text:
    Lavinia A. Du Bois, Respondent, v. The Union Dime Savings Institution, Appellant.

      Action of interpleader — § 820 of the Gode of Oivil Procedure is not a substitute there for — on what the right to interplead depends — when relief under § 452 will no be substituted therefor on appeal.

    Section 820 of the Code of Oivil Procedure is not a substitute for an action o: interpleader, hut is an additional and summary remedy afforded to defendant! to compel rival claimants to be brought into the action.
    The right of a defendant to compel rival claimants to be brought into an actioi by motion depends upon the same principles as the right to maintain an actioi of interpleader to compel rival claimants to litigate the controversy as betweei themselves.
    Although the relation between a savings bank and the owner of a deposit thereii is that of debtor and creditor, rival claimants for the same fund, or credit, maj be interpleaded and compelled to determine, as between themselves, thei) respective rights to the fund.
    An interpleader, either by action or motion, is unauthorized when the stakeholdei denies that the full amount demanded by one of the claimants is due.
    Incase “A” is threatened with a suit, or is sued by “B” for §1,000 and by “O’ for §500 of the same fund, and “A” admits that heholds §1,000, “B” and “O'’ may be compelled to interplead; but in case “A” denies that he holds §1,000 and admits that he holds §500, lie cannot compel “ B ” and “ C” to interplead.
    Where it appears that a motion for relief by interpleader was sought under the provisions of section 820 of the Code of Civil Procedure, and it does not appeal that it was suggested at the Special Term that a rival claimant might be brought in as a defendant in the action under section 452 of the Code of Civi Procedure, it is too late to claim for the first time on apxieal that such relie! hould have been granted at the Special Term under the latter section.
    Appeal by tbe defendant, Tlie Union Dime Savings Institution, from an order of tlie 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 24th day of April, 1895, denying the defendant’s motion to substitute Ellenora IT. Decker as defendant in the action!
    Prior to July 31, 1886, "William P. Du Bois deposited with thei defendant to the credit of “ William F. Du Bois, in trust for Louisa! Du Bois,” various sums amounting, with the accumulation of interest! on said date to $4,086.50. This account and the corresponding pas! book were numbered 138,463. Louisa Du Bois was the wife oil William F. Du Bois, and, she having died, he on the 31st of July! 1886, surrendered pass book No. 138,463 and had the fund, $4,086.50, credited on defendant’s books to “ William F. Bn Bois, in trust for Ellenora H. Decker,” which account and the corresponding pass book then delivered to him bore the number 180,769. Ellenora H. Decker and William F. Du Bois were brother and sister. There was credited to this account for interest January 1, 1887, $66.29, and July 1,1887, $67.28, so that August 1, 1887, there was standing to the credit of said account No. 180,769, $4,220.07. 'Before August 1,1887, William F. Du Bois married Lavinia A., his second wife, and on that date he opened a new account with defendant in the name of “ William F. Du Bois, in trust for Lavinia A. Du Bois,” which and the accompanying pass book were numbered 186,416, and transferred to it $1,000 from account No. 180,769.
    July 30, 1890, William F. Du Bois opened another account, which and its aecompaning pass book bore the number 226,331, with defendant, in the name of “ William F. Du Bois, in trust for Lavinia A. Du Bois,” and transferred to it from account No. 180,769 $3,552.07, which sum with the previous $1,000 represented account No. 180,769 and all accumulations of interest thereon. Account No. 180,769 was then closed and the pass book surrendered by William F. Du Bois to the, bank. Afterwards (the dates not appearing) William F. Du Bois drew $25 from account No. 186,416 and $890.46 from account No. 226,331. June 12, 1894, William F. Du Bois died, and on the same day Ellenora IT. Decker began an action in the Superior Court of this city against the defendant to recover $4,086.50, with the accumulations of interest thereon since July 31, 1886, not crediting the two payments of $25 and $890.46, amounting to $915.46. In that action the defendant answered, setting up substantially the foregoing facts.
    December 3,1894, this action was begun to recover $4,308.10, the amount standing to the credit of accounts Nos. 186,416 and 226,331, with the accumulations of interest thereon, crediting the defendant with $915.46, the amount of the two payments before mentioned. The defendant has not answered in this action, but admits it is owing to one or the other of the rival claimants the amount sought to be recovered in this action, and moved, at Special Term, for an order substituting Ellenora H. Decker as a defendant in its stead in this action, offering to pay into court the amount claimed herein, which is $915.46 less than the amount claimed, by Ellenora. H. Decker in her action.

      C. N. Bovee, Jr., and Frederick B. Campbell, for the appellant.

      G. W. H. Zeglio, for Ellenora H. Decker, respondent.

      Peter S. Carter, for Lavinia A. Du Bois, respondent.
   Follett, J.:

This is not an action brought by the bank against the two rival claimants of' the sum on deposit to compel them to interplead, but it is a motion made, pursuant to section 820 of the Code of Civil Procedure, by the bank — the defendant in two actions brought by the claimants — to substitute Ellenora H. Decker, the plaintiff in the first action, now pending in the Superior Court, as a defendant in the jfface of the bank in the second action brought by Lavinia A. Du Bois against it. Lavinia A. Du Bois consents that Ellenora H. Decker be substituted as defendant in the place of the bank in this action. The defendant offers to pay into court, pursuant to section 820 of the Code of Civil Procedure, or to hold, pursuant to section 115 of chapter 689 of the Laws of 1892, the sum claimed by Lavinia A. Du Bois, but it does not offer to pay into court, or to hold subject to the final determination of the controversy, the sum which Ellenora IT. Decker seeks to recover, which is $915.46, besides interest, more than the bank admits to be due from it. Section 820 of the Code of Civil Procedure is not a substitute for the action of interpleader, but is an additional and summary remedy afforded to defendants to compel rival claimants to be brought into the action. (Beck v. Stephani, 9 How. Pr. 193; Cronin v. Cronin, 9 Civ. Proc. Rep. 137; S. C., 3 How. Pr. [N. S.] 184.) The right of a defendant to compel rival claimants to be brought into an action by motion depends upon the same principles as the right to maintain an action of interpleader to compel rival claimants to litigate as between themselves.

Thotigh the relation between a savings bank and the owner of the credit be that of debtor and creditor, rival claimants “ for the same fund,” or credit, may be interpleaded and compelled to determine as between themselves their respective rights to the fund. (Chap. 689, Laws of 1892, § 115, the Banking Law.) But the difficulty with granting the defendant the relief sought under section 820 of the Code of Civil Procedure is, that these rival claimants do not seek to recover “ the same fund,” credit or sum. The-, amount which Ellenora II. Decker seeks to recover in her action being greater than the amount which the defendant admits to be due, it is not entitled to have her substituted in this action brought' by Lavinia A. Du Bois to recover a less sum, which the defendant admits to be due from it. (Baltimore & Ohio R. R. Co. v. Arthur, 90 N. Y. 234; New England Mutual Life Ins. Co. v. Odell, 50 Hun, 279; Van Zandt v. Van Zandt, 26 N. Y. St. Repr. 963; S. C., 7 N. Y. Supp. 706; 17 Civ. Proc. Rep. 448; Sibley v. Equitable Life Assurance Soc. of U. S., 24 J. & S. 274; S. C., 3 N. Y. Supp. 8; Dodge v. Lawson, 19 id. 904; S. C., 22 Civ. Proc. Rep. 112; Bender v. Sherwood, 15 How. Pr. 258 ; Supervisors of Saratoga Co. v. Seabury, 11 Abb. N. C. 461; Crane v. McDonald, 118 N. Y. 648; S. C., 2 Silv. 341, 358, note; Chamberlain v. O'Connor, 1 E. D. Smith, 665; Patterson v. Perry, 14 How. Pr. 505; Moore v. Usher, 7 Simons, 383; Glyn v. Duesbury, 11 id. 139; Diplock v. Hammond, 23 L. J. Ch. 550; S. C., 27 Eng. L. & Eq. 202; Bridesburg Manf. Company's Appeal, 106 Penn. St. 275; Glasner v. Weisberg, 43 Mo. App. 214; Story’s Eq. Pldgs. (10th ed.) § 291; 2 Story’s Eq. Juris. (13th ed.) § 821, et seq.; 3 Pom. Eq. Juris. § 1323.)

Had the bank admitted that there was due from it a sum equal to that claimed by Ellenora H. Decker — the larger sum — then the rival claimants might have heen compelled to litigate their claims as against each other. (Koenig v. N. Y. Life Ins. Co., 14 N. Y. St. Repr. 250; S. C., 14 Civ. Proc. Rep. 269; Progressive Handlanger Union No. 1 v. German Savings Bank, 25 J. & S. 594; S. C., 29 N. Y. St. Repr. 528; 23 Abb. N. C. 42; Yates v. Tisdale, 3 Edw. Ch. *71; Fargo v. Arthur, 43 How. Pr. 193. )

But we know of no authority authorizing an interpleader, by action or motion, when the stakeholder denies that the full amount demanded by one of the rival claimants is due. The rule deducidle from the authorities is: .In case A is threatened with a suit or is sued by B for $1,000, and by 0 for $500 of the same fund, and A admits that he holds $1,000, B and 0 may be compelled to inter-plead ; but in case A denies that he holds $1,000 and admits that he holds $500, he cannot compel B and O to interplead.

The bank was not entitled to an order substituting Ellenora TI. Decker as a defendant in its stead under section 820 of the Code of Civil Procedure.

The learned counsel for the bank now insists that the motion should have been granted under section 452 of the Code of Civil Procedure, which provides:

“ Sec. 452. The court may determine the controversy as between the parties before it, where it can do so without prejudice to the rights of others, or by saving their rights; but, where a complete determination of the controversy cannot be had without the presence of other parties, the court must direct them to be brought in.”

The difficulty with this contention is that the motion was not made under the section last quoted. It appears by the notice of motion that relief was sought under section 820, and not under section 452, of the Code of Civil Procedure, and it does not appear that it was suggested at Special Term that Ellenora H. Decker might be brought in as a defendant under section 452, and it is too late to claim for the first time on appeal that relief should have been granted at Special Term under the latter section.

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

Van Brunt, P. J., and O’Brien, J., concurred in result.

Order affirmed, with ten dollars costs and disbursements.


source: Caselaw Access Project

author: Follett, J.:

license: Public Domain

text:
    Hezekiah S. Archer, Plaintiff, v. Oscar M. Dunham and The Cassell Publishing Company, Defendants. Charles C. Murphy, Respondent; Henry J. Braker, as Receiver of The Cassell Publishing Company, Appellant.

      Corporation — fraudulent overissue of stock — measure of damages to innocent holder— claim therefor not defeated by a subsequent surrender and cancellation of valid stock.

    In case the officers of a corporation, authorized to issue stock certificates, fraudulently issue certificates for shares in excess of the number of shares the corporation is authorized to issue, the corporation is liable to an innocent holder in damages for such overissue to the extent of the value of the shares.
    In a proceeding instituted by a stockholder of a corporation against the receiver of a corporation, to recover damages because of the issue to him, by officers of the corporation authorized to issue stock certificates, of an issue of stock in .excess of the number of shares of stock of the corporation which it was authorized to issue, it appeared that, two days prior to the presentation of the claimant’s claim, the receiver’s agent, the receiver’s attorney and two others, persons not officers of the company, met at the office of the company and caused the secretary of the company to cancel and pin into the stock books of the company two genuine certificates of stock in such an amount that, had they been surrendered prior to the issuing of the stock to the claimant, his stock would not have been an overissue. Such surrender was unknown to the claimant at the time and was never consented to by him.

      Held, that the receiver could not cut off the claimant’s right to damages for the fraudulent overissue of stock, perpetrated upon him in March, 1898, by procuring a surrender of shares in October, 1898, without the claimant’s consent.
    Appeal by Henry J. Braker, as receiver of The Cassell Publishing Company, from an interlocutory judgment of the Supreme Court in favor of the claimant, Charles C. Murphy, entered in the office of the clerk of the county of New York on the 31st day of December, 1894, upon the report of a referee, and also from an order entered in said clerk’s office on the 11th day of December, 1894, confirming said report.

      Frank H. Platt, for the appellant.

      Carlton B. Pierce, for the respondent.
   Follett, J.:

January 21, 1890, the Cassell Publishing Company was incorporated under C. 40, L. 1848, and the laws supplementary thereto and amendatory thereof, witli an authorized capital stock of $350,000, divided into 3,500 shares of the par value of $100 each, for the purpose of printing, publishing and selling books. Oscar M. Dunham has been the president and a director of the corporation ever since its organization. The claimant asserts, and the referee found, that in March, 1893, the corporation, through its president, contracted to sell to him 100 shares of its stock for $10,500. It was also alleged by the claimant, and found by the referee, that the president of the corporation represented that said shares had been issued to a stockholder who had sold them to the corporation. The claimant paid for said shares by four checks, the first, dated March 16, 1893, for $1,500, payable “to the order of O. M. Dunham,” which was indorsed by the payee “ for deposit,” and was subsequently paid and the avails converted by Dunham ; the second, dated March 27, 1893, payable “ to the order of O. M. Dunham, Esq., or Cassell Publishing Co.,” for $1,000, which was indorsed by the treasurer of the. corporation “ for deptosit to credit of Cassell Publishing Co.,” which check was paid and the avails credited to the corporation; the third, dated. April 1, 1893, payable “to the order of O. M. Dunham or Cassell Pub. Co.,” for $1,000, which was indorsed by O. M. Dunham “ for deposit,” and the avails converted by Dunham, which check was paid; the fourth, dated April 6, 1893, payable “ to the order of O. M. Dunham ” for $1,000, which w>-as indorsed in blank by O. M. Dunham and by the treasurer of the corporation “for deposit to credit of Cassell Co.,” and the avails credited to the corporation. March fifteenth, certificate No.'87 for 100 shares of the stock was issued, which was signed by the president and treasurer-of the corporation and sealed witli its seal. It is alleged by the claimant, and found by the referee, that these shares were a fraudulent overissue made by the officers of the corporation.

On the 16th of May, 1893, the claimant owned two promissory notes, one for $800, due, without interest, May 21, 1893, and the¡ other for $354, due, without interest, May 29, 1893, which the-claimant delivered to the corporation as a loan. These notes were indorsed by the corporation for collection for its account, were paid when due, and the avails credited to the corporation.

June 17,1893, an action was brought by Hezekiah S. Archer, the vice-president, who was also a director, shareholder and creditor of the corporation, alleging that it had become insolvent by reason of the .fraudulent mismanagement of its affairs by its president, in which a receiver was appointed July 19,1893, who is now in possession and control of the affairs of the corporation. Pursuant to a notice published by order of the court, the claimant presented his claim, which was rejected, and thereupon the matter was referred to a referee to hear and determine.

The finding of the referee, that the claimant in purchasing the shares dealt with the corporation,-and not with Osear M. Dunham as an individual, is amply supported by the evidence, and, upon reading the record, we are convinced that a finding to the contrary would not have been sustained by this court. All the witnesses agree that the certificate issued to the claimant represented a fraudulent overissue of shares. Section 6 of the by-laws of the corporation provides that “all certificates of stock shall be signed hv the president and treasurer.” The certificate- issued to the claimant was so signed and was authenticated by the seal of the corporation. The fact that the avails of two of the four checks, given by the claimant in payment for the shares, were fraudulently converted by the president to his own use, does not affect the claimant’s right or the liability of the corporation.

It is well settled that, in case the officers of a corporation authorized to issue share certificates fraudulently issue certificates for shares in excess of the number of shares the corporation is authorized to issue, the corporation is liable in damages for such overissue to an innocent holder for value of the overissued shares. (N. Y. & N. H. R. R. Co. v. Schuyler, 34 N. Y. 30; Fifth Avenue Bank v. F. S. S. & G. S. F. R. R. Co., 137 id. 231; Cook S. & S. § 293; Mor. Corp. [2d ed.] § 186; Dos Passos Law of Stock Brokers & Stock Exchange, 641, et seq.)

Ten days after the appointment of the receiver, the claimant sailed for Europe. The day before he left, he heaj-d a minor that his stock was an overissue. On the 1st of September, 1893, he returned to New York and began an investigation in respect to the status of his shares, of which investigation the officers of the corporation, its receiver and his attorney knew. October 21, 1893, the receiver and his attorney procured two genuine certificates for shares [No. 2, issued January 23, 1890, to Oscar M. Dunham, for 250 shares, and No. 47, issued May 19, 1890, to Oscar M. Dunham, for 100 shares] to be in form surrendered and the original certificates annexed to the corresponding stubs in the book from which certificates were cut. This was done for the purpose of reducing the number of shares for which certificates were outstanding to the number which the corporation was authorized to issue. Upon this transaction the learned referee, by his 27th finding of fact, found as follows:

“ 27. That two days prior to the tender of stock and presentation of claims, and on the 19th day of October, 1893, the receiver’s agent, the receiver’s attorney and two other persons not officers of the company, met at the office of the company and caused the secretary of the company to cancel and pin into the stock books of the company two genuine certificates of stock in amount such that had they been surrendered prior to the issuing of the stock to the claimant his stock would not have been an over issue.”

Such surrender was unknown to claimant at the time, and has never been consented to by him.

One of the certificates so surrendered was held by the vice-president of the company, individually, as collateral to a loan, and was delivered and directed to be canceled by him, after learning of the overissue, and as an attempt to cure the same.

About this transaction or its purpose there was no dispute, but it was wholly ineffectual for two reasons: (1) There was no evidence that Oscar M. Dunham authorized the surrender and cancellation of the certificates; (2) the receiver could not cut off the claimant’s right to damages for the fraudulent overissue perpetrated upon him in March, 1893, by procuring a surrender of shares of an insolvent corporation in October, 1393, without the claimant’s consent. Had the shares been surrendered upon his consent and upon an agreement that he' would waive his claim for the fraud perpetrated upon him, or had the number of shares which the corporation was authorized to issue been increased according to law and he had consented to hold the shares previously issued to him as a part of such increase, liis claim for damages would have been cut off. The claimant did not consent to the cancellation of these shares, but was at that time actively engaged in prosecuting his claim for damages, which could not be defeated by such an indefensible subterfugej on the part of tlie receiver of the corporation. The claim for money received on account of the notes was not defended on tlie merits. The corporation received the money, and its receiver is liable to the claimant for the sum received. Receivers appointed by this court should always bear in mind that it is their duty to deal justly by the shareholders and creditors, and not to engage in schemes to defeat or impair the rights of either, and that those who disregard this rule do it at the peril of removal, or, at least, of being personally charged with costs.

The findings of fact, which are amply supported by the evidence, and. the conclusions of law, which are supported by the findings, clearly demonstrate that the receiver has no just defense to this claim.

The oi’der and judgment should be affirmed, with costs.

Parker, J., concurred; Van Brunt, P. J., concurred in result.

Order and judgment affirmed, with costs.


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

text:
    The People of the State of New York, Respondent, v. William H. Schooley, Appellant.

      Receiving stolen goods — evidence competent on the trial of an indictment therefor — what personal knowledge of a party making an acknowledgment a notary should have.

    Upon the trial of an indictment for receiving- stolen goods, knowing them to have keen stolen, it appeared that certain bonds, the property of one Gay, were stolen from her possession, and that subsequently these bonds, falsified by the. obliteration of certain indorsements existing thereon at the time of the larceny, and further falsified by the obliteration of the true numbers on the bonds and coupons attached and the substitution of other numbers, were in the possession of the defendant and were disposed of by him under circumstances which, it was claimed, established knowledge on his part that they had been stolen.
    One of the b,onds was sold by the defendant to a firm, to which he stated that the sale was for a client of his by the name of Peterson, who owned the bond. Peterson was not produced upon the trial, nor was his absence satisfactorily accounted for.
    An expert in chemistry testified to the erasure of the names and numbers originally upon the bonds and the substitution of other numbers, to which evidence the defendant objected on the ground that he was not charged with the crime of forgery.

      Meld, that it was competent to show not only the theft of the bonds, which the-defendant was charged with having received with knowledge of their theft, hut also the condition of the bonds when they reached the receiver’s hands, or which they had assumed when discovered; that the evidence being competent , its exclusion -was not called for because it tended to establish the commission of another crime by some one else.
    Upon such trial the opinions of experts in handwriting, to the effect that the signatures to powers of attorney and receipts purporting to have been given to the defendant by Peterson were in the handwriting of the defendant, were admitted in evidence, the evidence being introduced by the prosecution upon the theory that the defendant had falsified the powers of attorney. The foundation for the testimony was properly laid, and consisted of the handwriting of the defendant upon other papers and documents concededly his. The notaries, before whom the powers of attorney were acknowledged, were subsequently called as witnesses by the defendant, and testified in effect that the defendant introduced a man to them as Peterson, whereupon the acknowledgments were taken and they severally subscribed their names as notaries public. After the notaries had testified the defendant moved to strike out the opinions of the experts, which motion was denied.

      Meld, that even if it should be assumed that the testimony of the notaries established the fact that the defendant did not sign the powers of attorney, the refusal of the court to strike out the opinions of the experts would not call for the reversal of the judgment, as the evidence was competent and proper when received, and, being in the case, the court had the right to let it stand for what it was worth, although it was disproved.
    Upon the trial the officer, 'Yallely, to whom the warrant for the arrest of the defendant was given, was allowed to testify in regard to the absence of the defendant from the jurisdiction of the court. During his entire examination but one objection was made by the defendant, which was not sustained by the court; that objection was a general one, and was not interposed to a question which would naturally suggest to the mind of the court that the purpose of it was to show that the defendant was tiying to avoid trial. Subsequently the court inquired of the district attorney whether the purpose of the examination was to show flight, to which the prosecuting officer replied, “ Certainly,” whereupon the examination of the witness was continued without objection. Later on some controversy arose over the introduction in evidence of the record of a forfeited bail bond, and the court, of its own motion, refused to receive it, and, in order to lid the case of any such question, said : “I will strike out the entire testimony of Officer Vallely, and I will tell the jury to disregard it.” The defendant did not object to this determination of the court.

      Meld, that under such circumstances the defendant was not entitled to a reversal of the judgment.
    The impropriety of a notary giving a certificate that a person making an acknowledgment before him of the execution of a written instrument was personally known to him, when he had no other acquaintance with him than that obtained by a mere introduction, considered by Van Brunt, P. J.

      Appeal by tbe defendant, "William Ií. Scbooley, from a judgment of tlie Court of General Sessions of tbe Peace in and for tbe city and county oí New York, rendered on tbe 27th day of January, 1895, upon tbe verdict of a jury convicting him of • the crime of receiving stolen goods knowing them to have been stolen.

      Robert J. Haire, for the appellant.

      John R. Fellows, District Attorney, for the respondent.
   Parker, J.:

In December, 1890, four bonds of tbe St. Louis and Iron Mountain Railroad Company, of the par value of $1,000 each, tbe property of Ellen M. Gay, were stolen from her possession in Washington, D. C.

In August of tbe following year these bonds, falsified by tbe obliteration of certain indorsements thereon at tbe time of tbe larceny, and further falsified by tbe obliteration of tbe true numbers on tbe bonds and coupons attached, and tbe substitution of other numbers, were in tbe possession of tbe defendant, and disposed of by him under circumstances which the People claimed, and tbe jury have found, established knowledge on bis part that they bad been stolen.

One of tbe bonds the defendant sold to tbe firm of James Walsh & Son about August 10, 1891, for which he received tbe check of tbe firm for $1,035. One of tbe firm went with him to tbe bank upon which tbe check was drawn, where it was cashed, after which they returned to tbe office of Walsh & Son, and defendant banded back to the firm $135, taking with him $900, which he said was for a client of his by the name of Peterson, who owned the bond.

Peterson was not produced upon the trial, nor was his absence satisfactorily accounted for.

The history of the disposition of the other bonds to White, Morris & Go., the drawing out of the money (after deposit by defendant personally) upon his check, which he said -was done for the purpose of turning the money over to his client Peterson, together with numerous other facts and circumstances, were shown, from which it was claimed, on behalf of the People, that an inference of fact should be drawn that the defendant had guilty knowledge that the party from whom he received the bonds had stolen them. The defendant sought to show that his possession of the bonds was innocent; that they had been placed in his hands for disposition by a client named Joel Peterson, whom it appears was known as Edgar Richardson, and also as Abijali Richardson; and that at the time they came into his possession for disposition he had no knowledge or reason to suppose that Peterson had not come honestly by them. It is a fact of no small significance that these bonds, which had at the time an established market value at which they could be readily disposed of, should have been placed in the hands of this defendant for sale at a price far below that of their value in the open market. It is not our purpose to discuss the evidence, for* it is not contended that the trial court was in error in deciding that the evidence presented a question for the jury. Nor is this such a case as justifies the court in interfering with the verdict of the jury, which is the ultimate tribunal for the adjudication and determination of questions of fact, for that may not be done where the facts are reasonably capable of diverse or opposing inferences, unless the court is satisfied, from a review of the testimony, that injustice has probably been done. (People v. Cignarale, 110 N. Y. 23.)

The result of our examination of the record does not lead to any such conclusion.

The appellant urges that error was committed by the trial court in permitting Robert Ogden Doremus, an expert in chemistry, to testify to the erasure of the names and numbers originally upon the bonds, and the substitution of other numbers, because the defendant was not charged with the crime of forgery. It was clearly competent to show, not only the theft of the bonds which the defendant was charged with having received with knowledge of the theft, but also the condition of the bonds when they reached the receiver’s hands or which they had assumed when discovered. And the evidence being competent its exclusion was not called for, because it tended to establish the commission of another crime by some one else. Nor do we think the court erred in admitting the opinions of experts in handwriting to the effect that the signatures to the powers of- attorney and receipts, pui’porting to have been given to the defendant by Peterson, were in the handwriting of the defendant.

This testimony was introduced by the prosecution upon the- theory that the defendant had falsified the powers of attorney.

The foundation for the testimony was properly laid, and conT sisted of the handwriting of the defendant upon other papers and documents concededly his. The powers of attorney purported to have been acknowledged before notaries public, who were subsequently produced by the defendant, and testified in effect that the defendant introduced a man to them as Peterson, whereupon tlié acknowledgments were taken, and they severally subscribed their names as notaries public. After the notaries had testified, the defendant moved to strike out the opinions of the experts, which-motion the court denied. The appellant contends that this motion should have been granted, because, as he alleges, it then positively appeared that some person other than the defendant executed the-powers of attorney. If it should be assumed that the testimony of the notaries established that the defendant did not sign .the powers of attorney, the refusal of the court to strike out the opinions of the experts would not call for a reversal of the judgment, for it was competent and proper evidence when received, and, being in the case, the court had the right to let it stand for what it was worth,, although disproved. But it is not accurate to say that the testimony of the experts was wholly disproved by that of the notaries. One of the notaries, Mr. Prank Moss, testified that this defendant came te him with another man, whom he introduced as Joel Peterson, and requested him to witness the signature and take Peterson’s-acknowledgment; that he had never seen the man called Peterson before, but did know the defendant, and that, on the faith of the introduction, he witnessed the signature and took the acknowledgment. His testimony, so far as it related to the signing of the paper, which he witnessed and acknowledged, was as follows : “ Q. It is your best recollection that that paper was not signed in your presence ? A. I think it was not; I think I asked this man if he desired me to witness his signature, which I understand to be the proper form, and I did so at the time. By the court: Q. You witnessed the signature, but you had not seen it signed? A. No, I wouldn’t say that I had. By a juror: Q. Mr. Moss, do you say that you seen this man Peterson sign that? A. No ; I didn’t say that; I am not sure of that.”

It is clear that Moss’ testimony did not establish either that the alleged Peterson signed the power of attorney which he acknowledged, or that defendant did not. Nor was there any other testimony on that subject, except that of the defendant. And the jury were, therefore, at liberty to consider the testimony of the experts for what it was worth.

The other notary, Mr. Ritter, testified that the man, whom defendant introduced to him as Peterson, did sign a power of attorney in his presence, but as the motion made related to the execution of both papers and it was proper to refuse it as to one, the exception is not available.

The appellant also alleges that the trial court erred in permitting James F. Vallely, the officer to whom the warrant was given for the arrest of the defendant, to testify in regard to the absence of the defendant from the jurisdiction of the court. It is true that he gave some testimony tending in that direction, but during his entire examination only one objection was made by the defendant, which was not sustained by the court. That objection was a general one, and was not interposed to a question which would naturally suggest to the mind of the court that the purpose of it was to show that the defendant was trying to avoid trial. That the question to which the objection was interposed was not so understood by either the court or the counsel for the defendant appears later on in the examination of the same witness, when the court inquired of the district attorney what his purpose was in the examination he was then making of the officer, and whether it was to show flight? To which the prosecuting officer replied, “Certainly,” whereupon the examination of the witness was continued without objection. Later on some controversy arose over the introduction in evidence of the record of the forfeited bail bond, and the court, of its'own motion, refused to receive it, and, in order to rid the case of any such question, said: “ I will strike out the entire testimony of Officer Yallely, and I will tell the jury to disregard it.” The defendant did not object or except to this determination of the court, and wisely, because by it there was stricken from the record the testimony which he now claims was prejudicial to him, but which was admitted, as we have already observed, under such circumstances as would not entitle the defendant to a reversal of the judgment bad the evidence been improper. Under still another point, we are informed that the entire charge was excepted to, and the record verifies the statement. Such an exception, however, no more advantages the defendant than if he had not taken the exception. Even were the rule otherwise, the defendant would not be entitled to a reversal of the judgment, for the charge of the learned trial court correctly laid down the law of the case, and properly presented to the jury the questions of fact upon which they were to pass.

The judgment should be affirmed.

O’Brien, J., concurred.

Van Brunt, P. J.:

I concur in the conclusion arrived at by Mr. Justice Pabkeb, but it does not seem to me that the flagrant violation of duty by the notaries who took the acknowledgments to the powers of attorney offered in evidence in this case should pass without notice. In fact, they should be proceeded against criminally.

Two powers of attorney were offered in evidence claiming to have been executed on the fourteenth and the twentieth of August respectively, in which each notai’y certified that the person purporting to execute the power of attorney was personally known to such notary; and the evidence, as given by the notaries, shows that they had never seen such person prior to the time of the alleged acknowledgment, and that the only evidence of identity was an introduction by the prisoner, who, to at least one of the notaries, was not even personally known. It would appear from the record that it had been the habit of at least one of these notaries to certify to personal knowledge of the identity of a person executing a paper from an introduction at the time of execution. Such practice is a clear violation of the provisions of the statute and renders the notary liable to prosecution.

By 1 He vised Statutes, 758 (§ 9), it is provided that no acknowledgment of any conveyance having been executed shall be taken by any officer, unless the officer taking the same shall know or have satisfactory evidence that the person making such acknowledgment is the individual described in and who executed such conveyance.

It is evident that the satisfactory evidence referred to in this section means legal evidence, namely, the testimony of witnesses sworn to the fact.

Section 15 prescribes that every officer who shall take the acknowledgment or proof of any conveyance shall indorse a certificate thereof, signed by himself on the conveyance, and in such ceiv tificate shall set forth the matters hereinbefore required to be done known or proved, on such acknowledgment or proof, together with the names of the witnesses examined before such officer, and their places of residence and the substance of the evidence by them given.

Tims it appears that the certificate which the officer taking the acknowledgment must give must not only state the fact of the acknowledgment, but, if the person was not personally known, that he took evidence in regard to his identity, and he must state the names of the witnesses and the substance of the evidence given and certify that that was satisfactory proof to him.

Put it may be said that there is no requirement that witnesses shall be examined in order to prove identity ; that all that the statute requires is that the officer shall have satisfactory evidence, and that that may not mean sworn evidence. It may be entirely safe to rest the decision of this question upon the statute itself. In a statute evidence means legal evidence, and there is no proof by parol which is legal evidence unless sworn to by witnesses.

If there were any doubt upon this proposition it would be sufficient to refer to the decisions under section 12 of the same statute, which section provides that the proof of the execution of any conveyance shall be made by a subscribing witness thereto, who shall state his own place of residence, and that he knew the person described in and who executed such conveyance; and such proof shall not be taken unless the officer is personally acquainted with such subscribing witness, or has satisfactory- evidence that he is the same person who was a subscribing witness to such instrument.

In the case of Tuttle v. The People (36 N. Y. 435) it is expressly field that the statute requires an oath of the truth of the facts essential to satisfy the officer taking the proof, and to justify a record of an instrument. The case cited was one where a party swore that he was present at the execution of the paper, when such was not in fact the case, and upon indictment he was convicted of perjury.

In the case of Miller v. Link (2 Sup. Ct. Rep. [T. & C.] 86) the same rule is laid down. It is said the acknowledgment .of a deed must show that the party acknowledging the instrument was known or proved to the officer to be the party named in and who had executed the same.

The rule in regard to a subscribing witness is also recognized in the case of Jackson v. Vickory (1 Wend. 412). And in the case of Dibble v. Rogers (13 Wend. 542) the necessity of incorporating in the certificate of the officer the evidence taken by him, where the identity of the person executing the instrument is proven, is also expressly recognized. Many other cases might be cited establishing the proposition that mere personal introduction at the time of the execution of an instrument is not the evidence which the statute requi res, and that it is a violation of duty upon the part of an officer, making him liable to punishment, to take an acknowledgment under such circumstances. He must have evidence of identity, and incorporate such evidence in his certificate, if he desires to escape punishment for the violation of his duty.

Judgment affirmed.


author: Parker, J.:

text:
    Frank E. De Long and Others, Respondents, v. De Long Hook and Eye Company, Appellant.

      Trade mark — when the use try a corporation of the name of one of its incorporators will be enjoined.

    A man may use his own name because he cannot truthfully do business under any other, and the law protects that right ordinarily, even when such use is inj urious to another who has previously established a business of the same kind and gained a reputation which goes with the name. But the courts require that the name shall be honestly used by him, and will permit no deceit calculated to mislead the public into purchasing his goods under the belief that they are the manufacture of another.
    In an action brought to restrain the use of a trade mark, it appeared that in the year 1889 the plaintiffs put upon the market a hook and eye which they called “ The De Long Hook and Eye.” They were sewed upon cards, at the top of which was printed “The De Long Hook and Eye.” With advertising and at considerable expense, the plaintiffs built up a very large business.
    Subsequently one Oscar A. De Long, having conceived the idea of making a change or improvement in the hook, formed, with other persons, a corporation known as the “De Long Hook and Eye Company,” which thereafter com-menead the manufacture and sale of hooks and eyes sewed upon cardboard in the same manner as the plaintiffs’, each of which cards bore the words, “ De Long Hook and Bye Company, Makers, New York.” Later there w'as pasted over these words the words, “ Oscar A. De Long’s Improved.”
    The effect intended and accomplished by the use of the word “De Long,” in connection with the style of the card on which the hooks and eyes were placed, was to secure some part at least of the benefits resulting from the extensive advertising- which the plaintiffs had given to the name “DeLong” in connection with the hook and eye business. There were some slight differences in the name, variations of coloring- and size of cards and shape of hooks, and some difference in the printed matter on the cards.

      Held, that as the hooks and eyes placed upon the market by the defendant were so arranged and exhibited as to give a purchaser the impression that they were the plaintiff’s hooks and eyes, it was within the province of a court of equity to interfere for the protection of the purchasing public as well as of the plaintiffs, and for the suppression of unfair and dishonest competition;
    That the fact that one of the incorporators and stockholders of the defendant bore the name of De Long, gave the corporation no immunity from the consequences which ordinarily flow from an attempt to deceive the public by the fraudulent use of another’s name, since the promoters of the corporation could have given to it the name of either of the other incorporators or any other name they liked, provided the designation was honestly made and without injury to others;
    That the circumstances surrounding the creation of the defendant and the name of it were such as to show that the selection of the name was not an honest one, but a part of the original scheme of Oscar A. De Long to make such use of his own name as would enable him to profit by the name which the plaintiffs had given to their hooks and eyes and which they had made valuable by much labor and a liberal expenditure of money; that the corporation would not be permitted to make use of a name acquired in such a manner and for such a purpose.
    Appeal by the defendant, the De Long Iioolc and Eye Company, from an interlocutory judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the county of New York on the 9th day of January, 1895, upon the decision of the court rendered after a trial at the New York Special Term.

      Joseph H. Choate, Edward Wetmore and Benno Loewy, for the appellant.

      Frederick R. Coudert and C. E. Bushmore, for the respondents.
   Parker, J.:

The learned judge at Special Term decided that the defendant corporation should be restrained from using in selling or placing upon tlie market, its goods, tlie name “ De Long Hook and Eye Company,” upon tlie ground tbat tlie selection of suck name was. made with, intent to identify the defendant with the plaintiffs’ business, to the injury of tlie latter, and that its use is calculated to induce deception and confusion in the public mind as to the identity of the goods sold by the plaintiffs and defendant respectively.

An attentive examination of the evidence satisfies us that the determination of fact made at the Special Term, as a basis for its decision, is right. Undoubtedly the phenomenal growth-of plaintiffs’ business, and the large profits derived therefrom, suggested to one of the promoters of the defendant corporation the feasibility of deriving a substantial benefit from the reputation of plaintiffs’ goods, known as De Long’s Hooks and Eyes, because of tlie fact that his name happened to be Do Long.

The facts 'which support this conclusion were so fully discussed in the opinion of the learned judge at Special Term that it is unnecessary for us to do more than present an outline of the more important features.

Tlie plaintiffs put upon the market, in the year 1889, a hook and eye wdiich they called the De Long Hook & Eye.” They were-, sewed upon cards, at the top of which was printed “ The De Long-Hook & Eye.” With much advertising skill, and at considerable expense, the plaintiffs rapidly built up a large business. The sales,, which were about $12,000 in 1890, reached nearly $450,000 in 1893. In the summer of 1892, Oscar A. De Long, a buyer for one of the-departments of a large mercantile house, and who had from time to-time purchased the plaintiffs’ hooks and eyes to be sold at retail by his employers, conceived the idea of making a change in the book,, which he calls an improvement, and in the latter part of that year-lie sought capital necessary to enable him to engage in the hook and eye business. He found persons willing to enter into the enterprise-with him, and as a result a corporation was formed with the corporate name of the “ De Long Hook & Eye Company.”

Immediately thereafter the company commenced the manufacture and sale of hooks and eyes sewed upon cards in the same manner as the plaintiffs’, each of which bore the words De Long-Hook & Eye Company, makers, New York.”

Later he pasted over those words the words Oscar A. De Long’s Improved,” posting the words tiras covered up on the back of the card on a label. The effect intended and accomplished by the use of the word De Long, in connection with the style of the card on which the hooks and eyes were placed, was to secure some part, at least, of the benefit resulting from the extensive advertising which the plaintiffs had given to the name De Long in connection with their hook and eye business.

It is not conceivable that it could have been otherwise, but we are not left to conjecture, for the plaintiffs, in support of their contention that the method adopted by the defendant was intended to, and did, deceive the public, produced witnesses who testified in effect that in response to requests made to dealers for De Long hooks and eyes they were given defendant’s hooks and eyes, when they desired the plaintiffs’.

Starting then with the determination of fact by the Special Term, which we approve, that the defendant deliberately attempted to make such use of the name of one of its incorporators as to enable it to secure a portion of the business which plaintiffs had built up, we have no difficulty in arriving at the legal conclusion reached by that court.

That there were slight differences in the name, variations of coloring and size of cards and shape of hooks and some difference in printed matter on the cards must be conceded. “ Similarity, not identity, is the usual recourse when one party seeks to benefit himself by the good name of another.” (Bradley, J., in Celluloid Mfg. Co. v. Cellonite Mfg. Co., 32 Fed. Rep. 94.)

The real test in such cases is whether the tiling offered for sale is so arranged and exhibited that when it strikes the eye of an intending purchaser, possessed with ordinary intelligence and judgment, a false impression is likely to be produced that the goods of another are being offered for sale. And when that inquiry must be answered in the affirmative, as it has been in this case, “ it is the province of equity to interfere for the protection of the purchasing public as well as of the plaintiffs, and for the suppression of unfair .and dishonest competition.” (Fischer v. Blank, 138 N. Y. 252.)

This equity will do where the business practices complained of may not be of such a nature as to enable the party aggrieved to obtain redress under the restrictive rules of law, if, nevertheless, they are of such a character as to offend that law of fairness which should govern the acts of men.

This doctrine has frequently been asserted in other jurisdictions besides our own. In Coats v. Merrick Thread Company (149 U. S., at page 566) the court said: “ Bival manufacturers may lawfully compete for the patronage of. the public in the quality and price of their goods, in the beauty and tastefulness of their enclosing packages, in the extent of their advertising, and in the employment of agents, but they have no right by imitative devices to beguile the public into buying their wares under the impression they are buying those of their rivals.”

And in Lawrence Mfg. Company v. The Tenn. Mfg. Company (138 U. S. 537) the court said: “ Undoubtedly an unfair and fraudulent competition against the business of the plaintiff — conducted with the intent on the part of the defendant to avail itself of the reputation of the plaintiff to palm off its goods as plaintiff’s — would, in a proper case, constitute ground for relief.”

It is the appellant’s contention that, notwithstanding the determination of the court that defendant’s conduct in the use of the word “ De Long,” was intended to deceive the public and enable it to sell its goods as if they were plaintiffs’ goods, and, therefore, fraudulent, still it cannot be visited with the consequences which ordinarily flow from such action, because of the fact that one of its incorpora-tors and stockholders bore the name of De Long.

A man may use his own name because he cannot truthfully do business under any other, and the law protects that right ordinarily, even when such use is injurious to another who lias established a prior business of the same kind, and gained a reputation which goes with the name. Even then the courts require that the name shall be honestly used, and will permit no deceit calculated to mislead the public into purchasing his goods under the belief that they are the manufacture of another. But that is not this case, for the promoters of this corporation could have given to it the name of either of the other incorporators, or any other name they liked, provided the designation was honestly made and without injury to others. But the circumstances surrounding the creation of the defendant, and the name of it, satisfy us, as they did the trial court, that the selection of the name was not an honest one, but a part of the original scheme of Osear A. De Long to make such use of his own name as would enable him to profit by the name which the plaintiffs had given to their hooks and eyes, and. which they had made valuable by much labor and a liberal expenditure of money.

The recent case of Higgins Company v. Higgins Soap Company (144 N. Y. 462), decided since the entry of the judgment appealed from, is conclusive upon the proposition that a corporation will not 'be permitted to make use of a name thus acquired and for such purposes. In that case it appeared that Charles S. Higgins commenced the manufacture of soap for the market in 1846 ; after a time his son, bearing the same name, became interested with him in the business, to which he succeeded upon the death of the senior Higgms. In 1890 the junior Higgins and others formed a corporation called the “ Charles S. Higgins Company,” to which was sold and transferred the soap business of Higgins, together with the good will, labels, trade marks, etc. The article manufactured was known to the trade as Higgins soap. About a year after the corporation commenced the conduct of the soap business, some trouble arose among its officers and directors, resulting in the removal of Higgins from its presidency. As in the bill of sale to the corporation Higgins had reserved the right to engage in the manufacture of soap in the event of a termination of his employment by the corporation, he at once commenced preparations to that end. A corporation called the Higgins Soap Company ” was organized under the laws of New Jersey, and Charles S. Higgins was chosen as its president. Impressed upon its bars of soap and printed upon its wrappers were the words Higgins Soap Company.”

The suit to restrain the Higgins Soap Company from making use of its corporate name was unsuccessfully prosecuted until it reached the Court of Appeals, where it was held the injunction should issue. In the course of the argument the court said : The inference seems ii’resistible that the defendant assumed its corporate name so that it should carry the impression that it was the manufacturer of Higgins soap, so well known to the public. But if the name was assumed in good faith and without design to mislead the public and acquire the plaintiff’s trade, the defendant, knowing the facts, must be held to the same responsibility as if it acted under the honest impression that no right of the plaintiff was invaded.”

In this case Oscar A. De Long, the original promoter of defendant, knew all the facts. lie even had a conversation with the plaintiff De Long, in which a mutual attempt was made to discover whether there was any relationship existing between them, and this was some little time before he took any steps looking to the establishment of the hook and eye business. And further than that, the facts before us are such, as we have already said, as to require the inference that he brought about the naming of the defendant with the intent that the public should receive the impression that it was the manufacturer of “ De Long’s Hooks and Eyes,” so well and favorably known to the public.

The court further decided in Higgins’ case that the defendant derived no additional immunity from the fact that the name of “ Higgins,” in its corporate name, was that of one or more of its incor-porators, or that one of its members might have engaged in the same business under his own name, or had consented to the use of the name by the defendant. The decision in Higgins’ case answers the contention of the appellant as to that point. The same proposition was recently asserted in William Rogers Mfg. Co. v. R. W. Rogers Company (66 Fed. Rep. 66).

In view of the comment which the court made in Higgins’ case (supra) upon Meneely v. Meneely (62 N. Y. 427), it is sufficient to say in this case that it is not in point.

While fully concurring with the main features of the judgment, we, nevertheless, think the complaint of the appellant, that the judg-ment is too broad, is well founded. It is certainly more comprehensive than either the decision or the opinion of the trial court. We find no authority in this record for holding that the defendant may not manufacture and sell hooks and eyes of the character which it was manufacturing. Nor are we able to find any basis for the claim that the plaintiffs have the exclusive right to the use of cards to hold hooks. In so far as the judgment restrains the defendant from using the word De Long ” the judgment should be affirmed, but it should not embarrass the defendant in any honest effort which it may hereafter make to put its goods upon the market in a manner which shall not have the effect of persuading customers that the defendant’s goods are the manufacture of the plaintiffs.

It would seem as if its present form might have that effect; therefore, tbe judgment should be modified by inserting between the word “restrain” and the word “and,” at the end of the first adjudication in the judgment, the following: “ But nothing herein shall operate to prevent the defendant from manufacturing and selling hooks and eyes, put up in any form which shall not violate the trade marie of the plaintiffs, or have the effect of inducing the ordinary purchaser to buy defendant’s goods, believing them to be manufactured by the plaintiffs.”

We do not find in the complaint any allegation, nor in the record any testimony, as to the value of the subject-matter involved in this suit. The extra allowance, therefore, seems to have been without authority, and the appellant is entitled to a modification of the judgment in that respect. (Hanover Fire Insurance Company v. The Germania Fire Insurance Company, 138 N. Y. 252.)

The judgment should be modified in accordance with this opinion, and as modified affirmed, without costs.

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

Judgment modified as directed in opinion, and as modified affirmed, without costs.


text:
    Frederick Brandt, Respondent, v. George Schemeckenbecher and Others, Defendants; George Pfister and Others, Appellants; David G. Burton, Respondent.

      Mechanic's lien — expiration of, by lapse of time — lien not renewed by the lienor’s being subsequently made apan'ty in an action to foredose-wnother lien — § 6, chap. 342 of 1885.
    In an action brought to foreclose a mechanic’s lien a demurrer was interposed to the complaint on the ground of a defect of parties, in that other lienors had not been joined as defendants. The demurrer was sustained, and the order sustaining the demurrer provided that the plaintiff should be allowed to amend the summons and complaint by mailing the other lienors parties defendant. This was subsequently done, and service of the amended summons and complaint was made upon the subsequent lienors more than one year after the filing of their liens. Such lienors thus made parties defendant had not commenced an action to foreclose their liens within one year after the filing thereof, nor had they obtained an order of the court continuing their liens.

      Held, that, although under the provisions of section 6, chapter 342 of the Laws of 1885, had the appellants been made parties to the action before the expiration of the year by the original summons their liens would have been kept alive, yet, as their liens had expired before the summons was amended, the amendment could not have the effect of reviving the liens; that which the statute declares to be dead, the court cannot by order restore to life.
    Appeal by the defendants, George Pfister and others, from that portion of a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New Pork on the 3d day of November, 1894, upon the report of a referee, which dismisses the mechanics’ liens claimed by the appellants.

      Early & Prendergast, for the appellants.

      Philip L. Wilson, for the plaintiff and respondent.

      Milo J. White, for the defendant and respondent Burton.
   Parker, J.:

Complaint is made by the appellants of the decision of the learned referee in two respects : E’irst. Of the holding that the liens of the appellants had expired by operation of the statute. Second. Of the determination that the question whether the liens had expired was before the court for adjudication.

The plaintiff and the appellants filed their liens on the 1st and 2d days of October, 1891. The appellants did not commence an action to foreclose their 'liens, or either of them, within one year after such filing, nor obtain an order of the court continuing such hens.

This plaintiff commenced his action within the year, to wit, September 9, 1892, and had he made these appellants parties defendant, they would be within the protection of the further provision of section 6 of chapter 342, Laws of 1885, which reads, and when a claimant is made a party defendant to any action brought to enforce any other lien, such action shall be deemed an action to enforce the lien of such defendant, who is a claimant within the provisions of this act.”

But, having failed to do that, affirmative action on the part of these appellants within the year was necessary to longer continue the life of their liens.

They failed to take any steps whatever, and the presence of the straws at which they grasp on this appeal is due to the fact that the owner demurred to the complaint on the ground of defect of parties, in that other lienors, including these appellants, had not been joined as defendants. The demurrer was sustained by an order made February 10, 1893, by which it was further provided that the plaintiff should be allowed to amend the summons and complaint by making the other lienors parties defendant. This was subsequently done, and service of such amended summons and complaint was made upon these appellants April 21, 1893.

Because the appellants were necessary parties to a su ceessful prosecution of plaintiff’s action they urge that their omission should not work to their prejudice. But it will serve no good purpose to pursue that suggestion. It is sufficient to observe that the statute does not provide that the commencement of an action by a lienor shall be deemed an action by every other lienor to enforce his lien, but that such shall be its effect only as to a claimant made a party defendant.

The language of the statute is clear and unambiguous. It does not admit of a construction which gives to the making and non-making of a claimant a party defendant in an action to enforce a lien, precisely the same potency for continuing the life of liis lien.

As the lien of these appellants had expired before the summons was amended, the amendment could not have the effect of reviving the lien. That which the statute declares to be dead the court cannot by order restore to life.

The suggestion that the question as to the running of the statute against the appellants’ liens was not before the court seems to be without merit. It is distinctly presented by the answer of D. G-. Burton, one of the lienors.

The judgment should be affirmed, with costs to the respondent Burton.

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

Judgment affirmed, with costs to respondent Burton.


text:
    Adam S. Matheson and Robert C. Neal, as Receivers of The American Tube and Iron Company, Respondents, v. Clifton Wharton, Jr., as Assignee for the Benefit of Creditors of Jacob Jamer, and The National Tube Works Company, Appellants.

      Oonti'act ■— when its covenants a/i'e dependent — a failure to perform substantial covenants bars an action by the party in default.

    One Jacob Jamer, finding that it would be difficult for bim. to meet at maturity certain promissory notes made by bim, upon wbicb tbe National Tube Works Company and tbe American Tube and Iron Company were respectively indors-ers, entered into a written agreement witb such corporations under wbicb tbe respective notes were to be renewed by them respectively, tbe agreement providing that Jamer should pay a certain proportion of tbe indebtedness at specified times, as security for wbicb payments be assigned to tbe corporations certain accounts beld by bim against third parties.
    Tbe National Tube Works Company performed its part of the contract, but tbe American Tube and Iron Company having passed into tbe bands of receivers before certain of Jamer’s notes indorsed by it became due, these notes were not renewed by that company as provided by the agreement, but were protested, and Jamer was compelled to make an assignment for tbe benefit of bis creditors.'
    Although the agreement entered into between the parties conferred upon the National Tube Works Company and tbe American Tube and Iron Company the right to collect the accounts transferred by Jamer, these corporations did not do so, but permitted Jamer to collect them, and subsequent to bis assignment bis assignee collected them.
    Upon tbe trial of an action brought by the receivers of the American Tube and Iron Company against the assignee of Jamer to compel bim to pay over to tbe plaintiffs the proportion of tbe proceeds of tbe assigned accounts claimed by it,

      Held, that tbe promise to renew tbe notes from time to time was not merely incidental and collateral, but was the main inducement on Jamer’s part for providing the additional security, and that the American Tube and Iron Company, having failed to comply witb the provision of the contract by which it was to renew tbe notes as they matured, was divested of all interest therein, and that the plaintiffs could not recover.
    Appeal by the defendant, Clifton Wharton, Jr., as assignee for the benefit of creditors of Jacob Jamer, from a judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the county of New York on the 2d day of April, 1895, upon the "report of a referee.
    Also, appeal by the defendant, The National Tube Works Company, from so much of a judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the county of New York on the 2d day of April, 1895, as dhects the assignee of Jacob Jamer to pay the plaintiffs’ costs and to pay out of the residue of the fund $7,155.13 to the plaintiffs, or as directs such assignee to pay to the plaintiffs any sum whatever from the fund derived from the collection of the assigned accounts, the subject of the action, and fails to direct that the defendant, The National Tube Works Company, be paid in full their claims out of said fund.

      Alfred Jaretzki, for Clifton Wharton, Jr., appellant.

      James McKeen, for National Tube Works Company, appellant.

      Edgar J. Nathan, for the respondents.
   Parker, J.:

Prior to June 30, 1893, Jacob Jamer delivered to the National Tube Works Company, for value, several promissory notes aggregating $10,820.06, and to the American Tube and Iron Company notes aggregating $23,170.15. All of these notes had been indorsed by the payees and had been discounted and were outstanding in the hands of third parties on the date above mentioned.

Jamer, finding that it would be inconvenient, if not impossible, for him to meet the notes at maturity, so stated to the National Tube Works Company and the American Tube and Iron Company, and proposed an extension of time, by which twenty-five per cent of the indebtedness represented by the notes should be paid in six months, twenty-five per cent in nine months, twenty-five per cent in twelve months, and-the balance in fifteen months; and to secure such payment he proposed an assignment of accounts which he held against certain parties. The proposition was accepted and a tripartite agreement was entered into, in which Jamer was designated as the party of the first part, the National Tube Works Company party of the second part, and the American Tube and Iron Company party of the third part. It fixed the time of payment as he had proposed, and stated the method by which the extension was to be accomplished, which should be a renewal of the notes outstanding by the parties of the second and third parts so as to conform with such extension.

On the part of Jamer it was agreed to pay the amount of the notes in four installments at the several periods agreed upon, and to secure such payment Jamer assigned by the agreement certain accounts. The right to anticipate the payment of any of the installments was reserved to Jamer, the parties of the second and third parts agreeing that upon the payment of any installment they would re-assign to him a proportionate amount of the accounts assigned under the agreement, and that upon payment of all of the installments they would re-assign all of the accounts.

The party of the second part, the National Tube Worts Company, made performance of its part of the contract and is entitled to all of the benefits secured to it by the agreement. The American Tube and Iron Company passed into the hands of receivers on the 21th day of July, 1893, and, among the notes maturing immediately which it had agreed to renew, was one for $3,500 which became due July twenty-eighth, another for $1,739.80,'which matured July twenty-ninth, and another for $829.50, which matured July thirtieth-These notes were not renewed as by the agreement it was provided they should be, although Jamer and his counsel urged upon the receivers the importance of their renewal. Instead, they were protested, and Jamer, on the thirty-fh’st day of July, three days after the first note was protested, was compelled to make a general assignment for the benefit of his creditors. While the agreement conferred upon the parties of the second and third parts the right to' collect the accounts transferred by it, they did not in fact do so, but permitted Jamer to collect them, and after his assignment his assignee went on with their collection, the result being that at the time of the commencement of this suit there was in the hands of Jamer’s assignee the sum of $12,380.57, which had been collected from the assigned accounts. The plaintiffs demanded from the assignee such a proportion of this sum as the amount of notes upon which the American Tube and Iron Company was the indorser bore to the amount of the notes upon which the National Tube Works was the indorser. If the American Tube and Iron Company had made performance of its contract, as did the party of the second part, Jamer’s assignee would have been without excuse in failing to comply with the receivers’ demand ; as it had not, he insisted that the plaintiffs were not entitled to any portion of the assigned accounts. Thereupon this suit was brought, upon the equity side of the court, to compel the assignee to pay over to the plaintiffs that part of the proceeds claimed by them.

The learned referee decided that the American Tube and Iron Company did not comply with all of the provisions of the contract, in that it failed to renew the notes, to which we have referred, as they matured, but held that such omission did not annul the provisions of the contract assigning the accounts, or divest the American Tube and Iron Company of its interest in such accounts.

This presents the only question which we shall consider, as we approve of the views of the referee in all other respects, The ground upon which he based his decision, that the failure of performance on the part of the American Tube and Iron Company did not have the effect to deprive it of the right to its full share of the proceeds of the assigned accounts, was that the contract when signed was completely executed on Jamer’s part, and partly executed and partly to be executed on the part of the American Tube and Iron Company and the other jiarty to the contract. That the con-, tract was one of mutual promises, each promise being the consideration for the other, and, therefore, the promise, not the performance of it, constituted the consideration. In support of his position he cited Philpot v. Gruninger (14 Wall. 570) and Boone v. Eyre (reported in note to 1 H. Bl. 273).

It may be said, if he is right in his interpretation of the contract, that the cases cited furnish support for the legal conclusion reached. But the facts of those cases, as we read them, do not furnish any assistance in determining whether this contract'should be treated as executory, or as one executed by one party and partly executed, and partly to be executed, by the other parties at the moment of its execution.

A remark of Foote, J., in Grant v. Johnson (5 N. Y. 247) seems to apply with such force to these, as well as to the other cases to which our attention has been called, that we quote it: “ So many decisions have been made on the vexed question of what are and what are not dependent covenants, and so many of them are irreconcilable, that they rather perplex than aid the judgment in determining a given case.”

The opinion in Boone v. Eyre was written by Lord Mansfield, and Pollock, in bis work on Contracts (6th Eng. ed. p. 246), says: “ Erorn Lord MaNSKield’s time to the jDresent attempts liave been made to lay down rules for determining, in the absence of express provisions or other clear indication of intent, the relation of the one -party’s obligation to the other as regards the order of performance of mutual promises and the extent to which either is bound to accept performance of part, notwithstanding failure to perform other parts. In the earlier decisions, the Court inclined to treat the several terms of a contract * *. * as separate and independent promises, paying little regard to the effect which default in some or one of them might produce in defeating the purpose of the contract as a whole. At this day the tendency is the other way. The Court looks to the purpose and effect of the contract as a whole as a guide to the probable intention of the parties, and the presumption, if any there be, is that breach or default ip any material term of a contract between men of business amounts to default in the whole.”

And again, at page 248, that author says: But when there is a contract made by mutual promises we may have to inquire whether, in addition to each promise or set of promises being the consideration for the other, the performance thereof on the one side is not a condition, precedent or concurrent, of the right to claim performance on the other. There is no logical reason why it should not be so, or why express words should be reqixired to manifest an intention that it should. Each party’s promise is the consideration for the promise of the other, not for the performance which is due by reason of the promise. What are the terms and conditions of the duty created by the promise is another matter.”

In considering the tests which may be applied he says, at page 250 : “ Can it be said that the promisee gets what he bargained for, with some shortcoming for which damages will compensate him % Or is the point of failure so vital that his expectation is in substance defeated ? ”

The logical and necessary result of the position taken by the referee is that if the American Tube and Iron Company had failed to renew any of the notes described in the contract, yet it could recover, because, as he asserts, the contract was executed by one party, and partly executed by the others the moment it was signed. But in such case clearly Jamer’s expectations -would have been defeated, not only in substance, but entirely. What be was aiming at, as appears from every feature of the contract, was to procure an extension of the time within which to pay thirty odd thousand dollars, which the notes outstanding represented. To accomplish that result he was willing to .assign certain accounts which he held against other parties. There is no hint of any other intention in this contract. It was not provided •that the avails of these accounts should be applied in payment of the notes outstanding.

There was no authority to make any application whatever until six months thereafter, when the first installment should become due, ,and then it was to be devoted to the payment of one-fourth of his obligations, which would then be represented by renewal notes. Jamerwas attempting to protect his credit through a period of great financial depression, and that could only be accomplished by securing .his notes from protest, and, therefore, the parties of the second and third parts were required to renew the notes as they should mature.

This they promised to do in order to secure the collateral which .'he offered them as an inducement. It is true that the word collateral was not used, but that the accounts were intended as collateral security for the faithful performance of his promise to pay the sum which his notes represented in four equal installments in six, nine, twelve and fifteen months, is apparent.

The clause following the promise to pay begins with the words, “To secure the prompt and punctual payment of said sums of money, and each installment thereof at the time above provided, the party of the first part does hereby assign —”

And in the sixth clause it further provided “ that as each installment of the indebtedness hereinabove recited is paid off, the parties ■of the second and third parts will re-assign to the party of the first part a proportionate amount of the accounts assigned to and held up by them under this agreement, and that upon the payment of all •of the installments hereinabove provided for, and of any and all interest and charges that may have accrued thereon, they will re-assign all the accounts enumerated in said Schedule A, or such •others as may have been substituted therefor, to the party of the first part.”

The conduct of the parties was in harmony with the apparent language. of the contract. The parties of the second and third parts did not undertake the collection of the accounts. Jamer collected such as were collected, and the proceeds resulting from his efforts in that direction are the subject of this suit.

If the legal interpretation put upon this contract by the referee be sound, then if; necessarily follows that immediately upon its being signed, if the parties of the second and third parts had neglected or refused to renew any of the'notes referred to in it, and had permitted them to mature and be protested against Jamer while in the hands of third parties, nevertheless, the parties of the second and third parts would have been entitled to the collateral to protect them as against their liability as indorsers on the notes. Such, certainly, was not the intention of the parties, and the contract does not so indicate from whatever point of view it may be examined.

The promise to renew the notes from time to time so that Jamer should not be called upon to pay any of them under six months, and others for periods as far away as fifteen months, was not merely incidental and collateral. It was the main inducement on Jamer’s part for providing the collateral. The object was to secure himself against the threatening impairment of his credit. He apprehended financial ruin in the event that his paper should be dishonored, and thirty days later, when, through the American Tube and Iron Company’s failure to perform its contract, his paper went to protest, his apprehensions were proved to be well founded.

Respondent’s argument is that Jamer covenanted to pay his just debts, and, as security, assigned certain accounts to his two creditors, in consideration whereof they extended the time of payment and agreed to renew certain notes as the same matured. Thus the contract and consideration were wholly executed except as to the renewal of the notes, which could only be done in the future, and was a mere incident to the extension. But this position does not correctly present the facts.

The parties of the second and third parts were not then his creditors. All of the notes were then in the hands of third parties. As they bore the indorsement of the second and third parties they were threatened with liability thereon should Jamer fail to pay. To protect themselves they consented to assume the burden of renewing the notes and thus extending the time of payment for the time specified in the contract.

The contract contains a phrase that the parties of the second and third parts “ agree to extend and do hereby extend ” the time of payment of the said indebtedness, but that phrase did not effect an extension as there was no indebtedness due to them; instead, it was due to third parties, who held the notes. While these words were in presentí, they should be construed in the future tense. Otherwise they are meaningless, for there was nothing for them to operate on.

Without a renewal of the notes there could be no extension of time, and, therefore, the contention that the paragraph relating to the extension constituted the consideration for the contract, and the renewals were a mere incident to it, is absurd. The plan of tlie contract was to procure such renewals of these notes as' that one-fourth should be paid at each period of six, nine, twelve and fifteen months.

In giving expression to the agreement of the parties in this respect, the following language was used :

“ The parties of the second and third parts agree to extend, and do hereby extend, the time of the payment of said indebtedness so that one-fourth of the entire amount due each of the parties of the second and third parts shall be due and payable in six months from date, another one-fourth part in nine months from date, another one-fourth part in twelve months from date, and the remainder in fifteen months from date. And said parties of the second and third parts agree to renew the notes heretofore given by the party of the first part as the same mature, so as to conform with such extension.”

The use of the words do hereby extend ” furnishes the basis for the argument made by the respondents, that by the agreement the parties of the second and third parts extended, not promised to extend, but actually did extend, the time of payment. .But, as we have already seen, they did not extend the time of payment, for there was no indebtedness due them. The notes were not in their possession or under their control, and by that agreement they could not affect Jamer’s liability thereon to -the parties who held them. Their promises to renew the notes contained in the latter part of the' last-quoted clause develops the plan by which they undertook to insure Jamer against the notes becoming dishonored within the period which they had promised he should have to pay the amounts secured by them.

Having in mind the situation of the parties, the object which they intended to accomplish and the general scheme of the contract, the only reasonable construction which can be given to the opening clause of the provision which we have quoted, is that by it the-parties of the second and third parts agreed to extend the time of payment for the periods therein named, the promise to be effectuated by renewal of the several notes as they should mature, so as to-conform with such extension. Such a construction leaves no basis whatever for the claim that the renewal of the notes was a mere incident to the extension.

If we are right in the views expressed, it follows that the American Tube and Iron Company, having failed to perform its contract in a substantial and important respect, the plaintiffs cannot recover.

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

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

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


text:
    Edwin Van Antwerp, Appellant, v. Edward F. Linton and Others, Respondents.

      Principal and agent — agent liable to third parties for misfeasance not for non-feasance.

    An agent or servant is not liable to a third person for non-feasance in his employment ; as between himself and his master he is bound to serve the master with fidelity and for a breach of his duty he becomes liable to the master, who in turn may be charged in damages for injuries to third persons occasioned by the non-feasance of the servant. For misfeasance, however, the agent is generally liable to third parties suffering thereby.
    In an action brought against a corporation known as “The Brooklyns, Limited” and Edward F. Linton and others to recover damages, resulting from alleged negligence by which the plaintiff was injured, it appeared that the individual defendants were appointed a committee of the board of directors of the corporation to put certain grounds in condition fol- a game of foot ball. “ The Brooklyns, Limited,” having made default, the question before the trial court was as to the liability of the individual defendants. The individual defendants had no lease of the grounds, and the sole ground upon which the plaintiff sought to charge them with liability was that they were appointed a committee by the board of directors of the corporation to erect a stand and otherwise provide for the reception and convenience of the public, and that, by their negligence, there was a defective construction of the grand stand which fell and occasioned the injury complained of.
    Upon the appeal from a judgment dismissing the complaint,

      Held, that the corporation, being a domestic corporation organized under the laws of the State of New York, and being in possession of the premises when the stand was erected and at the time of the accident, liability against the individual defendants could not he predicated upon their being directors, officers or stockholders in such corporation;
    That as the negligence charged constituted non-feasance and not misfeasance, the individual defendants were not liable to the plaintiff for the accident, and that the complaint was properly dismissed.
    Follbtt, J., dissenting.
    Appeal by tbe plaintiff, Edwin Van Antwerp, from a judgment of the Supreme Court in favor of the defendants, entered in tbe office of tbe cleric of the county of New York on the 28th day of March, 1895, upon the dismissal of the complaint directed by tbe court after a trial at tbe New York Circuit before tbe court and a jury.

      Franklin Pierce, for the appellant.

      Edward, W. S. Johnston, for the respondents.
   Parker, J.:

This appeal brings up a judgment entered on the dismissal of the complaint, after the opening address to the jury by plaintiff’s counsel, which was taken down. Erom the complaint and opening it appears that the .plaintiff was injured by the fall of tbe grand st^nd at jhe Yale-Princeton football game on Thanksgiving day, 1890, on grounds in possession of “ Tlie Brooklyns, Limited,” a corporation organized under the laws of tbe State of New York.

The action was brought against “The Brooklyns, Limited,” and Messrs. Linton, Chauncey and Wallace, who were appointed a committee of the board of directors of “The Brooklyns, Limited,” to put tbe grounds in condition for the exhibition of the game.

“The Brooklyns, Limited,” made default, and the question presented to the trial court, upon the motion to dismiss the complaint, was whether, from the complaint and opening, a cause of action against the individual defendants was stated ? It was conceded that tbe individual defendants did not have any lease from “The Brooklyns, Limited,” nor any one else, running to them, and the sole ground upon which-the plaintiff sought to charge them with liability was, that they were appointed a committee by the directors of the corporation to erect a stand and otherwise provide for the reception and convenience of the public, and that by reason of their negligent omission of duty there was a defective construction of the stand, which led to its falling, resulting in injury to the plaintiff. As it was conceded that “ The Brooldyns, Limited, ” was a domestic corporation duly organized under the laws of this State, and in possession of the premises when the stand was erected, and also at the time of the accident, liability against the individual defendants could not be predicated upon their being directors, officers or stockholders in such corporation. (Demarest v. Flack, 128 N. Y. 205.)

That they were the agents of the corporation in directing and superintending the erection of the stand was assumed by the learned trial judge, as he was bound to do, upon the complaint and opening, and he reached the conclusion that the acts with which they were charged constituted non-feasance, and not misfeasance. If he was right in such respect it is conceded that the complaint was. properly dismissed, for whatever may be the rule in other jurisdictions, it is conceded that in this State an agent or servant is not liable to third persons for non-feasance. As between himself and his master he is bound to serve him with fidelity, and for a breach of his duty he becomes liable to the master, who in turn may be charged in damages for injuries to third persons occasioned by the non-feasance of the servant. For misfeasance the agent is generally liable to third parties suffering thereby. The distinction between non-feasance and misfeasance has been expressed by the courts of this State as follows: “If the duty omitted by the agent or servant devolved upon him purely from his agency or employment, his omission is only of a duty he owes his principal or master, and the master alone is liable. While if the duty rests upon him in his individual character, and was one that the law imposed upon him independently of his agency or employment, then he is liable.” (Burns v. Pethcal, 75 Hun, 443.)

Appellant urges that although these individual defendants were charged by the corporation with the duty of erecting this stand, and the acts complained of consisted in omitting to provide for a construction of sufficient strength to withstand the strain to which it was subjected, nevertheless they were guilty of misfeasance rather than non-feasance.

With commendable diligence he has brought to our attention authorities in other jurisdictions tending to support his contention, ,,but we refrain from their consideration, because it is our understanding that the courts of this State have determined otherwise.

In Murray v. Usher (117 N. Y. 542) the plaintiff, while employed upon a platform in a saw mill belonging to two of the defendants, sustained injuries by reason of its falling which occasioned his death. His administrator brought an action against the owners of the mill and one Lewis, who was their superintendent, having general charge of the business, and being specially instructed to look after the necessary repairs, which included the duty of inspecting the platform from time to time, to see that it was kept in a safe condition.

Judgment was recovered against all of the defendants. In the Court of Appeals the question of the superintendent’s liability was considered, the court holding that the omission of the superintendent to perform the duty devolving upon him constituted non-feasance for which he was not liable in a civil action, but that his employers were. That case, it will be observed, is directly in point with the one under consideration. Lewis, the superintendent, neglected to perform the duty which his employers intrusted to him, and such neglect led to the fall of the platform, which caused plaintiff’s injury. In this case the defendants were engaged in superintending the erection of the stand; as more than one was charged with such duty, they were called a committee, but the duties devolved upon them were of the same general character as in Murray's case, and the charge is that the fall of the stand was due to their neglect to properly discharge the obligations put upon them by the corporation.

In Burns v. Pethcal (supra) an attempt was made to recover! of a foreman for the loss of the life of an employee, due, it wasl charged, to the omission of the foreman to warn the dead man! of the danger of working in a particular place. There was a| recovery at the Circuit, but the General Term reversed the judg-| ment, holding that a servant is not liable jointly with his master! where the negligence of the servant consists of an omission of a duty* devolved upon him by his employment, although he may be liable* where he omits to perform a duty which rests upon him in his individual character, and one which the law imposes upon him independently of his employment.

These cases fully sustain the decision of the trial court.

The judgment should be affirmed, with costs.

Van Brunt, P. J., concurred; Follett, J., dissented.

Judgment affirmed, with costs.