text:
    JOHN A. WEEKS, Plaintiff and Respondent, v. THOMAS LOVE, Defendant and Appellent.

      Corporations—Manufacturing—Stockholders, in actions against, for debts of ike company under section 10' of chapter 40 of Laws of 1848— Parties to.

    1. Only a judgment creditor of the corporation can bring the action.
    3. In any such action brought by a judgment creditor of the corporation it is not necessary to join as parties either the general creditors of the corporation or other judgment creditors thereof, or any of them.
    Before Barbour, Ch. J., McCunn and Spencer, JJ.

      Decided July 1, 1871.
    This action was brought against the defendant, as a stockholder of the Peekskill Enamelled Iron Company, by one of its creditors, under the 10th section of the Manufacturing Corporation Act, which is in the following words:
    § 10. “All the stockholders of every company incorporated under this act, shall be severally individually liable to the creditors of the company in which they are stockholders, to an amount equal to the amount of stock held by them respectively for all debts and contracts made by such company, until the whole amount of capital stock fixed and limited by said company shall have been paid in, and a certificate thereof shall have been made and recorded, as prescribed in the following section ; and the capital stock, so fixed and limited, shall all be paid in, one half thereof within one year, and the other half thereof within two years from the incorporation of said company, or such corporation shall be dissolved.”
    Upon the trial, all the facts necessary to establish the liability of the defendant, as a stockholder, to the plaintiff, as well as the further fact that when the indebtedness was contracted by the company and accrued, there were several judgment creditors of the company besides the plaintiff. The plaintiff had judgment, and the case came before the general term on the single point presented by the defendant’s counsel, that all of the judgment creditors should have been joined in the action, and that a suit of this character cannot be maintained by one only, of several creditors.

      Theodore F. Sanxay, attorney, and of counsel for the respondent.

      Marsh & Wallis, attorneys, and Luther R. Marsh, of counsel, for the appellant.

      Mr. Marsh urged as follows :
    1. The words of the statute are: “ Shall be severally liable to the creditors of the company, &c. Not to the creditors severally. Not to each and every of the creditors. Nor are any equivalent words used. The action is to the creditors. But one action. And that action is not to any creditor. Nor to a creditor. But to the creditors. These words necessarily indicate a joint action of the creditors, for it is to them that the action is given. Whenever a 'right of action is conferred or a liability imposed upon a number of persons, the right or liability is always joint unless words of severance are used.

      2. The above construction has been recently given to these very words in another similar statute by the court of appeals (Osgood v. Laytin, 5 Abb. Pr. N. S. 1, 9, 10). The section under consideration in that case was in the act to provide for the incorporation of insurance companies (Id., p. 9 ; 4 Edm. Stat. at L. 202, 210, § 20). It is as follows : “No dividend shall ever be made by any company incorporated under this act when its capital stock is impaired, or when the making of such dividend will have the effect of impairing its capital stock ; and any dividend so made*shall subject each of the stockholders receiving the same to an individual liability to. the creditors of said company, to the extent of such dividend received by him.” The court, in construing this section, say (p. 11): “It is clear that no one creditor of the company can maintain an action against an individual stockholder, for the reason that the liability created by the statute is to the creditors generally, and not to individual creditors, thus creating a liability jointly. ” It is impossible to draw a distinction between these two cases. In each the liability is “ to the creditors qf the company ”—the words on this subject being precisely the same in each statute.
    3. This construction best subserves the policy of the statute and justice to the whole body of stockholders and creditors. The consequences resulting from allowing a single creditor to maintain his action against a stockholder, are such as, never could have been intended by the Legislature. Thus : (a.) If a judgment creditor may sue any stockholder he may choose, he may sue all the stockholders in separate actions, atid may commence as many actions as there are stockholders. The fact of obtaining judgment would not pay his claim, and he might obtain a separate judgment against every stockholder and collect his costs in each suit. This result is strongly put in the case above cited (p. 10). “Again, a creditor, if permitted individually to sue the separate stockholders, might institute actions against each, although his demand amounted to far less than the aggregate liability, and he would continue a creditor until he had obtained satisfaction of his debt, and could obtain judgment in all the actions.” (b.) Among the various creditors of the company similarly situated, no one is entitled to preference over the others. By the terms of the statute, the stockholders are liable to the creditors “to au amount equal to the amount of stock held by them respectively,” and no stockholder can be made to pay more. It cannot be the meaning of the statute that one creditor can absorb,, and by recovering his own debt exhaust this liability of any particular stockholder to the creditors, as would be the result of this individual action. But it is the clear meaning of the statute that all the creditors are entitled to the benefit of this stockholder’s liability in proportion to their respective claims, and that the rights of all the parties are to be settled in an action brought by the parties to whom the right is given, viz : “the creditors.” In the case cited the court of appeals takes this view, saying (p. 10): “Again, in equity, this liability enures to the creditors in proportion to the amount of the debts respectively. The maxim ‘That equality among creditors is equity,’ applies to the case.” Ho injustice can result to a creditor from the refusal of any other to unite in such an action as plaintiff, for in that event, under the Code, he may be joined as defendant.
    4. This case was disposed of on the trial entirely as a- matter of first impression on the part of the judge, and almost without argument from the cousel, it being the object of all parties to have the decision of the general term on the questions involved.

      Mr. Sanxay urged.
    As the liability of the defendant is one imposed by statute, the construction above stated, to be maintained, must be derived from the statute itself, either: First. From its ordinary plain signification; or, Second. From its signification' modified by some strong equitable consideration in this place.
    I. The plain signification of the statute, (a.) The statute is one which gives a right, and is not descriptive of a remedy, and that part of it which says, “ shall be liable to the creditors,” &c., is merely descriptive of the persons to be benefited, and was not intended to mark out the remedy or the form of action. It provides that stockholders shall, in certain cases, and to a certain extent, be liable substantially as partners, i. e., the same as if the company had not been incorporated. The liability is one on contract, and it has been held, that one who was a stockholder at the time the contract was made with the company, is liable, even though at the time the action was brought he may have no stock, on the very ground that the plaintiff is supposed to have given credit to the company, because the defendant was a stockholder, and thereby liable as a partner in a several and individual capacity (Corning v. McCollough, 1 N. Y. [1 Comst.] 47). (b.) It has been the practice from time immemorial, for one creditor alone to maintain an action on a stockholder’s liability, and what has been done for so long a time without question must be presumed to have full judicial sanction, (c.) If all the creditors of the company must be parties plaintiff, it would have to be an action of an equitable nature, and all the stockholders would have to be parties defendant; but the objection that such an action is the only one that can be maintained under the statute, is not now raised by the appellant, neither is it now contended by him, that it is the only appropriate action. The objection noto, simply is that all the creditors have not brought the action against this defendant atone, although the defendant asserts in in his answer (vide. fol. 34) that there are other stockholders, and it would seem to be a great contortion of the statute, to make it mean that all the creditors Jointly must maintain separate actions against a single stockholder, or against all the stockholders singly. Besides, how could there be any judgment, or how could judgment be entered in such an action % (Abbot v. Aspinwall, 36 Barb. 303). (d.) There are many cases in the books where it has been held that it is not necessary to join all stockholders as parties defendant in an action by a single creditor, and that if all stockholders are made parties defendant, all creditors would have to be made parties plaintiff, but it'does not appear upon what principle it would be requisite to make all creditors parties plaintiff in a suit against one of the stockholders. The only case where it could be necessary to join all creditors as parties plaintiff, is. where the action is brought in equity against all the stockholders, for the purpose of equitable contribution, or to secure an accounting (Abbott v. Aspinwall, 26 Barb.. 202 ; Bank of Poughkepsie v. Ibbotson, 24 Wend. 472). (e.) But many cases entirely overrule the objection raised by the appellant, and it must be considered as decided against him (Garrison v. Howe, 17 N. Y. 458, 462 ; Burr v. Wilcox, 22 Id. 551, 557 : 26 Barb. 202 : 24 Wend. 472). (/.) The case of Osgood v. Layten, reported 5 Abb. Pr. N. S. 1, is not at all applicable to this case. That action arose because of the making of an illegal dividend out of the capital of the company, which was a fraud upon all the creditors alike, and it was not upon a stockholder’s liability in the true sense of that term, although by a necessary coincidence, the defendants were stockholders.
    II. The statute modified by some strong equity, (a.) Ho case in equity is made out to modify the ordinary remedy at law upon the statute, and the remedy at law is adequate. It does not appear that different actions were commenced simultaneously by each creditor against the defendant, and each other stockholder separately; neither does it appear that an action has been commenced, on behalf of all creditors against said defendant and all the stockholders. It does not even appear from the case that the aggregate liability of the stockholders will not more than cover all debts of the company. Heither does it appear that other creditors are claiming or maintaining their rights against the stockholders. (5.) It does not aiDpear that any harm can come to the defendants by paying the demand of the plaintiff, for it has been held that when he has paid debts of tlie company equal in amount to the stock held by him, he has a. complete defense, both in law and equity, "to any further liability (24 Wend. 472). • (c.) The construction of the statute sought by the appellant would be most inequitable, and would work its practical nullification. A creditor, before suing, would have to make a search for a judgment against the company. He would have to make a personal inspection of the-judgment rolls in all cases. He would have to satisfy himself by outside inquiry and investigation, that the judgment record is strictly true, as the record would not be conclusive evidence against a person not a ■ party to it. He would have to find out whether the demand upon which the judgments so found were obtained, was upon a credit of more than one year. He would have to find out whether the actions upon which the judgments so found were obtained were commenced within one year from the time the' demands accrued. He would have to find out whether transcripts were docketed in the county where the company carried on its business. He would have to find out whether executions had been issued to the sheriff of the county where the company carried on its business, and whether they were returned unsatisfied. In examining the judgment rolls aforesaid, he might be compelled to go to many widely diverse portions of the State. He would have to determine whether the judgments were upon ordinary demands, or whether to servants or operatives of the company, as the stockholders are liable to the latter upon a different statute. He would have to determine who of the judgment creditors who had complied with all the conditions precedent to the suing of a stockholder, were creditors at the time the proposed defendant, was a stockholder. He would have to determine who of the judgment creditors were stockholders ; for though the latter may sue the company, they cannot sue another stockholder. He would have to determiné whether the suits against the company were properly litigated, for a stockholder may plead non debet of the company. What creditor to a small amount could afford to litigate such an expensive proceeding ?
   By the Court.—Barbour, Ch. J.

The generic term “ creditors,” used, as it is in the above section, without qualification, is broad enough to cover and include all of the creditors of a company, without any exception or distinction between judgment and general creditors. But that section, in effect, simply declares what shall be the individual liability of the stockholders if the capital shall not be fully paid in and a certificate recorded within the time specified. The remedy, or right of action, .which is given to the creditors, is limited and defined by section 24, which is as follows:

“§24. No stockholder shall be personally liable for the payment of any debt contracted by any company formed under this act, which is not to be paid within one year from the time the debt was contracted, nor unless a suit for the collection of such debt shall be brought against such company within one year after the debt shall become due; and no suit shall be brought against any stockholder who shall cease to be a stockholder in any such company for any debt so contracted, unless the same shall be commenced within two years from the time he shall have ceased to be a stockholder in such company, nor until an execution against the company shall have been returned unsatisfied in whole or in part ” (Id. 738).

Considering these two sections in their connection, it is apparent that, although each stockholder is declared by section 10 to be liable to the company’s creditors generally to the extent of his stock, no right of action is given to them as a class, but only, .by section 24, to such individual creditors as shall choose to avail themselves of section 24, and acquire a right of action against a stockholder by prosecuting their claims to judgment against the company, and exhausting their remedy against it by execution. Nor is a right of action against the stockholders given to all the judgment creditors, but only to such of them as shall have obtained judgments for debts which were payable in one year from the time of contracting, in suits brought within a year after the debts shall have become due. Nor can even one of that limited class of j udgment creditors sustain an action against any stockholder coming within the exceptions mentioned in section 24. It follows, in my opinion, that each judgment creditor of the company, who is not excluded by the terms of the last mentioned section, may bring and maintain his action against any stockholder who is not in effect released from personal liability by the further provisions of that section ; and that no suit can properly be brought against a stockholder by the creditors generally, or the judgment creditors, or any number of them, collectively, founded upon several judgments against the company.

The judgment appealed from should be affirmed, with costs.


source: Caselaw Access Project

author: By the Court.—Monell, J.

license: Public Domain

text:
    AMELIA PIXLEY, Plaintiff and Appellant, v. THE THIRD-AVENUE RAILROAD COMPANY, Defendants and Respondents.
    Cabbies.—Hokse Eailboad.—Passekgeb Case.
    1. Negligence of carrier, what evidence not suffieientj to establish,.—Dismissal of complaint.

      a. When the testimony of the passenger leaves it in doubt whether he fell off or was pushed off the car; and also leaves it in doubt (if he was pushed off), whether the conductor or some third person pushed him off, there being no evidence to clear up this doubt, the plaintiff’s complaint will be dismissed.
    Before Barbour Ch. J., Monell and Jones, JJ.

      Decided July, 1871.
    Appeal from judgment and order.
    The action was to recover for personal injuries received by the plaintiff, by the alleged negligence of the defendants’ servants.
    The action was tried before Mr. Justice Spehcer and a jury.
    The defendants moved to dismiss the complaint, on the grounds: first, of the plaintiff’s negligence; and, second, of no proof of negligence on the defendants’ part. The motion was denied, and the defendants excepted.
    The court, in charging the jury, submitted the question of negligence for their determination, under instructions as to the law.
    The plaintiff had a verdict, upon which judgment was entered. A motion for a new trial was denied.
    The defendants appealed from the judgment and order.

      Mr. James P. Lowrey, for appellants.

      Mr. F. Sherman Smith, for respondent.
   By the Court.—Monell, J.

The only evidence in this case which had any tendency towards inculpating the defendants, was that of the plaintiff. If either of her other witnesses saw the accident, or the manner in which it occurred. The case was therefore sent to the jury upon the wholly unsupported testimony of the plaintiff, as to the cause of the injury. I say, unsupported testimony, for I cannot regard the evidence of the witness Bohn, as in in any degree corroborating the plaintiff. He merely said, that he “ saw a lady fall off the car, and as she fell off, I saw a hand withdrawn towards the car.” He further said, there were three or four persons on the platform; that he saw a lady falling “and. a hand coming back apparently from her, and that is all I know about the case.” If or is the testimony of the witness Burchir of a more corroborating character. She testified that she saw a man lay his hand on the plaintiff’s shoulder. That was all she saw.

The-plaintiff testified upon her direct examination, that after she got upon the platform, and offered the fare to the conductor, she heard him say: “ She is drunk and does not know what she is about; I do not do business in that way.” That is all I remember, and I saw his hand go up to the bell, and, at the same time, I felt a hand touch my shoulder, and I went flying and I struck the rocks. It seems to me, that I heard the bell tinkle, and I was struck at the same time.”

She further said she could not tell whether she was pushed or turned round, ‘ ‘ because I stood in that way when I went in, and when I fell it was my left side and temple that was hurt.. I could not tell whether 1 fell or was pushed, I saw a hand go up, and I felt a hand go against me, and it seems to me as if I heard a bell ring just as I struck the stones.”

This is all the evidence furnished by the plaintiff, and, in my judgment, in was wholly insufficient to charge the defendants.

There was no proof that the plaintiff was “pushed”' from the car. The plaintiff herself could not tell whether she fell or was pushed, and no witness undertook to swear that she was. pushed. Certainly there was no evidence that the conductor pushed her. There were three or four other persons on the platform, either one of whom might have been the person whose hand the plaintiff felt touching her shoulder. No one could say it was the conductor’s hand.

In viewing this question I put out of sight the evidence furnished by the defendants, and looking only at the plaintiff’s side, I am unable to justify the verdict, and think the plaintiff should have been nonsuited.

To charge a master for the misconduct of his servant there must be sufficient evidence of such misconduct, and no mere conjectural case will do.

Unless we are to hold that, prima facie, railroad conductors and drivers are always negligent, so as to shift the burden upon the railroad company of proving the contrary, we must have something more than is furnished in this case ; for if the verdict is to be sustained upon mere probabilities, it will be at least fair towards the railroad company to presume, that a woman, with a child in her arms, standing on the platform of a moving car would probably fall whenever the brake was applied to stop it.

I think the judgment and order should be reversed, and a new trial ordered with costs to the appellants to abide the event.


author: By the Court.—Jones, J.

text:
    GASPAR TOCHMAN, Plaintiff and Respondent, v. WILLIAM P. BROWN, Defendant and Appellant.
    I. Evidence—Exclusion op, when not erroneous. When evidence is inadmissible in the aspect in which it is offered it is not error to exclude it, although it may be admissible in some other aspect.

      a. Contract, evidence to explain or to apply.

    1. Thus evidence offered to explainthe terms of a contract, being inadmissible for that purpose, was properly excluded, although it was admissible for the puipose of applying the contract.
    II. Contract—evidence to explain terms of when not admissible.
    1. Instance of.
    HI. Charge—Erroneous, when not ground for reversal.

      a. When the error could not by any possibility have injuriously affected the unsuccessfnl party.
    IV. Trial—Objections on, when and how to betaken to subject the rulings thereon to review.
    1. The objection must be taken before the objectionable question has been answered.

      2. The objection must be made to a question put or evidence offered; it cannot be made to the admission of evidence anticipated to be given, unless the trial judge distinctly permits it > to be so made.
    3. If, in answer to a proper question, a witness gives evidence not responsive thereto, or evidence that is improper, the remedy is by motion to strike out the objectionable testimony, and not by objection to it.
    V. ChABGE—BEEUSAB OE BEQUESTS TO, WHEN* PBOPEE.
    1. Assumed state of facts (concerning which there is no evidence), it is proper for the judge to refuse to charge what the law is as applied to them.
    2. Witness wholly unsupported, it is not error to refuse to charge that the testimony of a witness as to certain matters is wholly unsupported, even though no other witness had testified to the same or substantially the same facts.
    Before Barbour, Ch. J., Monell and Jones, JJ.

      Decided July 1, 1871.
    Appeal from a judgment, and an order denying a motion for a new trial on the judge’s minutes.
    The action is brought on an instrument of which the following is a copy :
    “Hew York," July 20, 1869.
    “ If General Tochman obtains for me a loan of $50,000 on the property located on Tenth-avenue, on terms suitable to me, I promise to pay him four per cent, on the loan in a check payable out of the same, for the purpose of his promoting emigration to Virginia.
    “ W. P. Brown.”
    The General Tochman mentioned in the instrument is the plaintiff, and the party signing it the defendant.
    The complaint alleges that the plaintiff has duly performed all the conditions of said instrument upon his part; that he has demanded of defendant payment of the sum of two thousand dollars, and that defendant has not paid the same ; and the prayer is for judgment for two thousand dollars, interest thereon, and costs.

      The answer of defendant denies performance on plaintiff’s part.
    On the trial it appeared that plaintiff had procured from the Metropolitan Savings Bank an offer to loan fifty thousand dollars on the property, at seven per cent, interest for one year ; and a letter from the president of the bank in the following terms :
    “ Metropolitan Savings Bank,
    “ Hos. 1 and 3 Third-avenue,
    “Hew York, July 30, 1869.
    “Mr. W. P. Brown:
    “ Dear Sir—In reference to a time loan from this institution, I would say that we do not make our bonds and mortgages for over one year ; but you can have the assurance that, if the interest is paid regularly and insurance kept satisfactory, .the loan may continue a term of years, if you should desire it. We do not care to disturb our investments when made.
    “ Yours, etc.,
    “ISAAC T. SMITH.
    “ President

    This offer and letter were communicated to the defendant, who, up to the time of the trial, had not taken the loan.
    Of these facts there is no dispute. But on the trial defendant claimed that the terms of the loan were not satisfactory to him; that he wanted a time loan of from three to five years, and that on this ground he, when the loan was offered to him, and on all subsequent occassions, refused to accept it; and he introduced evidence in support of the claim. Plaintiff introduced evidence to the effect that defendant, when the loan was offered to him ; and on various subsequent occasions, expressed himself satisfied with it, and promised to deliver his title papers to have the title examined.

      The question of fact, and whether the defendant assented to the terms of the loan, upon his being apprised of them, or not, was left to the jury, who decided that he did not so assent.
    In the course of the trial, plaintiff’s counsel offered to prove by the plaintiff, and also by one Cody Anfenger, what was said by the plaintiff at the time of making the contract, for the purpose of explaining the meaning of the words, “terms suitable to me.” Defendant objected ; objection was sustained, and plaintiff’s counsel excepted.
    The plaintiff, however, did subsequently, in answer to questions put by his counsel, give evidence concerning the conversation had at the time of signing the instrument. After having given some evidence about that conversation, he was proceeding: “and this was defined in the contract—” when defendant’s counsel objected; the objection was sustained, and plaintiff excepted.
    Mr. Anfenger was proceeding to state that conversation, and had testified: “Mr. Brown would not sign the contract that was signed there, until he knew he could have the loan for a number of years ; I and General Tochman told him that—■” when defendant objected ; the objection was sustained, and plaintiff’s counsel excepted.
    Defendant’s counsel, in the course of the crpss-examination of the plaintiff, read in evidence two written applications for loans, each signed by defendant, dated June 29, 1869, and addressed to the Metropolitan Savings Bank; one for thirty thousand dollars, on property on the southeast corner of Forty-sixth-street and Tenth-avenue; the other for thirty thousand dollars, on property on the northeast corner of Forty-fifth-street and Tenth-avenue.
    On July 26, 1869, the bank approved of a loan of twenty-five thousand dollars, on each of the applications, and indorsed its approval.
    On his direct examination, the plaintiff had testified that he presented to the principal of the bank, an application signed by the defendant.
    On his cross-examination, he was confused with respect to what applications he did present; but it afterwards appeared that the above were the only applications on which the bank acted.
    After the plaintiff had rested, the defendant was called as a witness on his own behalf. After having, on his direct examination, testified as follows :
    “ Q. When did you sign those applications (refer-, ing to the above mentioned applications) %

    “ A. On June 29, 1889 ; they are dated the 29th.
    “ The Court.—Did you deliver them at once ?

      “A. Yes, sir; I delivered them at once to the plaintiff.
    “Q. What then occurred ?

      “A. I then sent to the bank two or three days afterwards, to see if my loan had been granted ; I sent a boy over there—a young man—and I told the boy to wait for an answer from the president, and the president told the boy that he had no money to loan me; those were the words.
    “ Q. Where did you send the boy %

    “A. To the Metropolitan Savings Bank; the same place the applications were to go to.

      “ Q. When was that?
    “ A. That was three days after they were signed ; I made the inquiry whether my loan was granted.”
    The plaintiff’s counsel stated that he wished it understood, that he objected to all testimony of proceedings prior to making the contract.
    The objection was overruled and exception taken.
    The defendant was then asked: “What next occurred about this matter ? ” After giving, in answer to this question, some unimportant testimony, he proceeded to detail the conversation, which took place at the time the instrument sued on was signed.
    After he had got through, the plaintiff’s counsel stated that he renewed his objection to the whole of the testimony.
    The judge then remarked, that having heard no objection, he had allowed the testimony to proceed.
    Plaintiff’s counsel then stated that he had objected to all testimony on this point, and moved to strike out all the testimony of the witness in reference to the inducement for making the contract, prior to making it. The motion was granted.
    The defendant’s counsel called as a witness James Joyce, who after testifying, that at defendant’s direction, he went with a message to the Metropolitan Savings Bank, and saw the president, was asked: “What did he say to you?” The plaintiff’s counsel objected to the testimony. The objection was overruled, and an exception taken. The witness then testified, that the president said to him : “Tell Mr. Brown we ain’t got the money to loan him.” He further testified that he carried the message to Mr. Brown; and that the occurrence was somewhere about the 4th of July.
    Plaintiff ’ s counsel moved to strike out the testimony of the witness, on the ground that he placed the conversation before the contract was made. The motion was denied, and exception taken.
    After the defendant had rested, the plaintiff called the president of the bank, who corroborated the testimony of Joyce, and testified that at that time, the bank had in fact no money to loan.
    The judge, in his charge to the jury, directed them to disregard all the evidence which had been given as to what took place before the contract was signed, except the fact of defendant filing the applications, and the fact of his having sent to the bank. He also charged them, as a matter of law, that the words, “ on terms suitable to me,” meant on terms that defendant assented to after the making of the contract, and the question for the jury to determine was, whether the defendant had assented or dissented from the arrangements which were made by the plaintiff.
    To the charge as to the construction of the words, “on terms suitable to me,” the plaintiff excepted.
    The plaintiff then requested the judge to charge :
    1. That the plaintiff is entitled to a verdict.
    The court refused so to charge, and plaintiff’s counsel excepted.
    2. That all that was necessary for plaintiff to do in order to earn his commission, was to find some party who could and would make a loan upon the defendant’s property, upon the terms which defendant, at the time of making the contract, had stated would be suitable to him.
    The court refused so to charge, and plaintiff’s counsel excepted.
    3. That if the defendant, at the time of making the contract, stated what terms were suitable to him, the plaintiff had a right to rely on that statement, and that when plaintiff had found a party, in this cáse, the Metropolitan Savings Bank, who were willing and able to make the loan to the defendant, upon the terms stated to the plaintiff at the time of making the contract, then the plaintiff had done all that was necessary to fulfill the contract upon his part.
    The court refused so to charge, and plaintiff’s counsel excepted.
    4. Plaintiff’s counsel also requested the court to charge that the defendant’s testimony in regard to the letter written by him to Callender & Laurence, and testified to by Messrs. Anfenger, Callender, and Laurence, and also his testimony in regard to his visit to No. 30 Pine-street, testified to by Mr. Callender, is wholly unsupported.
    The court refused so to charge, and plaintiff’s counsel excepted.
    The jury rendered a verdict for defendant.
    From the judgment entered thereon, and from an order denying a motion for a new trial on the minutes, the appeal is taken.

      George Putnam Smith, attorney, and of counsel for appellant, made the following points:
    I. The justice erred in excluding evidence of defendant’ s statements at the time of making the contract in regard to the terms upon which he desired the loan. This evidence was competent and proper, (a.) As an explanation of the words “ terms suitable to me.” It tends, not to contradict or vary the written contract, but to aid in its construction, to show the real intent and understanding of the parties, and to apply the contract to its proper subject matter, and for these purposes parol evidence is always proper. Conversations between parties at the time of making a contract are competent evidence to show the sense which they attached to a particular term therein (Gray v. Harper, 1 Story, 574 ; Seldon v. Williams, 9 Watts, 9 ; Almgreen v. Dutilh, 1 Seld. 28). For this purpose, conversations some time previous to making the contract are admissible (Greenl. Ev. § 288, a ; McDonald v. Longbottom, 1 Ellis & El. 977). (b.) It was competent as part of the res gestae. “It may be laid down as a broad and distinct rule of law, that extrinsic evidence of every material fact which will enable the court to ascertain the nature and qualities of the subject matter of the instrument, or, in other words,- to identify the persons and things to which the instrument refers, must of necessity be received” (2 Taylor on Ev. § 1082 ; see also Greenl. Ev. § 286 ; Cary v. Thompson, 1 Daly, 35 ; Attorney-General v. Pearson, 7 Sim. 290, 307 ; Herring v. Boston Iron Co., 1 Gray, 134 ; Noyes v. Canfield, 1 Will. 79). “Anything said by one party in reference to the subject in controversy is admissible when offered by the other” (McClave v. Maynard, 35 How. Pr. 313). In the term “subject,” in this connection, text-writers include everything to which the instrument refers (Greenl. Ev. (Redfield’s ed.) § 286, note ; Phil. & Am. Ev. 732, note 1). Where the language used in a written contract will admit of more than one interpretation, parol evidence is proper to show the situation and motives of the parties, the subject matter of the contract, and the object to be attained-by it (French v. Carhart, 1 Comst. 96 ; Ely v. Adams, 19 Johns. 313, 316 ; Lowry v. Adams, 22 Vt. 160 ; 3 Phil. Ev. 4 ed. 1406, 1423). (c.) This evidence was competent to worlc an estoppel in favor of plaintiff. The evidence'in the case shows that something was said in regard to the terms; that in consequence and on the faith of said statements, the plaintiff and Messrs Aufenger & Callender acted, and the evidence of what these statements were, was eminently proper to estop the defendant from denying that a loan obtained in accordance with these statements was “ suitable” to him (Gaylord v. Van Loan, 15 Wend. 308 ; Crawford v. Lockwood, 9 How. Pr. 550).
    II. The justice erred in admitting evidence of the negotation between the defendant and the savings bank prior to .the contract. This at most was merely the inducement leading the defendant to make the contract, and as such was inadmissible. It makes no difference that part of this evidence was stricken out.
    ^ “When illegal evidence, properly excepted to, has been received at the trial, it must be shown that the verdict was not affected by it, or the judgment will be reversed” (Erben v. Lorillard, 19 JY. Y. 289).
    III. The justice erred in explaining in his charge the words “terms suitable to me.” (a.) What these words meant was a question for the jury (New York Belting Company v. Washington Insurance Company, 10 Bosw. 428 ; Martin v. Cope, 28 N. Y. 180 ; Daniels v. Hudson River Insurance Company, 12 Cush. 416 ; Sheldon v. Benham, 4 Hill, 131, note). (b.) The explanation was erroneous, and the jury were misled thereby.
    IV. The justice erred in his refusal to charge in accordance with the third and fourth requests of plaintiff’s counsel. 1. Each of these requests was pertinent and proper under the evidence (Holly v. Gosling, 2 E. D). Smith 262 ; McGavock v. Woodlief, 20 How. U. S. 221 ; Barnard v. Monnot, 3 Keyes, 203 ; Doty v. Miller, 43 Barb. 529 ; Van Lien v. Byrnes, 1 Hilt. 134).
    V. .The verdict was clearly against evidence and the weight of evidence. It is shown that the defendant made an application for a loan to an institution which he knew would bind itself for but one year. That a loan was granted of the desired amount. That a letter came to the defendant from this bank showing the terms of this loan. Two witnesses swear that he unqualifiedly ' accepted it. Three witnesses swear that they read a letter in which the defendant did so accept it. Mr. Callender swears that defendant called at his office and there stated his approval of the loan, and the defendant himself admits going to Mr. Callender’s office. Such a case comes under the rule: “Where the preponderance in the evidence is so decided as to lead very naturally to the conclusion that injustice has been done to a party by the judgment recovered against him, the judgment under the well settled rule applicable to such cases should be set aside and a new trial directed ” (Townsend Manufacturing Company v. Foster, 51 Barb. 346).

      Messrs. Wakeman & Latting, attorneys, and of counsel for respondents.
   By the Court.—Jones, J.

There are two general rules applicable to the reception of parol evidence of what occurred prior to and at the time of the making of a written contract. They are :

1. That such evidence is inadmissible to contradict or vary the terms of a valid written instrument.

2. That it is admissible to explain and apply the writing.

If the plaintiff, for the purpose of showing that the terms procured by him were suitable to the defendant, had offered to prove that he at the time of signing the instrument stated that such terms would be suitable to him, the evidence would not have fallen within the first rule. Proof that at the time of the contract certain terms were agreed upon which would be suitable to the defendant does not contradict the writing which provides that to entitle the plaintiff to his. stipulated compensation the terms of the loan must be suitable to the defendant; nor is it perceivable how such proof varies the written instrument.

The terms of the instrument do not import that to entitle the plaintiff to his commission the defendant must thereafter approve of the terms of a loan, or that he should accept of the loan; if it did, of course the evidence in question would be inadmissible.

The contract does not provide what terms the defendant should be bound to consider as suitable, nor does it give any intimation as to what defendant then regarded, or might thereafter regard, as suitable. It does, however, provide that if the terms should be suitable he should pay the stipulated compensation. We are therefore compelled to resort to parol evidence to ascertain the terms which defendant considered as suitable, in order to apply the words of the contract. It is manifest that an express approval of the terms of a loan procured after the contract would be evidence that these terms were suitable. Such approval, however, would have no greater force in fixing defendant’s liability than that which appertains to it as evidence that the terms were suitable. This, however, is not the only evidence that is admissible to fix a defendant’s • liability. His' statements, made either at the time of signing the instrument, or at any time afterwards, as to what terms would be suitable to him, are evidence to apply the words of the contract, and to show that those terms were suitable to him. Evidence that he stated that certain terms, if procured, would be suitable to him, is as strong proof of their being suitable as is evidence of his statement after they were procured that they were suitable.

The difficulty, however, is that the evidence was not offered with any such view. It was offered solely to explain the terms of the contract. What it was intended to make the contract mean by the proposed evidence we are not advised by the terms of the offer.

In the aspect in which the offer was put it was properly overruled.

The words are not technical words of any art, science, trade, business or profession, nor is there any ambiguity about them ; they are perfectly plain, and carry the intended idea to the mind as clearly as any idea can be conveyed by language. The idea conveyed by the language is that the defendant should not be bound to accept any loan obtained by plaintiff unless the terms thereof were suitable to him.

Although somewhat out of order it will be convenient here to consider the exception to the charge of the judge.

It was error to charge that the words “on terms suitable to me” meant on terms that he consented to after the making of the contract. As before observed, this is not the meaning of the words. These Words do not require that assent should be made at any particular time to satisfy. It simply requires that the terms procured should be suitable to the defendant, not that this suitableness should be assented to at any particular time.

But this error could not by any possibility have injuriously affected the plaintiff, since there was no evidence that the terms obtained were suitable, other than that of an assent thereto by the defendant after the making of the contract.

With respect to the objection by plaintiff to all testimony on behalf of defendant of proceedings prior to making the contract, it was not taken to any question to the witness pending and remaining unanswered, It must, therefore, be an objection taken either to evidence airea,dy given without objection, or to the admission of evidence anticipated to be given. In either view it was properly overruled. After evidence is given, it is too late to object; the only remedy is to move to strike out.

It is not competent to raise an objection by way of anticipation of evidence to be given. The duty of examining the words as they faff from the witness’s mouth to ascertain whether they fall within the objection, cannot thus be imposed on the judge. That duty devolves on counsel, and cannot thus be shifted. The trial judge could have permitted the objection to be taken by way of anticipation if he had seen fit so to do —but he did not see fit to do so. Even if the judge had permitted the objection to be thus taken, the case should nevertheless show that the objection was taken after questions put, and the proper motion to strike out made after the evidence bad been given.

The counsel for plaintiff intimates by his remark after the testimony was given, that he supposed his objection reached all evidence thereafter to be given, and that the overruling of it was a decision by the judge to allow such testimony. The judge, however, by his reply showed that he did not consider such to be the effect of the objection or of his ruling thereon, but that he regarded it an objection to the evidence already given. The judge having previously excluded similar testimony, there was no reason in fact or law for the attorney’s supposition. But the ruling was correct on another ground.

The plaintiff had himself given evidence respecting a conversation had by him with defendant before the making of the contract. To this extent, at least, defendant was entitled to rebut.

It may be that defendant, in his testimony, went further than he was entitled to for the purpose of rebuttal. But if so, the plaintiff should have renewed his objection when the witness commenced to give the objectionable testimony. He having failed to do this, his only remedy left was to request the court to strike out the objectionable testimony, and to direct the jury to disregard it. This request he did make, and it was granted.

The case of Erben v. Lorillard, 19 N. Y. 299, even when taken in its broadest latitude (and not as qualified and explained by Mandeville v. Guernsey, 51 Barbs 99), is not in point. That case only applies where the improper testimony has been duly and properly objected to, which is not the case here.

The testimony of the witness James Joyce was competent, as bearing on the evidence furnished by the two applications for a loan, to show that the negotations based on their application had fallen through, and that although they were approved by the bank • after the making of the contract between plaintiff and defendant, yet they did not form the basis of any negotation authorized by that contract.

This leads to the requests to charge. There being conflicting evidence as to whether the terms obtained were suitable or not, the first request was properly refused.

The next two requests are based on the assumption that there was evidence that the defendant, at the time of making the contract, stated what terms were suitable to him. As there is no such evidence, the requests were properly refused.

The last request was too broad. It was a request to charge that there was nothing in the demeanor of the various witnesses on the stand, in their manner of testifying, in the various minute circumstances surrounding the trial, in the probabilities of the statements of the various witnesses, from which the testimony of the defendant might gain support. It was for the jury to determine whether it derived support from any or all of these matters.

If the request had been to charge that defendant was unsupported by any witness who testified to the same or substantially the same facts, a refusal so to charge might have been error.

Perhaps it would have been better for the judge to have qualified his refusal to charge as requested ; but he was not bound to do so.

Judgment affirmed, with costs.


author: By the Court.—Jones, J. Barbour, Ch. J. [concurring in a reversal on different grounds, delivered an opinion as follows:]

text:
    MATTHEW KNELL, Plaintiff and Appellant, v. THE UNITED STATES AND BRAZIL STEAMSHIP COMPANY, Defendants and Appellants.
    Shippeb—Agent op, Ms power to make a special contract.
    1. He has power to make a special contract with a common carrier as to the carrier’s responsiMlity.

      Cabbies.—Corporation.
    1. Right to limit responsibility.

      a. A corporation, being a carrier, may by contract exempt itself from responsibility for a loss occurring through the fault, negligence or willful and criminal act of its servants, agents and officers other than its directors.

      b. What is a sufficient and valid ground of exemption does not ' appear to be settled.

      Semble: the carrier- should offer the shipper the option whether he will ship his goods at the usual rates charged by the carrier for carrying goods subject to all the common-law responsibities of carriers, or will, in consideration of paying a less rate for carriage, enter into a special contract exempting the carrier from one or more of his common-law responsibilities, and the shipper should have a reasonable opportunity to exercise the option und erstandingly.
    However this may be—

      e. When the shipper’s own agent prepared the contract, the shipper will (there being no evidence to the contrary) be presumed to have entered into it voluntarily and upon sufficient consideration. •
    2. Construction of conti'act.—Effect of general words.

    1. General words, where effect can otherwise be given to them, will not exempt from liability for loss arising from negligence, fraud or felony of employees.

      a. Consequently the words “It is expressly understood that the articles named in the bill of lading shall be at the risk of the owner, shipper or consignee thereof while on the pier or wharf awaiting shipment,” will not exempt the carrier from liability for loss arising from said causes.
    3. Burden of proof under clause of exemption.

    1. It devolves on the carrier to show that the cause of the loss was one falling within the clause of exemption to relieve himself from liability therefor.
    4. Clause reqidring claim for loss or damage to be made to agent of steamship, at port of discharge.

    1. Construction of term port of dischm'ge.

      a. It means the port to which the goods for a loss whereof a claim is made were shipped.

      b. If there is no agent at that port the clause is inoperative.

      Before Barbour, Ch. J., McCunn and Jones, JJ.

      Decided July 1, 1871.
    Appeal from a judgment entered on the report of a referee in favor, of defendant.
    The plaintiff shipped from the port of ¡New York to St. Thomas five bales and two cases of merchandise by the steamship North America, belonging to the defendants.
    The shipment was made under a bill of lading, which contained the following special clauses:
    “It is expressly stipulated that the articles named in this bill of lading, shall be at the risk of the owner, shipper or consigned thereof while on the pier or wharf, awaiting shipment, and as soon as delivered from the tackles of the steamer, at her port of destination; and if not taken away the same day by him, they may (at the option of the steamer’s agent) be sent to the store, permitted to lay where landed, or returned to the port of shipment, at the expense and risk of the aforesaid owner, shipper or assignee.
    “And it is further expressly stipulated that, in case any claim shall arise against the owners of said steamship company for any loss or damage occurring while such goods and merchandise are on the voyage, or for short delivery, such claim shall be proffered in writing at the office of the agent of said steamship at the port of discharge, within three days after the steamer shall have finished discharging. And in case such claim, whatever it may be, shall not be proffered within the time and at the place hereinbefore designated, such loss or damage shall be deemed to be waived, and the owners of said steamship discharged therefrom.”
    This bill of lading is the usual printed form used by the company. The blanks in it were filled by the clerk of the broker who was employed by the plaintiff to enter the goods for exportation, and that clerk, after filling it out, sent it to defendants’ office, where it was signed by one of defendants’ clerks whose special duty was to attend to signing bills of lading.
    The plaintiff sailed on the vessel to St. Thomas ; the bill of lading was handed to him on board of the vessel after she had commenced the voyage.
    On arriving at St. Thomas, one of the cases could could not be found. There was no representative and no office of the company at St. Thomas.
    It was subsequently discovered that the case in question had been stolen from the dock at the city of Hew York.
    The usual hours for receiving goods were from seven A. m. to five p. m. These goods were received after five p. M., as matter of accommodation.
    All of the goods were received on the wharf by the chief officer of the steamer on Saturday afternoon, about half-past five p. m. They were placed on the wharf opposite part of the wheel house and just forward of a gangway of the ship. The parties in charge of the vessel had .finished taking in cargo at three p. M., and commenced taking in coal, which was continued until twelve p. m. Saturday night. Ho work was done from twelve p. m. Saturday until twelve P. M. Sunday, when coaling was renewed. On Monday the rest of the goods were put on board, and the vessel sailed Monday afternoon. The goods could not be put on board before, because it was necessary to coal the ship before it could be done. The chief officer left the case in question on the wharf when he left at dark on Saturday night, and he never saw it after-wards.
    The pier in question is a covered wharf with a gate at the entrance which locks. A gate-keeper is stationed at the gate during daytime. Defendants had a berth at the pier and the exclusive use of two or three hundred feet on that side of the pier on which their boats lay. The other parties keep the keys of the gate. At night one Daniel Carver (an employee of defendants) was in charge of the pier and the freight belonging to or in charge of the company. He was assisted by the quartermaster of the vessel and two other watchmen. The merchandise in question were bonded goods, and in charge of a custom-house officer.
    This Carver was employed by defendants as stevedore and general superintendent of property on the dock belonging to or in charge of the company. He was paid by the month.
    There is no proof that Carver was connected with the robbery. The only evidence tending in that direction is that the company prosecuted him and one Stewart for the stealing. The result of that prosecution does not appear.
    It was conceded by both parties that the case was stolen by said Stewart between the time it was delivered on the pier on Saturday afternoon and the sailing oí the vessel on Monday afternoon; but at which particular hour during that period the evidence does not disclose.
    This Stewart was a laborer employed by Carver as defendants’ agent in loading and coaling the ship ; he was paid by the day for work done during the day, and by the hour for work done during the night.
    The case was tried before a referee, who reported in favor of defendants. From the judgment entered on the report this appeal is taken.

      Edwin James, attorney, and of counsel for appellant, urged :—
    The defense to the action rests entirely upon certain stipulations in the bill of lading, a copy of which is annexed to their points, and marked A. The defendants allege that, under the first stipulation, the goods were at the risk of the owner or shipper, while at the pier or wharf awaiting shipment. The first answer to this ground of defense is, that such a stipulation or notice in the bill of lading limiting the liability of the defendants as common carriers, was not brought to the knowledge of the plaintiff until after the goods were lost. He therefore was not bound by any of the stipulations contained in that document. Even if he were, the true meaning and proper construction of such a stipulation in the bill of lading is, a public wharf or pier, whereas, in this case, the goods were delivered to the defendants upon a portion of the wharf, their own private property} rented by them, fenced in by them, and from which they excluded the public. The delivery of the goods, therefore, to them was precisely the same as if they had been delivered in their own warehouse. Again: The goods were stolen by a man in their own' enployment: the defendants are therefore clearly responsible for the loss. The defendants also rely upon another of the stipulations in the bill of lading; that the claim should have been made in writing at the office, &c., within three days. The obvious answer to this is, that such claim must be for loss or damage accruing while the goods are on the voyage, and as these goods never were on the voyage, the limitation does not apply ; but, even if it did, the defendants have waived such stipulation, by offering to pay the plaintiff one thousand dollars in gold with a full knowledge of all the facts. The clause- in the bill of lading relative to the time for demand for restitution for loss or damage while on the voyage : “ While on the voyage,” in this instance, evidently means, after the goods are actually placed on shipboard, as the words “or short delivery” especially point to. In this case the goods were embezzled by defendant’s servants while in their custody on their wharf, and in such case the law is clear: “The masters and owners of a ship are responsible for the goods which they have undertaken to carry, if stolen or embezzled by the crew or any other person” (Shieffelin v. Harvey, 6 Johns. 170 ; 1811, Watkinson v. Langton, 8 Id. 213 ; Elliot v. Rossell, 10 Id. 1 ; and Kemp v. Coughtry, 11 Id. 107). A contract which should excuse the carrier from liability for damage or loss arising from his own fraud or gross negligence, would not be enforced” (Parsons v. Montrealt, 13 Barb. 553 ; Alexander v. Greene, 7 Hill, 533 ; Wells v. Steam Nav. Co., 8 N. Y. (4 Seld.) 375).

      George P. Andrews, attorney, and of counsel for respondents, urged:
    I. The stipulations of the bill of lading, under which the defendant claimed to be exempt from liability, were binding on the plaintiff. Common carriers may lawfully qualify their liability by special contracts, and the plaintiff made such a contract with the defendant, upon the terms contained in the bill of lading, (a.) The plaintiff assented to the terms of the bill of lading. His own agent, McKibbin, drew it; and when he delivered the goods, also presented the bill of lading to the defendant for signature. The plaintiff’s assent, therefore, is beyond question, unless the agent exceeded his authority. (5.) The broker, McKibbin, was employed . by the plaintiff to ship the goods, and by virtue of such employment had authority to contract with the defend ant on the terms contained in the bill of lading. In Meyer v. Harnden Express Co. (34 How. Pr. 290) it was expressly decided that an agent employed generally to ship goods, has full authority to make such a contract, (c.) The handing of the bill of lading to the plaintiff, personally, on the steamer, was not necessary to complete the contract. The delivery of the goods and the bill of lading by the plaintiff’s agent to the defendant, and the receipt of the goods, and the acceptance and signing of the bill of lading by the defendant, were a sufficient evidence of a delivery of the bill of lading to the plaintiff. It was left with the defendant to be handed to the plaintiff on the steamer merely for the broker’s convenience, as the plaintiff was going as a passenger. The defendant, after signing it, was merely a gratuitous bailee of the bill of lading. The signing and acknowledging of a deed, though left in the grantor’s possession for some purpose, has been repeatedly held sufficient evidence of delivery (2 Greenl. Ev. 10 ed. 279, and cases cited), (d.) A contract for the carriage of goods need not be in writing ; and the delivery of the case and the bill of lading by the broker to, and their acceptance by, the defendant, would have been sufficient evidence of the making of a contract between the plaintiff" and the defendant, on the terms contained in the bill of lading, even though the latter had never been signed or delivered.
    II. The defendant is not liable, under the clause of the bill of lading, which provided that the articles therein named should be at the risk of the owner or shipper thereof, while on the pier or wharf awaiting shipment, (a.) It was conceded that the case was not put on the steamer, and that it was stolen by Stewart from off the pier where it lay awaiting shipment; and the referee found, as matter of fact, that Stewart was not in defendant’s employ when the theft was committed ; which finding, as there was no conflict of evidence, is conclusive, unless it be claimed that the question as to Stewart’s being in the defendant’s employ is partly a question of law; or unless the finding was grounded on evidence palpably insufficient. So far as the question about Stewart’s employment may be one of law, there is no room for doubt that the referee’s finding was correct; and the evidence to sustain the finding, so far as it is, beyond dispute, a finding of fact, is clearly sufficient, (b.) Stewart stopped work at twelve o’clock Saturday night, and did not resume work till twelve o’clock the following Sunday night. If he stole the case, therefore, between twelve o’clock Saturday night and twelve o’clock Sunday night, it is too clear for argument that he was not in defendant’s employ when the theft was committed, (c.) The referee found as matter of fact that the case was stolen between the hours above mentioned. There was no conflict of evidence, and the finding is conclusive unless grounded upon evidence palpably insufficient—which it is not. (d.) Even if Stewart had been in the defendant’s employ when he stole the case, the defendant, under the above cited clause of the bill of lading, would not be liable for its loss. It is now settled law in this State, that common carriers may, by special contract, exempt themselves from liability for losses caused by the felony of their own servants even (Wells and Tucker v. Steam Navigation Company, 8 N. Y. 381 ; Wells v. N. Y. Central R. R. Co., 24 N. Y. 185 ; Bissell v. Same, 35 N. Y. 446 ; Perkins v. Same, 24 N. Y. 215 ; Smith v. Same, 24 N. Y. 222). By the bill of lading, the goods were at the plaintiff’s risk, and the risk of theft by the defendant’s subordinate servants was included, unless negligence in selecting those servants is shown.
    III. The defendant is not liable because the plaintiff did not comply with the agreement in the bill of lading, that claims like the plaintiff’s should be preferred in writing, at the office of the agents of the steamer, at the port of discharge, within three days after she finished discharging, (a.) It is conceded that the plaintiff did not prefer any claim, in writing, or otherwise, at the office of the steamer’s agent, in St. Thomas. (5.) This stipulation of the bill of lading applied to the circumstances of this case, (e.) It was lawful and valid (Lewis v. Great Western R. R. Co., 4 Hurlst. & N. 867 ; Simons v. Same defendant, 37 Eng. Law & Eq. Rep. 286). (d.) The defendant never waived its right to set up this stipulation in the bill of lading as a defense to the plaintiff’s claim. No agreement to that effect is alleged, and nothing was shown that could operate as an estoppel.
    IV. The defendant’s right to avail itself of any defence that it originally had, was not affected by the offer of compromise. An offer of settlement, if competent evidence as an admission of liability, does not estop or conclude the party making it; he is at liberty to show that the admission was made under a mistake as to his rights, or is untrue.
    V. It may be claimed that, though Stewart was not in the defendant’s employ when the theft was commited, still the defendant would be liable if the goods were lost through its negligence. In that case, the defendant having shown that the loss occurred through one of the risks excepted by the bill of lading, the burden of proof was on the defendant to prove negligence (Ang. on Carr. § 279). Ho evidence was introduced by the plaintiff for this purpose ; and the defendant, though not called on to do so, proved that there was no negligence on its part.
    VI. The defendant, owing to the nature of its business, does not undertake to furnish a warehouse for goods intended to be shipped by its steamers, and as the goods were received solely to accommodate the plaintiff, and the loss did not occur through, the de-' fendant’s fraud or negligence, the equities of the case are altogether on the side of the defendant.
   By the Court.—Jones, J.

The main question raised in this case is whether the defendant is relieved from responsibility by operation of the stipulation in the bill of lading, that the goods should be at the risk of the owner while on the pier or wharf awaiting shipment.

The plaintiff insists that the company is not thereby discharged.' Because,

1. The stipulation was not brought to plaintiff’s knowledge until after the goods were lost.

2. That the loss occurring through the theft of one of defendant’s employees, is a risk against which the defendant cannot protect itself by any contract or agreement whatever, because any contract or agreement to that, effect would be void.

3. That the loss occurring through the theft of one of defendant’s employees does not fall within the terms and scope of the stipulation.

The first objection is fully met by the case of Meyer v. Harden Express Co., 24 How. Pr. 290, in the reasoning of which case I fully concur.

The second objection is based on a misapprehension of the present state of the law on the subject. As the law now stands, a corporation, though it be a common carrier, may by contract exempt itself from liability for a loss occurring through the fault, negligence, or willful and criminal act of its servants, agents, or officers, other than the directors, and a contract to that effect will not be held void as being contrary to public policy (Perkins v. N. Y. C. R. R., 24 N. Y. 196 ; Wells v. N. Y. C. R. R., Id. 18 ; Dorr v. N. J. Steam navigation Co., 11 Id. 485 ; Bissell v. N. Y. C. R. R., 25 N. Y. 442). What is sufficient to constitute a valid and binding contract of exception is not yet fully settled.

In the above cited cases it is held that the carrying passengers or goods at less than the regular and customary rates, affords a sufficient consideration to uphold the-contract.

But I think the question whether a common carrier can prepare a printed form of contract? containing special clauses as to exemption and liabilities (see 24 N. Y. 201 ; 11 Id. 485), and then refuse to carry except on the terms of that form, unless the shipper can succeed in inducing him to make a special contract, thus compelling the would-be shipper to receive and accept a contract in that form, or else not ship the goods; and whether the shipper, by accepting under such circumstances a bill of lading containing said special clauses, thereby makes these clauses a binding contract on him ; still remain undetermined.

The present case does not call for a solution of the question. A carrier has undoubtedly the right to fix the rates at which he will carry all goods offered for carriage, subject to all the reponsibilities imposed on him by the law, and to adjust those rates according to the various descriptions of goods; and under the principle of the above cited cases, the carrier, if a shipper desires his goods carried at rates less than the usual and customary ones established, may insist that in consideration of such reduction, he shall be exempted from some one or more of his ordinary responsibilities (other than such as arise out of his own fraud, or such negligence of his own as amounts to a wanton and willful disregard of his duty) (21 N. Y. 213), and a contract to this effect will be good.

It seems to me, however, that the option of exempting the carrier from any of his responsibilities should rest not with the carrier but with the shipper, and he ■ should have a reasonable opportunity to exercise it understandingly.

In the case at bar the shipper’s own agent prepared the contract. In the absence of evidence to that effect we cannot assume that the contract was forced on the plaintiff; but must, on the contrary, presume it to have been voluntarily entered into with a full knowledge of all its provisions, and with a sufficient consideration arising out* of the carriage at rates less than the usual and customary ones charged by defendant for a like carriage under all the responsibilities of a common carrier.

This leads to the third objection.

The words used will, when taken in their most comprehensive sense, include the risk of loss through the negligence of, or robbery by, the defendant’s servants.

> But the doctrine now prevails that exemption from liability for loss arising from the negligence, fraud, or felony of employees will not be regarded as included in general words of exception where effect can otherwise be given to these words (Wells v. Steam Navigation Co., 8 N. Y. 375 ; Perkins v. N. Y. C. R. R., 24 Id., cited from p. 206).

This defendant, in the absence of a clause of exemption, would, as a common carrier, have been, liable for any loss of or damage to these goods, except only such as might have been caused by the act of Gtod ór of public enemies.

The general words of the clause in question may well be satisfied even though a loss occurring through the negligence, fraud, or felony of the defendant’s servants, be regarded as not covered by them, for there still remain the risks of loss by theft or robbery committed by persons other than defendant’s servants, the risk of loss by fire, by overflow of water, by steam, without any negligence or fault on the part of the defendants or its servants, for the words of the clause to operate on.

It follows that a loss occasioned by a robbery committed by one of the defendant’s agents is not one of the risks which the plaintiff, by the clause in question, was content to take upon himself.

The loss in question occurred through the theft of one Patrick Stewart.

If at the time of the robbery he was in defendant’s employ, then defendant is liable ; if he was not in its employ, then the plaintiff must bear the loss himself.

The referee has found that he was not in defendant’s employ.

Let us examine the evidence on that point. Thé case was stolen some time between dark Saturday night and eight A. u. the following morning. From twelve p. m. Saturday night to twelve p. m. Sunday night, Stewart was not in the employ of defendant; during the rest of the time he was. There is no evidence whatever that the robbery took place between twelve p. m. Saturnight and twelve p. m. Sunday night. It may be reasoned that the presumption is that it took place then, because it is more reasonable to suppose that a theft took place when but few were stirring around, than when a large number were. I do not know, as matter of common experience, that it would be regarded by thieves either easier or safer to commit a theft on such a place as a covered pier, which is watched over by watchman who can take a position commanding a view of the property at any time of the night, when the » noise and bustle of workmen performing their labor is hushed, and an almost oppressive stillness prevails through which the sound of "footsteps or the grating of a boat against a.pier, or any noise in removing the plunder would be easily heard, and attract the notice o£ the guardians of the property, whose attention would not be apt to be diverted from their duty of guarding by other duties or by other transactions occurring around them, than to cause themselves to be employed as part of a gang of laborers whose duties it is at one period of the night to be on the pier engaged in work at or near the place where the object of plunder is situate, and who are to some extent identified with a right to be about and handling, and then at that period of the night when they are on the pier in the course of the employment, committing, with the aid of confederates in the same gang or outside, a robbery amid the noise and confusion of the work, which would have the tendency to divert the attention of others, to drown whatever noise might be made in the commission of the robbery, and to cover the operations of those concerned in it, or which, if the attempted theft was discovered, would afford a plausible excuse for being found in the position and under circumstances which, without that excuse, might be sufficient to secure a conviction for an attempt to commit a crime.

There seems to me to be nothing in this case which warrants a presumption that the robbery took place during the time the thief was not in defendant’s employ.

The question then arises: on whom devolved the burden of proving the particular time at which the robbery took place. .

If it falls to the lot of plaintiff to prove that it took place at a time when Stewart was in defendant’s employ, then the judgment must be affirmed, for he has not proved it.

. If, on the other hand, it is incumbent on defendant to prove that, it took place at a time when Stewart was not its employ, then the judgment must be reversed, for he has not proved that.

The burden of proof is cast on him who must prove the fact to sustain his action or defense as the case may be.

The plaintiff’s cause of action rests on the nondelivery to him of goods; not for its loss in any particular manner. It is founded on the common-law liability of the common carrier, and not on the stipulation, nor can the'stipulation be regarded as a condition precedent.

"It was inserted in the contract to relieve the defendant from certain of its common law liabilities ; he must therefore show that the non-delivery was the result of a cause which, under the stipulation, relieves him from liability therefor.

It might seem at first blush as if this was requiring defendant to prove a negative. .But, in fact, it only requires proof of two affirmatives, one of which is peculiarly within the knowledge of its officers. The two affirmatives are : 1. The time during which Stewart was in his employ ; 2. The time when the robbery was committed.

The first it has proved; the second it has not proved with sufficient definiteness to relieve it from liability.

The defendant claims, however, that under the. bill of lading a presentation in writing of a claim for the loss at the office of the agent of the steamship at the port of discharge within three days after the steamship shall have finished discharging, was a condition precedent to a recovery by plaintiff; and that such condition precedent was not complied with.

The port of discharge here intended is the port to which the goods, for loss whereof a claim is made, were shipped. That in this case was St. Thomas.

It is a sufficient answer to this claim of defendant that it has no office of any agent at St. Thomas, nor any representative there.

It cannot take advantage of an omission to do that which it has rendered impossible to do' by its own neglect.

Barbour, Ch. J. [concurring in a reversal on different grounds, delivered an opinion as follows:]

There can be no doubt that the plaintiff was entitled to a judgment upon the pleadings and proofs exhibited at the trial, unless the defendants were released from liability for the loss of the goods, by the terms of the bill of lading; for the property was received by the latter as common carriers, and was not lost by the act of God or public enemies while in their possession as such carriers.

It is not necessary to discuss the question whether the mere employment by the plaintiff of a broker to ship the goods conferred upon him an authority to enter into a special agreement with the shipowners exonerating them from their ordinary legal liability as common carriers, nor, if so, whether the broker’s clerk who made the shipment possessed such authority by virtue of the employment of his principal to ship the goods, for there is no evidence in the case tending to prove that any agreement whatever was made with the defendants or their agents, by either the broker or his clerk. The broker did nothing whatever personally, and all that was done by the clerk was to insert a description of the goods in a blank bill of lading and send it to the office of the defendants; but such bill was not signed there and returned, so as to make its acceptance a valid contract between the parties, prior to the sailing of the ship. Indeed, it is quite apparent from the evidence that the goods were' delivered to the defendants as common carriers, without any special or other agreement limiting their liability, and were stolen and carried away from their wharf while so held; that the only agreement between the plaintiff and the defendants was contained in the bill of lading, and that agreement was made and completed by the delivery of the bill to the plaintiff and his acceptance of it on board the ship two days after she had sailed, and after the goods were lost and the right of action in the plaintiff to recover their value had accrued.

The special provision in the bill of lading which was intended to exempt the carriers from liability in certain specified cases, cannot properly be considered as applicable to the goods which had thus become lost before the delivery of the bill of lading, either in terms or as construed by the intention of the plaintiff and the defendants’ officers. For, the provision in question speaks only in futuro, and, by its terms, as well as clear intent, the owner of the goods undertook,—not to bear a loss which had already occurred, nor to discharge the defendants from their legal obligation to pay for the goods which they had lost,—but to assume a certain future hazard or risk ; the language being, “ It is expressly stipulated that the articles named in the bill of lading shall be at the risk of the owner, &c., while on the pier or wharf awaiting shipment.” It is clear, too, that when the bill was delivered to the owner, both he and the ship’s officers believed that the goods were on board; and for that reason it is impossible to suppose that either of the parties designed by the provision in question to discharge the carriers from an accrued liability. ' The provision in the bill of lading which is relied upon by the defendants as exempting them from liability, therefore, does not apply to the goods which are the subject of this action, nor operate as a discharge of the defendants from their obligation to pay for them.

I concur with my brother Jones in the opinion that the efforts of the plaintiff to give notice of the loss at St. Thomas was a performance on his part of the conditions of the bill of lading in that regard, even if any attempt by him to give such notice was necessary under the circumstances, which I doubt.

For these reasons, and without considering here any further question in the case, I am of opinion that the judgment should be reversed with costs, the order of reference vacated, and a new trial directed.

Judgment reversed, new trial ordered; order of reference vacated on payment of costs of trial and appeal.


author: Barbour, Ch. J. Freedman, J. Spencer, J. (Dissenting)

text:
    FANNY SCHOENWALD, Plaintiff and Respondent, v. THE METROPOLITAN SAVINGS BANK, Defendant and Appellant.
    The plaintiff deposited with defendants one hundred dollars. She was given a pass-book by defendants, in which was witten the amount of the deposit and date of its reception, in account form, purporting to' charge defendants as a debtor to plaintiff in that amount. Upon a page of this pass-book, following the entry, were printed rules¡ numbering from one to eighteen inclusive, and headed by the following words printed in capitals and larger type, “ Rules from the Charter and By-Laws.” The eight, eleventh, and seventeenth of those rules read as follows:
    “8. All deposits shall be entered in the book of the corporation, and a pass-book shall be given to the depositor, in which the sum deposited by him shall be entered, and which shall be his voucher, and the evidence of his property in the said institution.”
    “ 11. On making the first deposit, the depositor shall be required to subscribe his or her assent to be governed by the regulations and by-laws of the institution.

      “ 17. The secretary will use his best efforts to prevent frauds ; but all payments to persons producing the deposit-book shall be deemed good and valid payments to depositors respectively.”
    The plaintiff wrote her name in a book kept by defendants for that purpose, and wrote the same in German text or script, and took away the pass-book with her.
    On the 27th day of September thereafter a man calling himself John Brown, presented to the teller of the defendants this bank-book of defendants, and also a written order purporting to have been made by plaintiff, in this form:
    “27352 New York
    “ Let the bearer have $60 (sixty dolls),

      “ Sept. 27, 1869. o Eahnt Schoenwald.”
    This man indorsed the order, received the amount named from defendants; and a return of the pass-book after the amount had been entered therein. -
    The signature of the order was very much like the genuine signature of defendant; so much so, that plaintiff, when the same was presented to her and asked if it was her signature, said: “I do not know if it is or not; that looks like my writing;” but she afterwards stated that it was not her signature, because she never gave any one a paper like this. Reid, that these facts did not constitute an agreement between the parties by which the defendants were authorized to pay the deposit to any person presenting the bankbook with such an order (unless the signature to the order was that of plaintiff), and that the handing of a pass-book by defendants to the plaintiff as a voucher of the deposit, and containing the rules and by-laws of the bank, without calling her attention specially to the same, did not constitute a mutual contract, and that the only question for the jury in the case was this: Was the signature to the order the genuine signature of the plaintiff? Opinions of Barbotjr, Ch. J., and Freedman, J. See Spencer, J. (dissenting).'
    Before Barbour, Ch. J., and Freedman and Spencer, JJ.

      Decided, December 31, 1871.
    The plaintiff brings this action to recover sixty-nine dollars, an alleged balance of a deposit of one hundred dollars, made with the defendants.
    The defendants admit the deposit having been made, but allege that it was made by plaintiff, and accepted by defendants, subject to the conditions expressed in the charter and by-laws of defendants, of which plaintiff had knowledge. That by said charter and by-laws it is provided that payments will be made to depositors personally, or under their written orders, and that the possession of the pass-book of a depositor shall be deemed evidence of the right of the holder thereof, to draw the money deposited. That a person presented to defendants a draft or order, signed by the plaintiff, for sixty dollars, at the same time exhibited to defendants the pass-book of the plaintiff, whereupon defendants paid the said sixty dollars, and entered the amount thereof in said pass-book. The evidence disclosed the following facts, which are uncontested: That on the 31st day of August, 1869, the plaintiff deposited with defendants at their bank one hundred dollars. At the request of the officer of defendants she wrote her name in a book kept for that purpose at the bank, and wrote the same in German text or script. She was given a pass-book by the defendants, which she afterwards took away and in which was entered in words and figures, in plain English writing or script, the amount of the deposit, and the date of its reception. This deposit was entered inside of the book, in account form, and purported to charge the defendants as a debtor to plaintiff to that amount (one, hundred dollars). On a page or pages before the entry of the deposit, was "written the number of the pass-book, twenty-seven thousand three hundred and fifty-two, after which followed the printed words “bankbook,” under which plaintiff’s name was written in in plain English script. Then followed printed matter, denoting the name and place of business and business hours of the defendants, and directions purporting to be addressed to the owner of the pass-book, and also the names of the officers of defendants.
    Upon a page or pages of this pass-book, following the entry of the deposit, were printed certain rules, numbered from one to eighteen, inclusive, and headed by the following words, printed in capitals and larger type, “Rules from the charter and by-laws.” The following are the eighth, eleventh and seventeenth of said rules:
    “8. All deposits shall be entered in the book of the corporation, and a pass-book shall be given to the depositor, in which the sum deposited by him shall be entered, and which shall be his voucher, and the evidence of his property in the said institution.
    “11. On making the first deposit, the depositor shall be required to subscribe his or her assent to be governed by the regulations and by-laws of the institution.
    £ ‘ 17. The secretary will use his best efforts to prevent frauds; but all payments to persons producing the deposit-books shall be deemed good and valid payments to depositors respectively.”
    On the 27th of September, 1869, a man presented the bank-book of the plaintiff, to the paying teller of the defendants, and also an order purporting to have been made by the plaintiff in the following form:

      “27,352. “NewYokk.
    “Let the bearer have $60 (sixty dolls.).
    “Sept. 27, 1869. “Fanny Schoenwald.”
    The man who presented this order, after endorsing the same as “John Brown,” received the amount named, and a return of the bank-book, after the amount had been entered in the bank-book.
    The signature to the order was very much like the genuine signature of the plaintiff, so much so, that plaintiff stated under oath, on its being presented to her and she was asked if it was her signature, “I do not know if it is or not; that looks like my writing.” She afterwards stated that it was not her signature because she never gave any one a paper like this.
    After plaintiff received the bank-book, she kept it in her trunk and, as she supposed, locked, until October 19th, 1869, when she took it to the bank and drew thirty-nine dollars, this being the time the facts relating to the order of sixty dollars were discussed between the parties.
    Defendants refused to pay these sixty dollars drawn under the supposed forged order.
    Defendants’ counsel moved to dismiss the complaint, which was denied and exception taken. He then requested the court to charge,
    1. That defendants are entitled to a verdict.
    2. That the fact, if proved, that the plaintiff’s attention was not called to the by-laws of the bank at the time of making her deposit, does not relieve the plaintiff from the effect of said by-laws ; but she was bound by the same, and a payment made in accordance therewith was a valid payment.
    3. That, if the defendants were bound to call to the plaintiff’s attention the by-laws and regulations governing her deposit, the delivery to her of the pass-book wherein were contained these by-laws and regulations was a sufficient notice to her, and she was bound thereby.
    4. That the defendants, under their contract- with the plaintiff, had a right to presume that'the person who presented the plaintiff’s bank-book had a right to receive the money directed to be paid by the order.

      5. That, if the payment was made in good faith by the bank to a person presenting the bank-book of the plaintiff, the plaintiff was bound by such payment, even though the order directing the payment was a forgery.
    Which being refused, exception was taken. Exception was also taken to part of the judge’s charge, in which he charged “that if the plaintiff did not sign the order, or subsequently ratify it, the bank would be liable.”
    The jury found a verdict for the amount of the forged check and interest, sixty-five dollars. Defendants’ counsel moved for a new trial, which was denied and exception taken.
    This appeal is from the judgment entered upon the verdict, and from the order of the court denying a new trial.

      M. P. Stafford and Horace Graves, for the respondent.

      Geo. Putnam Smith, for the appellants.
   Barbour, Ch. J.

The pleadings show that the defendant is a corporation; but whether it has a fixed capital, with stockholders who share in the profits, or. has no capital beyond what is furnished by the money of its depositors, does not appear; nor do I deem that question important. It is sufficient that the bank is a corporation, and, therefore, bound by the same rules of law in regard to its dealings with others, which control the actions of natural persons.

Upon, receiving the deposit, the bank became bound to pay the amount to the plaintiff, whenever requested to do so by a check or order signed by the depositor, unless a special contract was made with her, either in terms or by legal implication from the acts of the parties.

Undoubtedly an agreement between the parties, by which the bank was required to pay the amount of the deposit, or any portion of it, to such person as should present the bank-book, or any other token, would have been valid. But the mere handing over to the depositor of a bank-book, containing the rules and bylaws of the bank, without calling her attention to its contents, did not constitute a mutual contract upon which the minds of the parties, met. That question has several times been passed upon in this court, and is no longer an open one here (See Ramaley v. Leland, 6 Robt. 358 ; S. C., 43 N. Y. 539). The cause, therefore, was properly left to the determination of the jury upon the single question as to the genuineness of the plaintiff’s signature.

The judgment ought to be affirmed,with costs.

Freedman, J.

Although, as a general rule, every person who deals with a moneyed institution, is bound by its regulations, lawfully made, although not communicated to him at all (Warhus v. Bowery Savings Bank, 5 Duer, 71 ; affirmed in 21 N. Y. 543), yet the by-law under which the savings bank resists the repayment of the deposit in this case is not a mere regulation for the return to the plaintiff of her money.

It is invoked to work a forfeiture in consequence of the happening of a certain event, over which the plaintiff has had no control.

There being no evidence of negligence on plaintiff’s part which contributed to the loss, as in Kelly v. The Industrial Savings Bank, 2 Daly, 227, and no proo that the bank had the power and capacity to establish the rule in question, the judgment and order appealed from should be affirmed with costs.

Spencer, J. (Dissenting)

If the pass-book, or bank-book, introduced in evidence, with all its written and printed matter, constitutes the contract of the defendants in the premises, the defense was full and complete, and the complaint should have been dismissed.

There was no fraud, nor wrong, nor gross neglect, on the part of the bank or its officers, established or alleged by the plaintiff. In fact, the evidence frees the defendants from all imputation of wrong in the premises. This is only a question as to which party shall bear a loss incurred without the fault of either.

In this pass-book was printed, among others, a rule providing that “The secretary will use his best efforts to prevent frauds ; but all payments made to persons producing the deposit books, shall be deemed good and valid payments to depositors respectively.”

The defendants paid sixty dollars to a man who had and presented the pass-book in which this sum was noted as paid, and at the same time this person presented an order for the money, purporting to be signed by plaintiff; and the signature was so much like her genuine signature that she could hardly deny the same to be hers on the trial, and I think the weight of testimony establishes beyond all question that, when first shown to her, she freely admitted it to be her signature. The jury, however, have found substantially that it was a forgery, and the question for review must be considered upon that position.

I hold that the defendants received this deposit subject to their rules and regulations as far as the same were set forth in the pass-book that was given to plaintiff, and in which the deposit was acknowledged.

The liability of the defendants must be based on the contract, and the contract included this rule, under and subject to which they received this deposit. Their liability, as limited by these rules, printed in the passbook, is all that the plaintiff can or should claim and enforce in the premises. This pass book and its rules and regulations was the contract they offered to enter into with plaintiff, and it plainly stated the terms on which they would receive plaintiff’s money; and plaintiff, by depositing the money, and having it entered, and taking the bank-book as a voucher or evidence in her favor, accepted the terms of the contract thus offered, and she must be held thereby. The rule of law governing contracts with common carriers does not apply here, nor does the rule of commercial law that applies to ordinary bankers and banks of loan and deposit, and which holds the latter responsible for any money of their customers, paid on forged or altered checks and orders.

Savings banks are instituted for the benefit of their depositors as well as their stockholders, and the former are individually and collectively interested in and affected by these rules and regulations, for they receive a consideration for their deposit, namely, interest on their savings, the magnitude of which is in proportion to the profits of the business.

I think the salutary and safe rule of law for them is this : that depositors in savings banks are bound to inform themselves, and shall be presumed to know the rules and regulations of the institution who pays them for the use of their savings, in the way of interest and safety. But when, as in this case, the rules and regulations of the bank that control and govern the reception and payment of deposits are printed in and upon the pass-book, the voucher that acknowledges the loan or deposit they have made, I have no doubt whatsoever that they will be presumed to know what they are, and to be held subject to them ; therefore I hold that these rules printed in the pass-book are a part of the contract between the bank and its depositors, and the deposits are received subject to and in accordance with those rules.

These savings institutions have been established and have grown up in this country for the convenience, interest, and the necessities of the poor.

The greater portion of all the deposits therein, and payments therefrom, are in small sums, and from a great multitude of persons, thus requiring the work of reception and payment during business hours to be done with great rapidity; and as a great many of the depositors can neither read, write, nor speak the English language, the work must be done with great simplicity. These facts have caused the adoption of the deposit or pass-book system. The very name popularly given to these books denote their service and use. They are given to the depositor as a pledge, token, or pass, that the money received and noted therein will not be .paid to any person, upon order or otherwise, unless this token or pass is produced.

The simplest minded of our people can understand this simple system. That the pass-book acknowledges the receipt of the money, and that no one can obtain their money from the bank without this pass, and if they take care of that their money is safe, and beyond the reach of any one but its rightful owner.

It would be onerous and unjust upon these institutions and upon their depositors if the rules of ordinary banks of deposit, in regard to the payment of checks and deposits, were strictly enforced, thus holding them liable for skillful forgeries of orders or checks presented with the pass-book, although they and their customers have agreed that the possession and presentation of the pass book shall authorize the payment.

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