‘ blacks.’ ”

The defendants, on the question of value, introduced evidence to show that the market-price of the goods in question began to decline about the fifteenth of November. That they were worth less in November than in October, and less in December than in November; that in October the market-price depended upon the demand, and that in that month there was always a demand for the goods, the season being in that month at its height; and the witness also, on that subject, stated that goods of that class, were more salable in October than in June or July. Whatever conflict this may create on the subject of the market-value in October, it appears, from the evidence of the salesman of the plaintiffs, that in October the goods had gone off in price, and although the defendants absolutely declined to accept the undelivered goods on the eighteenth of October, which were then tendered to them, the plaintiffs made no sale of them, and, so far as it appears, made no attempt to sell them until the seventh day of December at public auction, and this at a time when it would appear there was little or no demand for them.

Assuming these facts to be true, the delay of the plaintiffs in the exercise of their right to resell the merchandise was unjustifiable. Where that right is to be exercised it is incumbent upon the vendor to sejl for the best price that can be obtained at the earliest practicable period. (Tilt v. The La Salle Silk Mfg. Co., 5 Daly, 27; Pollen v. Le Roy, 30 N. Y., 549.) And this rests upon the rule stated in Pallen v. Le Roy (30 N. Y., 556), that “ the difference between tbe agreed price of an article and its market-value at tbe time of delivery is the actual damage sustained by a vendor upon tbe refusal by a vendee to accept tbe property sold, and tbe vendor may ascertain or liquidate tbis amount by a resale, taking all proper measures to secure as fair and favorable a sale as possible.”

Notwithstanding these facts and tbis leading principle, tbe learned justice in tbe court below in charging the jury said to them: “ Tbis question about tbe value of the goods in October has nothing really to do with this case, except so far as to furnish a motive for the defendants in refusing to comply with tbis contract, if they made one, because tbe law gives a man tbe right when there is an absolute sale of goods, the law gives tbe vendor a right, upon tendering tbe goods if they are refused, to take them and sell them at auction, giving tbe parties notice of tbe time and place of sale, and upon such sale tbe vendee is hable for any deficiency, and that was the course a'dopted here. It was a perfectly legal and proper course for tbe plaintiffs to take if there was a contract, and the defendants become absolutely liable for tbe difference between tbe contract-price and tbe amount realized on tbe sale, to which an exception was duly taken.”

It will be observed that tbe right to make tbe sale is unlimited in time by these observations, and that tbe value of tbe goods in October was disregarded, although twelve days of that month still remained after tbe refusal to accept the goods, and within which time they could have been sold at auction, and, when, according to the evidence, there was a demand for them and they were salable. And tbe effect ,also, of tbe charge was to assert tbe absolute legality of tbe sale at auction which took place, and tbe absolute liability of tbe defendants for tbe difference between tbe contract-price and tbe amount realized on tbe sale.

In addition to tbis, it may be said that tbe authority to sell at auction, unless evidence be given of such a custom, or of some unavailing effort to sell them at private sale and in tbe usual course of business, is not free from doubt. (See Pollen v. Le Roy, supra, 556, 557.) And, further, that the proposition declaring tbe defendants, as to value, absolutely bound by such a sale, unless there be no other evidence of value, is also questionable as a legal proposition.

The result of this consideration of this element of the case is, that the charge, under the facts and circumstances, was erroneous.

The judgment must, therefore, be reversed and a new trial ordered, with costs to appellants to abide event.

Judgment and order affirmed, with costs.


source: Caselaw Access Project

author: Barrett, J.:

license: Public Domain

text:
    DAILY REGISTER PRINTING AND PUBLISHING COMPANY, Appellant, v. THE MAYOR, Etc., OF THE CITY OF NEW YORK and THE NEW YORK LAW JOURNAL PUBLISHING COMPANY, Respondents.

      Designation of a lawjowrnal under chapter 656 of 1874 — the power conferred hythat act is continuous — a presiding justice of the Supreme Court may exen'dse it— New York Constitution, a/rt. 6, § 10.
    The power of designation of a law journal, conferred upon the judicial officers specified in chapter 656 of the Laws of 1874, is continuous. Any designation thereunder is made subject to the continuous exercise of the power of designation whenever, in the judgment of the designating officers, the service would be benefited thereby.

      Weed v. Tucker (19 N. Y., 432) followed.
    The power of judging when the proper occasion has arisen for a new designation of a law journal, under the provisions of that act, is necessarily involved in the grant thereby given, by implication, of continuous power.

      People ex rel. Brown v. Woodruff (32 N. Y., 355) distinguished.
    The duty imposed by this act, upon the presiding justice of the Supreme Court and others, of designating a law journal in which certain matters shall be published, is nothing more than an! additional duty attached to the judicial office, and is not obnoxious to the prohibition of section 10 of article 6 of the Constitution of the State of New York prohibiting justices of the Supreme Court from holding any other office or public trust.
    Appeal from a judgment in favor of the defendants, rendered upon a trial at the New York Special Term of issues of law raised by the plaintiffs demurrer to the separate answers of the defendants; whereby it was adjudged that the designation of the defendant, the New York Law Journal, on the 9th day of May, 1888, was a valid exercise of power by the judicial officers who made it,, and that such designation operated as a revocation of the designation of the plaintiff on the 21st of December, 1814.

      The action was brought to recover for certain publications made by the plaintiff under a designation made under chapter 656 of the Laws of 1874. (Preface to Laws of 1875, page 4.) The answer of the defendant, the mayor, aldermen and commonalty of New York, after making certain admissions, alleged as follows:

      Nvrvth. As and for a further and separate defense to the complaint, this defendant alleges that, on or about the 9th day of May, 1888, Charles H. Yan Brunt, then being the presiding justice of the Supreme Court of the first judicial department, Richard L. Larremore, then being the chief judge of the Court of Common Pleas, in and for the city and county of New York, and David McAdam, then being the chief justice of the City Court of New York, made and executed under their hands a certain instrument in writing, in the following words, namely:
    “In pursuance of an act of the legislature, entitled ‘An act relating to the publication of judicial proceedings and legal notices in New York city and county,’ approved by the governor December 17, 1874, being chapter 656 of the Laws of 1874 (Preface to Laws of 1875, page 4), and in pursuance of section one .thousand and ninety-three of an act of the legislature entitled ‘An act to consolidate into one act and to declare the special and local laws affecting public interests in the city of New York,’ passed July 1, 1882, being chapter 410 of the Laws of 1882, we, the majority of the justices and judges therein named, do hereby designate ‘ The New York Law Journal,’ a daily law journal published in said city by ‘The New York Law Journal Publishing Company’ of New York, as the paper in which shall hereafter be published the calendars of the courts of record, held in and for the city and county of New York, together with every notice or advertisement in legal proceedings which may be required by law to be published in one or more papers in said city and county. This designation to take effect only on said company filing with the comptroller of the city of New York a contract, duly executed by said company, that the charges for the printing of the calendars of said courts in said papers shall not exceed the sum of four thousand dollars per annum.
    “ The designation heretofore made of ‘ The Daily Register’ as the daily law journal in which shall be published the said calendars and legal notices, pursuant to said act of the legislature, entitled ‘An act relating to the publication of judicial proceedings and legal notices in New York city and county,’ approved by the governor December 17, 1874, which designation bears date December 21, 1874, is hereby revoked.
    “Dated New York, Mwy 9, 1888.
    “0. H. YAN BRUNT, •
    “ Presiding Justice of the Su/preme Court of the First Judicial P&pa/rtment.

    “R. L. LARREMORE,
    “ Chief Judge Cou/rt of Common Pleas, City aoid Coxmty of New York.

    “DAYID Me AD AM,
    “ Chief Justice of the City Cov/rt of New York.

    “A copy.
    “ James A. Elack,
    “ Clerk.”

    "Which said instrument was, on the day of May, 1888, filed in the office of the clerk of the city and county of New York. That said instrument having been so executed and filed, the New York Law Journal Publishing Company, being the company referred to in the foregoing instrument, and the publisher of the New York Law Journal, in said instrument mentioned, for the purpose of conforming to the requirements of said instrument, duly executed and filed with the comptroller of the city of New York an instrument in the following words:
    “ In accordance with the requirements of the designation made this day by the Honorables Charles H. Yan Brunt, Presiding Justice of the Supreme Court of the first judicial district; Richard L. Larbemore, Chief Judge of the Common Pleas, and David McAdam, Chief Justice of the City Court, whereby the New York Law Journal is designated as the paper and law journal provided for by ‘An act relating to the publication of judicial proceedings and legal notices in New York city and county,’ approved December 17, 1874, and in pursuance of a resolution of the board of trustees of the New York Law Journal Publishing Company, the proprietor of the said paper so designated, duly passed by that company;
    “ It is hereby stipulated and agreed, that the right conferred by the provisions of said act, to claim a sum not to exceed the maximum amount of fifteen thousand dollars per annum for the publication of the calendars therein named, is hereby waived, and in the place and stead thereof no amount exceeding the sum of four thousand dollars shall be claimed by or on behalf of that company for the material and services provided for by that act, and for claims for the publication of the calendars aforesaid, however much in excess thereof the rates fixed by the act for such publication may be proved to be ; -and the said company agrees to make any further contract to carry out this provision that shall be required by the said judges making the designation under said act.
    “In witness whereof, the said New York Law Journal Publishing Company has caused its corporate seal to be hereunto affixed, and these presents to be subscribed by its president, this ninth day of May, one thousand eight hundred and eighty-eight.
    [seal.]
    “JOHN M. BOWERS,

      “President New Porlt Law Journal Publishing Go.”

    In presence of Williams C. Bowers.
    Here followed a certificate of acknowledgment.
    That thereupon the said The New York Law Journal Publishing Company caused to be inserted and published in said pajier, known as The New York Law'Journal, between the 28th day of May and the 28th day of June, 1888, the calendars of the courts of record, held in and for the city and county of New York, together with every notice- or advertisement in legal proceedings which may be required by law to be published in one or more papers in said city and county, and still continues to make such publications. That said The New York Law Journal Publishing Company claims that, by virtue of said instrument, so made and éxecuted by said presiding justice of the Supreme Court of the first judicial district, the chief judge of the Court of Common Pleas, and the chief justice of the City Court, on May 9, 1888, above set forth, and the contract so made by said The New York Law Journal Publishing Company, and filed with the comptroller of the city of New York, as above set forth, the said law journal, designated as the Daily Register, ceased to become the daily law journal in which said calendars and legal notices are required by law to be published, pursuant to the act of the legislature in that behalf above referred to, and that said daily law journal, known as The New York Law Journal, thereupon became, and now is, the only legally designated paper, or law journal, in which, by the act above-mentioned, such calendars and legal notices must be published, and that this defendant, by reason of the said alleged designation of said New York Law Journal, has become and is liable to said The New York Law Journal Publishing Company for the compensation provided to be made for the publication of the calendars aforesaid, under and in pursuance of the requirements of said alleged designation of the New York Law Journal and of the contract executed by said The New York Law Journal Publishing Company, and filed with the comptroller of the city of New York, as above set forth.

      Tenth. That at all the times mentioned in the ninth paragraph of this answer, and prior thereto, the said New York Law Journal was, and now is, a daily law journal published in the city of New York by The New York Law Journal Publishing Company, which is the proprietor of the same.

      Eleventh. Denies each and every allegation of the supplemental complaint not hereinbefore admitted or denied.
    Wherefore, this defendant demands judgment that the complaint herein be dismissed, with costs. '
    HENRY R. BEEKMAN,

      Oowisel to the Corporation.

      Noah Davis (Nnevals <& Perry, attorneys), for the appellant.

      John M. Bowers (Platt d? Bowers, attorneys), for the Law Journal, respondent.
   Barrett, J.:

The main question presented by the demurrers in this case is whether the power of designation conferred upon the judicial officers, specified in chapter 656 of the Laws of 1874 (Preface to Laws of 1875 page 4), is or is not continuous. The plaintiff insists that such power was exhausted by a single exercise, while the defendants contend that the power is continuous. Both parties concede that the aet in question contemplates a permar nent system. There is, in fact, nothing transient in its character — nothing suggestive of a temporary exigency. It is entitled “ An act in relation to the publication of judicial proceedings and legal notices in New York city and county.” It provides for the publication in a designated law journal, without limit as to time, of all calendars of our courts of record, with such particulars as the judges may require. The expense of this publication, within the limit of $15,000 per annum, is charged upon the city. There is a further provision that every notice or advertisement in legal proceedings, which may be required by law to be published in one or more newspapers in the city or county, shall also be published in the designated law journal. There are still other details indicative of an enduring system; such as the proviso, limiting the annual subscription-price of the designated journal to ten dollars, the condition that no greater sum shall be paid for advertising therein than that allowed by law, and the exclusion from the general mandate, with regard to the publication of legal notices, of all matter included in other permanent systems, city and State. It seems to me that this bare outline of the ob jects and purposes of the act is conclusive of the present question. For it is entirely well settled, that where a definite public policy with regard to the administration of justice is inaugurated by a remedial statute like the present, there is a clear implication that a granted power, requisite to the execution of the system and essential to prevent its failure, was intended to be continuous. ( Weed v. Tucker, 19 N. Y., 422.) And this is the rule, although the act fails to provide, in terms, for the repeated exercise of the granted power.

The converse of this rule applies where the authority is conferred to provide for a temporary exigency (see People ex rel. Brown v. Woodruff, 32 N. Y., 369), or where a particular question is to be decided by a single exercise of judgment (Cox v. Mayor, 103 id., 523), or where a single act is to be performed within a specified time, especially when the act is required to be so performed ty a particular person then in office. (Bergen v. Powell, 94 N. Y., 591.) So, too, as to private grants, or to grants of the public property or of franchises for the emolument of individuals or private cor porations. (Weed v. Tucker, 19 N. Y., 432.)

The crucial question, then, in the case at bar, is whether the power to designate a law journal, from time to tíme, is essential to the maintenance and preservation of the permanent system provided for by the act. It is difficult to perceive how there can be any doubt upon this head. The designated law journal may fail in its duty, or it may cease publication. As was said by Denio, J., in Weed v. Tucker (19 N. Y. 429): “ The act was to be regarded as a permanent measure to secure the publication of the legal notices, not temporarily for the life of one man or of a single firm of business men, or the continuance of a particular business enterprise, but as an arrangement which was to exist in perpetuity.” What, then, becomes of the system if the power to designate is exhausted by a single exercise ? The journal may' die. In that case, if the power is exhausted, the system dies with the journal. If the system is "to live, plainly the designation must be repeated. It follows, therefore, that the power exists; and, if it exists, it may be exercised whenever, in the sound judgment of these judicial officers, the occasion demands. The renewed exercise of power must be as free and untrammeled as was its original exercise, and the judgment of the officers vested with this continuous authority is no more subject to review with regard to the second designation than it was with regard to the first. If the power exists for any purpose, or under any circumstances, the officers in question are the sole judges of when and how it shall be exercised, and their judgment as to the necessity or propriety of a fresh designation must, necessarily, be conclusive.

There is no distinction in principle between this case and the case of Weed v. Tucker, nor is there any material difference between the respective acts. "Whatever difference there is in the phraseology of the two acts favors and strengthens the claim of continuous power in the case at bar. Here there is a designation, and there there was a contract. The same purpose precisely was effected in a slightly different manner. There the board was required to “ enter into contract.” But that amounted practically to nothing more than the designation of a State paper to be thereupon governed by the terms of the statute. Indeed, the act was entitled “An act to designate a State paper.” The contract was the form whereby the designation was to be effected. Its terms were the statutory provisions. The board, it is true, took upon itself to contract for four years, but it might just as -well have contracted for four days or for forty years, or, as recognized by Judge Denio (bottom of p. 435), during its pleasure. The statute in that case was silent regarding the contract term just as here it is silent as to the designation term. The judicial officers here might have designated for four years with as much reason and authority as the board there “ entered into contract” for four years. The judges deemed, however, that a designation, to quote again thq language of Judge Denio, “ during the pleasure of the appointing power, would best comport with the intention of the legislature,” and, accordingly, no term was expressed. I cannot but think that, in this respect, they were right. In neither of the acts, 1854 or 1814, did the legislature confer authority, in express terms, to contract or designate for any definite term. These acts simply create a continuing system for the publication of legal notices at a statutory price, with discretion as to the vehicle for such publication. This discretion is vested in certain officials, to be evidenced in the one case by a form of statutory contract, in the other by a form of statutory designation. Now, whether the work is done under a statutory designation, with clear provisions as to resulting compensation, or under a statutory contract with similar provisions as to compensation, the substance of the arrangement is the same. The rule laid down in Weed v. Tucker, therefore, does not depend upon the incident of the termination of the contract by the lapse of the contract term, but upon the implication of continuous power essential to the support of the system. If the contract term had there been indefinite, the contract would have ended at the. will of either party; in other words, it would have been a contract during the pleasure of the contracting board and of the newspaper proprietors, and upon its being thus ended a new contract, under the principle enunciated, could at once have been made by the board. If this were otherwise, then the original contract, because of the failure to specify its duration, might have operated, at the pleasure of one of the parties against the will of the other, as a perpetuity in enjoyment.

The fallacy of the plaintiff’s position, on this point, is in its assumption of a vested right in the continuance of its service. The claim is, that, by force of the act and the original designation thereunder, a contractual relation sprang up between it and the city in perpetuity, that is, so long as it fairly prints and publishes what it is thus permitted to print and publish. It is quite clear, however, that no obligation rests upon the plaintiff to continue the service. It is not even required, as was the ¡State paper, under the act of 1854, to give a bond for the faithful performance of its service. The contractual relation which it claims under the statute is thus entirely one-sided, and dependent solely upon its own pleasure. It may withdraw when it so wills, while the city, if the plaintiff’s view be correct, is bound in perpetuity, and the judicial officers in question are without authority to improve the system or reduce its expense. If the act is to be thus construed, then the permanency of the system means simply the permanency of the plaintiff’s enjoyment, and the legislature has bound the city for all time by a one-sided agreement, in the nature of a perpetual franchise, for which the designated law journal has paid nothing, parted with nothing, and, with regard to the continuity of the service, agreed to nothing. As a further result the legislature has, at the same time, foisted upon the city an undeviating method of execution, demanding nothing more from the beneficiary than fidelity to routine duty, and has rendered the designating officers powerless to advance or perfect the system by the selection of progressive or more economical agencies. Such a construction surely cannot be given to the act by implication; and, in the absence of plain language, evincing an intention so hostile to the public good, it must be held that no perpetuity, either of employment or service, was contemplated. The true construction is, first, that the designation was made subject to the continuous exercise of the power whenever, in the judgment of the designating officers, the service would be benefited thereby; and, second, that it was accepted, subject to the right of the designated journal to withdraw from the service whenever, in its judgment, it would be benefited thereby. Thus we have- equality and fairness, with, every i/ncentme to a weU-regulated system, and with, power adequate (without doing injustice to any one) to effect it. Such an intention should, if possible, be attributed to the legislature, rather than the intention contended for by the plaintiff.

It is further insisted that, even if the continuous power be granted, the judicial officers cannot create the occasion for its exercise. But that is only another way of saying that these officers cannot redesignate where such redesignation involves a change in the existing service. Now, to say that the "designating officers have the power of redesignation when the occasion requires, but are not the final arbiters of what is the proper occasion or when it has arrived, is simply another way of denying the continuity of the power. If their judgment as to the proper occasion is not the criterion, then the system is thrown into chaos, and their exercise of the power is dependent upon the solution in the courts of questions of law and fact. For example, if a designated journal has stopped publication, it seems to be conceded that a fresh designation might at once be made. If, however, the failure is for but one week, the power may be questioned. Shall the redesignation, resulting from that failure, he then made to depend upon the ultimate decision of the courts as to whether that was a crucial failure ? Again, should a dispute arise as to whether the calendars are properly printed with such particulars and notices as the courts require, must the validity of the fresh designation depend upon the verdict of a jury upon that issue of fact? And, still further, shall it be left to the courts to say that the proper occasion has not arisen when the designating officers point to reduction of expense or improved execution, or both ? The latter question becomes especially significant in view of the fact that the act makes no provision for directions or suggestions (as between the designating officers and the designated journal) such as are usual between an ordinary employer and employee, and provides no legal methods for bettering the system except by redesignating what is deemed a better agency

In all these illustrations, I am speaking, of course, of a designation indefinite as to time. Different questions might arise where the service is being performed under a designation or contract for a fixed period —■ claims of vested right on the one side and of unauthorized specification of contract or designated period on the other. These questions may well be left for consideration when the occasion arises. It seems clear to me, then, that the privilege of judging when the proper occasion has arrived for the repeated exercise of power, subject, possibly, to any vested contract rights (where an attempt has heen made to fix a definite contract period), is necessarily involved in the grant, by implication, of continuous power. ■ One is as essential to the due and harmonious execution of the system as the other, and it is impossible, without throwing the whole subject into doubt and disorder, to sever this continuous power from the right to judge as to when the occasion is ripe for its proper exercise.

The claim, therefore, of an original power of designation which is absolute, supplemented by a continuous power of designation which is limited, cannot be maintained without jeopardizing the j>ermanency, vitality and usefulness of the system. ~We are consequently remitted to the plaintiffs original and more logical position, namely, that there is no continuity of power to he exercised upon aivy occasion or emergency, however critical, and that the life of the system is dependent upon the single and isolated designation with which the execution of the plan originates. It is either that or there is a continuous power which may be exercised, from time to time, whenever the designating officers deem that the efficiency or permanency of the service will be promoted thereby. In my judgment, the latter is the true construction of the act. The former cannot be sustained, either upon principle or authority. The case of Weed v. Tucker has never been questioned, and its reasoning-is directly in point. The People v. Woodruff (32 N. Y., 355) has been referred to as establishing the contrary doctrine. But, on a careful analysis, I find no antagonism between the two cases. In the People v. Woodruff the question was as to an appointment to office, and Weed v. Tucker was, in that respect, distinguished, but as applicable to contracts, not even questioned. The decision in People v. Wood-ruff proceeded mainly upon the conclusion that the implication of a continuing power of appointment in the comptroller was not essential to keep the hoard of tax commissioners full or to preserve the system. This conclusion was based upon a provision in the Revised Statutes which (treating the comptroller’s power as exhausted by a single exercise) authorized the governor to make the new appointments. Thus, said Judge Davies, “a mode of.appointment exists and is provided for, which meets the exigency and relieves the question from all embarrassment.” Judge Davies commented as well up>on the fact that the statutes there in- question required the comptroller to act “ immediately, ” and to appoint for a specified time; also that it conferred upon the comptroller power to fill vacancies happening during the specified term, and stopped there. The court, in effect, held that the intention of the legislature, as evinced by tbe peculiar phraseology of the act, was to limit the comptroller’s power to its immediate exercise “ for a single occasion, and only for a specified period of time; ” and, by the inclusion of continuous power, to fill vacancies during a single specified term, to exclude cony other continuous power. "When to this reasoning was added the discovery of ample provision, under general laws, for the continuation of the board and the reappointment of the successors of the first appointees (e. g., the governor’s power under the Revised Statutes) the inapplicability of Weed v. Tucker was pointed out.

£{No provision was made by law,” observed Judge Davies (referring to Weed v. Tucker), “ for any new or further contract, unless the same could be inferred or implied from the terms of the act, or from the circumstances of the case. * * * The cases referred to by him (Judge Denio) as analogous to that were, where there was no general provision oflcuw applicable, where the power first conferred had been exercised cmcl was exhausted. Those cases showed that, from, necessity, the authority conferred was not a temporary exigency whicli was intended to be provided for, but the establishment of a permanent system respecting that portion of the public business.” Here (as in Weed v. Tucker) we have no governor to make the redesignation in case of need — mo general provision of law applicable — no remedy save an appeal to the legislature. And the system might completely break down between the happen-, ing of the occasion for the exercise of the continuous power and the meeting of the legislature. But, notwithstanding this reasoning of Judge Davies, three of the judges dissented; and Judge Davis delivered an opinion (concurred in by Chief Justice Denio and Judge Brown), holding that the permanency of the board, under the phraseology of the act, admitted of no doubt, and that within the reasoning “ of the very clear and convincing opinion ” of Judge Denio in Weed v. Tucker, the comptroller’s power to appoint to full terms was not limited to a single occasion. The phrase ££ immediately upon the passage of the act ” was viewed, not as a limitation, but simply as a command to set about the exercise of the general power conferred — with speed. The case, therefore, is an authority only with regard to appointments to office under an act phrased with the seeming purpose of excluding continuity of power, in a case where there is no necessity for its exercise, as evinced by the controlling circumstances of existing power behind the act to reappoint without an appeal to the legislative body. The principle of Weed v. Tucker remains, therefore, unshaken and undisturbed, and it is clearly decisive of the present contest, fully supporting the renewed exercise of power by the judicial officers in question, on the 9th day of'May, 1888.

One or two minor points are made, but they do not call for extended consideration. The difficulty with regard to the continued publication of legal notices, in process of publication at the time of the redesignation, is considered in Weed v. Tucker, and it is there shown that the possibility of such incidents should not affect the conclusion upon the question of continuous power.

There is nothing in the point as to the prohibition of justices of the Supreme Court from holding other offices or public trusts. The duty imposed upon the presiding justice, of designating (with others) a law journal in which the calendars of the courts should be published, is nothing more than an additional duty attached to the judicial office. Having made that designation, certain other incidents follow under the act, such as the' requirement with respect to legal notices generally. Rut the designation of the journal is, primarily, for the thorough dissemination of the court calendars. This is important in securing preparation for trial and prompt attendance upon the call of the calendars. It would certainly be a very narrow and strained construction of the Constitution to hold that a duty, having such results for its object, was foreign to the judicial office. The illustrations of similar duties imposed upon the presiding justice and his associates by other laws, furnished by Mr. Justice Patterson in his opinion at Special Term, suffice to show a general legislative intent not to confine the judicial duty to the bare hearing and decision of cases, but occasionally to impose upon the judges, in the line of their vocation, duties bearing upon the general administration of justice.

For these reasons the judgment should be affirmed, with costs.

Daniels and Cullen, JJ., concurred.

Judgment affirmed, with costs.


author: Daniels, J. :

text:
    WILLIAM R. BARR and Another, Appellants, v. THE NEW YORK, LAKE ERIE AND WESTERN RAILROAD COMPANY, Respondent.

      A:contract of lease between raib'oad corporations, where a number of the directors are the same in each company, is void— remedy of a sloclcholder of the leased road.

    Where a lease of its road is made by one railroad company to another, and four of the directors of one company are directors in the other, and at the meeting at which the resolution is passed authorizing the leasing of the former road it does not appear that these directors, or either of them, were absent from the meeting or dissented from its adoption, a stockholder of the leased road cannot maintain an action to compel the company, which accepted the lease thereof under these circumstances, to pay the rent agreed to be paid therefor.
    As, under such circumstances, the directors in the leased road are instrumental, so far as their action goes, in bringing about this obligation on the part of the leasing road, in which they were also directors, the lease is void.
    The law, relating to the rescission of agreements fraudulently induced, has no application to such a case, as the stockholder’s inability to maintain the action does not depend upon the circumstance that no formal rescission of the lease has ever 1 been made by either road, but upon the fact that the agreement itself creates no binding obligation; and for that reason no rescission of it was required.
    The agreement to pay such rental cannot be enforced, because of the fact that the leasing road has retained possession of and continued to operate the road of the other company; the only remedy which the leased road or its stockholders have, lies in an action for an accounting against the leasing corporation for the earnings of the leased road.
    Appeal by tbe plaintiffs from a judgment, rendered at the New York Special Term, dismissing the plaintiffs’ complaint upon the merits, and entered in the office of the clerk of the county of New York on the 3d day of October, 1888.

      JElihu Boot and Stephen B. O lárice, for the appellants.

      W. W. MaeFcorland, for the respondent.
   Daniels, J. :

The action was brought by the plaintiffs as owners of shares of stock in the Suspension Bridge and Erie Junction Railroad Company, whose railroad connected the Erie Railroad, at Buffalo, with the Great Western Railroad of Canada, at Suspension bridge, to enforce the performance of a lease made between that company and the Erie Railway Company, and for the payment of the rent reserved in the lease. Both of these companies had passed under substantially the same management which was indentieal in the way of interest. And for that reason proceedings by the Suspension Bridge and Erie Junction Railroad Company had not been taken to secure the payment of the entire rental reserved in the lease. So much of it as had not been paid was required to make the dividend on the stock of the Suspension Bridge Company, which the plaintiffs claim should be made. The Erie Railway Company had passed out of existence before the suit was commenced, and the receiver of its property had, pursuant to a judgment and sale under a mortgage foreclosure, transferred his possession to the defendant, the New York, Lake Erie and Western Railroad Company. That company, under the reorganization pursuant to the sale, had become charged with the performance of this preceding obligation of the Erie Railway Company, and of the receiver, so far as-he became bound to perform it. The lease, upon whose validity the right of the plaintiffs to maintain the action depended, was executed by the Erie Railway Company and the Suspension Bridge and Erie Junction Railroad Company, on the 13th of July, 1870. And it leased the road of the latter company to the former, for whose business it had been constructed, with all its rights, franchises, privileges and estate, for the period of its corporate existence, which was the term of five hundred years. The Erie Railway Company, in consideration of the lease, agreed to pay, by way of rent, an amount equal to thirty per cent of the gross earnings of the leased road, not to be less than $52,500 dollars semi-annually. This rental corresponded imamount with the interest which would accrue on the bonds which the Suspension Bridge and Erie Junction Railroad Company had, by a resolution of its board of directors, adopted on the 28th of May, 1870, resolved to issue, amounting to the sum of $1,000,000, and to an equal dividend upon the stock of the same company, which was not to exceed the sum of $500,000. The rental was intended to be used in making those payments, and it was paid, as it was stipulated for by the lease, for about two years after it was executed. But subsequent to that time no more than the sum of $70,000 a year has been paid, which was necessary to pay the interest upon the $1,000,000, in amount of the bonds of the Suspension Bridge and Erie Junction Railroad Company. The interest on those bonds had been guaranteed by the Erie Railway Company, and to meet and perform the terms of this guaranty the appropriation of the sum of $70,000 annually had become necessary. The latter company had also guaranteed the payment of a semi-annual dividend of three and a half per cent on the stock of the Suspension Bridge and Erie Junction Railroad Company, but all the shares of this stock were afterwards acquired by the Erie Railway Company by purchase, except those belonging to the plaintiffs and a small number of other shares. The New York, Lake Erie and Western Railroad Company justified the omission and refusal to pay the additional rental on the ground that the obligation to pay it had been illegally entered into, and was opposed to the policy of the law.

The foundation upon which this objection rested was the identity, to a certain extent, of the directors in the Suspension Bridge and Erie Junction Railroad Company and the Erie Railway Company, and the interest of at least four of these common directors in the stock and bonds of the Suspension Bridge and Erie Junction Railroad Company, which was to bé promoted by the payment of the proportionate part of the rental, reserved in the lease now under consideration. Prior to the time when the lease was made, a contract was made and executed by the directors of the Suspension Bridge and Erie Junction Railway Company to build its railroad and receive therefor the $1,000,000 in its bonds, and $500,000 in its stock. This contract was subscribed by these parties on the 18th of May, 1870. But nothing seems to have been done under this agreement. For on the 7th of June, 1870, the company entered into an agreement with Mortimer Smith to build and construct the railway for the same consideration, and on the same day an agreement was made by the directors of the Suspension Bridge and Erie Junction Railroad Company with Smith to purchase and receive from him the stock and bonds already mentioned, as he should receive them from the Suspension Bridge and Erie Junction Railroad Company, and to pay him therefor, in monthly payments, the amount of money actually expended on his contract, proportionately corresponding to the bonds and stock received. These four persons, viz., James Fisk, Jr., Henry Thompson, Hugh Smith and William M. Tweed, who were directors in each of the companies, were parties to and subscribed this agreement. And on tbe 27th of June, 1870, Mortimer Smith assigned to them and others his contract for the construction of the railway, by which they became entitled, for the performance of his agreement, to the bonds and stock which would otherwise have been delivered to him. And it was after these persons had, in this manner, become entitled to proportionate parts of the stocks and bonds of the Suspension Bridge and Erie Railroad Company, that the lease in controversy was executed by the Erie Railway Company.

Before the assignment of this contract by Smith on the 8th of June, 1870, a special meeting of the directors of the Erie Railway Company was held, at which a resolution was adopted authorizing the president of the company to execute, under its corporate seal, all contracts necessary for the lease of the road of the Suspension Bridge and Erie Junction Railroad Company, and to equip and run the same, etc. And it does not appear that either one of the directors of the company was absent from this meeting or dissented from the adoption of this resolution.

The cost of building and constructing the railroad was about $850,000, leaving to the parties agreeing to receive the million dollars in bonds guaranteed by the Erie Railway Company, through the completion of their agreement, a net gain of about $150,000, together with the $500,000 in stock. These directors were, accordingly, interested in obtaining the lease from the Erie Railway Company, which, it has been insisted, as the ground of this action, that the New York, Lake Erie and Western Railroad Company should be obliged to perform, by the payment of the full amount of rent reserved in it. They were instrumental, so far as their action extended, in bringing about the creation of this obligation, and, to the extent to which it afforded or would secure profit and advantage to them, it interfered with and prevented the disinterested performance of their duty to the Erie Railway Company, and imposed an obligation upon that company for their benefit. And. as they were directors in that company, as well as in the Suspension Bridge ánd Erie Junction Railroad Company, they were disabled from creating, or contributing, by their action, to the creation of this obligation; for directors of a corporation sustain the substantial relations to it of trustees, who are bound to devote themselves disinterestedly to the advancement of the interests and prosperity of the company. They have no right, legally or morally, to contribute to the creation of an obligation on the part of the corporation they represent, which shall directly or indirectly result in a profit or advantage to themselves. But they are required to be governed solely by the motive of doing that which will best promote the prosperity and interest of the corporation whose affairs they are selected to manage. If they fail to observe this obligation, the law will not speculate to ascertain whether the company whose interests may be affected in this manner by its directors has been actually injured or not. But it will condemn the contract or obligation brought about in this manner, and prevent these persons, and all others claiming its benefit or advantage under them, or from their acts, from maintaining or enforcing the agreement.

This action caif be no otherwise sustained than by maintaining the validity of this lease, and justifying the misconduct of these directors in the way of imposing a burden upon the corporation represented by them for their own benefit; and that the courts will not do, to aid and assist stockholders in another company claiming to be entitled through the misconduct of the common directors to the advantages of such a contract as this action has been founded upon. This general subject was examined, and the rule sustained as broadly as it has been stated in Munson v. Syracuse, etc., Railroad Company (103 N. Y., 58) and, also, in Wardell v. Railroad Company (103 U. S., 651). An agreement entered into and brought into existence, as this lease was, is directly condemned by the rule which • these authorities sustain. And it not only disables the Suspension Bridge and Erie Junction Railroad Company from enforcing it against the Erie Railway Company and its successor, but the same disability attached to the plaintiffs, as stockholders in the former company, whose rights alone they have undertaken to enforce, to maintain this action. They' stand in the position of this company, and can obtain no other or greater advantages than the company itself was entitled to in the way of enforcing the payment of this rental. The contract was in conflict with the law, as it has been constantly enforced against trustees, who are not permitted to deal for their own benefit with the subject of the trust. Agreements entered into, or transactions consummated for tliat object, have constantly and uniformly been condemned. And where a contract may be entered into by the directors of a corporation, which is offensive to this principle of the law, there no action can be maintained upon it, but it stands precisely the same as all other illegal agreements, which the courts will not aid the parties or their privies in enforcing. (Bell v. Leggett, 3 Seld., 176; Sedgwick v. Stanton, 14 N. Y., 289.)

The law relating to the rescission of agreements fraudulently induced has no application to this case; for the plaintiffs’ disability to' maintain the action does not depend upon the circumstance that no formal rescission of the lease has ever been made, either by the Erie Railway Company or the New York, Lake Erie and "Western Railroad Company. The agreement itself created no binding obligation ; and, for that reason, no rescission of it was required to entitle the parties proceeded against to avail themselves of this and the New York, Lake Erie and Western Railroad Company as advantage.

Neither can the agreement to pay this rental be enforced because of the fact that the Erie Railway Company and its receiver, his successor, have retained possession and continued to operate the railroad of the Suspension Bridge and Erie Junction Company. Eor the principle which has been applied upon the force of that circumstance securing the performance of the obligation of the other party, entered into without actual authority, can have no force or effect over this controversy. Where the sole objection is that an agreement is entered into by a corporation, without authority, it is bound to pay the equivalent of the advantage secured by it, so long as that advantage is enjoyed under the agreement. But this case does not rest upon an agreement made extrinsic to the authority of the railroa'd companies. Each company did have the power to enter into this contract. But it is because of the manner in which it was brought about by the co-operation of the common directors, who were acting largely for the promotion of their interests in the creation of this agreement, that the law interferes and pronounces its condemnation upon it. The agreement itself, as a contract, is incapable of performance through the instrumentality of courts of justice; and the only remedy which either the Suspension Bridge and Erie Junction Railroad Company or its stockholders have is an action for an accounting against the New York, Lake Erie and Western Railroad Company for the earnings of the railroad itself. That does not appear to have been required; and if it had been, upon the trial of the action, no ground to support it was presented by the evidence. For the $70,000 a year paid for the use of the railroad appears to have exceeded the amount of its earnings, for which the New York, Lake Erie and Western Railroad Company would be bound to account.

The judgment should, therefore, be affirmed, with costs.

Van Brunt, P. J., concurred.

Judgment affirmed, with costs.


author: Bartlett, J.:

text:
    EDWARD S. JAFFRAY and Others, Appellants, v. JOSEPHINE M. SAUSSMAN. Application of MORITZ FREEDMAN and CHARLES I. FREEDMAN, Execution Creditors of JOSEPHINE M. SAUSSMAN, Respondents.

      Judgment confessed, for a sum, apart of which only is due — issuance of an execution with direction to levy for the whole amount — right of a junior judgment-creditor •— Code of Oivil Procedure, sea. 1277 — lien of the confessed judgment

    A debtor confessed judgment in favor of a creditor, on May 14,1888, for $2,094.58, of which amount only $637.58 was due at that date, the balance not becoming due until July 6, 1888, and an execution was issued thereon to the sheriff directing him to levy and collect the whole amount of the judgment.
    Another creditor of the same debtor having subsequently, on the same day, obtained by confession a judgment against him for $2,800, all of which was presently payable, moved to vacate and set aside the prior execution.

      Held, that the court properly ordered an amendment of the execution issued upon the first judgment, so as to permit the sheriff to collect thereunder only the sum actually due on the judgment under which it was issued, at the time the judg ment was confessed.
    That the junior execution-creditor had a sufficient standing in court to enable him to insist upon the reduction, to the proper sum, of the amount to be collected under the prior execution.

      Tlie provisions of section 1277 of the Code of Civil Procedure, providing that where the whole amount of the confessed judgment is not due, and an execution is issued in the first instance only for a portion thereof, “the judgment shall remain as security for the sum or sums to become due after the execution is issued,” does not make the judgment in the meantime a lien upon the personal property of the defendant as well as upon his real estate.
    Such a judgment is security to just the same extent as any other judgment for the like amount would be upon which no execution has been issued.
    Appeal by the plaintiffs from an order made at the New York Special Term, amending an execution, entered in the office of the clerk of the county of New York, June 11, 1888.

      Isaac I. Miller, for the appellants.

      A. Blumenstiel, for the respondents.
   Bartlett, J.:

The defendant confessed judgment in favor of the plaintiffs for $2,094.58 on the 14th day of May, 1888. Of this amount only the sum of $637.58 was due at that date. The balance did not become due before the 6th day of July, 1888. The plaintiffs’ attorneys, however, on the day the judgment was confessed, issued an execution directing the sheriff to levy and collect the whole amount of the judgment. Subsequently, on the same day, the respondents, constituting the firm of Freedman Brothers, obtained a judgment, also by confession, against the defendant for $2,802.22, all of which was presently payable, and duly issued an execution thereon. They found their process preceded, however, by the execution which had been issued upon the confessed judgment in favor of the plaintiffs. The sheriff levied upon certain personal property belonging to the defendant and sold the same under and by virtue of both executions; and, thereupon, a motion was made in behalf of Freedman Brothers, the subsequent execution-creditors, who are the respondents on this appeal, to set aside the execution in favor of the plaintiffs so far as it affected their own execution. This motion was not granted in the form in which it was made, but the court at Special Term ordered an amendment of the plaintiffs’ execution so as to permit the sheriff to collect thereon only the sum actually due to the plaintiffs at the time the judgment was confessed, together with costs. The moving parties, Freedman Brothers, appear to be satisfied with this order, but the plaintiffs have appealed.

As the questions presented by the appeal are of considerable practical importance, it may be well to quote in full section 1277 of the Code, of Civil Procedure, under which they arise. That section is contained in the article entitled “ Confession of Judgment,” and provides as follows:

“Where the debt for which the judgment is rendered is not all due, execution may be issued upon the judgment for the collection of the sum which has become due. The execution must be in the form prescribed by law for an execution upon a judgment for the full amount recovered; but the person whose name is subscribed to it must indorse thereupon a direction to the sheriff to collect only the sum due, stating the amount thereof, with interest thereon, and the costs of the judgment. Notwithstanding the issuing and collection of such an execution, the judgment shall remain as security for the sum or sums to become' due after the execution is issued. • When a further sum becomes due an execution may, in like manner, be issued for the collection thereof; and successive executions may be issued as further sums become due.”

The execution issued upon the confessed judgment in favor of the appellants did not conform to the requirements of this section. The statement showed that only a portion of the sum for which the judgment was confessed was then due, but the indorsement on the execution directed the sheriff to collect the whole amount. If the defendant had objected to the execution by reason of the erroneous direction thus indorsed thereon, it is conceded that she would have been entitled to have it amended upon making a proper motion for that purpose, but the appellants contend that subsequent execution creditors have no standing in court to insist upon a reduction of the execution to the proper amount, and that none but the defendant can assert the right to have it reduced. On the contrary, I think that where an execution has been issued under section 1277 of the Code of Civil Procedure, but has been indorsed, in disregard of the provisions of that section, with a direction to the sheriff to collect more than the amount actually due, it is competent for a subsequent execution-creditor, in a direct proceeding for that purpose, as by motion, to attack the execution for invalidity so far as it directs the sheriff to collect anything in excess of the sum presently due on the prior judgment.

The personal property of the debtor does not become subject to the lien of either judgment until the issue of executionand the subsequent execution-creditor has a direct and manifest interest in preventing a prior execution-creditor from acquiring a lien on the personal property which is larger than the law allows and which is likely to impair or defeat his own lien, as may well be the case where the estate is not sufficient to satisfy the claims of both creditors. Under such circumstances, the subsequent execution-creditor is plainly injured by the excess in the amount of the prior execution, and is affected by the error in such a manner as to give him the right to have it corrected.

The provision of the Code which permits a judgment to be confessed for money to become due at a future date (Code of Civil Pro., § 1273), constitutes an exception to the general rule that only such claims as are past or presently due can be put into judgment; and the rights of the creditor to whom a judgment is confessed for money not yet due should not be extended by construction. Referring to that part of section 1277, which provides that in a case where the whole amount of a confessed judgment is not due, and execution is issued in the first instance only for a portion thereof, the judgment shall remain as security for the sum or sums becoming due after the execution is issued,” the appellants argue that this provision makes the judgment a lien upon the personal property of the defendant in the meantime, as well as ujion his real estate. I do not think so. The plain meaning seems to be that the judgment shall be security to just the same extent as any other judgment for a like amount would be upon which no execution had yet been issued. There is nothing in the language of the section which requires any other construction, or appears to warrant it. The Code says that the judgment shall remain as security, not the judgment and execution. If the contention of the plaintiffs is correct, that the privilege of objecting to an excessive execution under section 1277 is confined to the debtor who confesses the judgment, a curious result might follow. If the debtor chose to acquiesce in the form of the execution, he could allow his property to be sold thereunder and applied to the payment of a claim nine-tenths of which might not be due for a year to come, and in consequence of this proceeding a subsequent judgment-creditor, whose judgment liad been recovered tbe same day upon a claim, presently payable, might find his execution returned nulla bona, because the goods of the defendant had been taken to satisfy a debt not yet due.

■In Mr. Freeman’s treatise on the Law of Executions is a note referring to numerous cases in which courts have disregarded variances between the amount of the judgment and the amount mentioned in the execution. (Freeman on Executions, § 43). In none of these cases, all of which have been examined, is it held that the objection that the amount of an execution is excessive can be taken only by the defendant. JVIost of them uphold the doctrine that an execution which calls for too much money is not void, but merely voidable. (Peck v. Tiffany, 2 N. Y., 451, 458; Hunt v. Loucks, 38 Cal., 372.) In the latter case, speaking of such an execution, the Supreme Court of California holds that it cannot be attacked collaterally by anybody or even directly by a stranger. But, as already intimated, a subsequent execution-creditor is not to be regarded as a stranger in interest. The appellants invoke the rule which is laid down so often in the books in various forms, to the effect that none but the defendant can take advantage of a defect in an execution which is amendable. (Abels v. Westervelt, 15 Abb. Pr., 230 ; Wright v. Nostrand, 94 N. Y., 31, 47.) But the facts of the cases in which this rule has been applied must not be overlooked. No instance of its application as against a subsequent execution-creditor, where the amount of the prior execution was too large, has fallen under my notice. The rule has been held to be applicable in suits against sheriffs for an escape or a false return, where the fact that the execution was voidable has been pronounced unavailable as a defense. (Bissell v. Kip, 8 Johns., 88, 99; Bacon v. Cropsey, 7 N. Y., 195.) It has also frequently been declared that the objection that an execution was issued sooner than the statute prescribed, or without proper proceedings to revive the judgment, could be taken only by the defendant. (Kimball v. Munger, 2 Hill, 364; Pierce v. Alsop, 3 Barb. Ch , 184, 190, 196.) In the cases cited to this effect, however, no question arose as to the debt being actually due, which was represented by the judgment and execution. The decisions merely affirmed the right of a debtor to waive a delay which he might have insisted on under the statute, and to waive it irrespective of the wishes of third persons. But what the judgment-debtor has done in the case at bar is something very different from merely waiving a statutory delay in the collection of a demand conceded to be due. By acquiescing in the form of the execution which 'the appellants have issued, she has consented to ajiply her personal property to the liquidation of claims in behalf of the appellants, which will become due at a future time, to the exclusion or impairment of a claim in behalf of the respondents, which is due already. I do not think the provisions of the Code in relation to confessions of judgment were designed to be employed by debtors for such a purpose; and in the case at bar its accomplishment was properly prevented at the instance of the parties who were directly liable to injury therefrom, by granting their motion to the extent of reducing the execution to the amount actually due on the appellants’ judgment at the time it was issued.

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

Yan Brunt, P. -I., and Daniels, J., concurred.

Order affirmed, with costs and disbursements.


text:
    MICHAEL MEEHAN, Appellant, v. WILLIAM B. MOREWOOD and Others, Respondents.

      Assa/ult — what acts, of a foreman in a wm'éhouse, a/re within the scope of his employment.

    In an action for an assault upon tlie person of the plaintiff by an employee of the defendants’ firm, it appeared that tlie plaintiff went with a truck, by the defendants’ direction, to obtain some chests of tea at the defendants’ storehouse, where they found the defendants’ foreman, and the delivery upon the truck was begun. The attention of the defendants’ foreman was, during the delivery, called to the fact that one of the chests of tea was in bad order, by the plaintiff, who told the foreman he could nothake the chest in question. The foreman insisted that he should, and the plaintiff refusing to do so the defendants’ foreman exclaimed: “Here, you damn scoundrel, clear out,” and kicked and shoved him down into the street. The plaintiff, as he was passing out, grasped the door, i which the defendants’ foreman shut upon one of the plaintiffs fingers, causing a wound which rendered the amputation of the finger necessary.

      Held, that tlie acts of the defendants’ foreman were not within the scope of his employment and that the defendants were not responsible therefor.

      Hoffman v. The New York Central and Hudson River Railroad Company (14 J .& S., 526, 529) distinguished.
    Appeal by tbe plaintiff from a judgment in favor of tbe defendants, entered upon a dismissal of tbe complaint at tbe New York Circuit, at tbe close of tbe plaintiff’s case, which judgment was entered in tbe office of the clerk of tbe county of New York on tbe 28th day of October', 1887.

      James M. Lydd/y, for the appellant.

      George A. Si/ronq, for tbe respondents.
   Bartlett, J.:

In this action tbe plaintiff seeks to hold tbe defendants liable for an assault which was committed upon tbe plaintiff by a person in the employ of tbe defendants’ firm. Tbe defendants and William Donaldson, now deceased, carried on business as warehousemen in tbe city of New York. The plaintiff was a truckman engaged in tbe cartage business, and employing a number of men under him. In April, 1885, be was directed by Mr. A. Driggs to go to tbe storehouse of tbe defendants’ firm, for tbe purpose of taking some tea out of it, to be carried over to Mr. Driggs’ store. He went to tbe office of tbe defendant, where “ a gentleman took tbe order and said bis foreman would dehver the tea on Water street side of tbe bouse.” Tbe plaintiff, therefore, proceeded to tbe Water street side with a truck driven by one of bis employees, and accompanied by another man to load. Here they found tbe foreman, one Neil Mabony by name, and tbe delivery of tbe tea was begun. As it was being placed upon tbe truck tbe plaintiff’s loader objected to one of tbe chests, and said be would not take it because it was in bad order. 'The plaintiff called tbe attention of Mabony to tbe fact, and told tbe foreman that be could not take the tea to which objection was made, because it was in bad condition, and to take it would be against tbe orders of bis boss. Mabony insisted that he should take tbe tea. Tbe plaintiff said be wished be could, but be would have to pay for tbe damage if be did. Thereupon Mahony exclabned, “ Here, you damned scoundrel, clear out of here; ” and) seizing the plaintiff by the collar, he kicked him and shoved him ont into the street. The plaintiff grasped the door as ho was passing out, and the defendant shut it upon one of the plaintiff’s fingers, causing a wound which rendered the amputation of the finger necessary.

Upon these facts the question arises whether the foreman, Mahony, was acting in his master’s business and within the scope of his employment as a servant of the defendants’ firm at the time he committed this appaz’ently unpz’ovoked and outrageous assault. If he was, the defendants must be deemed responsible, although the conduct of the servant amounted to a willful and wanton wrong on his part. (Mott v. Consumers' Ice Co., 13 N. Y., 543 ; Quinn v. Power, 87 id., 535.) In this class of cases “ the inquiry is, whether the wrongful act is in the course of the employment or outside of it, and to accomplish a purpose foreign to it.” (Ochsenbein v. Shapley, 85 N. Y., 214, 220.)

The appellant refers to the separate defense, set up in the seventh subdivision of the answei, as an admission that Mahony was acting in the coui'se of his employment on the occasion of the attack which he made upon the plaintiff. In this poi'tion of the .answer it is averred that if the plaintiff sustained the injuries of which he complains, they were caused by his own misconduct while forcibly trespassing upon the premises mentioned in the complaint, and while committing, or attempting to commit, an assault and battery upon a porter or workman employed and performing his duties as such on said premises.” There is nothing in the testimony, however, or anywhere in the record, to identify the porter or workman thus mentioned with Mahony. On the contrary, Maliony’s functions appear to have been distinctly different from those of a workman or porter, and higher, for according to the plaintiff’s own testimony he was the person indicated as being the foreman by the gentleman in the office of the defendant firm who took the order for the tea. The seventh subdivision of the answer, therefore, cannot be construed into an admission that Mahony was acting in the scope of his employment at the time he assaulted the plaintiff. The duty to which Mahony appears to have been assigned by his employers was the supei'intendenee of the délivery of the tea to , the plaintiff. Evidently he was expected to do nothing more than to see that the plaintiff should be allowed to take away certain specified chests of tea. If the plaintiff had attempted to carry off other goods, the foreman, doubtless, would have been expected to interfere and protect the property of the firm. But his employment did not contemplate the exercise of any compulsion upon the plaintiff to force him to accept any particular teas, or any teas whatsoever, against his wish or protest. Indeed, a direction to deliver property to a person who has come for it generally involves the assumption that the person who has come is desirous of receiving the property. If the foreman, in making the asaault, was actuated by any other feeling than one of mere anger, because the plaintiff had expressed an unwillingness to accept some of the tea, his purpose must have been to force the tea upon the plaintiff in spite of his objection; but there is no reason to suppose that the defendants themselves would have insisted, or wanted anyone to insist in their behalf, that he should take the tea in question notwithstanding his refusal to do so. The object sought to be accomplished by the foreman in making the assault thus appears to have been wholly disconnected from his employment. It was not done in the prosecution of the business which the master employed the servant to do, and the question whether the act complained of was so done is the true test of responsibility in such a case as this. (Cosgrove v. Ogden, 49 N. Y., 255.) The trial judge, therefore, was right in holding that no case had been made out against the defendants’ firm, and the complaint was properly dismissed. "What was said by the Superior Court in Hoffman v. New York Central, etc., Railroad Company (14 J. & S., 526, 529), to the effect that it is always a question for the jury, whether the act of a servant was done in pursuance of his employment or wickedly and maliciously, was expressly limited to cases in which the wrongful act is not entirely inconsistent with the nature of the servant’s employment. Here, however, it seems to have been so.

The judgment should be affirmed, with costs.

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

Judgment affirmed, with costs.


author: Daniels, J.:

text:
    WILLIAM F. LETT, Appellant, v. THE GUARDIAN FIRE INSURANCE COMPANY, Respondent.

      Insurance policy — right of an owner of the insured property, whose right is lost by reason of a breach of condition, to recover as the assignee of a mortgagee under a mortgagee clause attached to the policy.

    A policy of insurance was issued by the defendant upon the property of one Briggs, upon which there was a mortgage held by Angelina Butler, to whom, by the terms of the policy, the loss, if any, was to be paid. The policy contained a condition that the same should be void if any change took place in the title of the property, unless the consent in writing of the company were indorsed thereon, hut a mortgagee clause or agreement was annexed to the policy by which the company agreed that the insurance, as to the interest of the mortgagee only, should not be invalidated by any act or neglect of the owner of the property, provided that whenever the company should pay the mortgagee any sum for a loss under the policy, and should claim that as to the mortgagor or owner no liability therefor existed, it should at once be legally subrogated to all the rights of the mortgagee, under all the securities held as collateral to the mortgage debt, to the extent of such payment.
    • The property was conveyed by Briggs, the owner, to the plaintiff without the consent of the company, subsequent to which conveyance it was injured by fire, and the plaintiff, to whom the mortgagee had assigned her interest in this policy of insurance (she having prior to such assignment, in consideration of payments made upon the mortgage, agreed to look to the land alone as security for the payment Of the amount still due thereon), brought this action upon the policy.

      Held, that the right to recover upon the policy, as a part of the security for the debt, was extinguished by the payment which had been made upon the debt, and by the agreement of the mortgagee to look to the land, so that the mortgagee had no longer any remaining interest in the insurance policy.
    That, consequently, the plaintiff derived no advantage from the assignment thereof made by the mortgagee to him.
    That as the parties had by their agreement destroyed any right on the part of the defendant to be subrogated to the rights of the mortgagee, they had released the defendant thereby from liability under the mortgagee clause.
    That, as the plaintiff, as the owner of the property, by reason of the breach of condition of the policy, had no legal right to enforce the policy against the company in his own behalf, and as even should he be permitted to do so, as the assignee of Mrs Butler, then, under the provisions of the mortgagee clause, the company would be entitled to resort to the mortgagee for reimbursement for any amount which it should be compelled to pay, that the law, to avoid circuity of action, would hold this right to reimbursement to be a defense against the enforcement of the policy.

      Appeal from a judgment, rendered at the New York Circuit, dismissing the plaintiff’s complaint, entered in the office of the clerk of the county of New York on the 14th day of June, 1888.

      James M. Lydd/y and John A. Goodlett, for the appellant.

      N. B. IToxie, for the respondent.
   Daniels, J.:

The action was to recover the amount of a policy of insurance issued by the defendant upon the 19th of April, 1883, upon two five-story brick buildings, adjoining and communicating, and being 62 and 64 Rutgers slip, $1,250 being insured upon each building.

At the time when the policy was issued the property was owned by S. Ellis Briggs. A mortgage existed upon it which was held by Angelina Butler to secure the sum of $15,000 and interest. The insurance, by the policy, was to extend over the period of one year. On the 29th of May, 1883, S. Ellis Briggs, with his wife, conveyed the premises insured to Louis Jt McKenna by a warranty deed, subject to the outstanding mortgage, securing $15,000, with interest, and, on the first of June of the same year McKenna conveyed the property by a warranty deed to the plaintiff. This change in the title divested Briggs of all his insurable interest, and, by a clause in the policy, it was declared that it should become void unless consent in writing should be indorsed upon it, if any change took place in the title, interest, location or possession of the property, excepting the case of succession by reason of the death of the insured, whether by sale, transfer or conveyance, in whole or in part. After the plaintiff acquired title by the deed delivered to him, and in the month of June, 1885, evidence was given tending to show that notice of this change in the title was given verbally to officers oí thq insurance company. But no indorsement was either requested in writing or made by the company of that fact upon the policy. And the omission to obtain the indorsement, under this language, avoided and terminated the insurance so far as it could enure to the benefit of the plaintiff. And there was no obligation at any time affecting the defendant by which it was bound to make the indorsement upon the policy unless it consented so to do. When the policy was issued, the loss, if any, was made payable to Angelina Butler, the mortgagee; and a mortgage clause or agreement was annexed to the policy by which the company agreed that the insurance, as to the interest of the mortgagee only, should not be invalidated by any act or neglect of the mortgagor, or owner of the property insured, or by the occupation of the premises for purposes more hazardous than was permitted by the policy; but she was required to notify the company of any change of ownership or increase of hazards which should come to her knowledge, and for which the company reserved the right to be paid by the mortgagee on reasonable demand, according to the established scale of rates for the use of the increased hazards. A fire occurred on the 17th of September, 1885, injuring the property to the extent of upwards of $16,000.

At this time this and other policies were held by the mortgagee as security for the amount mentioned in the mortgage. After the occurrence of the fire the other companies having insurances upon the property satisfied by payments their liability for the injury to the property. By those payments the sum of $7,499.05 was received and turned over to the plaintiff, and he paid to the mortgagee the sum of $6,679.52, with the interest then due, thereby reducing the amount of the mortgage to $8,500, and she assigned the mortgage to Austin Abbott as trustee. By this reduction the interest of the mortgagee in the insurances was extinguished, and from that time it was agreed that the mortgage should be held upon the land itself as security for the payment of the amount to which it had in this manner been reduced, and that security was regarded as, in fact it was, sufficient for the mortgage debt. For, according to the valuation of the property given by the plaintiff himself as a witness, it was stated to be worth about $35,000, which would leave a valuation of near $18,000 over and above the injury occasioned by the fire.

When the settlement reducing the mortgage to this sum of $8,500 tookplace, Mrs. Butler, the holder of the mortgage, executed an assignment of this policy of insurance to Austin Abbott, and he delivered the assignment as well as the policy to the plaintiff, who had also taken an assignment of the interest of his grantor on the 1st of June, 1885. And the real point, legally speaking, in the case is whether the plaintiff can maintain this action under the assignment executed to Abbott, and a subsequent assignment of the same policy made by Mm to the plaintiff on the 13th of April, 1888. If Mrs. Butler had retained her right to the mortgage, she would have been at liberty to collect the amount on the policy from the defendant, but, by the payments and agreement with her, the right to hold the policy as an additional security for the money mentioned in the mortgage was extingmshed. And the plaintiff was a party to the arrangement, and made the payments to her through' which that result was produced.

The defendant had then denied its liability upon the policy, but still there was a liability which might have been enforced by Mrs. Butler if this change had not been made in the security. But by the change and the payments the insurance was wholly detached from the debt. Her right to claim or recover upon it as a part of her security was extingmshed by the payments then made to her by the plaintiff, and she had no remaining interest in the insurance after that which she could assign, or keep the policy alive in favor of the assignee. The plaintiff accordingly derived no advantage from the assignment made by her to Abbott, and the delivery of that assignment with the policy to him. For she had no remaining interest in it to assign.

The agreement of the company with the holder of the mortgage provided, further, that “ it is also agreed that whenever the company shall pay the mortgagee any sum for loss under this policy, and shall claim that, as to the mortagor or owner, no liability therefor existed, it shall at once be legally subrogated to all the rights of the mortgagee under all the securities held as collateral to the mortgage debt, to the extent of such payment, or, at its option, may pay to the mortgagee the whole principal due or to grow due on the mortgage, with interest; and shall thereupon receive a full assignment and transfer of the mortgage, and all other securities held as collateral to the mortgage debt; but no such subrogation shall impair the right of the mortgagee to recover the full amount of her claim.” And as the plaintiff, as the owner of the property, had no legal right to enforce the policy against the company in his own behalf, if he should be permitted to do so, as the assignee of Mrs Butler, then, under this part of the agreement, the company would be entitled to resort to the mortgage for the reimbursement of the amount it would be compelled to pay out of the property. In other words, whatever sum it might pay to the plaintiff, as the assignee of Mrs Butler, it would be entitled to reimburse itself for out of the property owned by the plaintiff himself and incumbered by the mortgage. And where that may be the relation-of the parties to a transaction the law, to avoid circuity of actions, will hold this right of reimbursement to be a defense against the enforcement of the agreement itself.

There would be no legal propriety in allowing the plaintiff to collect the amount of this insurance from the company, when upon its payment the company could resort to his property through the mortgage, and recover back what it had paid. (Phelps v. Johnson, 8 Johns., 54; Clark v. Bush, 3 Cow., 151; Brown v. Williams, 4 Wend., 360; Conn. Fire Ins. Co. v. Erie Ry. Co., 73 N. Y. 399.) The case in this respect differs from that of Baynor v. Baynor (21 ITun, 36), where, upon the assignment of a mortgage without the debt, it was permitted to be enforced in favor of the assignee for the amount -which was advanced to obtain it. In this case the ' plaintiff advanced nothing,' in fact, for the payment which was made was obtained from policies of insurance held by Mrs Butler as the assignee of the mortgage.

The result will'be the same if the transaction between the plaintiff and Mrs. Butler, and Abbott, who took the assignment of the mortgage as a security from that time only upon the land, by the adjustment of their affairs extinguished the right of the company to follow and enforce the mortgage for its indemnity. Bor if they, in this manner, destroyed the right of the defendant under its agreement to subrogation for its own protection, that destruction, necessarily, had the effect of releasing it from liability, both to Mrs. Butler and the plaintiff, as the assignee. It did appear, further, by the evidence, after it is stated that the defendant denied its liability upon the policy, that the plaintiff took out another insurance for the same amount in the Phoenix Insurance Company. That insurance extended from the 25th of July, 1885, to the 1st of May, 1886, and the plaintiff, in August, 1887, demanded of Briggs a return of the premium allowed in the settlement, for the policy issued by the defendant, on the ground that it had, at that time, been canceled, and he had obtained an insurance for the same amount in another company. This insurance was paid by the Phoenix Company, and the payment probably formed a part of the money received by Mrs. Butler to reduce tbe mortgage to tbe amount for wbicb Mr. Abbott took it as security against tbe land alone. From tbe time when tbe settlement was made with her this policy was no part of tbe security for tbe mortgage debt, and its assignment, merely as a policy in wbicb neither sbe nor Mr. Abbott any. longer bad an interest to transfer to tbe plaintiff, gave bim no legal benefit under tbe arrangment wbicb bad previously existed, through wbicb sbe held tbe policy as a further security. When this transfer was made it was no 'more than an insurance on tbe property itself for tbe benefit of tbe person to whom it bad been issued, and assigning it subsequent to that túne to Mr. Abbott, and by Mr. Abbott to tbe plaintiff, vested bim with no right of action upon it. It was practically no more than tbe assignment of a mortgage would be without tbe transfer of an interest in tbe debt, and that would give tbe assignee no legal or equitable right to enforce it as a security. (Merritt v. Bartholick, 36 N. Y., 44; Wanzer v. Carry, 76 id., 526.)

Tbe judgment, under these principles, seems to have been right, and it should be affirmed, with costs.

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

Judgment affirmed, with costs. -