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

text:
    The People of the State of New York ex rel. Press Publishing Company v. James J. Martin and Others, Commissioners, etc.

      Certiorari — where a board is authorised to act on the “ best information” it can obtain.

    In a proceeding by certiorari to review the action of tlie police commissioners of tlie city of New York in designating certain newspapers, it appeared that tlie relator published in the city of New York a newspaper known as the World; that the defendants composed the board of police commissioners of the city of New York, and were authorized by statute to designate at least two newspapers in which were to be published a list of the candidates for election; that the statute provided for the selection by the board, under certain limitations, of the papers having the largest circulation in the city of New York, and that this was to he determined by “the best information the board can obtain.”

      Tlie relator furnished, certain evidence of the circulation of its papers, and on the last day, when the board was about to determine the question, furnished additional evidence (an affidavit) showing that it had the largest circulation.

      Held, that the statute left to the board the decision as to what sources of information it might consider best, and did not restrict it to legal evidence. (Follett, J., dissenting.)
    That an affidavit presented at the last moment that the board had authority to act could not form the foundation of a reversal of its decision.

      Semble (per Follett, J.), that the action of the board was judicial and subject to review; that the relator had a sufficient interest in the question to enable it to prosecute this proceeding, and that the fact that the time within which the lists were to be published had expired did not require a dismissal of the writ.
    Certiorari issued out of the Supreme Court and attested November 2, 1892, directed to James J. Martin, diaries E. MacLean, John M'cClave and Jolm C. Slieehan, as police commissioners of the city of New York, constituting the board of police commissioners of the city of New York, commanding them to-certify and return to this court their proceedings in relation to the designation of four newspapers published in the city of New York for the publication of the list of all nominations of candidates for offices to be filled at the election to be held in the city of New York on November 8, 1892, with all things appertaining thereto, and any rules or regulations prescribed by the board of police commissioners of the city of New York relating to such designation, etc.
    The statute under which the action sought to be reviewed was taken reads as follows :
    “ One of such publications shall be made in a newspaper which advocates the principles of the political party that at the last preceding election cast the largest number of votes in the State, and another of such publications shall be made in a newspaper which advocates the principles of the political party that at tlie last preceding election cast the next largest number of votes in the State.
    “ The clerk or board in selecting the respective papers for such publication shall select those which, according to the best information he can obtain, have the largest circulation within such county or city. In making additional publications the clei’k or board shall keep in view the object of giving information so far as possible ■ to the voters of all political parties; and in no event shall additional publications be made in two newspapers representing the same political party.”

      J. If. Bowers, for the appellant.

      G. L. Sterling, for the respondent.
   Yan Brunt, P. J.:

I cannot agree in the conclusion at which Mr. Justice Follett has arrived in the case at bar.

It will be observed that in the statutes considered and the cases cited by Him the language was essentially different from the statute under which this proceeding arises. In the case of The People v. Brennan (39 Barb. 651), the language of the statute (Chap. 227, Laws of 1863, §2) was: “No portion of the sums which shall hereafter be raised by taxes or assessments in said city and county of New York shall be paid for advertising, except the same shall have been incurred for advertisements in the newspapers authorized by the mayor and comptroller of said city, who shall designate four jiapers having the largest daily circulation, and any six others in their discretion, not to exceed ten in all.” The mayor insisted that the term “ daily circulation ” meant the largest general circulation, and the comptroller that it meant the largest circulation within the city; and the question discussed by the court was as to which of these contentions was correct.

It is true that in discussing the question it was said: “ But as the determination of the question of fact which four papers have the largest daily circulation, involves the consideration of evidence, and an adjudication upon such evidence by the mayor and the comptroller, we do not see upon what principle a mandamus can issue corn-man ding the comptroller to unite with the mayor in designating four certain papers, naming them in the mandamus.” But, as already suggested, the language then under consideration was essentially different from the one under which this application arises.

By the law of 1863 the mayor and comptroller were compelled to designate four papers having the largest daily circulation. There Avas no provision as to Avhat evidence or proof they should take, in order to establish the fact of circulation, and the courts held that they were bound to take evidence upon that point, which necessarily meant legal evidence, and to decide upon such evidence.

In the case at bar, the provision of the statute is, that the board in selecting the respective papers for such publication shall select those which, according to the best information the board can obtain, have the lai’gest circulation within said city, clearly giving the board the greatest latitude as to the sources from, which information is to be derived, and expressly excluding the idea that legal evidence only could be acted upon. This statute -was passed and this,language was used, evidently because of the difficulties arising from the strict phraseology of the act of 1863 and other acts of a similar character; and it was the manifest intention of the Legislature to give the board greater discretionary powers than those which either of these previous acts had conferred.

So in the case of The People ex rel. Francis v. Common Council of Troy (78 N. Y. 33), section 3 of title 2 of chapter 813 of the Laws of 1873 was under consideration, which provided that the common council shall designate not to exceed four papers, having the largest circulation in the city, in which said advertising shall be done. And in that case it was held that no mode of ascertaining which papers have the largest circulation being pointed out, the question was left open as one of fact to be determined by the common council, and that the determination of such question of fact was a judicial duty, and though the common council might be compelled by mandamus to determine the facts, it could not be directed to decide in a particular way, however clearly it might be made to apj>ear what the decision ought to be. It appeared in that case that the common council designated the papers without any evidence before it as to which had the largest circulation, and it was held that it was the duty of the council to make the designation on evidence, and that its duties were judicial and not ministerial.

But in the case at bar they are not restricted to evidence, but are to get the best information they may obtain, thus leaving it discretionary with the board as to what sources of infonnation they may consider to be the best. Because the court is of the opinion that better information may be obtained, it cannot control the judgment of the board as to what it considers best.

And furthermore, in the case at bar, the relator had furnished proof which was clearly insufficient to entitle it to the designation ; and at the last meeting of the board on the last day on which the designation could be made, they presented additional and amended affidavits claiming that the board, without having any opportunity to test in any respects tbe statements therein contained, was bound to accept them in their entirety. I do not think, after this relator had presented its evidence, and the board was acting upon it, upon the last day in which it had any authority to act, that the presentation to it of an affidavit can form the foundation of a reversal of such action. Such a ruling would make it impossible for the board to guard against the presentation of alleged facts which might have no existence in reality, or to apply any ordinary tests to only alleged proof in order to ascertain its value.

.1 am of the opinion that the writ should be dismissed.

O’Brien, J., concurred.

Follett, J.

(dissenting):

This is a special proceeding begun by a writ of certiorari, for the purpose of reviewing the final determination of the board of police in designating certain newspapers in which lists of nominations of candidates for offices to be filled at the general election of 1892 were to be published, and in refusing to designate the World, a newspaper published by the relators, as a paper in which such lists should be published, and in refusing to receive evidence as to which papers had the largest circulation.

No material disputed question of fact is presented by the writ, the papers on which it was granted and the return filed in obedience to the writ.

The World, the /Sim and the Daily News are newspapers published in the city of New York which, preceding the general election of 1892, advocated the principles of the political (Democratic) party which at the last preceding election cast the largest number of votes in this State. The Tribune and the Press are newspapers published in said city which, preceding the election of 1892, advocated the principles of the political (Republican) party that at the last preceding election east the next largest number of votes in the State. On the Gtli of November, 1892, a general election was held in this State, pursuant to section 2 óf chapter 680 of the Laws of 1892, the Election Law.” Prior to October twenty-fifth of that year certificates of nominations of candidates for offices, to be filled by the voters residing in the city of New York, were filed with the board of police commissioners of that city, pursuant to section 58, and prior to that date the Secretary of State, pursuant to section 60 of said act, certified to said board the nominations for State offices to be filled at that election.

On the 6th of September, 1892, the New YorkPress Association, which publishes the World, filed an affidavit with the board of police, which stated that the World was a newspaper published in the city of New York; that it advocated the principles of the political party that at the last preceding election cast the largest number of votes in this State; that the paper had been published for several years, and that it had the largest circulation of any newspaper published in said city, in the State of New York or in the United States.

At a meeting of the board of police, held October 25, 1892, a resolution was adopted providing that the lists of nominations filed and certified, as aforesaid, should be published in the Daily Netos and the Sun newspapers, advocating the principles of the political party which at the last preceding election cast the largest number of votes in this State, and in the Tribune and Press newspapers, advocating the principles of the political party that at the last preceding election cast the next largest number of votes in this State.

It is alleged in the petition upon which the writ was granted that: Said board of police commissioners of the city of New York, at the meeting of the said board on the 25th day Of October, 1892, when said designation of four certain newspapers for the publication of the list of nominations above mentioned 'was made, refused to allow' the production of evidence showing that the circulation of the World in the city of New York was larger than that of any other daily newspaper published in said city, and that its circulation was 75,000 in excess of that of the Sun or the Daily News, although such evidence was offered ; and that the said hoard of police commissioners of the city of New York, on said 25th day of October, 1892, refused to allow evidence to be produced showing that the circulation of the World was larger than that of any other newspaper published in said city, and that on said 25th day of October, 1892, no affidavit relating to the circulation of the Sun, the New York Daily News, the Tribune and the New York Press, or to the circulation of any other newspaper, except the affidavit hereto annexed and marked Exhibit ‘ B,’ was on file in the office of the said Board of Police Commissioners in the city of New York, all of which appears by the affidavit of John Norris, hereto attached. Deponent further says that none of the four newspapers so designated as aforesaid are newspapers having the largest circulation within the city of New York.”

This allegation, not being denied in the return, must be deemed to be true for the purposes of this review. (Code Civ. Proc. § 2138; People ex rel. Peck v. Commissioners, 106 N. Y. 64; People ex rel. McLaughlin v. Commissioners, Id. 676; S. C., 10 N. Y. St. Repr. 666.)

It is also alleged “ that said Board did not obtain any information, as a Board, relative to the newspapers having the largest circulation within said city, other than that furnished by the affidavit of John Norris, a copy of which is hereto annexed, marked Exhibit B,’ as deponent is informed and verily believed.” Exhibit “ B ” is the affidavit filed by the relator September 6, 1892.

The commissioners in their return say: The said Board, in selecting the respective papers for the said publication, selected those which, according to the best information it could obtain, had the largest circulation within the city'and county of New York.” A copy of the record of the proceedings of the board upon making the designation is set out in the return, and it does not appear that they acted upon evidence.

The principal questions involved in this controversy are: (1) Is the action of the board, under the statute, judicial, and so subject to review by this writ, or is it ministerial and, therefore, not reviewable in this proceeding ? (2) Has the Press Publishing Company sufficient interest in the determination to entitle it as relator to prosecute this proceeding ? (3) In case the first and second questions are determined in favor of the relator, should the writ be quashed because the time during which the lists were to be published has passed ?

It is well settled in this State that when an officer or board is authorized to act in a ministerial capacity, that he or it may be compelled to act by a. writ of mandamus, but if the action involves the exercise of discretion, it is equally well settled that how the discretion shall be exercised cannot be controlled by the court. "When the act is judicial, it is the subject of review by a writ of certiorari. Whether the action is judicial or ministerial largely depends upon the question, must the determination be made upon evidence'(

The following is the section of the statute (Oliap. 680 of 1892) under which the designation was made :

“§61. Publication of Nominations. — At least six days before an election to fill any public office * * * the board of police commissioners of the city of New York, * * * shall cause to be published in not less than two nor more than four newspapers within such * * * city, * * * a list of all (nominations of candidates for offices to be filled at such election, certified to such * * * board by the Secretary of State, or filed in the office of such * * * board.

“ * * * One of such publications shall be made in a newspaper which advocates the principles of the political party that at the last preceding election cast the largest number of votes in the State; and another of such publications shall be made in a newspaper which advocates the principles of the political party that at the last preceding election cast the next largest number of votes in the State. The clerk or board, in selecting the respective papers for such publication shall select those which, according to the best information he can obtain, have the largest circulation within such * * * city. In making additional publications the * * * board shall keep in view the object of giving information, so far as possible, to the voters of all political parties; and in no event shall additional publications be made in two newspapers representing the same political party.”

That the action of the board, under the section of the statute quoted, is judicial, seems to have been conclusively settled in this State.

Section 2, chapter 227 of the Laws of 1863, provided :

“ § 2. No portion of the sums which shall hereafter be raised by taxes or assessments in said city and county of New York shall be paid for advertising, except the same shall have been incurred for advertisements in the newspapers authorized by the mayor and comptroller of said city, who shall designate four papers having the largest daily circulation, and any six others in their discretion, not to exceed ten in all.”

The mayor insisted that the term daily circulation ” meant the largest general daily circulation, and the comptroller that it meant the largest daily circulation within the city. Upon the application of the mayor the Special Term granted a peremptory writ of mandam is commanding the comptroller to unite in designating four certain papers having the largest daily circulation. The order granting the writ was reviewed at General Term (The People v. Brennan, 39 Barb. 651), where it was held that the duty imposed by the section above quoted was not ministerial, but judicial, requiring the consideration of evidence, and the writ was so modified that the comptroller was required to meet with the mayor and designate four papers having the largest general daily circulation. In discussing the question it was said : But as the determination of the question of fact, which four jtapers have the largest daily circulation, involves the consideration of evidence, and an adjudication upon such evidence by the mayor and the comptroller, we do not see upon what principle a mandamus can issue commanding the comptroller to unite with the mayor in designating four certain jsapers, naming them in the mandamus.”

This case was reviewed at considerable length and approved in People ex rel. Francis v. The Common Council of Troy (78 N. Y. 33), which arose over the construction of a clause of section 3 of title 2 of chapter 813 of the Laws of 18Y3, which provided that: The common council shall designate not to exceed four newspapers, having the largest circulation in the city, in which the city advertising shall be be done.”

Upon proof that the Troy Times had the largest circulation in the city of Troy, a peremptory writ of mandamus was granted at Special Term, commanding the common council to designate that newspaper as one of those in which the city advertising should be done. The order of the Special Term was affirmed by the General Term (17 Hun, 20), but it was reversed in the Court of Appeals on the ground that the duty imposed on the common council by the clause quoted was not ministerial, but judicial. It was said : "No mode of ascertaining which papers have the largest circulation is pointed out by the statute, and consequently that question is left open as one of fact to be determined by the common council.”

It was also held : “ Where a subordinate body is vested with power to determine a question of fact, tlie duty is judicial, and though it can be compelled by mandamus to determine the fact, it cannot be directed to decide in a particular way, however clearly it be made to appear what the decision ought to be.”

In the last case cited, as in the one at bar, the common council designated the papers without any evidence before it as to which had the largest circulation, and on the same day, but after the designation had been made, the proprietors of the Troy Times presented to the common council an affidavit showing that it had the largest circulation in the city, but that body refused to reconsider its action.

Under the statutes construed in the cases cited it was distinctly held that it was the du iy of the boards to make the designations on evidence, and that their duties were judicial and not ministerial. The procedure by which the board of police must be guided in making its designation, is much more definitely pointed out in the statute under which they acted than was the procedure under either of the sections considered in the cases cited, and clearly indicates, that it is the duty of the board to act on evidence.

The provision is: The * * * board, in selecting the respective papers for such publication, shall select those which* according to the best information he (the board) can obtain, have the largest circulation within such * * * city.”

The word shall ” is mandatory, and considered in connection with the context it cannot fairly be construed to mean may.” What shall the board do ? The language of the statute furnishes the answer : (1) It shall determine which papers advocate the principles of the two political parties which cast the largest number of votes at the last election. (2) Which of these papers have the largest circulation in the city.

How shall these questions be determined ? Again the statute, answers the question. Upon “ the best information he (the board) can obtain.” The information is to be obtained, and it is to be the best. The best information as to which of several newspapers has the largest circulation cannot, under any authority, legal or metaphysical, be intuitive, or evolved from the inner consciousness of the members of the board. Neither have they any right to guess what the fact may be, but it is the duty of the board to obtain by inquiry* and receive such evidence as may be offered as to which newspaper lias tlie largest circulation. The best information can be acquired from persons having precise knowledge of the subject, and from the books of the publishers of the papers. Such evidence was offered to the board, but it refused to receive or consider it, and in doing so it violated a duty which it owed to the public, and, perhaps, which is the next question, a duty which it owed to the relator.

Has the relator a sufficient interest in the determination to entitle it to prosecute this proceeding? By chapter 237 of the Laws of 1884 the provision in the charter of the city of Troy, which was discussed in People ex rel. Francis v. The Common Council of Troy (supra), was amended so as to read as follows :

“ The common council shall, at its second regular meeting after the general election in each year, designate not to exceed four newspapers published in said city, and having the largest circulation within its corporate limits, in which shall be published all the municipal advertisements, official notices, legal notices and the common council proceedings, including all advertisements and notices emanating from the common council, or from any department of the city government, or any officer of the city, except as is otherwise provided in section six of chapter thirty of the laws of eighteen hundred and eighty. The papers so designated shall be known as official newspapers. The oath of the publishers of said newspapers, ■and the business records of such newspaper offices for the three months preceding such designation, shall be required by the common council as confirmatory of the actual circulation of the said newspapers before such designation is made by the common council.”

The common council, in defiance of this statute, designated certain newspapers without receiving any evidence as to which of the papers published in the city had the largest circulation therein. This action was taken on the theory that the statute was not mandatory. The publishers of the Troy Times obtained a writ of certiorari for the purpose of reviewing the action of the common council. It was alleged in the petition that the Troy Times when the designation was made, had, and for many years previously had, the largest circulation of any newspaper published in that city. The position was taken in behalf of the common council that the relators had not such an interest in the question determined as to entitle them to review it. In discussing this question the court said:

It is urged that, however gross the error, the relators have no-standing to correct it, for the reason that the duty enjoined upon the common council is enjoined for the benefit of the public, and not of the relators; and that, if the members of the common council willfully fail in their official duty, they may be proceeded against by criminal prosecution. Without contesting their liability to criminal prosecution, and conceding that, if the relators sought a personal recovery against the members of the common council the latter might find immunity under shelter of their judicial action, we think the relators have shown sufficient interest in this designation to entitle them to demand that erroneous action be vacated, and the way cleared for legal action. Offices are created for the public good; but the rights of the officer are recognized and enforced. It is a part of our scheme of government to secure the co-operation of private interest in demanding the observance of law. The relators have not merely that interest which is common to all the citizens of Troy, but they have that special interest which is peculiarly, and, if their allegations are true, exclusively, their own, in being entitled to the designation which the law commands and awards. The law provides, not, it is true, for their interests, but for the interests of the public, that their claims to this designation and its emoluments shall be examined upon prescribed evidence, and, if found to be valid, shall be allowed.” (People v. The City of Troy, 2 N. Y. Supp. 114; S. C., 17 N. Y. St. Repr. 661.)

In this reasoning we concur. Upon the question of interest it is alleged by the relator, and the allegation is not denied' in the return, that the publication of these lists “ is of large pecuniary value to the paper that may be designated to publish the same, to wit, of the value of the sum of $12,880 and upwards, and the Press Publishing Company has been deprived by the aforesaid act of the Board of Police Commissioners of the city of New York of such pecuniary return.”

The evidence shows that the World had a larger circulation than any other newspaper published in the city of,New York, which, if true, with the undenied allegations referred to, establishes that it had a pecuniary interest in the determination of the question. Under the statutes which provide that soldiers shall be entitled to certain appointments in preference to those who did not serve in the army, it has been repeatedly held that a veteran who had been refused an appointment, to which he was entitled under the act, has a sufficient interest in the question to review the action of the appointing power, though he is but one of a class upon whom the preference is conferred. Three Iowa cases (Welch v. Board of Supervisors, 23 Iowa, 199; Smith v. Yoram, 37 id. 89 ; The Iowa News Co. v. Harris, 62 id. 501) are cited to sustain the proposition that the relator has not sufficient interest in the determination to entitle him to review it. In the case last cited it was said : “ The public might suffer from the wrongful action of the board, but we are not able to see that the plaintiff would, unless we could presume that the compensation allowed would be over-compensation, and that we could not do.”

The conclusion reached in this case, that a person has no interest in the performance of a service because it must be presumed that the compensation provided is an exact equivalent for the services, does not seem to us well founded. In the first place, the premise was not established, and, secondly, if it had been, it does not follow that a person has no right to redress when prevented from performing a contract or rendering service which he is entitled to perform or render, because the compensation is no more than a fair equivalent for the service. For the infringement of his right he is at least entitled to recover nominal damages, and the question as to how much he may recover is one quite apart from his right to maintain an action.

In Welch v. The Board of Supervisors (supra), it was said: ■“ The duty (to designate the newspapers) is imposed upon the board; they are the custodians of the power, but no one can insist upon its performance or exercise, because he happens to be at the time the owner and proprietor of a newspaper.” The correctness of this proposition is admitted. The person complaining must show, either that his paper should have been designated, or that he had been denied the right given by the statute, to have his claim to be so designated considered.

In Smith v. Yoram (supra), the opinion of the court upon this question rests solely upon the authority of Welch’s ease, no additional reasons being given. The judgment, however, is not placed solely on this ground. It is said : All other sources of information are open to them (the board), so that even if plaintiff had such an interest as to enable liim to maintain this proceeding, we cannot say, upon the affidavits of the respective publishers, which is all the evidence in the record, that the board did not decide correctly, for they may have had other evidence not of record and which probably controlled their action.”

We think the relator had, in the case at bar, sufficient interest in the determination made by the board of police to entitle it to review the decision.

This brings us to the final question : Should the writ be quashed because the time during which the lists were authorized to be published has passed ?

The determination was made October twenty-fifth, and the writ was granted November 2, 1892, and the return was filed on the sixteenth of December following. It is insisted in behalf of the board that this case falls within the principle of the decisions which hold that when a final determination has been so far executed that a judgment under a writ would accomplish nothing, it should be quashed. This rule has been so frequently applied to proceedings under writs brought to compel the inferior tribunal to affirmatively perform a duty relating to a private right, that it may be said to . be a well-settled canon of procedure in this State.

But the proceeding before us was not instituted solely for the purpose of compelling the board of police to order the lists printed in the World, but to obtain a reversal of an erroneous decision, which, when made, was injurious to the then existing rights of the relator, would be injurious as a precedent, and as a bar to proceedings, civil or criminal, against the members of the board, and it does not fall within the principle above stated.

In People ex rel. Porter v. Tompkins (40 Hun, 228), it was said: “When it (the writ) involves the inquiry whether the action and determination were legal, and should be set aside or confirmed, it may be seen that the writ may be effectual after the powers of the tribunal or officers have ceased, as to the matter in question, because it is a mere matter of review, but when the purpose of the proceeding is to have the direction of the court for those to -whom the writ is issued, to do some act, by way of correction of an error, it must, we think, be within the power of such officer or tribunal to perform the act.”

Iii People ex rel. Seymour v. Canal Board (7 Lans. 220), a writ of certiorari was issued to review the proceedings of the canal board in awarding the damages to the relator. The appraisers of canal damages had awarded the relator upwards of $4,000, which the canal board reduced by more than $1,000. After the writ was issued and before a return thereto was made, the canal board rescinded its resolution and vacated its modification of the determination of the appraisers. The point was taken that the wilt should be quashed. It was held that, “ The fact that since the issuing of the writ the canal board, recognizing the invalidity of the decision, has rescinded the resolution by which it was made, can have no effect upon the relator’s rights in the premises. lie lias the same right to a judicial construction of the act complained of as before.” The decision of the canal board was reversed and set aside as null and void.

In The Matter of Bracket (27 Hun, 605), a writ of certiorari was issued to review the conviction and sentence of the relator by a court martial. Before the hearing, the court martial amended its proceedings and revoked the warrant issued for the collection of the fine; notwithstanding, it was held that the relator was entitled to a judgment reversing the proceedings of the court martial, with costs.

In People v. N. Y. C. & H. R. R. R. Co. (28 Hun 543) —the freight case — a writ of mandamus was refused at Special Term. (63 How. 291.) On the review of the order at General Term it was insisted that the time had passed when anything could be ordered to be done under the writ. It was said : It is suggested that the time has now passed when such a writ can be of any valuable effect. This is probably so, but we are governed by the record in disposing of the appeal and not by subsequently occurring events. The appellants labor now under a judgment alleged to be injurious to the rights they possessed when it was pronounced, and harmful to them as a precedent. If erroneous they are entitled to have that judgment reversed, and to be indemnified, in the discretion of the court, for the costs incurred on the appeal made necessary by the errors.”

The determination of the board of police was voidable when it was made, and then affected the relator’s pecuniary interests and denied a right, and the relator is entitled to have it set aside. The sole object of this proceeding is, not to compel the board to correct an error by which the relator was pecuniarily injured, but its object in great part is to obtain a reversal of the decision of the board refusing to receive evidence and determine the rights of this relator and of all others similarly situated, upon evidence, so that in the future the duty which the board owes to the public and to all persons and corporations having a pecuniary interest in its determination, will be discharged in accordance with the statute. Should an action be brought against the members of the board for damages, or a prosecution by indictment be instituted, their determination, which would be alleged to be judicial in character, would be interposed as a defense. One of the chief objects of a writ of certiorari is to compel boards and public officers, having judicial functions, to keep within the jurisdiction conferred upon them, and to compel them to perform their duties according to the commands of the statute. If we are right upon the first two propositions, a public and a private wrong was committed by the determination, and there is no mode provided by law for a reversal of that decision except by this proceeding. Under such circumstances, a coqrt having general jurisdiction to review and correct the errors of subordinate tribunals, should not cramp its authority within the narrowest limits, but hold that it is broad enough to correct the evil complained of, unless prevented by the force of some statute. The common-law power of this court to correct, by means of this writ, the errors of inferior tribunals exercising judicial, or cpiasi-judicial, power, is preserved by the Code of Civil Procedure (§ 2120).

The refusal of the board of police to receive evidence as to which of the papers were entitled to be designated, and to determine the question on evidence, was erroneousj and its determination illegal, and it is set aside, with fifty dollars costs to the relator.

Writ dismissed.


source: Caselaw Access Project

author: Per Curiam :

license: Public Domain

text:
    Charles Remsen, Respondent, v. William A. Reese and Others, Defendants; Robert E. Westcott, Purchaser, Appellant.

      Purchaser at a judicial sale, entitled to possession uponMs accepting a deed and paying the purchase price — when a tender of the deed and possession is too late.

    A purchaser at a judicial sale is not required to accept a deed and then struggle for possession; he is entitled to be put into possession when he accepts the conveyance and pays the purchase price.
    A tender of a deed and possession to a purchaser at a judicial sale is too late when it was made nearly two months after the date fixed in the contract for the completion of the purchase, and more than one month after the purchaser, who had failed to secure even a promise of possession with the deed, had declared the contract at an end, and demanded the repayment of the money paid by him.
    Appeal by Robert E. Westcott, the purchaser at a partition sale, from an order made at the New York Special Term, and entered in the office of the clerk of the city and county of New York on the 24th day of July, 1893, directing him to complete his purchase.

      E. Luther Hamilton, for the appellant.

      William 8am Johnson, for the respondent.
   Per Curiam :

Pursuant to a judgment in partition, the premises in question were sold to Robert P. Westcott,. May 2, 1893, who then pajd to the referee the required percentage of the purchase price. By the terms of sale the remainder of the purchase price was to be paid and the referee’s deed delivered May twenty-fourth. On that day the purchaser tendered the purchase price and offered to complete the sale, provided certain judgments were satisfied of record or the judgment in partition so amended as to release the property from the lien of the judgments and the purchaser put into actual possession of the premises. By an arrangement between the attorneys for the plaintiff and the purchaser a motion to amend the judgment, so as to require the referee to pay the money into court, was argued May twenty-ninth, and the motion granted June first, the order also providing that the referee complete said sale as of May 24, 1893, oil payment to him of $26,550, the balance of the purchase money.”

June eighth, the purchaser served on the referee a certified copy of the order and asked Mm to complete the sale as of May twenty-fourth, at the same time informing him that there was a tenant in possession who was not a party to the action, and requesting that the referee deliver possession. The latter expressed a willingness to deliver the deed and take the remainder of the purchase money, but said he could not deliver possession, and referred the purchaser to the plaintiff’s attorney.» The attorney said that he did not understand about the lease to the tenant, and referred the inquirer to a Mr. Cushman, who was his counsel in the action and the attorney for the lessors, and he said that the tenant had had a written lease which lie thought had expired on May first, and that since that time the possession of the occupant had been that of a tenant at will, and that he would go out if requested by the purchaser. To the inquiry: “ Suppose the tenant will not go out at the request of the purchaser ? ” Mr. Cushman replied: “ Then you can put him out.” The attorney for the purchaser at once said that the purchaser would not complete the sale on such terms. Subsequently, and on the same day, he asked the tenant to let him see the written lease, the answer being that he couldn’t lay his hands on it, but would look for it.” Replying to the inquiry as to the terms under which he had possession, the tenant said : As the matter seemed to be complicated, he would have to see his lawyer before saying anything about it.”

June fourteenth, the purchaser demanded of the referee a return of the money paid, and two days later purchased other real estate. Nearly a month later, and without having tendered to the purchaser possession, together with the referee’s deed, and while the tenant was still in possession, this motion was made. The court decided that the purchaser was entitled to immediate possession; that if it could not be given him the motion should be denied, otherwise granted, and directed that the order be settled on notice. The following day the lessor, in writing, offered the tenant $100 and the rent for June and July if he would surrender possession by nine o’clock the following morning. The offer was accepted, the tenant gave up possession, and on the same day the lessor made affidavit to that effect, which, with another affidavit, was presented on the settlement of the order, which directed the purchaser to pay over the remainder of the purchase price.

The court correctly stated the rule in its memorandum of decision, to the effect that such a motion will not be granted unless immediate possession can be given to the purchaser. The purchaser at a judicial sale is not required to accept a deed and then struggle for possession. lie is entitled to be put into possession when he accepts the conveyance and pays the purchase price. So, if it be necessary to offer a special inducement to the tenant .to give up possession, as was done in this case, the purchaser is not called upon to do it. The contrary view seems to have been entertained by the moving party until after the decision of the court, when possession was promptly obtained. But then it was too late. Nearly two months had passed since the date fixed in the contract for the completion of the purchase, and more than one month since, failing to secure even a promise of possession with the deed, the purchaser had declared the contract at an end and demanded the repayment of the money paid by him.

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

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

Order reversed, with ten dollars costs and printing disbursements, and the motion denied, with ten dollars costs.


text:
    Edward S. Stokes, Respondent, v. William E. D. Stokes, Appellant.

      Action for damages for the publication of alleged defamatory matter — bill of partiewIcors not granted therein.

    It is no part of the office of a bill of particulars to state the elements which may enter into the general damages which may be recovered in an action brought to recover damages for the publication of alleged defamatory matter.
    Appeal by the defendant, William E. I). Stokes, from an order made at the New York Special Term, and entered in the office of the clerk of the city and county of New York on the 21st day of June, 1893, denying the defendant’s motion for a bill of particulars.

      Artemus II. Holmes, for the appellant.

      John J. Adams, for the respondent.
   Per Curiam :

This is an action for a recovery of general damages for the publication of matter alleged to be defamatory. Three, independent causes of action are set forth in the complaint. The amount of the damages which the plaintiff claims to have sustained by each cause of action is not stated, but it is alleged that the plaintiff has sustained $250,000 damages by reason of the three causes of action stated. No special damages are claimed. The defendant moved for an order requiring the plaintiff to serve a bill of the particulars of the damages sustained by him, which was denied.

In such cases the plaintiff cannot be compelled to state how much he claims for loss of reputation, for injured feelings, or how much he claims by reason of the personal ill will of the defendant. It is no part of the office of a bill of particulars to state the elements which may enter into the general damages which may be recovered in such an action.

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

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

Order affirmed with ten dollars costs and disbursements.


author: O’Brien, J.:

text:
    The Chase National Bank of the City of New York, Respondent, v. Benjamin C. Faurot, Appellant.

      Promissory note — ■when not a specialty although hearing the seal of a corporation— shaving a note not 'usury.

    In an action brought by a national bank to recover the amount due upon a promissory note, it appeared that the defendant Faurot received a note to his order, signed “ New York Construction Co.” “Ity F. P. Graf, Secy.” and bearing stamped on it “New York Construction Company, seal,” and indorsed and delivered it to his attorney to be used in carrying out an agreement with one Simon. The latter obtained possession of the note before he had complied with the agreement, and diverted it by delivering it to his banker, who through a note broker sold it to the plaintiff for less than its face.

      Tlie defendant claimed that the sale was usurious, the note diverted and that it was not a negotiable instrument, being under seal.

      Held, that the sale of the note was not usurious, and that, if it had been, usury could not be urged against the plaintiff, a national bank;
    That the presence of what purported to be the seal of the corporation on the note did not change it from a negotiable instrument to a specialty,, in the absence of proof that it was the seal of the company and was affixed by authority and with the intention of making the instrument a specialty and not negotiable.
    Appeal by the defendant, B. C. Faurot, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the city and county of New York on the 28th day of June, 1892, upon the verdict of a jury rendered at the New York Circuit, and also from an order or interlocutory judgment of the Supreme Court, entered in said clerk’s office on the 1st day of July, 1892, denying defendant’s motion to set aside the verdict and for a new trial.

      Lcmrence E. Sexton, for the appellant.

      Philip G. Bartlett, for the respondent.
   O’Brien, J.:

This action was brought against defendant as indorser of a promissory note, the face of which was as follows :

“16,787.02. Lima, Ohio, July 8th, 1890.

“ Four months after date we promise to pay to the order of B. C. Faurot, sixteen thousand seven hundred eighty-seven and dollars, at Lima Nat’l Bank, Lima, Ohio.

“Yalue received.

“NEW YORK CONSTRUCTION CO.

“ [Seal of the company.] • By F. P. Graf, Secy.”

The defendant indorsed this note, and it was given to liis attorney for the jiurpose of carrying out an agreement entered into between the defendant and one Simon, in connection with certain negotiations relating to the construction of a railroad for which Simon agreed to procure the capitalists. The unquestioned arrangement between the defendant and Simon was, that until such time as Simon had procured the execution of a proper agreement by the capitalists, whose names were given, to construct the road, the note in suit was not to be delivered to him. Simon, however, succeeded in obtaining possession of the note without procuring the execution of the agreement as he had promised, and subsequently delivered it to the president of his own bank, who, through note brokers, sold it to the plaintiff for value. Tlie amount paid by the brokers was $16,000 ; and upon the purchase of the note from the brokers the plaintiff paid $16,500.

These figures are referred to because upon them was predicated one of the defenses, that of usury, which may at the outset be disposed of by the statement that it is not available to defendant, for two reasons, the first being that the plaintiff is a national bank, against whom the plea of usury could not be urged; and, secondly, it was not usury to purchase the note for less than its face in the manner in which the plaintiff purchased it, nor could such purchase in any way be tortured into an agreement by which the plaintiff exacted a greater sum than the legal interest for the loan of $16,000.

It appearing that the note had been diverted, the question of the good faith of the plaintiff, and as to whether or not it liad paid value for the note, were under proper instructions submitted to the jury, who having found in favor of the plaintiff, their verdict should be sustained unless there are some valid legal grounds for disturbing it.

The principal ground relied upon by appellant is, that the presence upon the note of the words “ New York Construction Company, seal,” stamped or impressed upon the paper, detracts from its character as a negotiable promissory note. The question thus presented, therefore, is whether the instrument sued on was a negotiable promissory note, or, as the result of the impression upon the paper of what appears to be the seal of the corporation, it became a specialty and thus lost its negotiable character.

Ve can see no distinction, upon the facts here appearing, between this case and the one recently decided by this General Term, of Weeks v. Esler (68 Hun, 518), wherein it was held that “before an instrument in the form of a promissory note made by a corporation, with what purports to be the seal of the corporation impressed thereon, but containing no words indicating an intention to execute it as an instrument- under seal, can be held to be a specialty and not a negotiable promissory note, it must .be shown that the seal is the seal of the corporation and was affixed by its authority, and that it was tlie intention of tlie parties to the instrument that it should be an instrument under seal and not negotiable.”

The appellant concedes that if tlie rule thus laid down in Weeks v. Esler is sound in law, it is difficult to distinguish it from the present case, so far as the question of indorsement is concerned, and would result in an affirmance of the view taken by the court below as to the negotiability of tlie note. Because pressed upon us with considerable force and ability, we have examined the question anew, and are satisfied with the correctness of the ruling in the case cited, which conclusion practically disposes of the contentions raised upon this appeal apd obviates the necessity of our examining the many other suggestions made of what, if a different rule were to prevail, might be the law controlling the rights of the parties.

We think that the judgment was right and should be affirmed, with costs.

Follett and Parker, JJ., concurred.

Judgment affirmed, with costs.


text:
    W. Bayard Cutting and Another, Respondents, v. William E. D. Stokes, Impleaded, etc., Appellant.

      Party wall — ■what rights therein of a grantor pass to his grantee.

    Adjacent proprietors own in severalty tliat portion of a wall which stands on their respective lands, subject, however, to its use as a party wall; they are mutually entitled to its support for the purposes for which it was erected ; each has an easement to have his neighbor keep up his half, to support his own, and a court of equity will enjoin the maintenance of openings or -windows therein.
    On July 22, 1889, a corporation, being the owner in fee of certain premises in the city of New York, made a contract of sale thereof. A few months thereafter such corporation entered into a contract with one Stokes, who was about to erect a building upon adjoining premises owned by him, which secured to him the right to erect one-half of his westerly wall upon the lot owned by said corporation, with the right secured to the corporation to use the wall in common with Stokes as a party wall; when it was so used the corporation to pay its share of the necessary expenses incurred in the erection thereof.
    Stokes thereafter erected the building, as he had contemplated, including the wall which was the subject of the agreement, and was finally completed, prior to the delivery of a deed of the land by such corporation to the vendee under the contract, but left in the wall certain openings for the purpose of light. ’

      In an action brought by the purchasers from the corporation to enjoin Stokes from maintaining openings in the wall,

      Held, that the plaintiffs succeeded to the rights outlie corporation in respect to such wall, notwithstanding the fact that their title was not acquired until after the wall was constructed.
    Immediately following’ the granting clause of the agreement made between the defendant and such corporation, it was stated that the division lines between the lots should run through the center of tlie wall, which wall was to be mutually used and enjoyed by the parties for all the purposes of a party wall, except in the event that such corporation should elect not to use or occupy such wall, in which case the defendant, on tender to him of a proper deed conveying to him such portion of the lot of sucli corporation on which such wall had been erected, would pay therefor the sum of §2oO.
    Neither the corporation nor the plaintiffs elected not to use the wall.

      Held, that the wall, when erected, became, by virtue of the provision of the agreement, a partjr wall, and would so continue, unless the successors of sucli corporation in the ownership of such lot should make the election authorized by the agreement.
    Appeal by tlie defendant, William E. D. Stokes, from a judgment of tlie Supreme Court in favor o'f the plaintiffs, rendered upon a decision of the court, after a trial by the court at the New York Special Term, and entered in the office of the clerk of the city and county of New York on tlie 16th day of February, 1893.

      Ernest Hall, for the appellant.

      J. Archibald Murray, for the respondents.
   Per Curiam :

The House of Mercy, a corporation organized under the laws of this State, was, on the 22d day of July, 1889, the owner in fee of certain premises situated in the city of New York and immediately adjoining certain other premises owned by the defendant. On that day the House of Mercy made a contract of sale with the plaintiffs in this action, embracing the premises owned by it, the deed to be delivered and the remainder of tlie purchase money to be paid January 1, 1890. A few months later the House of Mercy entered into a contract with the defendant Stokes, who was about to erect a building upon the premises owned by him, which secured to Stokes the right to erect one-half of the westerly wall upon the lot owned by the House of Mercy, with the right secured to the corporation of using the wall in common with Stokes as a party wall, when used the corporation to pay its share of' the necessary expense incurred in the erection of the wtfll.

After the making of the agreement, Stokes erected the building as he had contemplated, including the Avail which was the subject of the agreement, but left in it certain openings for the purpose of light. The wall was finally completed prior to the delivery of the deed by the House of Mercy to the plaintiffs, AAdiieh was on January 1, 1890.

It is well settled that the adjacent proprietors own in severalty that portion of the wall which stands on their respective lands, subject, however, to its use as a party AA’-all, and that they are mutually entitled to its support for the purposes for Avliich it Avas erected (Partridge v. Gilbert, 15 N. Y. 601); that each has an easement to have his neighbor keep up his half to support his oavu (Fettretch v. Leamy, 9 Bosw. 510); and that a court of equity Avill enjoin the maintenance of openings or AvindoAArs in a party Avail. (St. John v. Sweeney, 59 How. Pr. 175.)

The plaintiffs succeeded to the rights in such respect of the. House of Mercy, notwithstanding their title was not acquired until after the Avail was constructed. And this brings us to the question Avhether, under the agreement between Stokes and the House of Mercy, the wall Avliich lias since been erected in pursuance of it is a. party wall. It recites that, “ Whereas,- the said party of the second part (Stokes) is hoav about to erect a dAvelling house upon his said lot of land, and the said parties hereto have mutually agreed that the westerly Avail of such dwelling house shall be built and erected one equal half part thereof upon the Avesterly side of the said lot of the party of the second part, and the other equal half part thereof upon the easterly side of said lot of the party of the first part, subject to the provisions of this agreement.”

Immediately folloAving the granting clause the agreement reads : “ So that the division line betAveen the said tAvo lots shall run through the center of said Avail, which Avail so to be erected is to be mutually used and enjoyed by the respective parties hereto, and their respective heirs, successors and assigns, for all the purposes of a party AArall between dAvelling houses or other buildings erected, and Avliich may bp hereafter erected, upon the said íavo respective lots of land in. just and equal rights and privileges with respect thereto, except in the case hereinafter provided.”

The exception to which the last phrase refers furnishes whatever basis there is for the contention of the defendant that the wall is not a party, wall; but before referring to it reference will be had to one or two other provisions of the agreement.

The clause last quoted is followed by certain covenants on the part of the party of the second part touching the rights and privileges to be accorded to the party of the first part in the use of the Avail, which it is covenanted shall be “ to the same extent reciprocally as-had been bargained and granted by the said party of the first part to the said party of the second part, as hereinbefore expressed; one equal half part of the cost and expense of building the said wall is,, however, to be paid to the said party of the second part, his heirs and assigns, by the said party of the first part, its successors or assigns,, as soon as it or they shall make use of, occupy or enjoy the Avhole of said Avail.”

The exception to which reference has been made is contained in the latter part of the agreement, and is to the effect that if the party of the first part (House of Mercy), its successors or assigns, “ shall at any time elect that it or they Avill not use or occupy the said Avail,, as hereinbefore pixrvided, then and in such case the said party of the-second part, his heirs or assigns, on tender to him or them of a, proper deed duly executed for conveying to him or them the fee simple of such portion of said lot of the party of the first part on which said wall- shall have been erected, free from all incumbrances, * * * "will pay therefor the sum of two hundred and fifty dollars at the time of such tender.”

The House of Mercy did not elect, nor have the plaintiffs as its; successors in title elected, that it or they will not use the wall. And the defendant’s contention is that until such election takes place it. cannot be determined whether the Avail is, under the agreement, a party wall. We do not so read the contract. It provides for its erection as a party wall. Its use as such is contemplated by the parties. The rights of all the parties to it are fixed beyond the-power of the party of the second part, acting alone, to interfere with it in any Avay. In order to secure the contract Avith the House of Mercy, he accorded to it one additional privilege, i. e., if at any time before that corporation, or its successor in title, should make actual use of the wall by the erection of a building, he would, if 'it or they should elect to take it, pay $250 for so much of its land as the wall covers. "When the wall was erected it became, by virtue of the provisions of the agreement, a party wall, and it will so continue unless the successors of the House of Mercy in the ownership of the lot referred to shall make the election authorized by the •agreement.

The judgment should be affirmed, with costs.

Present — Van Brunt, P. J"., Follett and Parker, JJ.

Judgment affirmed, with costs.


author: Parker, J.:

text:
    John D. Cheever, Plaintiff, v. The Pittsburgh, Shenango and Lake Erie Railroad Company, Defendant.

      Fa/udulent misappropriation of notes by the president of a corporation — matice sufficient to put a purchaser'on inquiry.

    On llie 17tli day of February, 1888, the directors of a railroad company passed a resolution authorizing its president to make a contract for the purchase of flat cars for the use of the company, and in carrying out such purchase, to give notes of the company to the amount of $10,000. On the same day the secretary of the company prepared two notes for signature bearing a later date, which were drawn to the order of one Bruen, the private secretary of the president, and were signed by the president and the secretary of the company.
    It was suggested by the secretary of the company that the notes might be lost, and before maturity pass into the hands of a bona fide holder, to avoid which risk the president stated that the notes could be made payable to the order of Bruen, who would not indorse them until the president should be ready to use them in the accomplishment of the purpose aimed at by the resolution.
    The president did not use the notes directly or indirectly for the purchase or in payment of flat cars. On the nineteenth day of March, a firm, of which the railroad company’s president was at that time the senior member, borrowed from one Brooks $30,000, giving their note therefor, and as collateral thereto, among other things, the notes in question, which at that time bore the indorsements of Bruen and of such firm. Subsequently, long after maturity, Brooks became the owner of the collateral, and thereafter they were duly transferred to one Cheever, who brought an action thereon against the railroad companjL

      Held, that the facts above stated authorized the conclusion of law that the president of the company fraudulently appropriated the notes to his private use.

      Whatever is sufficient to put a person of ordinary prudence on inquiry is constructive notice of everything to which that inquiry would reasonably have led.
    Brooks testified upon the trial that the president of the railroad company told, him, at the time he turned over the railroad company’s notes as collateral security for the personal debt of the firm of which the president was a member, that he was the president of the defendant, and Brooks knew that he was. pressed for money.

      Held, that the facts were sufficient to put Brooks upon inquiry ;
    That as the plaintiff was a purchaser after maturity, he was in no better position than Brooks.
    Motion by tbe plaintiff, Jobn D. Clieever, for a new trial upon exceptions ordered to be beard at tbe General Term in tbe first instance, upon the dismissal of tbe plaintiff’s complaint at tbe New York Circuit on tbe 19th day of April, 1893.

      Aust-bn G. Fox, for tbe plaintiff.

      Frank Sullivan Smith, for the defendant.
   Parker, J.:

Tbe directors of tbe Pittsburgh, Sbenango and Lake Erie Railroad Company, on tbe 17th day of February, 1888, passed tbe. following resolution: “ Pesolved, That tbe president be and hereby is authorized to make a contract for tbe purchase of fifty flat cars for tbe use of this company, and is authorized in carrying out this purchase to give notes of this company to the sum of $10,000.”

On tbe same day the secretary of tbe company prepared two notes for signature, bearing a later date, and they were signed by the secretary and president. Tbe notes were in tbe form following:

“ $5,000.00. “ Greenville, Pa., FeVy %4:th, 1888.

“ Three months after date tbe Pittsburgh, Sbenango and Lake ,Erie Railroad Company promises to pay to tbe order of John T. Bruen, five thousand dollars, at tbe American Exchange National Bank, New York city.

“ Yalue received.

“THE PITTSBURGH, SHENANGO AND LAKE ERIE RAILROAD COMPANY.

<cAttest: By M. S. Frost, Presidents'

“E. S. Templeton, Secreta/ry.

The secretary was not in favor of the execution of the notes at that time, but the president, who had principal charge of the finances of defendant, explained that he might not be able to induce a car company to accept the notes in payment for cars, and then it would be necessary to have the notes discounted, and the proceeds used for that purpose. To the suggestion of the secretary that if the notes should be lost, and finally before maturity pass into the hands of a Tjonafide holder, the company might sustain serious loss, the-president answered, that such risk could be avoided by making them payable to the order of his private secretary, Bruen, who would not indorse them until the president should be ready to use them in the accomplishment of the purpose aimed at by the resolution.

The president did not use the notes directly or indirectly for the purchase or in payment of flat cars.

But on the nineteenth day of March, the firm of M. S. Frost & Son, of which defendant’s then president was the senior member, borrowed from Francis A. Brooks the sum of $30,000, giving their note therefor, and as collateral security thereto, among other things, the notes in question. These notes then bore the indorsements of Private Secretary Bruen and M, S. Frost & Son.

Subsequently, but long after maturity, Brooks became the owner of the collateral, and thereafter they were duly transferred to this plaintiff.

The facts to which we have briefly alluded are uncontradicted. .No material fact is anywhere in the record controverted. They ■command tlie conclusion of law that the jnesident of the company fraudulently appropriated these notes to his private use.

With this remark, we dismiss from further consideration the request of the plaintiff to have the question of fraud submitted to the jury. The plaintiff urges that the fraud being established, the ’notes are still valid obligations in the hands of a Iona fide pur-chaser, and in the discussion he gives prominence to the fact that Brooks had no suspicion of the fraudulent conduct of Frost.

But it is not enough, in a case like this, that the purchaser bo ignorant of the wrong in order to entitle him to claim the protection which the law affords to the good-faith purchaser of commercial paper.

There are cases in which it is not sufficient to close the eyes, and say, I did not see; cases where the circumstances are such as to put the prudent man on inquiry, a.nd if reasonable inquiry will develop the wrong, he cannot afterwards claim, as against the party sought to be injured, protection, because he did not know of the fraud.

One of the instances which calls for inquiry by the purchaser of commercial paper is where an officer of a corporation is attempting to make use of its business paper for his private purposes.

This rule is not unreasonable. The officer occupies a position of trust which oftentimes affords opportunities, and occasionally presents great temptations, to use his trust for a temporary personal benefit. The knowledge that such is the fact, and the further one that corporations are not accustomed to have dealings with their officers of such a nature as to make it necessary to give them their notes in payment, is sufficient to suggest to every man of ordinary prudence that the possession of the business paper of a corporation by one of its officers, which he avowedly intends to use in payment of, or as security for, a personal debt, is so far suspicious as to prompt inquiry touching his right to so use it. Hence the rule that he who takes the notes or securities of a corporation from one of its officers in payment of, or as security for, Iris individual liability, is bound to inquire into the circumstances under which the officer obtained possession of the notes or securities, and if he fails to make such inquiry, he does so at his peril. ( Wilson v. M. E. R. R. Co., 120 N. Y. 145, and cases cited.)

Now Brooks testifies that Erost told him at the time he turned over this defendant’s notes as collateral security for the personal debt of Erost & Son, that he was the president of the defendant, and certainly he knew that Erost was pressed for money, because he visited Brooks in Boston to obtain from him a ioan of 830,000.

These facts should have prompted him to inquire how the president came to use the notes of this corporation, whose property had just come from the hands of a receiver, for his individual benefit, and in law he was bound to inquire.

Whatever is sufficient to put a person of ordinary prudence on inquiry is constructive notice of everything to which that inquiry would reasonably have led. (Shaw v. Spencer, 100 Mass. 388.)

Had he tried to obtain information on the subject he would naturally have first inquired whether the corporation had authorized the issuing of the notes, and an examination of the resolution permitting their issue would have disclosed to him that they were issued for a specific purpose, to wit, the purchase of cars.

This information would have assured him that the president was without authority to use them in the first instance for his private purposes, therefore, he would have found it necessary to take a further step, and ascertain whether the notes had accomplished the object for which they were issued, and thereafter passed regularly into the hands of the president, or his firm.

All these facts Brooks would have discovered had he made the inquiry which ordinary prudence dictated and the law enjoined, and with such information in his possession there could be no recovery on the notes by him. Because lie was bound to inquire and did not, he is deemed to have had constructive notice of such facts, with necessarily the same legal result as if he had obtained full knowledge of the facts. As the plaintiff is a pui-chaser after maturity he is in no better position than Brooks.

Plaintiff’s exceptions overruled and defendant’s motion for judgment granted, with costs.

O’Brien and Follett, JJ., concurred.

Defendant’s motion for judgment granted, with costs.


author: Follett, J.:

text:
    John Pondir, Appellant, v. The New York, Lake Erie and Western Railroad Company, The Buffalo, Bradford and Pittsburgh Railroad Company and Hugh J. Jewett, as Receiver of The Erie Railway Company, Respondents.

      Defeat in parties ■ — • right of a stockholder to redress a wrong done to his- corporation by another corporation which has obtained control of its board of directors— demand before suit unnecessary.

    Wlien a defect of parties is pleaded, and the plea is sustained by the evidence, tlie court may refuse to allow the cause to stand over and dismiss the suit; but when a defect of parties is not pleaded, and the necessity for other parties to the action appears on the trial, the plaintiff not being guilty of laches, the suit should not be dismissed, but should be ordered to stand over on proper terms to enable the plaintiff to bring the necessary parties before the court.

      The Erie Railroad Company, through the action of the Buffalo,. Bradford and Pittsburgh Railroad Company, whose directors were elected and controlled by the Brie Company, obtained, without consideration, the property of such latter corporation and so arranged its affairs as to render all the shares of its stock (other than those hold by the Erie Company) valueless.

      Held, that a stockholder of the Buffalo, Bradford and Pittsburgh Railroad Company might maintain an action to redress the wrong done to his company.

      Semble-, that where the delinquent parties are in control of the corporation whose stockholders are injured, a demand upon that corporation to bring a suit would be futile and is unnecessary.
    Appeal by the plaintiff, John Pondir, from a judgment of the Supreme Court in favor of the defendants, rendered upon a decision of the court after a trial at the New York Special Term, and entered in the office of the clerk of the city and county of New York on the 15th day of June, 1892, dismissing the plaintiff’s complaint on the merits.
    This action was brought in January, 1881, by a shareholder in the Buffalo, Bradford and Pittsburgh Railroad Company to have a lease executed January 5, 1866, by that corporation to the Erie Railway Company, and a mortgage executed September 1,1870, by the latter corporation on the leasehold interest to the Banners’ Loan and Trust Company declared null and void, and to compel Hugh J. Jewett as receiver, and the New York, Lake Erie and Western Railroad Company to account and pay over to the Buffalo, Bradford and Pittsburgh Railroad Company all receipts, profits and benefits received by them respectively from the property of the last-mentioned corporation while in their possession, and also to restrain the New York, Lake Erie and Western Railroad Company from voting upon the stock held by it in the Buffalo, Bradford and Pittsburgh Railroad Company.
    The following facts are alleged in the complaint and admitted by the answers, or are .found by the court, and are not challenged by the appellant’s recpiests or exceptions, or appear on the record and are uncontradicted:
    The Buffalo, Bradford and Pittsburgh Railroad Company was incorporated in 1857, under the laws of the State of Pennsylvania, with a capital stock of $950,000, divided into 9,500 shares of the par value of $100 each, but its capital, under a provision in its charter, ' was afterwards, from time to time, increased, so that July 27, 1869, it consisted of 22,864 shares of the par value of $100 each. The 1st day of January, 1865, it mortgaged its property and franchises to Dorman 13. Eaton, as trustee, to secure the payment of 2,000 bonds of $1,000 each, aggregating $2,000,000. Erom 1861 until December 25, 1879, the Erie Railway Company was a corporation incorporated and existing under the laws of New York.
    January 5, 1866, the Buffalo, Bradford and Pittsburgh Railroad Company, as party of the first part, and the Erie Railway Company, as party of the second part, entered into a lease by which the former leased to the latter for 499 years from January 1, 1866, its railroad and its lands except the following: “ Excepting and reserving, however, unto the party of the first part, and all the oil underlying the demised premises or any part thereof, with the right to them, their successors or assigns, to enter upon said premises or any part thereof, to excavate and bore for the said oil, and to erect all the usual structures for raising, receiving, storing, getting ready for market and taking away and forwarding such oil, and to occupy any part of the demised premises for said purposes, without interfering, however, with the use of the same by the party of the second part as a railroad ; and the party of the second part to transport said oil at usual and reasonable rates.”
    By this lease the lessee agreed to pay all taxes assessed on the corporation in the States of New York and Pennsylvania, and the interest on the mortgage bonds issued under the mortgage January 1, 1865, and also the principal of the bonds when they should mature. No other rent was agreed to be paid.
    The land reserved embraced about 8,000 acres situated in the county of McKean in .Pennsylvania. When the lease was executed the Buffalo, Bradford and Pittsburgh Railroad Company had twelve directors, three of whom were directors of the Erie Railway Company, one of them, Robert H. Burdell, being its president, and another, John Arnot, being the vice-president of the Buffalo, Bradford and Pittsburgh Railroad Company, and at this date the Erie Railway Company held 21,875 of the 22,864 shares then outstanding in the Buffalo, Bradford and Pittsburgh Railroad Company, leaving 989 shares owned by others.
    September 1, 1870, the Erie Railway Company executed a mortgage on the demised property and other property to the Farmers’ Loan and Trust Company, to secure the payment of certain bonds,' and on the 4th of February, 1874, it executed a second consolidated mortgage on the demised property and other property to said trufet company, to secure the payment of $30,000,000 in bonds. In 1875 the trust company brought an action ,to foreclose the mortgage of February 4, 1874 (to which action the Buffalo, Bradford and Pittsburgh Railroad Company was not a party), in which a judgment of foreclosure and sale was afterwards entered. Hugh J. Jewett was appointed a receiver in this action.
    In 1875 the People of the State of New York brought an action to dissolve the Erie Railway Company because of its alleged insolvency, and May 26, 1875, Hugh J. Jewett was appointed a receiver in that action of all the property of the corporation, which action resulted in a judgment entered November 25, 1879, dissolving the corporation, and Jewett was continued as receiver until December 30, 1879, when, having turned over the property to the New York, Lake Erie and Western Railroad Company, he was discharged as receiver.
    April 4, 1875, the plaintiff purchased, and has ever since owned, fifty shares of the capital stock of the Buffalo, Bradford and Pittsburgh Railroad Company.
    December 30, 1876, the Buffalo, Bradford and Pittsburgh Railroad Company conveyed the lands and interests excepted from the lease to the Northwestern Mining and Exchange Company (a Pennsylvania corporation), for the recited consideration of $40,000, but no consideration for this conveyance has been in fact paid by the grantee to the grantor. At the date of this conveyance six of the thirteen directors of the Buffalo, Bradford and Pittsburgh Railroad Company were directors of the Erie Railway Company, and, since the execution of the lease, the Erie Railway Company and its receiver, and the New York, Lake Erie and Western Railroad Company, by virtue of their ownership of a large majority of the shares of the Buffalo, Bradford and Pittsburgh Railroad Company, have named and elected such directors as these corporations chose for the lessee company.
    On the 30th of December, 1876, the Northwestern Mining and Exchange Company, as party of the first part, entered into a contract in the nature of a lease with II. L. Taylor & Co., as party of the second, part, by which the lands conveyed, as aforesaid, and other lands, were leased, for twenty years to the party of the second part, for the purpose of procuring oil and gas therefrom. The rent or compensation payable was a percentage of the oil and gas that might be produced. "Who were the directors of the mining company at the date of the grant does not appear, but the record shows that at the time of the trial of this action, and for several years previous, its board of directors and its executive officers had been filled by the directors and executive officers of the Erie Railway Company and by its successor, the New York, Lake Erie and Western Railroad Company.
    April 27, 1878, the New York, Lake Erie and Western Railroad Company -was incorporated under the laws of this State, and shortly thereafter it succeeded to all of the property of the Erie Railway Company, including all of its right, title and interest in and to the property, leased and conveyed to it by the Buffalo, Bradford and Pittsburgh Railroad Company.
    The Northwestern Mining and Exchange Company has a capital of $500,000, all of which is owned by the New York, Lake Erie and Western Railroad Company. On the 13th of May, 1881, the Northwestern Mining and Exchange Company conveyed the 8,000 acres of lands and oil rights to the Wilcox and Howard Improvement Company (a Pennsylvania corporation) for the recited consideration of $100, and for other good considerations. On June 28, 1881, the name of the last-mentioned corporation was changed to the New York, Lake Erie and Western Coal and Railroad Company. When the last-mentioned conveyance was made the trustees of the grantee were not connected with the New York, Lake Erie and Western Railroad Company, but at the date of the trial of this action its trustees were connected with the last-named corporation. The New York, Lake Erie and Western Railroad Company owns all of the stock of the Northwestern Mining and Exchange Company, which corporation owns all of the stock of the New York, Lake Erie and Western Coal and Railroad Company. Since the conveyance of the 8,000 acres of land to the Northwestern Mining and Exchange Company, Hugh J. Jewett, as receiver of the Erie Railway Company, and the New York, Lake Erie and Western Railroad Company, have derived a considerable income from the property. But two dividends have been paid upon the shares of the Buffalo, Bradford and Pittsburgh Railroad Company since that date, one of one dollar per share, paid March twenty-eighth, and another of sixty-two cents per share, paid October 9, 1885.

      Simon Sterne, for the appellant.

      W. W. MaoFarland, for the respondents.
   Follett, J.:

There is no conflict in the evidence in this case. All of the material facts were testified to by the officers and employees of the defendants, who offered no evidence except the order of December 30,1879, discharging Hugh J. Jewett as receiver of the Erie Railway Company. By the transactions set forth in the statement of facts the Erie Railway Company and its successor, the New York, Lake Erie and Western Railroad Company, have acquired the property reserved in the lease without any consideration being paid therefor. This was effected through the compliant board of directors of the Buffalo, Bradford and Pittsburgh Railroad Company, elected and controlled by the Erie Railway Company, which held a majority of the stock of the Buffalo, Bradford and Pittsburgh Railroad Company. By this means the last-mentioned corporation was stripped of all of its pi’operty except that used for railroad purposes, and for the use of which nothing will be paid for 499 years, except taxes assessed on its property and the interest on its debt. This renders all of the shares not held by the Erie Railway Company practically valueless, and that such was the intended effect is apparent from the transactions. This was a fraud on the Buffalo, Bradford and Pittsburgh Railroad Company and its shareholders. Such frauds are not uncommon in the management of corporations, and when they are exposed should be condemned by the courts and a heavy hand laid upon all who participate in them.

On the 16th of March, 1880, the plaintiff requested the Buffalo, Bradford and Pittsburgh Railroad Company to bring an action against the Erie Railway Company to redress the wrongs herein complained of, which request was not complied with, and it is apparent that further application would have been unavailing, for the three defendants appeared in this action by the same attorneys and served answers in all respects alike, except it is alleged in the answer of Hugh J. Jewett that his accounts as receiver have been approved by the court, and that he has surrendered all of the property that came into his hands, and was discharged from his receivership on the 30th day of December, 1879. Under such circumstances an action may be maintained by a shareholder to redress the wrong done to the corporation of which he is a member. (Brinckerhoff v. Bostwick, 88 N. Y. 52; Barr v. N. Y., Lake Erie & Western R. R. Co., 125 id. 263.) In the case first cited it was said: “ The action to recover such losses, as before observed, should, in general, be brought in the name of the corporation, but if it refuses to prosecute, the stockholders, who ai-e the real parties in interest, will be permitted to sue in their own names, making the corporation a defendant. (69 N. Y. 154.) And that course of proceeding is also allowed if it appears that the corporation is still under the control of those avIio must be made the defendants in the suit. (See Butts v. Wood, 37 N. Y. 317; Robinson v. Smith, 3 Paige, 222.) In such cases a demand upon the corporation to bring the suit Avould be manifestly futile and unnecessary. A suit prosecuted under the direction and control of the very parties against whom the misconduct is alleged, and a recovery is sought, would scarcely afford to the shareholders the remedy to Avhicli they are entitled, and the fact that the delinquent parties are still in control of the corporation is of itself sufficient to entitle the shareholders to sue in their own names. (Hodges v. New England Screw Co., 1 R. I. 312; Heath v. Erie Railway Co., 8 Blatchf. 347.) If they could not be permitted in such cases to assert their own rights in a court of equity, the directors, so long as they remained in office, could set them at defiance.”

The Buffalo, Bradford and Pittsburgh Railroad Company Avas not a party to the action for the foreclosure of the mortgage under the judgment in which the property of the Erie Raihvay Company was sold and acquired by the NeAv York, Lake Erie and Western Railroad Company, and the rights of the Buffalo, Bradford and Pittsburgh Railroad Company are not cut off by the judgment and sale, and, besides, the mortgage was not a lien on the property and rights reserved to the lessor in the lease.

Upon the discovery of the fraud an action could be maintained by a shareholder (the corporation refusing to sue) to set aside the deed of December 30, 1876, and the subsequent conveyances and Hens, but to such an action the subsequent grantees and holders of-liens arc necessary parties; or an action could be maintained against the parties to the fraud and those who subsequently aided in its' consummation to compel them to account as trustees ex maleficio for whatever they have received through the wrongs which they committed. To such an action the subsequent grantees and lienors are not necessary parties, for no relief could be granted against them, and in this case, for a stronger reason, the Northwestern Mining and Exchange Company and the New York, Lake Erie and Western Coal and Railroad Company are not necessary parties to such an action, for the stock of both corporations is entirely owned by the New York, Lake Erie and Western Railroad Company.

It is asserted that in no event can Jewett, as receiver, be compelled to account. This may or may not be so. The conveyance of December 30, 1876, by which the Buffalo, Bradford and Pittsburgh Railroad Company was deprived of its property was executed when Jewett was acting as the receiver of the Erie Railway Company, and for several years he, as receiver, received a portion of the rents and profits of the lands conveyed. We think he should be required to account and to show how these receipts were disposed of. It may be that it will appear that his accounts rendered to the court were so stated that its order approving of his transactions and discharging him will be a defense, but this cannot be determined in advance of the accounting.

Under the evidence contained in this record we can see no answer to the plaintiff’s claim that the New York, Lake Erie and Western Railroad Company should be required to account and pay over to the plaintiff the rents and profits acquired by it through these fraudulent dispositions of the property of the corporation in which the plaintiff is a shareholder.

The defendants not having pleaded that the subsequent grantees of the Buffalo, Bradford and Pittsburgh Railroad Company and the persons and corporations who have acquired liens upon the property were necessary parties, they were not in a situation to ask to have the action dismissed on the ground that those corporations and persons should have been brought into the action. (Code Civ. Proc. § 499.) When a defect of parties is pleaded and the plea is sustained by the evidence, the court may refuse to allow the cause to stand over and dismiss the suit, but when a defect of parties is not pleaded and the necessity for other parties to the action appears on the trial, the plaintiff not being guilty of laches, the suit should not be dismissed, but ordered to stand over on proper terms to enable the plaintiff to bring the necessaiy parties before the court. (Colt v. Lasnier, 9 Cow. 320; Van Epps v. Van Deusen, 4 Paige, 64; 1 Barb. Ch. Pr. 321; 1 Dan. Ch. Pr. [3d Am. ed.] 291 et seq)

The judgment should be reversed and a new trial granted, with leave to the plaintiff to apply to bring in any such additional parties as he may be advised, with costs to the appellant to abide the event.

Yan Brunt, P. J., concurred.

Judgment reversed and new trial granted, with leave to the plaintiff to apply to bring in any such additional parties as he may be advised, with costs to the appellant to abide the event.


text:
    John S. Keyes and Another, Individually and as Executors, etc., Appellants, v. Barbara Ellensohn, Impleaded, etc., and Anna Kristof, by Samuel D. Sewards, her Guardian ad litem, Respondent.

      Guardian ad litem for an infant defendant — when he may be appointed on the plaintiff’s application.

    A guardian for an infant defendant of tile age of fourteen years and upwards cannot be appointed upon the plaintiff’s petition until after tlie expiration of twenty days from the time that the service of the summons is complete.

      Quaire, whether such an appointment is void or voidable only.
    Appeal by the plaintiffs, John Keyes and another, individually and as executors, etc., of Antoine Ruppaner, deceased, from an order of the Supreme' Court, entered in the office of the clerk of the city and county of New York on the 30th day of August, 1893, vacating and setting aside the judgment entered in the above-entitled action as to the defendant Anna Kristof.

      Eugene II Hatch, for the apjiellants.

      Isaac W. Miller, for the respondent.
   Per Curiam :

The infant defendant was upwards of fourteen years of age when her guardian ad litem was appointed upon the petition of the plaintiffs1 attorney. An appointment of a guardian ad litem for an infant of the age of fourteen years or upwards cannot be made upon such a petition until after the expiration of twenty days from the time when the service of the summons is complete. (Code Civ. Proc. § 471.) It is conceded that this appointment was made within the twenty days, and consequently it was premature and void.

The guardian so appointed appeared in the action and answered, but made no defense on the trial, and May 5, 1892, judgment was entered against the infant. On July 24, 1892, a guardian ad litem was appointed on the petition of the infant, who moved to vacate the judgment as against his ward, which was granted.

The appellant urges that a judgment against an infant defendant for whom a guardian has not been appointed is voidable, hut not void. Assume this to he so — which we do not decide — the Special Term had the right to set aside a voidable judgment as against this infant, and we think its discretion was wisely exercised.

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

Present- — Pollett and Parker, JJ.

Order affirmed, with ten dollars costs and disbursements.


text:
    Lucia Cohen, Respondent, v. Abraham Cohen, Appellant.

      Costs — judgment- by default — -no trial fee taxable.

      A trial fee cannot he taxed in the case of a default in the service of an answer or demurrer where the court simply takes proof to determine whether the plaintiff is entitled to judgment.
    Appeal by the defendant, Abraham Cohen, from an order overruling the clerk’s refusal to tax a trial fee of $30, and $15 costs herein, entered in the office of the clerk of the city and county of New York July 14, 1893.

      Samuel G. Ada/ms, for the appellant.

      Howe (& Hummel, for the respondent.
   Per Curiam :

By section 3251 of the Code, a trial fee is allowed for the trial of an issue, either of law; or fact. By section 964, an issue of law or fact can only arise where an answer, demurrer or reply has been served.

There being no answer, demurrer or reply, no issue of law or fact was joined in this case; the application to the court was a mere application for judgment, and the court simply took proof to determine whether the plaintiff was entitled to judgment.

The plaintiff is not entitled to tax a trial fee or costs after notice of trial, no such notice being necessary or proper in the progress of the action.

The order appealed from should be reversed and the clerk’s taxation affirmed, without costs.

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

Order reversed and the clerk’s taxation affirmed, without costs.


text:
    In the Matter of the Application of Jessie C. McBride, Appellant, for a Peremptory Writ of Mandamus against Thomas E. Murray, Respondent.

      Mandmmus to an inferior tribunal — after a decision that it has not jurisdiction to act.

    A mandamus will not lie to compel an inferior tribunal to decide an action or proceeding pending before it, where such tribunal has already decided that it has not jurisdiction to entertain the same.
    Appeal by the applicant, Jessie C. McBride, from an order of the Supreme Court, entered in the office of the clerk of the city and county of New York on the 24th day of June, 1893, denying her motion for a peremptory writ of mandamus to compel Thomas E. Murray, justice of a District Court in the city of New York, to proceed forthwith with the summary proceedings instituted in said court by the applicant against Uriah W. Tompkins, tenant.

      Hoyt c& Rubens, for the appellant.

      G. J. G. Hall, for the respondent.
   Per Curiam :

It is undoubtedly true that a mandamus will lie to compel an inferior tribunal to decide an action or proceeding pending before, it; but where the court or judge or justice disposes of the proceeding by decision, even though such decision be manifestly erroneous, it cannot be reviewed upon mandamus. (Cases cited in Fiero on Spec. Proc. 56.)

In the case at bar, the justice determined that he had not jurisdiction, and that disposed of the action or proceeding pending before: him. Whether he had jurisdiction or not must be reviewed in the ordinary way.

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

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

Order affirmed, with ten dollars costs and disbursements.