text:
    Thomas Sheffield, Appellant, v. Nicholas Murray, Respondent, Impleaded with Others.

      Appeal from, an order sustaining or overruling a demurrer — bond, given to discharge a mechanic’s lien — the liability of the sureties is not affected by the amount of the bond being in excess of the jurisdiction of the court fixing its amount.

    An appeal from an order sustaining- or overruling a demurrer is not permitted by tbe Code of Civil Procedure. The appeal must be from the judgment.
    Where a bond is given for tbe purpose of discharging of record a mechanic’s-lien, and is treated by all the parties in interest as valid, and upon the faith of it the mechanic’s lien is discharged of record, an action can be .maintained upon the same although the amount thereof exceeds the jurisdiction of the-court which makes the order fixing the amount of the bond to be given to discharge the lien.
    ' Appeal by tlj.e plaintiff, Thomas Sheffield, from an interlocutory judgment of the Supreme Court in favor of the defendant Nicholas-Murray, entered in the office of the clerk of the county of New York on the 20th day of April, 1894, upon the decision of the-court rendered at the New York Special Term dismissing the plaintiff’s complaint as to the said Nicholas Murray, with notice of an intention to bring up for review upon such appeal an order made at the New York Special Term, and entered in said clerk’s office on the 13th day of March, 1891, overruling the plaintiff’s demurrer to the new matter set up in the answer of the said defendant and directing that the plaintiff’s complaint be dismissed as to such defendant.

      M. F. HaJ/pvn, for the appellant.

      F. B. Troutmazi, for the respondent.
   Yan Brunt, P. J.:

It has been repeatedly held in this court and in the Court of Appeals that an appeal from an order sustaining or overruling a demurrer is not permitted by the Code of Civil Procedure; the appeal must be from the judgment. Therefore, so much of the appeal as is from the order overruling the demurrer must be dismissed, with ten dollars costs.

The appeal from the judgment brings up the question as to whether the new matter contained in the answer was sufficient to constitute a defense to the cause of action set out in the complaint. It appears that one Thomas L. Sheffield, in February, 1889, filed a notice of a lien in the county clerk’s office in the city and county of New York, claiming a lien for work done and materials furnished upon certain buildings in said city; that in such notice the defendant Robinson was named as contractor, and one Edward Early was named as the owner of such building. Robinson subsequently made an application to the City Court of New York, and to one of the judges thereof, for an order fixing the amount of a bond to be given to discharge such lien. Thereupon the said court, by an order, fixed the amount of the bond to be given at $2,100. Robinson thereupon ■entered into a bond as principal, together with one Mary E. Robinson and the respondent Murray as sureties, for the purpose of discharging the said lien, which bond was duly approved, and upon the filing thereof such lien acquired by the filing of said notice was discharged. Sheffield then commenced an action to foreclose the said mechanic’s lien. Subsequently the claim and cause of action were •assigned to the plaintiff herein. Issue having been joined in said action of foreclosure, the same was tried before a referee who gave judgment for the plaintiff. But inasmuch as the lien had been, discharged by the filing of such bond, a judgment in form only, directing a sale of the premises, was entered. Neither the principal nor his sureties paid the amount found due by said judgment of foreclosure. "Whereupon application was made by the plaintiff for leave to maintain an action in his own name against said principal and sureties for the amount of the bond. Such leave was granted; and the question presented is whether the 'plaintiff can maintain an action upon said undertaking because its amount exceeded the jurisdiction of the City Court. In view of the fact that the undertaking was treated by all the parties as one having validity, and upon the faith of it the mechanic’s lien was discharged of record, it seems to us that the question is no longer opened for discussion under the decision of the Court of Appeals in Goodwin v. Bunzl (102 N. Y. 224).

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

Pollett and O’Brien, JJ., concurred.

Judgment" reversed, new trial ordered, costs to appellant to abide event.


source: Caselaw Access Project

author: Per Curiam :

license: Public Domain

text:
    In the Matter of the Application of The Manhattan Railway Company and Another, Appellants, v. Julia A. Kent, Individually and as Trustee of Ellen Kent, Deceased, and Others, Respondents, Relative to Acquiring Title to Certain Real Property in the City and County of New York.
    No. 1.

      Condemnation proceedings — costs in the absence of proof of an offer.

    The statute defining the circumstances under which parties to condemnation pro- . ceedings are entitled to costs is explicit in its terms, and although there may be an adjudication of the Superior Court that the parties were unable to agree as to the price of the land to be taken, yet where there is no allegation in the petition, nor any evidence showing that any offer had been made, which could relieve the petitioners from the payment of costs, the defendants are entitled to the same.
    Appeal by the plaintiffs, The Manhattan Railway Company and another, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the ■county of New York on the 17th day of July, 1894, granting the defendants’ motion for costs and an extra allowance, and directing the modification of the final order so as to direct that the defendants recover their costs and allowance, and also from the. final order made at the New York Special Term and entered in said clerk’s office on the 6th day of July, 1894, in so far only as it is modified by the order entered in said clerk’s office on July 17, 1894.
    In February, 1894, the Manhattan Eailway Company and another commenced proceedings under chapter 23 of the Code of Civil Procedure for the condemnation of so much of the easements, or rights in the nature of easements, of light, air and access, appurtenant to certain real estate belonging to Julia A. Kent, individually and as trustee, etc., of Ellen Kent, deceased, and others, as was taken by the maintenance of the structure of the elevated railway of the plaintiffs. Such proceedings were had therein as resulted in a judgment that the condemnation of such rights and easements was necessary for the public use, and that the plaintiffs were entitled to hold the same, and commissioners were appointed to ascertain the compensation to be made to the owners of the same.
    Thereafter the owners of such easements were awarded the sum of $750 as compensation for the property taken.
    The report of the commissioners was confirmed, but the order confirming the same omitted to grant costs and allowances to the defendants. No offer was ever made by the plaintiffs in such proceeding, or by any one in their behalf, to purchase the property taken in such condemnation proceedings.
    Upon motion of the defendants the final order in the condemnation proceedings was amended by granting costs to the defendants, together with an extra allowance.

      William S. Q-odden, for the appellants.

      A. B. Oruilcshank, for the respondents.
   Per Curiam :

Ye see no reason for interfering with the order appealed from. The statute is explicit in its terms defining the circumstances under which parties to these proceedings are entitled to costs. It is true that there was an adjudication of the Superior Court that the parties were unable to agree as to a price, but there is no allegation in the petition.or any evidence that any offer had been made which could possibly relieve the petitioners from the payment of costs.

Under these circumstances, under the statute, the defendants were entitled to the costs which were allowed them by the court.

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

Present: Van Brunt, P. J., O’Brien and Follett, JJ.

Order affirmed, with ten dollars costs and disbursements.


text:
    In the Matter of the Application of The Manhattan Railway Company and Another, Respondents, v. Julia A. Kent, Individually and as Trustee, etc., of Ellen Kent, Deceased, and Others, Appellants, Relative to Acquiring Title to Certain Real Property in the City and County of New York.
    No. 2.

      Condemnation proceedings — what is the trial.

    Proceedings before the commissioners in condemnation proceedings do not constitute the trial contemplated by the statute. Such proceedings are a mere assessment of damages, and the trial spoken of in the statute is that which takes place preliminary to the appointment of the commissioners.
    Appeal by the defendants, Julia A. Kent, individually and as trustee, etc., of Ellen Kent, deceased, and others, from an order of the Supreme Court, made at the New York Special Term and’ entered in the office of the clerk of the county of New York on the 12th day of September, 1894, denying the defendants’ motion for a review of the taxation of the costs in these proceedings.
    These condemnation proceedings were commenced by the filing ■of a petition and notice on February 26, 1894. Such proceedings were had that on March 19, 1894, it was referred to a referee pursuant to section 3361 of the Code of Civil Procedure, to hear and determine the truth of the allegations contained in the petition. Thereafter such proceedings were had before the referee that his report was made and filed, and thereupon a judgment and order were made adjudging that the condemnation of the real property described in the petition was necessary for the public xiSe) and appointing commissioners to ascertain the compensation to be made to the defendants therein. Thereupon the commissioners met, the parties appeared before them, eight meetings were held and twenty witnesses were examined. Evidence was given by the plaintiffs’ witnesses tending to show that no compensation should be allowed.
    On May 28, 1894, the report of the commissioners was filed in the office of the clerk of the county of New York, whereby the defendants were awarded $750 as compensation, and such report was thereafter confirmed.
    By the final order entered in such proceedings, as amended, it was adjudged that the defendants recover costs of the proceedings, together with five per cent extra allowance, to be taxed at the same rate as where the defendant is the prevailing party in an action in the Supreme Court. Thereafter the defendants presented a bill of costs which contained, among others, the following items: Trial fee, issue of fact, thirty dollars; allowance by statute, sixty dollars; trial occupied more than two days, ten dollars; and a disbursement, county stenographer, minutes, nineteen dollars and sixty cents; all of which items were struck out of the defendants’ bill of costs by the clerk of the court upon the taxation of costs. The defendants thereafter moved for a review of the taxation of costs by the clerk. Their motion was denied, and from the order denying such motion this appeal was taken.

      A. B. OndJcshcmh, for the appellants.

      William U. G-odden, for the respondents.
   Per Curiam :

The proceedings before the condemnation commissioners were not the trial contemplated by the statute. Such proceedings were a mere assessment of damages. The trial spoken of in the statute is that which takes place preliminary to the appointment of commissioners.

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

Present — Yan Brunt, P. J., O’Brien and Follbtt, JJ.

Order affirmed, with ten dollars costs and disbursements.


author: Per Ouriam :

text:
    Richard C. Sibley, Appellant, v. The New York Times Publishing Company, Respondent.

      Discovery and inspection of papers — when it should he granted.

    One Sibley signed a contract by wliicli lie agreed to subscribe and pay $50,000 for 500 shares of a corporation about to be organized. Thereafter he paid $15,000 on account of his subscription, and signed a contract by which he agreed to pay the balance to three of the promoters of the corporation, or to their assigns, four months after date, with interest. Sibley refused to pay the balance, and the corporation, which had been organized in the meantime, brought an action to recover the §35,000, alleging that it was the assignee of the promoters.
    Prior to the commencement of such action an action was begun by Sibley against such corporation by the service of a summons without a complaint. Thereafter, he verified a petition in such latter action, in which he stated that the action was brought by him to rescind the subscription contract, on the ground that it was obtained by fraud and deceit, and on the further ground that the corporation and its promoters had failed to perform the contract under and by which the subscription was obtained. It was stated in the petition that it was necessary that the plaintiff be permitted to inspect the original subscription contract, the contract for the payment of §35,000, and the assignments of such two contracts, to enable him to prepare and serve his complaint in such action, and that repeated demands to be permitted to inspect those documents had been refused. '
    The defendant denied that the plaintiff was defrauded or deceived, and denied that it or its promoters had failed to perform the contract under which the subscription was made.

      Held, that the denial of a motion for an order requiring the defendant to permit the plaintiff to inspect such documents was erroneous;
    That the plaintiff was a party to the papers and had a right to know whether the agreement set up in the action in which he was the defendant was an exact copy of the original, and he had a right to inspect the two documents and the-assignments of them to the defendants, if they had been assigned in writing;
    That in case it was shown that such papers were not in the possession of the-defendant, nor within the control .of the defendant, nor of its officers nor employees, it could apply to be relieved from the terms of the order requiring it to file the same for inspection, and that it could then be determined whether a reference should be ordered to ascertain the whereabouts of the same.
    Appeal by the plaintiff, Richard O. Sibley, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of county of New York on the 18th day of September, 1894, denying the plaintiff’s application to be allowed to make an inspection of certain papers and vacating an order of the Supreme Court, made at the New York Special Term and entered in said clerk’s office on the 5th day of September, 1894, directing the discovery and inspection of such papers.

      Frederick JR,. Kellogg, for the ajipellant.

      JB. F. Finstein-, for the respondent.
   Per Ouriam :

On March 29, 1893, the defendant was incorporated under the laws of this State with an authorized capital of $1,250,000, divided into 12,500 shares of $100 each. Before March 29, 1893, several persons, who may be called promoters, interested themselves in obtaining subscriptions for shares in the corporation to be thereafter organized for the purpose of purchasing and conducting the New York Times. The plaintiff signed a contract by which he agreed to subscribe and ¡iay $50,000 for 500'shares. At some time, the date not appearing, the plaintiff paid $15,000 on his subscription, and on April 7, 1893, signed a contract by which he agreed to pay $35,000 to three of the promoters, or to their assigns, four mouths after date, with interest from April 1, 1893. The plaintiff refused to perform this contract, and in August, 1894, the New York Times Publishing Company brought an action in this court against Sibley to recover the $35,000, alleging that it was the assignee of the contract. On July 17, 1894, this action was begun by the service of a summons without a complaint. On August 31, 1894, the plaintiff verified a petition in which it was stated that the action was brought to rescind the subscription contract, on the ground that it was obtained by fraud and deceit, and on the further ground that the corporation and its promoters had failed to perform the contract under and by which the subscription was obtained. It is further stated in the petition that it is necessary that the plaintiff be permitted to inspect the original subscription contract, the contract for the payment of $35,000, and the assignments of said two contracts, to enable him to prepare and serve his complaint in this action; and that repeated demands to be permitted to inspect these documents had been refused. Upon this petition a motion was made for an. order requiring tlie defendant to permit tlie plaintiff to inspect those documents. The defendant by its officers denied that the plaintiff was defrauded or deceived, and denied that it or its promoters had failed to perform the contract under which the subscription was made.

We are unable to see any reason for refusing the plaintiff permission to see the original contract for the payment of $35,000, or the original subscription agreement and the assignments of those two contracts, if any there are. The plaintiff is a party to these papers, and one of them at least is in the possession of the defendant. He has a right to know whether the agreement set up in the action iu which he is a defendant is an exact copy of the original, and no harm can be done to the rights of this defendant in permitting such an inspection. Nor áre we able to see why the plaintiff in this action should not have the right to inspect the original subscription agreement. The only reason given by the defendant for refusing this right is, that on certain dates named the contract was not in its possession. It is not stated in the defendant’s affidavits that this contract was not within the control of the defendant or of its officers or agents.

We think that the right of the plaintiff to have an inspection of these two documents and of the assignments of them to the defendant, if assignments in writing have been made, is clear. In case it shall turn out that the first subscription contract is not in the possession or within the control of the defendant or of its officers or employees, it can apply to be relieved from the part of the order requiring it to file that contract for inspection, and then it can be determined whether a reference shall be ordered to ascertain its whereabouts.

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

Present — -Yan Brunt, P. J., and Follett, J.

Order reversed, with ten dollars costs and disbursements.


author: Follett, J.:

text:
    The Bank of British North America, Appellant, v. Richard Delafield, Respondent.

      Special question submitted to a jury — error in the admission of evidence, when disregarded— admissibility of entries in boohs of account — requests to the court to find facts and that the jury be directed to find as to them, distinguished.

    In case special questions are submitted to tlie jury upon tbe trial of an action, pursuant to sections 1187 and 1188 of the Code of Civil Procedure, which embrace all the material issues of fact, and are answered, rulings upon questions of evidence not relevant to the findings submitted are to be disregarded on appeal, and so are the exceptions to refusals to charge, unless the requests are germane to the questions submitted.
    Entries in books of account against the interest of the persons making or authorizing them are competent against such persons, but self-serving declarations made by some of the partners after the dissolution of the firm of which they are members, are incompetent evidence as against a partner who has withdrawn from the same.
    There is a difference between asking a court, upon the trial of an action, to rule that a fact is established and requesting the court to instruct the jury to find whether such fact is established.
    Van Biujnt, P. J., dissenting.
    Appeal by tlie plaintiff, Tbe Bank of British North America, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of New York on the 8th day of June, 1893, upon the verdict of a jury upon a special question of fact submitted to it, rendered after a trial at the New York Circuit, and also from an order entered in said clerk’s office on the 22d day of May, 1893, denying the plaintiff’s motion for a new trial made upon the minutes.
    December 31, 1883, William T. Coleman, Frank S. Johnson and Carleton C. Coleman, of San Francisco, and Richard Delafield, of New York, executed a contract by which they became partners under the firm name of William T. Coleman & Co., for the purpose of transacting a general mercantile and commission business in San Francisco and New York. The articles provided:
    “ This co-partnership is to remain in force for one (1) year and to be continued thereafter from year to year on same terms and conditions, unless some one of the partners shall wish to withdraw from the partnership or desire a change of terms, in which event he must give written notice of such desire at least sixty (60) days before the end of the year, or before the time the change is desired, that the remaining partners may agree as to the future, according to the terms niueteenth'and twentieth.”
    • The firm continued in business until December 31, 1887, when Delafield withdrew from the firm, and the business was thereafter continued under the same firm name by the San Francisco partners until May seventh, when they made a general assignment for the benefit of their creditors. The firm had two places of business, one in San Francisco and the other in New York, Delafield being in charge of the New York office. The firm kept an account with the Bank of New York National Banking Association, and on the 31st day of December, 1887, Delafield drew a check against this bank account, signed by the firm name, for $25,000, which was paid, he receiving the avails thereof. Sometime after January, 1888, the firm took the position that the $25,000 so withdrawn from the bank by Delafield -was a loan from the firm to him, which he agreed to pay on demand, and April 26,1888, the firm assigned its claim against Delafield arising from this check to the Bank of British North America, which brought the present action against him to recover that sum on the theory that it was a loan.
    The defendant by his answer admits that he drew from the bank $25,000 on the 31st of December, 1887, by means of the check, but alleges that it was not a loan, but was a sum which he was entitled to draw from the firm.
    Whether the sum taken was loaned by the firm or was taken by the defendant as part of its assets, was the principal question of fact litigated on the trial. At the close of the evidence the court, with the assent of the counsel for the litigants, submitted to the jury this question: “ When the defendant drew from the funds of the firm of William T. Coleman & Co. the sum of $25,000 on the 31st day of December, 1887, was it as an acceptance of the offer of Wm. T. Coleman to loan him $25,000 contained in the telegram of December 12, 1887, and reaffirmed in the letter of December 13, 1887, so that the firm of William T. Coleman & Co. loaned and the defendant borrowed that sum from the said firm, and the said sum of money was drawn by the defendant with the intention of appropriating that sum on account of amount coming to him from the co-partnership when about terminating ? ”

      The jury answered the question in the negative, and thereupon the court directed a general verdict for the defendant, to which direction no exception was taken. A motion was made on the minutes for a new trial, was denied, and an order was entered. Afterwards a judgment was entered on the verdict, and the plaintiff has appealed from the order and the judgment.

      Hugh L. Gole, for the appellant.

      John E. Ear sons, for the respondent.
   Follett, J.:

Neither party requested that any question of fact other than the one embraced in the finding be submitted to the jury, and no objection was raised to the form of the finding. The only questions involved in this appeal are: (1) Was the answer to the question contrary to the weight of evidence? (2) Were errors committed in the reception or rejection of evidence ? (3) Did the court err in refusing to charge the jury that the plaintiff might recover in case the defendant was not entitled, under the state of the accounts, to withdraw $25,000 from the firm’s assets on the 31st of December, 1887, even though a loan was not contemplated? The evidence shows that the defendant charged $25,000 to himself on the books of the firm as a partnership item on the day the money was drawn, and that December 31, 1887, January 31, 1888, February 29, 1888, March 31, 1888, and May 10, 1888, trial balances, showing the state of the accounts of the New York office on those dates, were rendered, which included the item of $25,000 as a charge against the defendant in the partnership accounts. Whether the trial.balance of December 31, 1887, was sent to San Francisco does not definitely appear, but those subsequently rendered were mailed. The new firm, of which the defendant became a member, acted as the agents of William T. Coleman & Co. until their failure, and it does not appear that the $25,000 was asserted by the firm of William T. Coleman & Co. to be a loan to the defendant, instead of an item between partners to be adjusted on accounting, until April, 1888. The defendant testified that the $25,000 was not taken as a loan, and there is little evidence to support the contention that it was agreed between the firm and the defendant that the sum was to be loaned to him. Neither of the partners who continued in the firm was sworn in respect to the transaction, and the only evidence that a loan was ever contemplated is derived from defendant’s telegram to William T. Coleman of December 11, 1887, and the telegram in reply, dated the next day, and William T. Coleman’s letter of December 13, 1887. Coleman said in his telegram and letter : Will not, cannot consent to anybody drawing one dollar beyond necessities of living until after liability is liquidated, but will lend you the money if you can negotiate it without interfering with our needs and regular business. Our payables precede any other consideration.” Nowhere in the correspondence is there a distinct and unequivocal offer to loan defendant $25,000 or any other sum. It may be that the evidence may have authorized an inference that this advance was considered as a loan, but it does not require that such an inference should be drawn by the jury, and, we think, as the question of fact was fairly submitted by the court to the jury, that the answer to the question should not be set aside as against the weight of evidence.

In case special findings are submitted to a jury (pursuant to sections 1187 and 11S8 of the Code of Civil Procedure) which embrace all the material issues of fact and are answered, rulings upon questions of evidence not relevant to the findings submitted are to be disregarded on appeal and so are the exceptions to refusals to charge, unless the requests are germane to the questions submitted. It often happens on trials, before the true issue is developed, that irrelevant evidence of a nature likely to affect a general verdict is received over the objection and exception of one of the litigants, but if the special finding submitted excludes the incompetent evidence from the consideration of the jury the error is not a ground for a new trial. (Thomp. Tr. § 2699.) One of the objects of submitting a special finding is to prevent juries from returning verdicts on their general notions of right and wrong, often influenced by irrelevant evidence or by the arts of skillful counsel, and to compel them to determine whether the facts on which the right to recover depends, do or do not exist.

This brings us to the consideration of the two rulings on the admissibility of evidence, which, it is urged, are erroneous. The firm kept a set of books at San Francisco in which considerable sums were charged against the defendant after he had withdrawn from the firm. These entries were not authorized by him, nor were they made with his knowledge, nor was it proved that all of the items cliai’ged were just as between the defendant and the firm. It is apparent, without discussion, that these entries made by the San Francisco partners were not competent against the defendant upon the issue whether it was agreed that the sum withdrawn! December 31, 1887, was a loan. Entries against the interest of the persons making or authorizing them are competent against such persons, but self-serving declarations made by some of the partners after the dissolution of the firm were incompetent as against the defendant.

Before the plaintiff rested evidence was received which, it is asserted, tended to slioiv that nothing was coming from the firm to the defendant on the 31st of December, 1887. In ansvur to this defendant was permitted to introduce in evidence, over the jilaintiff’s objection and exception, a telegram dated San Francisco, November 11, 1886, signed William T. Coleman & Co., and received at New York, stating that the profits of the firm for that year were $325,000. It is clear that this evidence was not relevant to the issue whether more than a yekr afterwards the defendant borrowed $25,000 of the firm, and it could not have affected the jury in their consideration of this issue. These are all of the objections relating to the admissibility of evidence which are discussed by the plaintiff.

The plaintiff insists that there were two material .issues of fact which were not submitted to the jury. (1) Was there a balance exceeding $25,000 due plaintiff from the firm ? (2) Was it out of that balance that defendant drewr the specific sum which is the basis of this action ? The plaintiff did not request the court to submit either question to the jury, and took no exception to the direction of the general verdict. On the contrary, the plaintiff requested the court to charge (fifteenth request) that defendant wras indebted, December 31, 1887, to William T. Coleman & Co., in the sum of $27,210.99. Asking the court to rule that a fact is established is quite different from requesting the court to instruct the jury to find whether such fact is established.

The court ruled that if the transaction were a loan the plaintiff was entitled to recover, but if not, it was not entitled to recover. The plaintiff preferred several requests, couched in different terms, but all based on the theory that the plaintiff vrould be entitled to recover if the defendant, at the time he drew the $25,000, was indebted to the firm instead of having a credit therewith.

These requests were refused, and the plaintiff excepted. In this there is no error. As before stated, the jury did not find, nor was it asked to find whether the defendant drew more from his firm than he was entitled to draw. The only evidence bearing on this question is found in the trial balances and accounts based on the estimated value of the firm’s assets and the amount of its liabilities. It is common knowledge that the results shown by such balances and accounts are not often realized when the assets are converted into money and the liabilities are discharged. There was no evidence from which it could have been found how much the defendant will be indebted to or entitled to draw from the firm, when all of the assets shall be converted into cash and the liabilities paid off. The evidence does not disclose the state of the accounts of the other partners, and so it was impossible for the jury to find as a fact, or for the court to decide as a matter of law, what the defendant’s interest was in the firm on the 31st of December, 1887.

It should be borne in mind that this is a strictly legal action brought to recover a sum of money alleged to have been loaned by the plaintiff’s assignor to the defendant. It was tried on that theory, and the plaintiff was beaten on the question of fact which it tendered, and it now seeks to recover on the theory that the defendant was indebted to the firm in more than the sum claimed, and that in equity he ought to pay it over to the plaintiff. How much the defendant is indebted to the firm, of which he was a member, or to his late partners, cannot be ascertained until there is a final accounting, and if then it shall appear that he is indebted it would seem more equitable that his liabilities to the late firm should be applied to the payment of the debts of that firm, and not in payment of the debts of the new firm of which he was not a member, and which became insolvent. It seems to us that the learned trial judge apprehended the true question of fact in the case and correctly decided every legal question presented to him.

The judgment and order should be affirmed, with costs.

Parker, J., concurred; Yan Brunt, P. J., dissented.

Judgment and order affirmed, with costs.


author: f OLLISTT, J. :

text:
    James R. O’Beirne, on Behalf of Himself and all Other Bondholders of The Allegheny and Kinzua Railroad Company, Appellant, v. Spencer S. Bullis and Others, Respondents.

      Specific, performance, — when impossible, damages may be awarded in lieu, the.re.oj— legal relief granted in Cm equity action.

    Where the specific performance of a contract to mortgage real estate cannot he had because the person contracting- to mortgage the same is not the owner thereof, specific performance of such contract will not he decreed in an action brought for that purpose.
    In caso the plaintiff in an equitable action shows that he is entitled to equitable relief, which, if granted, would he unavailing because of the defendant’s inability to perform, the damages sustained by the plaintiff may be recovered in the same action.
    Appeal by the plaintiff, James R. O’Beirne, on behalf of himself and all other bondholders of The Allegheny and Kinzua Railroad Company, from a judgment of the Supreme Court in favor of the defendants, entered in the office of the clerk of the county of New York on the 20th day of February, 1893, upon the decision of the court, rendered at the New York Special Term, dismissing the plaintiff’s complaint.
    This action was begun July 15, 1891, to compel the individual defendants Bullis and Barse to convey, by way of mortgage, to the Central Trust Company 30,000 acres and 16,000 acres of timber land, pursuant to their contracts of October 8, 1889, and December 9, 1889, or, in case they were incapable of mailing such conveyances, that they he adjudged to pay the value of said 46,000 acres to said trust company as security for certain bonds.
    In 1889 the Bradford and Corydon Railroad Company and the Allegheny and Kinzua Railroad Company were railroad corporations organized and existing under the statutes of the State of Pennsylvania, with a contemplated main line of thirty miles in length, of which sixteen miles were completed and in operation.
    On the 6th day of July, 1889, the Interior Construction and Improvement Company was incorporated under the statute of the State of New Jersey, entitled “An act concerning corporations,” approved July 7, 1875, and the several acts supplemental thereto and amendatory thereof, with a capital stock of $100,000, divided into 1,000 shares of the par value of $100 each.
    In the summer of 1889 the defendants, Spencer S. Bullis and Mills "W. Barse, being the owners of all the shares of said two railroad corporations, and desirous of obtaining sufficient money to complete the construction of the two roads, applied to I. B. Newcombe & Co., bankers, of the city of New York, to negotiate $250,000 in bonds, to be secured by a first mortgage on the property of said railroads and on 30,000 acres of timber land owned by Bullis & Barse, and situated in the county of McKean in the State of Pennsylvania near said railroads. As a result of this application, a written contract was entered into on the 8th day of October, 1889, between I. B. Newcombe & Co., of the first part, and Spencer S.. Bullis and Mills W. Barse of the second part, in which it was recited that .the party of the second part owned all the. shares of the two railroad corporations, and that they also owned or controlled 30,000-acres of valuable timber land in the county of McKean.
    By this contract the party of the second part agreed that a mortgage should be executed on the property of said two railroads and on said 30,000 acres of land to the Central Trust Company, as trustee, for the purpose of securing mortgage bonds to the amount of $250,000, payable thirty years after date, with interest at five per cent per annum, payable semi-annually. The jiarty of the first part undertook to sell at par $210,000 of said bonds and pay the avails-over to the party of the second part, for the purpose of completing the main line of their roads. The mortgage was to be executed and the bonds ready for delivery on or before January 1, 1890. This contract contains other provisions which it is not necessary to-refer to.
    In the summer of 1889 there was a corporation known as the-Allegheny and Kinzua Railroad Company, which was organized under the statutes of the State of New York, for the purpose of constructing a road about sixteen miles in length, of which ten miles had, in 1889, been constructed. Spencer S. Bullis and Mills W. Barse owned all the shares of this corporation. The design of the promoters of these three railroad corporations was to have the roads-constructed by them form a continuous line.
    In November, 1889, I. B. Newcombe & Co. sent an engineer to-examine the road and the timber land proposed to be’mortgaged. Barse and Bullís showed the engineer large tracts of valuable timber land, lying along the route of said roads, which Barse and Bullís said they owned, or controlled, and that the tracts contained 200,000 acres. The result of the investigation was that a supplementary contract was entered into December 9, 1889, between I. B. Newcombe & Oo., party of the first part, and Spencer S. Bullís and Mills W. Barse, party of the second part, by which the contract of 'October 8, 1889, was modified. In the later contract it was recited that the party of the second part owned the capital stock of the Allegheny and Kinzua Railroad Company, amounting to $80,000. By this contract it was agreed that the three railroads should be consolidated into a single corporation, under the statutes of the States of New York and Pennsylvania, with a full-paid capital stock of $500,000, and that a mortgage upon the three railroads so consolidated, and on said 30,000 acres of timber land, to secure the payment of' $500,000 of bonds, should be given to the Central Trust Company as trustee. This mortgage was in lieu of the mortgage provided for in the contract of October 8, 1889. The party of the first part agreed to sell $260,000 of these bonds at par, for which they were to receive $40,000 of bonds for their services, making $300,000 of bonds to be issued and marketed in the first instance. The $300,000 of bonds so to be issued were to be used to complete the lines of the constituent corporations, amounting to forty-six miles, and $200,000 of the bonds were to be applied to pay for the •construction of twenty-four miles of branches and extensions. As an additional security for the $200,000 of bonds Barse and Bullís agreed to convey to said trust company 16,000 acres of timber land as security.
    On the 9th of December, 1889, the Interior Construction and Improvement Company entered into a contract with the Allegheny and Kinzua Railroad Company (the New York corporation), and on the same day it entered into another contract with Spencer S. Bullís and Mills W. Barse for the construction of a certain number of miles of railroad in consideration of a certain number of bonds and shares of stock to be issued pursuant to the aforesaid contract.
    February 26, 1890, the three railroad corporations were consolidated, pursuant to the statutes of the States of New York and Pennsylvania, under the name of the Allegheny and Kinzua Railroad Company, with a capital stock of 5,000 shares of the par value of $100 each. On the 27th of February, 1890, the Allegheny and Kinzua Railroad Company, by Spencer S. Bullis, its president, and Spencer S. Bullis individually, and Sarah E. Bullis, his wife, executed, acknowledged and delivered a mortgage (dated February 1, 1890) to the Central Trust Company upon the property of the corporation and upon 30,954 acres of land to secure the payment of 500 bonds of $100 each, with semi-annual interest at the rate of five per cent per annum. Bonds amounting to $500,000 were executed by the railroad and delivered to the trust company, of which $300,000-were negotiated and are now outstanding, except $15,000, which have been paid.
    By the tenth article of the mortgage it was provided that on the application of Spencer S. Bullis any of tlie timber lands mortgaged by him should be released by the trustee from the lien of the mortgage on payment by Bullis of the sum fixed by appraisers, one to be appointed by him, another by the trust company, and they to select ihe third. Upon the application made to have 4,379 acres of said imber land released, its value was appraised by the appraisers soippointed at one dollar per acre. The court found that of the-50,95411¶9-0- acres covered by the mortgage, Spencer S. Bullis, thenortgagor, had no title to 24,971^^, and also that there were L5,890 acres of land covered by the mortgage which the mortgagor-
    lid not own both the soil and the timber standing thereon, and that i large part of the land covered by the mortgage was incumbered. The court further found that of all the land so covered by the mortgage only 1,900 acres were held by an unincumbered title, and were imbered as provided in the contracts.

      Frank S. Smith, for the appellant.

      Albert Moot, for respondents Bullis, Barse and the railroad, iompany.
   f OLLISTT, J. :

The facts found by the court upon uncontradicted evidence conlusively show that Spencer S. Bullis and Mills W. Barse perpetra* ted an atrocious fraud upon I. B. Newcombe & Co., the trust company and every person purchasing the bonds secured by the mortgage. It is found (findings 28 and 29) that the agents of I. B. Newcombe & Co. were escorted by Bullís, at the request of Barse, through large tracts of heavily timbered land in McKean county, near the railroads, who reported its value to the firm, by which report they were induced to attempt to negotiate the bonds. A clear understanding of what thesé individual defendants intentionally accomplished cannot be better disclosed than by quoting the findings of the court.

Twenty-fifth finding.— “ That at and before the making and execution and delivery of said several agreements, the defendants Bullís and Barse pretended and represented to the said firm of I. B. Newcombe & Co. that the said 30,000 acres of land were timbered, free and clear of ah incumbrances, and contiguous and adjacent to the line of the defendant railroad company as the same was then constructed and projected, and that said laud was covered by a large quantity of merchantable timber which would be sufficient to, and would actually provide said railroad with at least 70 tons of freight to the acre, for conveyance over said railroad at rates from 25 to 50 cents per ton, in addition to the percentage accruing to said defendant railroad company from divisions with other lines.”

Forty-sixth fi/ndi/ng.— “ That of the lands mentioned and described in said mortgage, Exhibit ‘ D,’ 24,971.52 acres thereof, more or less, being warrants 3708, 3717, 3719, 4874, 4872, 4871, 4917, 3702, 3710, 3712, 3718/3699, 4335, 4336, 3722, 3732,' 2396, 2550, 4913, 5572, 5556, 3703, 3422, 3423, 4875, 4876, 3706, 3734, 3711, 5578, and lots 18 and 34, were not owned by said Bullís at the date of said mortgage.”

Forty-seventhjmdmg.— “ That the following warrants described in the mortgage annexed to the complaint herein were not timbered, or had all timber removed off them at the date of the execution of said mortgage, to wit: Warrants 3734, 3711, 3702, 4335, 4336, 4872, 4875, 4876, 3422, 3423, 5573, 5572, 3703, 3708, 3717, 3719, 3699, 5556, all in the county of McKean, State of Pennsylvania, and lots 41, 42, 43, 34, 35, 25, 27, 33, 18 and 26, located in the town of Red House, county of Cattaraugus, State of New York.”

Fifty-second finding.— “ That the defendant Bullis, at the date of the execution of the mortgage above mentioned, did not have the title to the soil of certain of the lauds described in said mortgage and the timber standing thereon, being warrants Nos. 3708, 3717, 3719, 4S74, 4872, 4871, 4917, 4335, 4336, 3710, 3712, 3718, 3699, 3702, 3722, 3732, 2396, 2550, 4913, lot 18, aggregating 15,890.92 acres more or less.”

Fifty-third finding— “ That the defendant Bullis, at the date of the execution of the mortgage above mentioned, did not have free and unincumbered title to the following lands described in said mortgage, to wit: "Warrants Nos. 5572, 5556, 5573, 2396, 2550, 4913," 3706, 3734,3711, 3714, 3731, 4335, 4336, 3722, 3703, 3708, 4817, 4871, 3717, 3719, 4872, 4874, lot 34.”

Fifty-fourth finding.- — “That of the lands mentioned and described in the said mortgage, £ Exhibit B,’ 1,900 acres thereof, being warrants 3731 and 3714, were owned by said Bullis at the date of said mortgage and constitute a compliance with the covenants and agreements of the defendants Bullis and Barse.”

These findings are sufficient to show the magnitude and character of the fraud perpetrated by Bullis and Barse. By the forty-ninth and fiftieth findings it appears that much of the land mortgaged was of little value, and by the fifty-first finding, instead of such land being included in the mortgage, that land of the value of at least eighteen dollars per acre should have been included in order to constitute a compliance with the contracts of Bullis and Barse. These findings, in connection with the fact that 4,379 acres of land was valued by the appraisers at one dollar per acre, sufficiently show the value of the land included within the mortgage.

The learned trial court correctly held that a specific performance of the contracts could not be decreed because it did not appear that Bullis and Barse, or either of them, owned timber lands other than those described in the mortgage.

The ground on which the court refused to award damages and dismissed the complaint is not disclosed, but we assume it was on the theory that, as equitable relief could not be granted, the plaintiff was not entitled to legal relief, to damages. "We take it to be too well settled to require the citation of .many authorities that in •case a plaintiff in an equitable action shows that he is entitled to equitable relief which, if granted, would be unavailing because of the defendant’s inability to perforin, that the damages sustained by the plaintiff may be recovered in the same action. (Margraf v. Muir, 57 N. Y. 155-159; Miles v. D. F. I Co., 125 id. 294; Valentine v. Richardt, 120 id. 272.)

It has been held in many cases Drought to compel the specific performance of contracts that damages may be, awarded to the plaintiff though specific performance be refused. The right of this plaintiff, who purchased and owns ten bonds of $1,000 each, to maintain this action in behalf of himself and of all other bondholders, is not seriously questioned, and was determined in Belden v. Burke (72 Hun, 51).

It appears that the trust company on the 4th of April, 1893, three months before this action was begun, declared, pursuant to article 3 of the mortgage, that the whole sum secured by it should become immediately due and payable. The plaintiff showed a sufficient demand upon the trust company to bring an action for the protection of the bondholders and refusal, to entitle him to maintain this action.

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

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

Judgment reversed, new trial granted, costs to appellant to abide event.


text:
    George F. Wiechers, Plaintiff, v. The Central Trust Company of New York, Defendant.

      Recoeery from a trust company for stock 'delivered upon a forged assignment— amount of such recovery limited to the value of the stock not directed to be sold — exceptions heard at the General Term upon a verdict directed by the court — the-General Term may modify the verdict and order con appropriate judgment.

    A person placed with a firm of brokers certain certificates exchangeable, upon presentation to a trust company, into the stock of a new corporation, and upon the faith of a forged assignment of such stock made by the brokers, th'e trust company delivered the stock to a third person. Subsequently the owner directed the sale of a portion of the stock covered by the original certificate by his brokers, who pretended to sell the same and placed an amount equal to the value thereof to the credit of the owner.

      Held, that the owner of the stock could only recover from the trust company the value of the stock which he did not direct his brokers to sell.
    In case a trial court directs a verdict for several distinct items, the amounts of which are not disputed, and the exceptions taken on the trial are ordered to be heard in the first instance at the General Term of the Supreme Court, that court has power, when there is no conflict of evidence, to modify the verdict by rejecting one or more of the items and directing the entry of a judgment on the verdict as modified. It may apply the law to an agreed state of facts, and order an appropriate judgment, and has the same power to modify a verdict on which a judgment has not been entered as it has to modify one which has ripened into a judgment.
    Motion by tlie defendant, The Central Trust Company of New York, for a new trial on a case containing exceptions, ordered to be heard at the General Term in the first instance, upon the verdict of a jury in favor of the plaintiff directed by the court after a trial at the New York Circuit on the 18th day of April, 1894.
    In December, 1888, the plaintiff became the owner of 2,424 shares of the Sugar Refining Company, which stood in his name on the books of the corporation. Subsequently he transferred 500 shares to Erahz O. Matthiessen, leaving 1,924 shares owned by plaintiff. In November, 1890, he purchased, through Field, Lindley & Co., 876 shares, which were transferred on the books of the Sugar Refining Company, making 2,800 shares then owned by the plaintiff and standing in his name. In July, 1890, a plan, in form a contract, was entered into for the purpose of terminating the affairs of the Sugar Refining Company, the defendant becoming a party to the contract and assuming certain duties thereunder. On the 29th of October, 1890, a supplemental plan was proposed by which a-corporation to take the place of the Sugar Refining Company was to be organized, pursuant to the laws of New Jersey, under the name of the American Sugar Refining Company, with a capital of $50,000,000, one-half of which was to be common stock and one-half seven per cent cumulative preferred stock, which corporation was so organized in January, 1891. In the plan of agreement of October 29, 1890, it was, among other things, provided:
    “The shares of the American Sugar Refining Co. will be exchanged, share for share, for Central Trust Company receipts, representing certificates, one-half in preferred shares and one-half in common shares.
    “ Each holder of the. Central Trust Co. receipts for 100 shares (or fractions thereof in proportion) will receive:
    “ 50 shares of the American Sugar Refining Co. cumulative preferred stock.

      “ 50 shares of the American Sugar Refining Co. common stock, and in addition
    “ in cash ($500). * * *
    “ All certificate holders who desire to participate in this plant may deposit their certificates at once with the Central Trust Co., when they will receive in exchange the Central Trust Co. receipts, which are, in turn, exchangeable for the stock of the new company. The time for the deposit of certificates is limited to December 1st, 1890.”
    The plaintiff became a party to these agreements and received from the defendant twenty-eight certificates for 100 shares each, of which the following (aside from certificate number) is a copy:

      “ 100 shares. Certificate of Deposit 100 shares.
    OF THE
    Sugar Refineries Company Certificates
    (hereinafter referred to as shares of stock) deposited under an agreement between holders of the Sugar Refineries Company certificates and Theodore A. Havemeyer, Franz O. hlatthiessen, Jno. O. Searles, Jr., Joseph B. Thomas, Julius A. Stursberg and Kidder, Peabody & Go., committee, and the Central Trust Company of New York, dated July 30th, 1890, and which agreement is hereby made a part of the undersigned certificate of deposit as fully as if the same were textually inserted therein.
    “ The Central Trust Company Shares
    No. 3226. of New York 100. hereby certifies that it has received from G-. F. Wiechers one hundred shares of stock, as above stated, in trust, subject to the terms and conditions of the above-described agreement, and to be used for the purposes therein stated of the committee of trustees therein named, or a majority of them, or their successors, and the holder hereof assents to, and is bound by the provisions of said agreement by receiving this certificate. The holder hereof is entitled to receive all the securities, benefits and advantages' coming to the depositors, respectively, of said stock under said agreement.
    “ The interest represented herein is assignable by transfer upon books kept by this company for that purpose by the holder hereof in person, or by proxy, upon surrender of this certificate, subject to the terms thereof.
    “CENTRAL TRUST COMPANY OF NEW YORK,’
    <£ By B. G-. Mitchell,
    “ New York, 9 Dec., 1890. Asst. Secretary.”

    Ten of these certificates, representing 1,000 shares, were, December 10, 1890, assigned and delivered to Field, Lindley & Co. (a firm of brokers), as security for a loan to plaintiff’s son of $30,000. On this date the plaintiff also delivered to Field, Lindley & Co. the eighteen certificates for the purpose of having them exchanged for shares in the American Sugar Refining Company when they were ready to be delivered.
    Some person forged the name of the plaintiff to an assignment dated January 30, 1891, by which the shares represented by the eighteen certificates were assumed to be assigned and transferred to Edward N. Hussey, the execution of which transfer purports to be witnessed by Edward M. Field and Field, Lindley & Co. The signatures Edward M. Field and Field, Lindley & Co. are in the handwriting of Edward M. Field. The eighteen certificates, with the forged assignment, were delivered to the defendant, and certificates for the number of shares assigned were issued and delivered to Edward N. Hussey.
    On the 9th of February, 1891, plaintiff received the check of Field, Lindley & Co. for $5,000, representing five per cent on the ten certificates assigned to Field, Lindley & Co. as security for the loan to the plaintiff’s son, and, February 12, 1891, the plaintiff received the firm’s check for $9,000, the five per cent dividend on the eighteen certificates which he had not assigned, as provided by the plan of October 29, 1890. Both checks were paid.
    On the 10th of February, 1891, the plaintiff directed Field, Lindley & Co. to sell 1,400 shares of common stock (all the com-moil shares then owned by him) at market rates, which they assumed to do, and, February eleventh, credited the plaintiff with $.107,800, which they represented to be the avails arising from the sale of said shares.
    On Ajiril 1, 1891, John F. Wiechers, plaintiff’s son, and the members of the firm of Field, Lindley & Co., formed a partnership under the name of Field, Lindley, Wiechers & Co., and continued the business of the former firm. The plaintiff, to assist his son to enter the firm, advanced him $50,000 by way of a debit in his account with Field, Lindley & Co. At the time of the formation of the new firm the amount to the plaintiff’s credit with Field, Lindley & Co. was $58,103.36, which sum was credited to them, charged to the new firm and by that firm credited to the plaintiff, of which he was informed April 1, 1891, by an account rendered.
    July 2, 1891, the American Sugar Refining Company paid a dividend of three and one-lialf per cent on its preferred shares and of four per cent on its common shares, and January 2, 1892, it paid like dividends on its preferred and common shares.
    In November, 1891, Field, Lindley, Wiechers & Co. failed. On the 9th of May, 1892, the plaintiff demanded of the defendant the return of the eighteen certificates and the payment of all dividends paid upon the shares represented by them, which was refused, and this action was brought to recover the value of the shares and the dividends received.

      George A. Strong, for the plaintiff.

      William Allen Butler, for the defendant.
   Follett, J.:

At the close of the evidence the defendant moved that the complaint be dismissed on various grounds, which was denied and an exception taken. The defendant then moved that the jury be directed that the plaintiff was not entitled to recover a greater amount than the value of the 900 shares of preferred stock and the dividends of July, 1891, and January, 1892, on those shares, which motion was denied and the defendant excepted.

The plaintiff thereupon asked the court to direct a verdict in his favor for $225,580.72, based upon the following statements:

1,800 shares at 100............................. $180, 000 00

Interest (May 27, ’92-Apr. 18, ’94).............. 20,460 00

5% dividend................................. 9, 000 00

Interest (May 9, ’92-Apr. 18, ’94).............. 1, 048 00

Dividend July 1, ’91.......................... 6, 750 00

Interest (May 9, ’92-Apr. 18, ’94)............... 786 36

Dividend Jan. 1, ’92.......................... 6,750 00

Interest (May 9, ’92-Apr. 18, ’94)............... 786 36

$225, 580 72

. The plaintiff’s motion was denied and he took an exception. Thereupon the court directed a verdict for the plaintiff for $167,625, stating that it was arrived at by taking the value of 1,400 shares of preferred stock, as proved, and adding thereto interest from June 3, 1892, also the dividends of July, 1891, and of January, 1892, with interest from June third to the date of the trial. The defendant excepted to the direction. Upon the argument of this motion the defendant insisted that the verdict should be set aside and a new trial granted, and the plaintiff insisted that the verdict be increased from $167,625 to $225,580.72, and that in case the court held that it was without power to increase the verdict that it be set aside as insufficient and a new trial granted.

We are unable to see any just foundation for the plaintiff’s position that he is entitled to recover the value of the 1,400 common shares and the five per cent dividend, amounting to $9,000, paid on the eighteen certificates, pursuant to the plan of reorganization. Field, Lindley & Co. assumed to collect this dividend for the plaintiff and gave him their check therefor, which was paid. Ten days before the plaintiff ordered the firm to sell his 1,400 common shares they had assumed to sell and transfer the title to them, without authority, but after receiving the plaintiff’s order of February 10, 1891, to sell, they on the next day credited him with $107,800, their then market value. On March 31, 1892, the account was balanced as per this statement:

Hr. Geo. F. Wiechers, Esq.

Date. Amount. Days. Interest.

1891.

Feby 10 _ To cash. Geo. F. Wiechers........... “ do J. F. Wiechers............ 5.000 00 50,000 00 49 299 44

“ 12 “ do Geo. F.. Wiechers......... 9.000 00 47 47 00

Mar. 81 “ Field, Lindley, Wiechers & Co... 58,103'26

“ Int. balance.................... 303 26

122,103 26 649 70

In account current with Field, Lindley & Co. Cr.

April 1, 1892, the plaintiff received a copy of the foregoing statement in which he acquiesced and accepted the new firm of Field* Lindley, Wiechers & Co. as his debtor for $58,103.26, the balance due from the former firm. Whether this credit was paid to the plaintiff or lost by the failure of the firm does not appear. He testified that he authorize^ Field, Lindley & Co. to sell the 1,100 common shares, and, when he received credit for them, he was charged with knowledge that his agents to sell had assumed to be his agents to transfer the shares to the purchaser, for he must have known that an assignment or transfer was necessary. True, he testified that he had never dealt in stocks, but he had then recently transferred 1,000 shares in the usual way to the firm as security for the debt of his son* and so was not wholly ignorant of the mode of transferring the title to shares. The plaintiff having placed the eighteen certificates in the possession of the firm, with power to exchange them for shares in the new corporation, and having afterwards given the firm power to sell the common shares, and having received the avails of the pretended sale, we think he cannot recover their value of the defendant, though when he gave the order to sell, and when he received the credit, he was ignorant of the fact that the shares had been wrongfully disposed of.

The plaintiff has no greater claim against this defendant than he had against Field, Lindley & Co., and clearly he could not retain the price of the 1,400 common shares and also recover from the firm the value of those shares, nor could he retain the $9,000 paid to him as a dividend and recover from them the amount of that dividend. The court did not err in refusing to direct a verdict for the value of the 1,400 common shares and for the five per cent dividend, amounting to $9,000. As before stated, the court directed a verdict for the value of 1,400 preferred shares, and the dividends declared on them in July, 1891, and January, 1892, with interest. Five hundred of the preferred shares had been assigned and transferred by the plaintiff to Field, Lindley & Co. as collateral security for the loan to his son, which transfer' was absolute on its face, was executed by the plaintiff, and the defendant did not violate the plaintiff’s rights in accepting the surrender of the receipt which represented those shares and in issuing a new one to Field, Lindley & Co. or to their transferee. Subtracting the 500 preferred shares from 1,400 preferred shares leave 900 preferred shares, which the plaintiff had not authorized Field, Lindley & Co. to transfer, and the plaintiff’s recovery should have been limited to the value of those shares, and to the dividends declared on them in July, 1891, and in January, 1892, with interest on those dividends.

In case the Circuit directs a verdict for several distinct items, the amounts of which are not disputed, and the exceptions taken on the trial are ordered heard by this court in the first instance, it has power, when there is no conflict of evidence, to modify the verdict by rejecting one ór more of the items and direct the entry of a judgment on the verdict as modified. This court may apply the law to an agreed state of facts and order an appropriate judgment. Had a judgment been entered on the verdict and an appeal taken, the power of tlxis court to modify the judgment by deducting some one or more of tlie items entering into it would not be doubted, and the court has the same power to modify a verdict on which a-judgment has not been entered as it has one which has ripened into a judgment.

The judgment should be modified so as to provide that the plaintiff recover the value of 900 preferred shares and the dividends declared on them in July, 1891, and in January, 1892, with interest on those dividends, and a judgment is ordered upon the verdict as modified in favor of the plaintiff, without costs of this motion to either party.

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

Judgment modified, so as to provide that plaintiff recover the value of 900 preferred shares and the dividends thereon in July, 1891, and January, 1892, and judgment ordered on verdict as modified in favor of plaintiff, without costs.


author: Parker, J.:

text:
    National Mahaiwe Bank, Respondent, v. Elizabeth T. Hand, as Executrix, etc., of Allen F. Hand, Deceased, Appellant.

      Agreement to keep premises insured — breach thereof — measure of damages — evidence improperly admitted, upon a trial.

    An agreement was entered into between two persons whereby one leased from the other a building for a period of years, with the right to purchase upon complying with the conditions therein named, and the lessee therein covenanted “ to keep in force insurance on said property for the benefit of said bank (the lessor) in the sum ofyten thousand dollars, in such companies as said hank shall approve.” No policy of fire insurance was issued covering such building, and the same was thereafter destroyed by fire.

      Held, that the measure of the damages of the lessor was not the sum of $10,000, but the cost of procuring- a policy of fire insurance in that amount covering the premises in question;
    That upon the failure of the lessee to take out the policy of insurance as provided by such agreement, the lessor should have taken out the same and charged the lessee with the cost thereof.
    The complaint in an action alleged the making- of a contract by which the defendant’s testator agreed to keep certain premises of the plaintiff occupied by him insured in a specified sum, its breach by the defendant, injury to the plaintiff, and demanded damages to the full extent of the injury. All the allegations of the complaint were admitted by the defendant; the plaintiff then rested; the defendant introduced in evidence a policy of insurance upon such premises against loss occasioned by the explosion of steam boilers; the defendant then rested.
    The plaintiff thereupon requested and obtained permission to open the case and to give testimony showing that the president of the plaintiff was informed by the defendant’s testator that a fire insurance policy had been obtained and was in force upon the premises in question, and that the plaintiff relied upon such ■ statement, and that it did not know differently until after the destruction of the property by Are.

      Held, that such evidence was not admissible, as that issue was not within the pleadings.
    Appeal by the defendant, Elizabeth T. Hand, as executrix, etc., of Allen E. Hand, deceased, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 30th day of April, 1894, upon the verdict of a jury directed by the court after a trial at the New York Circuit.

      George G. Holt, for the appellant.

      J. F. Harrison, for tlie respondent.
   Parker, J.:

Defendant’s testator entered into an agreement with, plaintiff on the 16th day of March, 1889, by which certain premises were leased to him for a period of years, with the right to purchase upon compliance with the conditions named. In addition to the stipulated sum to be paid as rent, the lessee further covenanted to keep in force insurance on said property for the benefit of said bank in the sum of ten thousand dollars, in such companies as said bank shall approve, and also to pay all taxes assessed on said premises and property for the year 1889, and thereafter in the event of his purchasing said property as aforesaid.”

In August following the mill buildings were destroyed by fire, and the plaintiff, ascertaining that the lessee had not taken out a policy of fire insurance in its name or for its benefit, commenced this action. Upon the trial, and immediately after plaintiff’s counsel had opened the case to tlie jury, “ defendant’s counsel admitted that the plaintiff was a National bank, organized under the laws of the United States and doing business at Great Barrington, in the State of Massachusetts; that on or about March 16,1889, the plaintiff; and Allen F. Hand entered into an ageeement, a copy of which is annexed to the complaint; that the said Allen F. Hand entered into and took possession of the lands and property described in the said contract, being certain premises known as the Berkshire Paper Mill property, in the village of Mill Pi ver, Berkshire county, Massachusetts ; that the said paper mill was destroyed by fire on or about August 14, 1889; that there was no fire insurance existing-upon the mill at the time the mill was burned, and that, for the purpose of this case, the mill property was worth ten thousand dollars ($10,000), and that interest on $10,000 from August 14, 1889, to the date of the trial was $2,833.33, and the plaintiff’s total claim $12,833.33.” Plaintiff thereupon rested.

Defendant’s counsel then put in evidence a policy of insurance upon the premises in question in the sum of $10,000, covering the explosion of steam boilers, which he contended was a literal compliance with his client’s covenant to keep the property insured in the sum of $10,000.

He rested his case at this point, and moved for a dismissal of the complaint on the grounds:

First. That the policy introduced was in compliance with the terms of the covenant for insurance; and,

Second. .That Hand having failed to insure against fire, it was the duty of plaintiff to effect insurance and charge Hand with its cost, and that the measure of damages was the cost of such insurance. Under the pleadings and the evidence as it then stood, we think defendant’s counsel was right in his contention that the cost of effecting the insurance constituted the proper measure of damages. The question has not often been brought to the attention of the courts. Indeed, the investigations of counsel, and such as wo have been able to make, have produced one case only in w-hich the question as to the measure of damages has been discussed. That ease differs somewhat from the one under consideration, but the reasoning employed is entirely aj)plicable. In Dodd v. Jones (137 Mass. 322) a contract for the sale of a house and lot contained a promise that the grantor would assign a policy of insurance then in full force and effect. The property was conveyed to the grantee, but the policy was not assigned, although its assignment was requested. The purchaser did not procure any insurance and the house was injured by fire. The purchaser then attempted to recover from his grantor such a sum as he would have been entitled to recover upon the policy of insurance had it been assigned, alleging that by reason of the grantor’s failure to perform his contract in such respects the policy became void. The trial court held' that plaintiff was only entitled to recover for the cost of procuring insurance for the unexpired term of tlie policy.

The court in its opinion said: The agreement wras not a contract of insurance but of sale, and the measure of damages for the breach of it was the value of the thing sold. A sum that would procure a similar policy, and thus place the plaintiff in the position she would have been in had there been no breach of the contract,, would indemnify her, and she cannot elect to go without insurance, and hold the defendant as insurer. Damages resulting from the burning of the building are not the direct and natural consequence of the breach of the defendant’s contract, and could not have been contemplated by the parties as included in it. The natural consequence of the failure of the defendant to perform liis contract would be that the plaintiff would procure another policy of insurance, and she cannot charge the defendant with the consequences of her neglect to do that.”

The argument in that case is applicable to this one; Hand’s contract was not one of insurance but of leasing. The agreement does-not contemplate that he should become the insurer of the property, and that the lessor should look to him in case of loss by fire to the extent of $10,000. But rather that for the use of the premises lie-should pay the taxes, whatever sum should be assessed against the property, and the insurance premiums necessary to keep in force a $10,000 policy, no matter what tlie expense of it should be, and in addition should pay a fixed sum to tlie lessor, which thus became to it net rent.

Under this contract of leasing tlie lessor had the right to demand of the lessee that lie at once comply with liis agreement respecting insurance, and in case of liis neglect or refusal to perform, it was the right of the lessor to procure insurance and charge the lessee with the cost of it. This is a matter of every-day practice as between mortgagor and mortgagee under stipulations similar in character. If this position be well taken, it follows that defendant was entitled to a dismissal of the complaint, for when she had rested there was no proof whatever tending to show what would have been the cost of obtaining the stipulated insurance.

The plaintiff thereupon moved the court “to open the case in order to show that the president of the bank was informed by Mr. Hand that a fire policy had been obtained and was in force, and that the bank relied upon Mr. Hand’s statement that he had taken out a fire policy, and that the bank did not know differently until after the mill burned.”

The object which the plaintiff had in view is readily apparent. Under the evidence as it then stood, and it was as broad as the complaint, argument had been made to the trial court that plaintiff was not entitled to recover any other sum as damages than the cost of insurance. Impressed, doubtless, with the force of the argument, it sought to introduce a new element, one not pleaded, and without asking an amendment of the complaint, the court was implored to open the case and admit testimony not embraced within the issues. The complaint alleged the making of the contract; its breach by the defendant; injury to the plaintiff, and demanded damages to the full extent of the injury. But its request was to be permitted to prove something in addition to that which it had alleged, facts which it apparently regarded as essential to support a recovery in the amount demanded in the complaint. It asked, in effect, permission to prove that it had not taken out insurance, and charged defendant with the cost, as it might have done, because defendant’s testator deceived it; that he misled the plaintiff by telling its president that he had taken out insurance; that plaintiff relied fully upon such assurance, and, therefore, believing that such a policy was in full force, omitted to take the steps which it otherwise would have taken for its protection. Such an .issue the defendant had not been invited by the pleadings to meet upon the trial, and he promptly made objection to the evidence on the ground that it was not within the pleadings. Objection was also taken when the president of the plaintiff was first called as a witness, and thereafter during his testimony, but the objections were overruled, and the exceptions taken thereto present error, which calls for a reversal of the judgment.

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

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

Judgment reversed, new trial granted, costs to appellant to abide event.


text:
    In the Matter of the Appraisal for Taxation of the Estate of Catharine A. Taylor, Deceased.

      Liability to taxation of foreign religious corporations under chapter 399 of the Laws of 1892- — statutes limited, in their operation to the State enacting them.

    The exemption contained in chapter 399 of the Laws of 1892 in favor of “any religious corporation" applies only to corporations organized under and pursuant to the laws of the State of New York, and not to foreign corporations nor to those organized under the laws of other States of the United States.
    A statute granting power and privileges to corporations must, in the absence of plain indications to the contrary, be held to apply only to corporations created by the State in which it is enacted, and which has the power of visitation and. control over the corporation.
    Appeal by a legatee, The Trustees of the Elberon Memorial Church in Elberon, from an order of the Surrogate’s Court of the county of New York, entered in the office of the clerk of that court on the 23d day of December, 1893, affirming an order of said Surrogate’s Court, entered in the said clerk’s office on the 12th day of April, 1893, with notice of an intention to bring up for review on such appeal the said order of April 12, 1893, determining that the trustees of the Elberon Memorial Church are liable to pay a tax upon the legacy bequeathed to them by the will of Catharine A. Taylor, deceased.

      FamiUton Wallis, for the appellant.

      JBenjmnin F. Dos Passos, for the respondent, the Comptroller of the city of New York.
   Parker, J.:

The Elberon Memorial Church, a religious corporation organized under the laws of the State of New Jersey, complains of a decision of the surrogate, adjudging that a legacy of $100,000, bequeathed to it by one Mrs. Taylor, is subject to a transfer tax of $5,000, pursuant to chapter 399 of the Laws of 1892.

The provision of the statute upon 'which reliance is based to both overthrow and support the decision of the court below reads as follows : But any property heretofore or hereafter devised or bequeathed to any person who is a bishop, or to any religious corporation, shall be exempted from, and not subject to, the provisions of this act.”

As the appellant is a religious corporation it insists that the exemption- from the tax of any religious corporation” necessarily permits a transfer of the legacy bequeathed to it free from the burden which officers charged with the duty of administering the statute would fasten upon it. In support of this contention authorities are cited establishing certain rules of statutory construction, which it is contended are applicable to the statute before us, and we are invited to apply them as if the question were now for the first time presented to a court for determination.

But, as we read the decisions, the question so far as this court is concerned is at rest. In The Matter of Smith (28 N. Y. Snpp. 476; 77 Hun, 134), decided in April last by the General Term of the fifth department, the proposition before us was presented and decided.

In that case there were bequests to three foreign mission societies incorporated under laws other than of the State of New York, and the court said : “ As there is an absence of any plain indication in the act that it is intended to apply to foreign corporations, we are inclined to hold that under the doctrine of the Prime case the three societies mentioned are liable to the payment of the legacy tax.” The Prime C Gase (136 N. Y. 347) it is true did not arise under chapter 399 of the Laws of 1892. That statute had gone into effect long before the case was presented to the Court of Appeals, but the question arose under chapter 553. of the Laws of 1890, amending chapter 191 of the Laws of 1889. Section 1 of said act as amended provided that “ Any religious, educational, bible, missionary, tract, literary, scientific, benevolent or charitable corporation, * * * may take and hold * * * property not exceeding in value '$3,000,000 ; ” that the personal property of such corporation shall be exempt from taxation, and that “ An act to tax gifts, legacies and ■collateral inheritances in certain cases, and the acts amendatory thereof shall not apply thereto, nor to any gifts to any such corporation by grant, bequest, or otherwise.”

It will be observed that in Prime's ease, as in the one before us, the statute described the corporation which should be entitled to the benefits provided by it as “ any religious ” corporation.

But the court held that the Legislature intended only to confer exemption upon the legacies bequeathed to domestic corporations. The court said: “We are of opinion that a statute of a State granting powers and privileges to corporations must, in the absence of plain indications to the contrary, be held to apply only to corporations created by the State, and over which it has the power of visitation and control. Such is the natural interpretation of such legislation, in the absence of a contrary intention appearing on the face of the act. The Legislature in'such cases is dealing with its own creations, whose rights and obligations it may limit, define and control.”

The Court of Appeals had before it the statute under which the surrogate assessed the tax upon appellant’s legacy in Matter of Merriam (141 N. Y. 479).

The question in that case was whether a bequest to the United States was subject to the tax imposed by the act. The court, in the course of its argument, said: “ This court has held that the provisions exempting the religions, charitable and other corporations named in the Inheritance Tax Acts apply only to domestic corporations.” And having asserted the proposition that under the statute only domestic corporations are exempt, the opinion next proceeds to overthrow the contention of the appellant, that the United States is to be regarded as a domestic corporation so far as the State of New York is concerned. Thus reasoning, the conclusion was reached that the United States, if regarded as a corporation, was not included among the corporations entitled to receive legacies free from the transfer tax.

These decisions, we think, fully support the decision of the surrogate.

The order should be affirmed, with costs.

Van Brunt, P. J., and Barrett, J., concurred.

Order affirmed, with costs.