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    JOSEPH B. PENNELL, et al., Respondents v. THE MAYOR, ALDERMEN AND COMMONALTY OF THE CITY OF NEW YORK, Appellants.

      Action upon contract for clearing wood and, brush from land which was to be flooded by the building of a dam under the Aqueduct Commissioners.

    The plaintiffs had contracted to do the work for a consideration which consisted of a certain sum of money and the wood that they might cut and remove for their own benefit. The action was brought to recover upon two causes of action. 1st. To recover the value of about 770 cords of wood that had been cut by them under the contract, and had been wholly lost to them through the act and fault of the defendants in flooding the ground cleared by the plaintiffs with water during the time plaintiffs were engaged in the performance of their contract. 2d. To recover the increased cost of clearing off the brush, under the same contract, occasioned by reason of the premature flooding.
    The main question presented by the appeal relates to the construction of the contract which required two things to be done. 1st. The land was to be cleared and, 2d. All timber, brush, grass and all other vegetable growth, were to be removed beyond the limits of the land. The work was to be done in the order of precedence approved by defendants’ engineer ; and all the timber and other growth were to be removed or burned, and all the work covered by the specifications was to be done and completed on or before November 1, 1889. The work was completed by the plaintiffs within the time fixed for its completion, and no controversy exists between the parties in that respect. The litigation is confined to the two causes of action specified.
    The counsel for defendants claimed and argued that all parts of the contract should be construed in such a way as to give force and validity to all of them, and to all the language used where that is possible, and such is the true rule beyond question; but it is equally true that a clause giving an additional and independent right to one party and imposing a corresponding burden upon the other, cannot be interpolated by the -court. Surrounding circumstances may be considered to explain or define something in the contract that requires explanation or definition, but they cannot be invoked to add something entirely new. In no case has the court, in its consideration or construction of a contract, the right to make a new contract or to add clauses thereto.
    Held, that the plaintiffs had until November 1, 1889, to do and complete their work under the contract; and there being no clause or provision therein giving the defendants the right to flood the land before that time, they had no right to interfere with the plaintiffs and their work by doing so; and having so interfered months before that time they were guilty of a wrongful act, for which, if damage ensued therefrom to the plaintiffs, they have a cause of action. The contention of the defendants, that under that clause of the contract “ that all work should be done in the order of precedence approved by their engineer,” he had the right, to order all the wood not only to be cut but to be removed at any time prior to November 1, 1889, and that all that was necessary for that purpose was that a reasonable notice should be given to the plaintiffs, would be a harsh and forced construction of the contract; but it is not necessary to consider and determine that point for no such order or notice was ever given. The letters of April 20th and May 7 th, 1889, relied upon by the defendants in support of this construction, relate only to a clearing of the land, and in view of the clear distinction made by the contract itself between “ clearing” and “ removal,” the letters cannot be so construed as to include, even by implication, an order of removal.

      Eeld, that the record discloses no error that calls for a reversal, nor can it be maintained that the verdict is contrary to the evidence or excessive.
    Before Sedgwick, Ch. J., Freedman and McAdam, JJ.

      Decided May 4, 1891.
    Appeal by defendants from a judgment in favor of the plaintiffs, entered upon the verdict of a jury, and from an order denying defendants’ motion for a new trial.

      Kellogg, Rose & Smith, attorneys, and L. Laflin Kellogg of counsel, for respondents, argued :—
    There was a fair conflict of evidence in this case on all the issues upon a mass of testimony overwhelmingly in favor of the plaintiff. The case was rightly submitted to the jury and this court will not disturb the verdict, (a) It is well settled that upon a conflict of evidence on a question of fact, rightly submitted to the jury, the court, on appeal, will not grant a new trial, on the ground that the verdict is against the weight of evidence, although they deemed the conclusion reached by the jury erroneous. Winchell v. Latham, 6 Cow. 682 ; Fleming v. Hollenbeck, 7 Barb. 271; Adsit v. Wilson, 7 How. Pr. 64; Mackey v. N. Y. C. R. R. Co., 27 Barb. 528 ; Stoddard v. L. I. R. R. Co., 5 Sand. 180. Where there is evidence upon a question of fact, the verdict of the jury is conclusive. Conklin v. Thompson, 29 Barb. 219 ; Henlage v. Hall, 33 Barb. 347 ; Lewis v. Blake, 10 Bow. 198 ; Howe v. Stevens, 12 Abb. N. S. 389 ; Morris v. Sherrill, 63 Barb. 31. (b) As to the first cause of action to recover the value of the wood. The wood lost became the property of the plaintiffs by the distinct terms of the contract made and entered into by the city of New York, through its aqueduct commissioners, in compliance with all the forms of law. This was provided in two separate provisions. “ All the wood cut and removed by the contractors is to become their property, and its value is to be considered a part of the compensation for the work done under this contract in accordance with the specifications.” “For the furnishing of all the labor and materials necessary to do all the work herein specified,” the plaintiffs were “to receive in full compensation the following sums of money, which is in addition to the value of the timber which is to remain their property, as previously specified, to wit, $8,975.” The wood claimed for is the wood found and cut on this clearing. There was no dispute upon "the trial upon the following facts: 1st, that the wood was lost; 2d, that the amount of wood lost was 770* cords. This was proved by actual measurement; 3d, that the wood was totally lost beyond recovery by and through the acts of the defendants in erecting a dam which threw the water back upon the work of the plaintiffs, flooded the wood, watersoaked it and scattered it after it had been piled. The only contest made by the defendants upon this point was: 1st, As to the value of the wood. 2d, As to the date of the flood. 3d, As to whether they did not have the right to compel the plaintiffs to take the wood off prior to November 1, 1889. 1st, As to the value of the wood: The. plaintiffs proved the value of this wood to be about $3 to $3.75 per cord at Bog Brook. The defendants’ proof was that the value of the wood was from $1 to $2.25 per cord. The jury found upon this issue in favor of the plaintiffs at the defendants’ highest price. 2d, As to the date of the flooding: This is not material as to the first cause of action. The plaintiffs complain that the flooding began at the time of the erection of the first temporary dam, April 20, 1889. That a second dam was put in about June 1, 1889. The defendants claim that the first dam referred to by the plaintiffs as overflowing their work was of advantage to the plaintiffs and not a loss. The defendants admit that the second dam was staked out May 9, 1889. And the date of flooding was July 2, 1889. By the distinct terms of their contract the plaintiffs had until November 1, 1889, to remove this wood, and for any interference therewith by the defendants or loss occasioned thereby the city would be necessarily liable. The defendants admit that they made these obstructions which caused the flooding. It was in their power to have waited until the plaintiffs had. removed their wood or finished their contract. This they seemingly refused to do, hence the loss was their fault and not that of the plaintiffs. 3d, As to the right to compel the plaintiffs to remove the wood prior to November 1, 1889. The plaintiffs, under their contract, had until November 1, 1889, to remove the wood. Neither the city nor the engineer could compel them to remove it faster under the terms of • the contract. The defendants claim that they had this right by virtue of this language of the contract, to wit: “The work must be done in the order of precedence, approved by the engineer.” There is not the slightest evidence in this case but that the plaintiffs did obey that clause in the contract and did the work in the order of precedence, as approved by the engineer. They commenced the work where the engineer directed, and continued until the close of the work. Mr. O’Hern states so specifically. He is nowhere contradicted. The right of precedence in doing particular work could not give a right of expedition on the whole work. This assumed right is further sought to be enforced in violation of the plaintiffs’ rights under their contract by two letters sent by the engineer to the plaintiffs. The first complains of the inadequateness of the force and warns the plaintiffs that they will be flooded if they do not hurry. The second notifies them that it is necessary that they should arrange to clear off the timber in Mud Pond Swamp within the next thirty days. The clause usually found in such contracts referring to the expediting of the work is absent from the present contract, and the city had not the slightest right to indicate or determine the speed with which this work should be done. During the time for the performance of the contract the contractors could not be interfered with, except as to the order in which the work should be done. They had the right to leave their wood upon the premises, and not to have it interfered with 'by any act of the defendants until November 1, 1889. It may be that any negligent act on their part which tended to increase the damage by leaving the wood there unnecessarily, might be taken into consideration by the jury upon the question of the amount of damage. It appears, however, that immediately upon receipt of these notices, though unlawfully given, that the contractors did increase their force and hurry the work along as fast as possible. The evidence states:
    "We had about forty men on Bog Brook before April 20, the day of my first notice from Mr. Burbank. After we received that notice we put on every man we could get. I cannot tell *y°u how many we put on. All the men we could hire. We hired every man that came along. We increased our force right along after the notice of May 7.” It was distinctly testified by more than one witness that the plaintiffs made every effort to expedite the work of removing the timber, and did succeed in removing all but 770' cords. All these questions were submitted to the jury under a proper charge from the court; were sustained by a large preponderance of evidence, and the finding of the jury should not be disturbed, (c) As to the second cause of action to recover increased cost of doing the work which was occasioned by the act of these defendants in wrongfully flooding the work. 1st, The liability of the city for the increased cost of work occasioned by the act of the defendants, is well established. Mulholland v. Mayor, 113 N. Y.
      632; DuBois v. Delaware and Hudson Railroad Co., 4 Wend. 285; Ladue v. Seymour, 24 Wend. 60; Sedgwick on Damages, p. 243; Alloman v. Mayor of Albany, 43 Barb. 39 ; Robinson v. City of Brooklyn, Gen. Term Supreme Court, First Dep’t, March, 1876. 2d. The increased costs of this work to the plaintiffs was caused by the direct act of the defendants. It was occasioned by the flooding of the work by the building of a temporary and second dam. This claim is sustained by the uncontradicted evidence of the plaintiff O’Hern. He states distinctly as follows : “The flooding caused by the building of this dam cost us, in addition to what we paid in cutting the wood, $840, which I wouldn’t have paid had it not been for this flat being flooded over.” “I stated to the jury that the increased cost of doing the work caused by this flood and the water that was thrown there by the city was $840. That was the fair value of it. The fair value of doing the work, without the water, would be $840 less.” “ These men that I let the contracts to could see as well as I could that they were going to be flooded out before they got through, and for that reason I had to increase the price for cutting that wood.” “That was the exact amount of increased labor with no profit in it. After the waiter started to come in, all the men had to work in the water, as it raised all the way from—well, I saw them working up to their hips in the water.” O’Hern also says that the water commenced to back up on the 20th day of April, 1889. All the defendants’ witnesses concede that the entire wrork was flooded on July 2, 1889. The plaintiffs distinctly state that these contracts were made when the contracting parties had knowledge of the impending floods, and that the plaintiffs were compelled thereby to pay an increased price by reason thereof. By referring to the dates of these contracts, it will appear—1st, That they are all after the date April 20, 1889, fixed by O’Hern as the time of the beginning of the flooding, and all but one after the date fixed by Humbert, when the dam was staked out and work commenced, to wit, on May 9, 1889. These questions upon this branch of the case were allowed to go to the jury, and, upon a large preponderance of evidence, and almost in the absence of any evidence upon the part of the defendants, the verdict was found in favor of the plaintiffs for the full amount.

      William H. Clark, counsel to the corporation, and Henry B. Twombly of counsel, argued :—
    I. The contention of the defendants that the terms of the contract required the plaintiffs not only to cut but to remove the wood as reasonably required by the engineer is the correct construction of the terms of the contract. The trial judge erred in holding otherwise. The provision in the contract that “ the work must be done in the order of precedence approved by the engineer” means either something or nothing. If the plaintiffs’ contention, adopted and charged by the trial judge, be correct, that they were obliged by said provision merely to commence their work at such places and at such times as the engineer might direct, but that they had until November 1 to complete the work at any and every portion of the land to be cleared, then the clause means nothing. Under this interpretation the contractors might leave any and every portion of the work not done until immediately prior to November 1, thus preventing during all that time not only the erection of the temporary dam, but also the laying of the foundations of the dam No. 1. The clause would thus be of no value whatever to the defendants in the prosecution of the work, and would have to be treated as mere surplusage. But if the contention of the defendants be adopted, the clause in question required the contractors to cut and remove the wood as might be directed by the engineer, the only limitation of his power .being that he must give the contractors reasonable time within which the particular work ordered must be done. On the question of reasonable time—Kelly v. Sentenne, Law Journal of March 25, 1891; Bass v. White, 65 N. Y. 565; Williams v. Hart, 116 Mass. 513; Bowery Nat. Bank v. Mayor, 8 Hun, 224 ; Parks v. Morris Axe Co., 54 N. Y. 586. The case of Barnard v. Lee, 97 Mass. 994, held, that “ even when time is not on the face of the contract essential, it may become so by one party notifying the other that it is essential that a thing required to be done by the contract should be done on a particular day, supposing that this notice is reasonable.” This interpretation is consistent with and harmonizes perfectly with the further requirements of the contract that the whole of the work must be done by November 1. The old familiar rule of law that all “ parts of the contract will be construed in such a way as to give force and validity to all of them, and to all of the language used where that is possible.” (Parsons on Contracts, p. *505) would thus be carried out. Coghlan v. Stetson, 19 Fed. Rep. 727; Booth v. Cleveland Mill Co., 74 N. Y. 21. All parts of a contract should be read and effect given to each. Justice and common sense should rule in interpretation. Smith v. Clews, 114 N. Y. 190. The defendants contend that their interpretation of the contract is the only reasonable -one, and the only one whereby full effect is given to all the terms of the contract. The clause in controversy is “ the work must be done in the order of precedence approved by the engineer.” The word is “ done,” not “begun” or “ prosecuted.” Webster defines “ done ” to mean “ performed, ” “ executed, ” “finished.” Worcester defines “done” to mean “to make an end,” “to conclude.” The plain meaning then of the clause “ The work must be done, etc.,” is that the wood and brash must be cut and removed, i. e., the work done, or finished as ordered by the engineer. The contract itself establishes that “ done ” means just this : “ The work to be done consists (1) in clearing all the lands, * * * * and (2) in removing from said lands all such timber, brash, grass, and other vegetable growth thereon beyond the limits of the said city lands.” And in the very section containing the clause in dispute, “all the timber and other growth must be removed or burned, and all the work covered by the specifications must be done and completed on or before November 1, 1889.” One part of the agreement may be resorted to to explain the meaning of the language or expressions of another part. Pensacola Gas Co. v. Lotzes, 2 South. Rep. 609. The language is to be construed in favor of the comprehensive language over the restricted. Parsons on Contracts, page *501. Where there is a doubt whether given words are used in an enlarged or a restricted sense, that construction should be adopted most beneficial to the promisee. This rule is thoroughly discussed and approved in White v. Hoyt, 73 N. Y. 505, 511. So also, Hoffman v. Ætna Ins. Co., 32 Ib. 405. But if the clause be ambiguous or doubtful, there is a further legal rule which when applied to the facts in question sustains the city’s contention.
    II. The contract in question should be construed with view to “ the surrounding circumstances existing when the contract was entered into, the situation of the parties and of the subject matter of the instrument.” Coleman v. Beach, 97 N. Y. 553 ; French v. Carhart, 1 Ib. 102 ; Blossom v. Griffin, 13 Ib. 569. Nash v. Towne, 5 Wall: 699, was a case where the contract was made by the parties in Milwaukee in the midwinter for the delivery of certain flour on board steamer at Neenah on the Lake, “free on board.” In this case the court held, that evidence of the closing of the lake by ice was proper, as within the understanding of the parties to the contract, and that “ free on board ” meant delivered on board the ship when the ice should be gone. The court said : “ Courts, in the construction of contracts, look to the language employed, the subject matter and the surrounding circumstances. They are never shut out from the same light which the parties enjoyed when the contract was executed, and in that view they are to place themselves in the sanie situation as the parties who made the contract, and so to judge of the meaning of the words and of the correct application of the language to the things described.” Knowlton v. Oliver, 28 Fed. Rep. 516; Dent v. N. A. S. Co., 49 N. Y. 395. Knapp v. Warner, 57 W. Y. 688, held that: “For the purpose of explaining a written instrument, extrinsic evidence of all the circumstances, the knowledge of which can aid the right interpretation thereof, is admissible.” The surrounding facts in this case clearly tend to support the interpretation put upon the contract by the city. The contract attached to the proposals for bids, under which the plaintiffs put in their bids, showed that the work was for clearing lands, which were to be flooded by the East Branch Reservoir, and the maps referred to therein showed the Dams Nos. 1 and 2, located thereon, also the temporary dam across Bog Brook. The plaintiffs’ own testimony is as follows: Mr. O’Hern testified that he had read over his contract before putting in his bid, and had examined the maps. “I knew that the contract for the work of building Bog Brook Dams Nos. 1 and 2 had been let and the contract signed when I put in our bid.” Mr. Pennell testified that he knew that Paige & Co. had contracted to build Dam No. 1 before they took the clearing job ; that he had examined the map of the land to.be cleared and noticed what provision was designated on it for Dam No. 1: “I am familiar with the fact that in order to build a dam across a water-course, a temporary dam is constructed in order to permit the dam to be constructed on the other side of it; I was familiar at the time that I signed this contract with the provisions of the contract, that the work must be done in the order of precedence of the engineer ; I knew that the temporary darn would have to be constructed some time.” The further testimony as to the circumstances surrounding the making of the contract was from the defendant’s witnesses. Paige & Co. began the work on Dam No. 1 on February 21, 1889. The date of the clearing contract is March 27, 1889, and the proposals for said contract are dated February 21, 1889. The progress of the building of Dam No. 1, required the closing of the sluiceway of the temporary dam on July 2. These circumstances plainly show that the clause in question meant, as the defendants contend, that if the progress of the work on Dam No. 1 required that Bog Brook should be completely cleared on July 2, as it did, and the engineer should give the contractors reasonable notice of that fact, as he did, that then the contractors must complete their work in Bog Brook on or before that time, or suffer the consequences. The facts in the cáse show that a reasonable time was allowed the contractors to do this part of the work. The date that the flooding of the Bog Brook swamp began is well established as July 2, by the testimony of .both plaintiffs’ and defendants’ witnesses, Mr. O’Hern’s own statement alone being to the contrary. The total amount of wood cut under the contract was 2,500 cords, and the time allowed was seven months, or 357 cords per month. The wood cut on Bog Brook was 770 cords which on the above ratio it would require two months and five days to cut. But the plaintiffs were given from April 1 to July 2, over three months, and it is in evidence that work was begun on March 20. If the trial judge, therefore, had considered the question of reasonable time, he must have found for the defendants.
    III. The intent of the parties to the contract was clearly shown by the facts as set forth in point II, supra, to have been that the work was to have been completed as ordered by the engineer, and the court erred in ruling to the contrary in his charge, and in his refusal to charge the defendants’ first five requests to charge. “ If" the meaning of the instrument by itself is affected with uncertainty, the intention of the parties may be ascertained by extrinsic testimony (the development of the circumstances under which the instrument was made), and this intention will be taken as the meaning of the parties expressed in the instrument, if it be a meaning which may be distinctly derived from a fair and rational interpretation of the words actually used.” Parsons on Contracts, p. *565. The case of Smith v. Clews, 114 N. Y. 190, was as follows: The contract in question was in the following terms: Received jewelry “on approval to show,” etc., and “to be returned on demand.” The court held that the words “on approval,” as ordinarily interpreted, are neither inconsistent with an authority “ to show ” nor an obligation “ to return on demand.” We must, however, presume that the parties intended some meaning by their use, and as the meaning does not appear from the context, we have a case where parol evidence is admissible to enlighten the court and to show the intent of the parties to the contract. The court further held that such evidence was admissible and that a nonsuit was error. White v. Hoyt, 73 N. Y. 512. In a legal tender case (Woodruff v. Woodruff, 52 N. Y. 53), the court held, “We are to assume that the parties made these contracts in good faith and for the praiseworthy object of avoiding litigation, and we must construe their language, if practicable, with a view to this object, and in light of such existing facts as the parties are presumed to have known.” Both parties to this contract knew that the temporary dam must be built, and the water forced back to keep it from the foundations of Dam No. 1. They knew that work on Dam No. 1 had been begun, and that Bog Brook must be cleared of timber and brush at once, as it would shortly be flooded. The statement of the plaintiffs to the contrary are interested statements made on the trial, and are not corroborated by the facts, which in this case speak louder than words, (a) The practical interpretation by the parties themselves as to the correct interpretation of the terms of the contract is entitled to great, if not controlling influence, for the reason, among others, that the interest of each party leads him to a construction not favorable to himself. This rule is applied with reference to what was actually done, not what the plaintiff-parties say on the trial was their supposition. In Springstein v. Samson, 32 N. Y. 703, the court held that when the terms of a contract are ambiguous, the interpretation thereof requires “ the aid of the acts done, and other acts the doing of which are contemplated” to determine the proper meaning. Lyles v. Lesher, 7 West. Rep. 51. The whole testimony of the facts on behalf of the plaintiffs show that they understood the- contract then as the defendants now contend: (6) Applying also the rule that “ a party will be held to that meaning which he knew the other party supposed the words to bear, if this can be done without making a new contract for the parties ” (Parsons on Contracts, page *500), to the facts, and again the contention of the defendants is supported. The engineer in charge saw that the contractors began work first on Bog Brook swamp. He ordered them to hasten on April 20th, and on May 7th, again notified them to “ clear off the timber” in thirty days. The contract was made to prepare the way for the building of the Dam No. 1 and the temporary dam, and the clause that the work should be done in the order of precedence as approved by the engineer could have been inserted with no other purpose. “It is a rule of law as well as of ethics, that where the language of a promisor may be understood in more senses than one, it is to be interpreted in the sense in which he had reason to suppose it was understood by the promisee.” Hoffman v. Ætna Ins. Co., 32 N. Y. 405; Barlow v. Scott, 24 Ib. 40; White v. Hoyt, 73 Ib. 511. In Raynolds v. Com. Fire Ins. Co., 47 N. Y 605, the court held that a contract should be given, the “sense in which the person making the promise believed the other party to have accepted it, if he in fact did so understand and accept it.” The intent is to be considered and knowledge of certain facts bearing on intent is competent. In all aspects, then, of the case, by the surrounding circumstances, the plain intent of all parties, and their practical interpretation of the contract, the construction of the contract contended for by the city is shown to be the only just and fair one. If when the intention is ascertained, from extrinsic testimony, it is found that the words will fairly bear the construction which makes them express their intention, then the words will be so construed, and the contract in this sense or with this interpretation will be enforced. Parsons on Contracts, p. *562; Parshall v. Eggert, 54 N. Y. 23.
    IV. The court erred in practically directing a verdict for the plaintiffs since the interpretation of the contract in reference to the intent of the parties and the surrounding circumstances was for the jury. “The charge was a direction of a verdict for the plaintiff and in the absence of anything from which it may be implied that the right to go to the jury has been waived, an exception to the ruling of the judge is sufficient to present the objection on appeal that there were questions of fact for the jury, and it is not necessary to request that every fact be so submitted.” Vail v. Reynolds, 118 N. Y. 301. The interpretation of the contract in question should have been submitted to the jury.
   By the Court.—Freedman, J.

This action arose out of a contract made for clearing wood and brush from the land which was to be flooded by the building of certain dams under the general plan for supplying New York city with water, authorized by chapter 490 of the Laws of 1883, and the amendments thereto. The plaintiffs had contracted to do the work for a consideration which consisted of a certain sum of money and of the wood that they might cut and which it was their right to remove for their own benefit. The action was brought by the plaintiffs to recover upon two causes of action (1) to recover the value of about 770 cords of wood cut by them under the contract, but wholly lost to them through the act and fault of the defendants in flooding the ground cleared by the plaintiffs with water during the time the plaintiffs were engaged in the performance of their contract; and (2) to recover the increased cost in clearing off the brush under the same contract occasioned by reason of the premature flooding.

The main question presented by the appeal relates to the construction of the contract. .It required two things to be done, viz.: (1) the land was to be cleared; and (2) all timber, brush, grass and other vegetable growth thereon was to be removed beyond the limits of the land. The work was to be done in the order-of precedence approved by defendants’ engineer, and all the timber and other growth was to be removed or burned, and all the work covered by the specifications was to be done and completed on or before November 1, 1889. As matter of fact the work was completed by the plaintiffs by the time fixed for its completion and was accepted by the defendants, and no controversy exists here in that respect. The litigation in this action is confined to the two causes of action specified.

In respect to them the counsel for the defendants has argued that all parts of the contract should be construed in such a way as to give force and validity to all of them and to all of the language used where that is possible, and this is the rule beyond question. But it is equally true that a clause giving an additional and independent right to one party and imposing a corresponding burden upon the other cannot be interpolated by the court. So surrounding circumstances may be considered to explain or define something in the contract which requires explanation or definition, but they cannot be invoked to add something entirely new. Justice and common sense are to rule in the construction and the interpretation of what is written, but neither can be used for purposes of addition. In no case has the court the right or power to make a new contract for the parties.

Judged by these rules, the plaintiffs had until November 1, 1889, to do and complete their work, and there being no clause or provision in the contract giving to the defendants the right to flood the ground before that time, they had no right before said time to interfere with the plaintiffs by doing so, and having so interfered months before the said time, they were guilty of a wrongful act, for which, if damage ensued, the plaintiffs have' a cause of action.

It has been strenuously insisted that, under the clause that all work should be done in the order of precedence approved by the engineer, the defendants’ engineer had the right to order all the wood not only to be cut, but also to be removed, at any time prior to November 1, 1889, and that all that was necessary for that purpose was that a reasonable notice should be given to the plaintiffs. Such a construction of the contract would be a harsh and forced one, but it is not necessary to determine the point for the reason that no such order or notice was given. The letters of April 20th and May 7th, 1889, relied upon by the defendants in support of this contention relate only to the clearing of the land, and in view of the clear distinction made by the contract itself between that term and the term of removal, the letters cannot be stretched so as to include by implication an order of removal.

The issues were submitted to the jury in accordance with the foregoing views. The record discloses no error which calls for reversal, nor can it be maintained that the verdict is contrary to the evidence or excessive.

The judgment and order should be affirmed, with costs.

Sedgwick, Ch. J., and McAdam, J., concurred.


source: Caselaw Access Project

author: By the Court.—Freedman, J.

license: Public Domain

text:
    GEORGE LANGDON, Plaintiff v. THE NEW YORK BOOK COMPANY, Defendant. In re. JOHN B. ALDEN, Appellant, and GEORGE H. STONEBRIDGE, Jr., Receiver, etc., Respondent.

      Contempt of court for bringing an action without leave of the court against its receiver.

    The above entitled action was brought in 1889, by the plaintiff, a judgment creditor, for the sequestration of the property of the company-defendant, as provided by section 1701 of the Code. In February, 1889, George H. Stonebridge, Jr., was, by the final judgment, appointed permanent receiver of the corporation, defendant, who, after qualification, applied for and procured from a justice of the Supreme Court, a warrant of arrest against JohnB. Alden, pursuant to the provisions of section 12, part II, title I, chapter V, article 8, of the Revised Statutes, which provisions are by law made applicable to receivers of corporations, and Alden was arrested and produced by the sheriff for examination. His motion to vacate the order was denied, and he appealed to the general term of the Supreme Court, and, upon such appeal, the order of the special term, denying his motion to vacate the order, was reversed and the warrant vacated, upon the ground that the allegations of the petition having been made upon information and belief only, they were insufficient to justify the issue of the warrant of arrest. Alden then brought an action against Stonebridge individually in the City Court, alleging that the warrant was void for want of jurisdiction, and that Stonebridge who had caused it to be issued as receiver, was personally responsible in damages. Thereupon Stone-bridge obtained from this court an order requiring Alden to show cause why he should not be punished for contempt of this court for bringing said action in the City Court without the leave of this court, and such proceedings were had upon said order that resulted in an order adjudging Alden guilty of contempt of this court and imposing a fine of $250 and costs. This last order is now presented for review.

      Held, That, irrespective of the merits disclosed in the proceedings, such a warrant cannot be granted unless notice of the application for the same be given to the attorney-general of the state, pursuant to the requirements of section 8, chapter 378 of the Laws of 1883, and a warrant granted without such notice is void.
    There having been no notice of the application to punish Alden for contempt served upon the attorney-general, the order appealed from must be reversed with costs, with leave, however, to the receiver to renew the motion upon proper notice to the attorney-general.
    This motion to punish for contempt, and the order having been entitled and moved in the action in which the receiver was appointed, and that action being one for the sequestration and distribution of the assets of the corporation-defendant, the statute of 1883, referred to, commonly known as the Haggerty Act, applies. That act provides that in all such actions or proceedings a copy of all motions and motion papers, together with a copy of any other application to the court, and of the order or judgment proposed thereon to the court, shall, in all oases, be served on the attorney-general, etc.
    Before Sedgwick, Ch. J., Freedman and McAdam, JJ.

      Decided May 4, 1891.
    Appeal by John B. Alden, from an order of the special term adjudging him guilty of contempt of court ■ for bringing an action without the leave of this court against George H. Stonebridge, Jr., who at the time was the receiver of the New York Book Company, appointed by this court.

      Dill, Chandler & Seymour, attorneys, and James B. Dill of counsel, for appellant, argued :—
    I. The order appealed from is void for want of jurisdiction in the justice either to entertain the application or to enter the order, because, no notice was given to the attorney-general. This fact appears in the recital of the order to show cause, in the direction as to service of the order to show cause, in the two affidavits of service and in the stipulation. There were no proofs of service in the recital of the order adjudging Alden guilty of contempt of court, that show only the appearance of counsel for Alden and of counsel for the receiver. Because such notice was jurisdictional (Whitney v. N. Y. & Atlantic R. R. Co., 32 Hun, 172), the printed case must affirmatively show that such notice was given to the attorney-general. “ Where the jurisdiction of the court is made to depend upon the existence of some fact of which there is an entire absence of proof, it has no authority to act in the premises, and if .it nevertheless proceeds and entertains jurisdiction of the proceedings, all of its acts are void and afford no jurisdiction to the parties instituting them as against parties injuriously affected thereby.” Fisher v. Langbein, 103 N. Y. 84. The appeal papers do not show such notice because, as a matter of fact, no such notice was given. Such notice was necessary. The motion to punish Mr. Alden for contempt was entitled in the sequestration action in which the receiver was appointed, and this action was an action under the Code of Civil Procedure for the distribution of the company’s assets. (Code, §§ 1794-1896.) The general term, first department, has expressly decided that the Haggerty Act applies to an action under these sections of the Code. Whitney v. N. Y. & Atlantic R. R. Co., supra. The Court of Appeals has decided In re Vanamee, 23 N. E: Reporter, 1149, and in 29 State Reporter, 593, that in any proceeding by a receiver, appointed in such an action, notice to the attorney-general is essential to jurisdiction. It was held to be fatal to the jurisdiction of the court in granting a warrant similar to the one obtained in this action upon which the suit is brought. The Haggerty Act (Laws of 1883, chap. 378, § 8) provides : “ That a copy of all motions and all motion papers and a copy of any other application to the court, together with copy of the order or judgment to be proposed thereon to the court in every action or proceeding now pending for the dissolution of a corporation or a distribution of its assets or which shall hereafter be commenced for such purpose shall, in all cases, be served upon the attorney-general.” And it further provides: “Any order or judgment granted in any action or proceeding, as aforesaid, without such service of such papers upon the attorney-general, shall be void.” Laws of 1883, chap. 368, § 8. The general term of the first department has expressly decided that such service is jurisdictional. Whitney v. N. Y. & Atlantic R. R. Co., supra; also, In re Vanamee, supra. Upon the appeal to the general term of the Supreme Court, first department, from the third warrant obtained by this same receiver against Mr. Alden, the court' decided that the Haggerty Act applied to this very action in • the Superior Court,, and that the failure to serve the attorney-general with notice of any motion or application, made the order entered thereon void. This opinion has not yet been reported but was handed down in March, 1891. Under these authorities it is respectfully urged by the counsel for the appellant that the order adjudging Alden guilty of contempt, is absolutely void for want of jurisdiction in the court to grant the order, because the attorney-general was not notified. It is fair to say that neither the Stonebridge ease nor the Yanamee case had been reported when Judge Ingraham rendered his decision in August, 1889. Judge Ingraham’s opinion, as to the jurisdiction of the justice to grant the warrant, is overruled by the opinion of the general term (February, 1890) upon an appeal from the warrant in question, Matter of Stonebridge, 57 Hun, 442, and also is in opposition to the decision of the Court of Appeals affirming the decision of the general term, second department, in the Vanamee case (December, 1889) before cited.
    II. It was not necessary to apply for leave to bring the action in the city court, because the action was not against the receiver in his official capacity, but was brought against him individually. In urging this view upon the attention of the court, the counsel for the appellant has two objects in view. The first bears upon the point that Alden was not guilty of contempt in following the advice of his counsel in applying for leave, because these authorities bear out the advice of counsel; and second, that Judge Ingraham’s- order was erroneous, because there are no authorities overruling these cases. The suit is based upon the theory that the defendant. Stone-bridge is responsible to Alden upon the ground that he (Stonebridge) had Mr. Alden arrested under a warrant issued without jurisdiction. Stonebridge is sued by Alden in the City Court action upon the "same theory that the receiver Noble was sued by Halliday for assault and battery in arresting him (Halliday) under a similar warrant. Noble v. Halliday, 1 N. Y. 330. The city court action is based upon the principle laid down by the Court of Appeals that where an officer of the court acts without jurisdiction, he is personally liable in damages to the person against whom the process runs. It is a case where the familiar principle is applied that where a receiver is sued for his own personal act, which is without jurisdiction, he is personally liable. No claim, is made against the assets of the corporation in the receiver’s hands. No claim is made against Stonebridge as receiver. He is charged as an individual with having Mr. Alden arrested under a process that was totally without jurisdiction; in causing the arrest of Mr. Alden he was a mere trespasser, and stands in the same position as if he had proceeded to the office of Mr. Alden and there personally assaulted him. The judgment, if Mr. Alden recovers one, would not be against Stonebridge in his capacity as receiver, and the execution would not run against the property in Stonebridge’s hands as receiver. Confessedly Stone-bridge as receiver is an officer of the court and entitled to the protection of the court in his official capacity, but the moment that he commits an illegal act such as is claimed by Alden he committed in arresting him without jurisdiction, then the receiver becomes personally liable to Alden in an action against him individually, and leave is not necessary in order to bring such an action. The general rule is stated by High on Receivers, 2d ed., § 254, where he says: “ It is in all cases necessary that a person desiring to bring suit against a receiver in his official capacity should first obtain leave of the court by which he was appointed, since the courts will not permit the position of their officers to be disturbed by suit or otherwise without their consent or permission.” The exception to this rule is stated by Mr. High, at section 257, as follows: “ Notwithstanding the extreme jealousy thus shown by the courts in protecting their receivers against unauthorized interference by suit, such protection will not be extended to acts which are outside and in excess of the functions of receivers, or to matters in which he occupies the attitude of a mere trespasser as dealing with or assuming possession of property which is not embraced in his receivership, and when suit is brought against a receiver in another court for acts committed by him as an individual, as for taking and retaining possession of property not pertaining to his receivership and as to which he is a mere trespasser, such action will not be enjoined by the court appointing the receiver and an action of replevin has been maintained for the recovery of such property, although leave of the court had not been obtained to bring the action.” See also, Beach on Receivers, § 660. The rule that leave is not necessary to sue a receiver where the judgment against him is sought to be recovered, not as receiver, but individually, is laid down by this court, Freedman, J., Matter of Platt, 41 N. Y.. Super. Ct. 514. The United States District Court of New Jersey in 1881, Judge Dixon writing the opinion, held that it was not necessary to obtain leave to sue a receiver where the receiver took property as receiver which did not belong to the assets over which he was appointed receiver. He was sued -for trespass, and a motion was made to stay the proceedings and to punish the plaintiff because he had failed to obtain permission to sue the receiver. In re Young, 7 Fed. Rep. 858. The same principle was also decided by the United States Circuit Court in Missouri in October, 1884, in the case of Curran v. Craig, 22 Fed. Rep. 101. This last decision covers the principle involved in this case. The judge who granted the warrant, the sheriff who executed it, the attorney who procured it and the receiver who obtained it, are each of them personally liable, because the warrant was without jurisdiction (Fisher v. Langbein, 103 N. Y. 84); and no leave is necessary to begin suit against the receiver any more than it would be necessary against any of the officers who are concerned in issuing the warrant. The distinction between an action brought against a receiver as a receiver and an action brought against a receiver individually for damages is- recognized by the general term of the Supreme Court in this state in the fourth department in the case of Dewey y. Finn, decided in October, 1883. The opinion being by Hardin, Justice. This case is not reported in full except in the 18th volume of the New York Weekly Digest, at page 558. In that case a receiver in supplementary proceedings was appointed and took possession of certain property claimed by a third party. The third party brought an action against the receiver individually seeking to recover against him individually damages for such wrongful taking. An application was made to the special term to punish the plaintiff for contempt of court, and he was adjudged in contempt of court and fined ten dollars, from which order he appealed to the general term. The general term reversed the order, holding, that where a receiver wrongfully takes the property of a third party, a suit may be brought against the receiver individually to recover damages, against him as an individual, and that the plaintiff is not required to obtain leave before bringing such a suit for the reason that the claim is against the receiver individually for wrongful taking; for doing an act outside of his legal authority as receiver, and that the judgment sought to be recovered does not create a lien upon the property under the custody of the court, namely, the property in the hands of the receiver. This case is almost parallel to the present action, and we cannot see how the order of Judge Ingraham can stand under this decision of the general term which does not appear to have been criticised or reversed by any subsequent decision.
    III. The warrant obtained by the receiver was void for want of jurisdiction. In Judge Ingraham’s opinion, he has made this issue of law the basis of his decision upon the following ground of reasoning. He says, if the receiver had jurisdiction .to act, then his act in obtaining the warrant was within the course of his duty as receiver, and hence, although individually sued, nevertheless, such a suit being based upon a legal act as receiver, would be against the receiver as receiver, and not individually. This really is the issue of law in the City Court case, and the converse doctrine is certainly true, that if the act of the receiver was without jurisdiction, then he is individually liable. We have already said that as to this very warrant the general term has vacated it and set it aside upon the ground that it was issued without jurisdiction, and therefore void. Matter of Stonebridge, 57 Hun, 442. There can, therefore, be no question on this appeal that Judge Ingraham was wrong in saying that the judge who granted the warrant had jurisdiction. This being so, there is no question but that the receiver is liable individually under the decision already cited. Fischer v. Langbein, 103 N. Y. 84.
    IV. Because the advice given to John B. Alden by his counsel was supported by accredited authorities and because the matter involved was a mere question of practice, not of disobedience to an order of the court, John B. Alden was not guilty of contempt in not obtaining leave to bring the action against the receiver individually. If the attorneys were wrong ■in their advice, then the general term of the fourth department was wrong, the United States District Court and the United States Circuit Court were wrong, and so eminent text writers as Mr. High and Mr. Beach had previously fallen into the same error. In the case of Dewey v. Finn, 18 Week. Dig. 558, the Supreme Court, at the special term, upon a similar application fined the party bringing the action $10, although there was no proof in that case that he did so under the advice of counsel. This fine was subsequently set aside and the order vacated by the general term upon, the ground that the action was against the receiver individually and not as receiver, and hence was not a contempt because no permission was necessary. The force of this authority at this point is to show that the judge who thought the plaintiff guilty of contempt thought at the same time that $10 was a sufficient fine. See also Power v. Village of Athens, 19 Hun, 170; People v. Cooper, 20 Ib. 486 ; King v. Flynn, 37 Ib. 329. The general term of the third department, November, 1879, in the case of George H. Power against The Village of Athens, passed upon a similar question, Learned, J., writing the opinion.

      Straley, Hasbrouck & Schloeder, attorneys, and Charles E. Hughes of counsel, for respondent, argued:—
    I. The objection that the order appealed from is void for want of jurisdiction is untenable. It is argued that notice of the application to punish John B. Alden for contempt was not served upon the attorney-general and that the order appealed from is therefore void. (1) The application was not within the Haggerty Act. Laws of 1883, chap. 378, § 8. The motion had no relation to any proceedings for the discovery, collection or distribution of assets; its sole object was to punish the appellant for an unwarrantable interference with the receiver. (2) If it be assumed that by the statute cited service upon the attorney-general of notice of the motion was required, an omission to comply with the provision would constitute either an irregularity or a jurisdictional defect. If an irregularity, and such we conceive it to be (if the case falls within the statute), it cannot be taken advantage of upon appeal. The remedy is by motion to set the order aside. Pitt v. Davidson, 37 Barb. 97; Hooker v. City of Rochester, 12 N. Y. Supp. 671; Hammond v. Morgan, 101 N. Y. 179. (3) If it be treated as a jurisdictional defect, there are two grounds upon which the objection should be overruled. The reeord does not disclose any want of jurisdiction in the court below to make the order in question. It is asserted that the attorney-general was not served with notice of the motion. The court has before it no proof of the truth of this assertion. The record is silent with reference to service upon the attorney-general, and, to overturn the order which the court has deliberately made at special term, this court must assume a fact without any evidence to establish it. Where the existence of the jurisdiction of the court depends upon possible' facts, and the subject matter of the action or proceeding is within its general jurisdiction, its power to act in the particular case will be assumed upon appeal, unless the record contains evidence conclusive to the contrary. The jurisdiction of this court to make the order appealed from, in a case where proper service was made upon the attorney-general, will not be questioned. Such service is a possible fact, and its existence will be assumed to support the action of the court, unless disproved by the record upon which the appeal is made. With reference to the general jurisdiction of the Superior Court, the rule is laid down by the Code of ■Civil Procedure, § 266. It may be said that this enactment has special reference to the cases specified in the preceding sections, defining the jurisdiction of the Superior Court; but if in a case where the general jurisdiction of the court may be drawn into question its power to act is presumed, and the burden is thrown upon the defendant of affirmatively disproving it, upon the principle of omne majus continet in se minus, there should be a similar presumption in a case admittedly within its general jurisdiction, and- where its power to act depends upon possible facts, of which the record contains no disproof. And, as has been frequently stated by this court, the meaning of the section of the Code to which we have alluded is that the court will presume the existence of the facts necessary to confer jurisdiction until the contrary is shown. The objection was not urged below, and it is too late to raise it upon this appeal. The appellant did not challenge the receiver to produce evidence of the fact now alleged as essential to jurisdiction, nor did he produce any proof negativing its power in the premises. It wras assumed by both parties that the court had jurisdiction to punish the appellant for contempt, if it was a proper case for its exercise. The affidavits presented in opposition to the motion dealt, exclusively with the question whether Alden had been guilty of contempt. The receiver was not called upon to furnish an affidavit of service of the motion papers upon the attorney-general, and whether he would have been able to do so is a conjecture upon which this court will not enter; and it was upon the argument for a stay pending this appeal that we learned for the first time that our opponents intended taking the objection now under discussion. The attitude of the parties in the court below supports and strengthens the presumption arising from the fact that the court actually asserted. its power to act, and upon this appeal, in view of the absence from the record of all contradictory evidence, the jurisdiction of the court to make the order must be taken as established. And this course is fully sustained by the authorities. In a case in which the jurisdiction of the Superior Court of Buffalo was in question it was said by the Court of Appeals : “ No question appears to have been made in the Superior Court as to its jurisdiction. The statute creating it declares that its jurisdiction shall be in all cases presumed (Laws 1854, chap. 222, § 1). Under the tenth section of the same act, if this be an action on a contract, and the contract was made in Buffalo, or if the corporation had an agency established for the transaction of business in that city, then jurisdiction did in fact exist. As no question was made upon that point at the trial, and jurisdiction was legally possible, it must now be assumed to have existed.” Bidwell v. Astor Mutual Insurance Company, 16 N. Y. 263 ; see also Willits v. Waite, 25 Ib. 577. So where it was urged in the Court of Appeals that the matter was within the exclusive jurisdiction of the United States Courts as courts of admiralty, it was said: “ To the position that the courts of New York have no jurisdiction of this action as being of maritime jurisdiction exclusively, it is a sufficient answer to say that the question not having been raised in the courts below, it cannot now be raised and decided here, and any opinion which we should express upon it would be obiter.” Steers v. Liverpool, N. Y. & Phila. S. S. Co., 57 N. Y. 1. Where the record is silent it will be presumed that a court of general jurisdiction in some way acquired jurisdiction of all the defendants against whom it rendered judgment. City of St Louis v. Lannigan, 10 S. W. Rep. (Mo.) 475.
    II. John B. Alden was guilty of contempt of court in suing receiver Stonebridge without leave. (1) The fact that George H. Stonebridge, Jr., is receiver of the defendant corporation is not an issue. This question was not raised below. We refer to it because, upon the application for the last warrant, it was seriously contended in the Supreme Court that the appointment of the receiver was invalid. But this contention was found untenable. Matter of Stone-bridge, Sup. Ct., Gen. Term, Feb., 1891. The receiver’s appointment and qualification cannot be questioned in this collateral proceeding. High on Receivers, § 203 ; Atty.-Gen. v. Guardian Mut. Life Ins. Co., 77 N. Y. 275. (2) The .fact that the suit of Alden v. Stonebridge was brought without leave of Court is not disputed. The question is whether Alden before commencing the action should have obtained the Court’s permission. (3) The action of Alden v. Stonebridge was brought to recover damages alleged to have been occasioned by an act of the defendant as receiver, and performed in the course of his official duties. The receiver was sued for procuring a warrant to be issued, directing the examination of John B. Alden in relation to the property of the corporation. The warrant was annexed to the complaint. It recites that George H. Stonebridge, Jr., the petitioner, had been duly appointed permanent receiver of the New York Book Company; that he had duly qualified; that there was good reason to believe that John B. Alden had in his possession property belonging to the said Stonebridge as receiver; that property had been concealed, and that John B. Alden could testify concerning such concealment. The application was made by the receiver, as such, for the purpose of procuring evidence as to the whereabouts of the assets which it was his duty to reduce to his possession. The privilege of the warrant was given him in his official capacity, and his application for it was in discharge of,an official duty. The statute authorizing the issuance of the warrant forms part of the article defining the powers of trustees of insolvent debtors. R. S., part 2, chap. 5, title 1, art. 8, §12; 4 R. S., 8th ed., p. 2528, §12. The powers of trustees, and with them the right to apply for the warrant, are given to receivers. R. S., part 3, chap. 8, title 4, art. 3, § 72; 4 R. S., 8th ed., p. 2682, § 72 ; Code Civil Pro., § 1788. (4) It is a contempt of court to sue its receiver without leave, and this rule extends to cases where it is sought to hold the receiver personally liable for wrongs alleged to have been done by him to third persons in the course of the performance of his duties as receiver. The receiver is an officer of the court. In the administration of the estate confided to his care he is the court’s representative. The court will not permit him to be called to account for any of his acts in the course of the discharge of his official duties, or to be vexed or interfered with by litigation, without its consent and until it has had an opportunity to ascertain whether there is a just ground for the proposed proceeding, and to, determine in what tribunal it shall be prosecuted. “Courts of equity are so jealous of permitting any unauthorized interference with their receivers, that, they frequently interpose by injunction to restrain the prosecution of actions against them when leave of court has not first been obtained.” High on Receivers, §2,56. See also, De Groot v. Jay, 30 Barb. 483; James v. James Cement Company, 8 St. Rep. 490; Searle v. Choat, L. R., 25 Ch. Div. 723. And if the receiver is sought to be held for an act done in the discharge of his duties as such, the case is within the rule, although the action is not brought against him in his official capacity. Taylor v. Baldwin, 14 Abb. Pr. 166. These general rules, which we presume will not be questioned, have equal application where it is sought to hold the receiver personally liable, for a wrong, if it be one committed in the course of his official duties. The doctrine is thus stated by the United States Supreme Court. Davis v. Gray, 16 Wall. 203; Barton v. Barbour, 104 U. S. 126. So in an action of claim and delivery. Miller v. Loeb, 64 Barb. 454. And the same rule has been applied by the United States Circuit Court in an action against a receiver of a railroad for injuries resulting in the death of the plaintiff’s intestate. Kennedy v. I. C. & L. R. Co., 3 Fed. Rep. 97. The obvious distinction is between cases in which the act is outside the scope of the receivership, and relates to acts performed outside the official duty, and in which the receiver is sued as an individual trespasser, and cases where, although the suit sounds in tort, the wrong, if any, has been committed in the performance of his duty, and while engaged in an effort to properly administer the trust committed to him.

      But in every ease the court will insist upon its right to determine not only whether a separate suit may be brought, but in what court it shall be prosecuted, and usually it will prohibit a resort to any other tribunal. “ As a general rule leave will not be granted by this court to sue a receiver appointed by its authority, in any other tribunal; it is only when special facts and circumstances are shown to exist to render a departure from the regular course and practice of the court advisable, that such leave is given.” In the Matter of the Application of Platt, 41 Super. Ct. 513. (5) The receiver applied for the warrant for the purpose of obtaining a discovery of assets which should come into his possession, and any judgment against him growing out of the invalidity of the warrant would be payable out of the trust property. It is obvious that the receiver would be entitled to charge against the estate any sums, which might be recovered against him in the action brought by John B. Alden. There is no allegation in the complaint charging bad faith. The cause of action is based upon the fact that the warrant was issued upon the receiver’s application, that the appellant was arrested, and that the warrant was vacated. The' receiver had been informed that large assets were concealed ; that John B. Alden, who had previously managed the corporation, could give valuable information which would lead to their discovery. It was the duty of the receiver to invoke the privilege conferred by statute, and to endeavor to ascertain the whereabouts of the property in order that he might take proper steps to reduce it to his possession. If the case were one of neglect on the part of those representing the receiver in preparing insufficient papers, it would be a fault for which the receiver would not be held personally liable, but would be permitted to charge whatever recovery there might be had upon the assets which might come into his control. Where a receiver, in the discharge of his duty, injures others through the neglect or misconduct of his servants or agents he is not personally liable, and if a recovery is had in an action founded upon the wrong, it must be payable out of the funds in his' hands as receiver. This rule has been applied in an action for negligence brought against a receiver managing a railroad placed in his charge, where the injury has been occasioned through the fault of those employed by him. Camp v. Barney, 4 Hun, 373; see also Hall v. Smith, 2 Bing. 156. These cases are cited approvingly by the United States Supreme Court in Barton v. Barbour, 104 U. SD. 126; Cardot v. Barney, 63 N. Y. 281. In Camp v. Barney, supra, where it was sought to hold the defendant personally liable for negligence occasioning personal injury to the plaintiff in ' the course of his administration of the estate, it was held that the action should be so mended as to “make the judgment against the defendant as receiver, and to limit the recovery as above stated.” See also McNulta v. Ensch, 24 N. E. Rep. (Ill.) 631; Davis v. Duncan, 19 Fed. Rep. 477. But in this case there was no neglect. The history of the warrant negatives such a conclusion. The warrant was vacated because certain allegations were upon information and belief; the receiver’s attorneys, however, had a precedent in favor of the sufficiency of such allegations, under the statute in question. Noble v. Halliday, 1 N. Y. 330. The important point is the nature of the act which was the occasion of the alleged injury, and that having been found to have been done without bad faith, in the proper discharge of his duties a,s receiver, and the latter having been guilty of no personal negligence or misconduct, he is entitled to the protection which is a necessary incident to the office with which he has been invested.

      James C. Murray, for plaintiff.

      Charles F. Taber, attorney-general of the State of New York.
   By the Court.—Freedman, J.

The above entitled action was brought in this court by a judgment creditor for the sequestration of the company’s property, and by final judgment entered therein George H. Stonebridge, Jr., was appointed permanent receiver of the corporation. After having qualified as such, the receiver procured from a justice of the Supreme Court a warrant of arrest against John B. Alden pursuant to the provisions of section 12 of part II, title I, chapter 5, art. 8, of the Revised Statutes, which provisions are, by law, made applicable to receivers of corporations, and under this warrant Alden was arrested and produced by the sheriff for examination. His motion to vacate the warrant having been denied, he appealed to the general term of the Supreme Court, and upon such appeal the order of the special term denying his motion was reversed and the warrant vacated (53 Hun, 545) upon the ground that the allegations of the petition, being upon information and belief only, were insufficient to justify the issuance of the warrant.

Alden then sued Stonebridge individually in the City Court upon allegations to the effect that the warrant was void for want of jurisdiction, and that Stonebridge who had caused it to be issued as receiver, was personally responsible in damages. Stonebridge, as receiver, thereupon obtained from this court an order requiring Alden to show cause why he should not be punished for contempt of this court in instituting the action in the City Court without the leave of this court, and the proceedings had upon this order to show cause finally resulted in the order adjudging Alden guilty of contempt and imposing a fine of $250 upon him besides costs. In making this order, which is now presented for review, the learned judge who made it seems to have been of the same opinion which the general term of the Supreme Court must be deemed to have entertained on vacating the warrant (see 53 Hun, 545), namely, that there was jurisdiction in the justice who granted the warrant, to pass upon the question whether or not the warrant should be granted upon the merits disclosed.

But since that time it has been -determined that, irrespective of the merits disclosed, such a warrant cannot be granted unless notice of the application for the warrant was given to the attorney-general pursuant to the requirements of section 8 of chapter 378 of the Laws of 1883, and that a warrant granted without such notice is void. Matter of Venamee, 29 N. Y. State Rep. 198, affirmed 23 North Eastern Rep. 1149 ; Matter of Stonebridge, 57 Hun, 441.

These decisions are fatal to the order appealed from, because it sufficiently appears that no notice of the application to punish Alden for contempt was •served upon the attorney-general. ■ The motion to punish having been entitled in the sequestration action in which the receiver was appointed, and the action being under the provisions of the Code of Civil Procedure one for the distribution of the company’s assets, the act of 1883, commonly known as the Haggerty act, applies. By that act it is provided that in such an action or proceeding a copy of all motions and all motion papers, and a copy of any other application to the court, together with a copy of the order or judgment proposed thereon to the court, shall, in all cases, be served on the attorney-general in the same.manner as provided by law for the service of papers on attorneys who have appeared in actions, whether the applications but for this law would be ex parte or upon notice, and that any order r judgment granted in any such action or proceeding, without such service of such papers upon the attorney-general, shall be void. . This language is so broad and comprehensive that I fail to perceive how it can be held that the receiver’s application to punish Alden is not covered by it. This being so it is unnecessary to consider the other questions involved.

The order appealed from should be reversed with ten dollars costs and disbursements, and the motion to punish denied with ten dollars costs, with leave, however, to the receiver to renew the motion upon payment of such costs and upon proper notice to the attorney-general.

Sedgwick, Ch. J., and McAdam, J.> concurred.


text:
    JOHN PRIESSENGER, Respondent v. PHEBE E. SHARP and FERDINAND G. SOPER, Individually and as Administrators, Appellants.

      Title to real estate.—Action to recover so much of the purchase price of real estate, paid at the sale by plaintiff, with the expenses incurred by him in examining the title, etc., on the ground that the defendants could not convey nor assure a good title to the premises.

      Held, that the plaintiff was entitled to receive from defendants a good marketable title within the rule laid down by the Court of Appeals in The Methodist Episcopal Church Home v. Thompson, 108 N. 7. 618, and in Moore v. Williams, 115 lb. 586. He was not bound to show that the title tendered was absolutely bad. Upon the whole case, the judge of the court below was fully justified in finding that the defendants, did not offer to give, and could not give, a good marketable title. The defects in the title, and the legal questions arising thereon, fully appear from the opinion of the court.

      Before Sedgwick, Ch. J., Freedman and McAdam, JJ.

      Decided May 4, 1891.
    Appeal from judgment entered upon the decision and by direction of a judge at special term, a trial by jury having been waived.

      Thomas J. McKee, attorney, and Daniel G. Rollins of counsel, for appellants.

      Page & Taft, for respondent.
   By the Court.—Freedman, J.

The action was brought to recover back so much of the purchase price of real property as was paid by the plaintiff as the purchaser at the time of the sale, together with the expenses incurred by him in examining title, etc., on the ground that the defendants were unable to give a good title to the premises according to their contract.

The plaintiff was entitled to a good marketable title within the rule laid down by the Court of Appeals in The Methodist Episcopal Church Home v. Thompson, 108 N. Y. 618, and Moore v. Williams, 115 Ib. 586. He was not bound to show that the title tendered was absolutely bad.

The exceptions disclosed by the record present two questions, viz.: (1) whether the findings of the trial judge to the effeet that the defendants did not offer to give, and could not give, a good marketable title, are supported by the evidence, in which case the conclusions of law based thereon must be sustained; and (2) whether the plaintiff can have judgment notwithstanding the fact that the defendant Georgiana A. Rutherford did not appear in this action and was not served with a copy of the summons.

As to the first question: The record contains no deed or deeds or other documentary evidence from which the actual state of the title could be determined with precision. The question of title seems to have been litigated principally upon the pleadings.

The 6 th paragraph of the complaint is as follows, viz.: “ VI. On August 1, 1881, one William Callahan and Ann Callahan, his wife, being then the owners in fee of the above described premises, executed and delivered a mortgage for one thousand dollars on a part of said premises to William R. Soper and Alfred Soper, as trustees. Said mortgage was recorded in the office of the register of the city and county of New York, in Liber 1586 of mortgages at page 196, on the 2d day of August, 1881. Said mortgage was assigned by the said William R. Soper and Alfred Soper as trustees, to the said Alfred Soper, individually. Said Alfred Soper commenced an action to foreclose said mortgage and another mortgage owned by him covering the rest of said premises, and said action was prosecuted to a judgment of foreclosure and sale, and the said Alfred Soper became the purchaser of said premises at said sale, and the referee appointed in said suit executed to him a deed thereof, purporting to convey the title thereto. Subsequently the said Alfred Soper having such title to the said premises as he acquired by the said deed from the said referee and no other title, died September 13, 1885. He left a will which was duly admitted to probate on the 6th day of October, 1885, by the surrogate of the county of New York. Letters of administration with the will annexed, dated October 9, 1885, were duly issued upon the estate of the said Alfred Soper to the defendants Phebe E. Sharp and Ferdinand G. Soper, the sister and brother respectively of said testator, and they duly qualified as such administrators. By his said will the testator devised one-half of all his real estate to the defendant Phebe E. Sharp. The remaining one-half thereof he devised to the said Phebe E. Sharp to hold the same in trust for the benefit of his brother Ferdinand G. Soper during his lifetime and to pay him the interest accruing on the same, and at his decease the defendant Phebe E. Sharp to use and to hold said real estate for herself or her heirs. The said will gave no power of sale to any executor or administrator or trustee appointed thereunder, nor to.any person. That the defendant Georgiana A. Rutherford claims to be seized in fee of an undivided half part of a portion of said premises by virtue of a deed dated December 5, 1888, and recorded in the office of the register of the city and county of New York, February 18, 1889, in Liber 2188 of Deeds at page 470, which was made to her as grantee by Phebe E. Sharp and Ferdinand G. Soper, individually and as executors with the will annexed of Alfred Soper, deceased.”

The answer of the defendants Phebe E. Sharp and Ferdinand G. Soper admits these allegations by not denying the same, and in addition contains the following express admissions, viz.:

“II. Defendants admit that on the sale of the premises described in the said complaint, Alfred So-per became the purchaser of the same, and that he received a deed of said premises from the referee appointed to sell the same, conveying the title • thereof to him, and that said Alfred Soper died on September 13, 1885, leaving a last will and testament which was duly admitted to probate by the surrogate of the county of New York, on the 6th day of October, 1885, and that letters of administration with the will annexed, dated October 9, 1885, were duly issued to said defendants, and that they duly qualified.

“III. That said last will and testament of Alfred 'Soper after disposing of certain pieces of personal property devises his property as follows : 1 I give unto my sister Phebe E. Sharp, one-half of my property, both real and personal, for her use and benefit. I give unto my sister, Phebe E. Sharp, the remaining half of my property, she to hold the same in trust for the benefit of my brother, F. G. Soper, during his lifetime, and to pay him the interest accruing on same. At his decease, my sister, Mrs. P. E. Sharp, to use and hold the property for herself or her heirs.’ ”

It, therefore, stands admitted beyond dispute that the mortgage made by Callahan to William R Soper and Alfred Soper, as trustees, was assigned by said trustees to one of their number individually and that the latter foreclosed the mortgage and brought the property at foreclosure in his own name. The title obtained by him in this way is presumptively voidable at the instance of the beneficiaries of the trust under which the trustees held the mortgage, and any person taking the title from him takes it with notice of the fact that the mortgage was held in trust. It was competent, however, for the defendants to show that, in fact, this trust created no defect. But the burden was upon them to show it. They gave no evidence to that effect. Moreover, the plaintiff gave evidence that at the time fixed for the closing of the title the defendants’ attorney stated that somebody might be interested in that mortgage besides the trustees. Under the decision of this court in Toole v. McKiernan, 48 N. Y. Superior Ct. R. 163, the title was, therefore, not marketable.

It further appears that the will of Alfred Soper, by devising to the testator’s sister one-half of his real estate, to hold the same in trust for the benefit of Ferdinand G. Soper during his lifetime, and to pay him the interest accruing on same, created a valid express trust belonging to the third class mentioned in section 55 of article 2, title 2, chapter 1 of part I of the Revised Statutes (1 R: S. 728, § 55), and that the will contains no power of sale, either expressed or implied, which enables the trustee to convey title. In such a case' the- rule is that the trustee cannot destroy the trust by uniting with the beneficiary in a conveyance of the trust property. Chapter 257 of the Laws of 1886, amending § 65 of article 2, title 2, chapter. 1 of. part I of the Eevised Statutes, expressly provides that where the trust is, or shall be, expressed in the instrument creating the estate, every sale, conveyance, or- other act of the trustees, in contravention of the trust, shall be absolutely void. The case at bar falls within the prohibition of this statute.

Upon the whole casé the learned judge below was fully justified in' finding that the defendants did not offer to give, and could not give, a good marketable title.

As to the second question, it is sufficient to say that the 1st, 2d, and 3d paragraphs of the complaint alleged a joint liability on the part of the defendants, and that the facts therein set forth, not having been denied by the answer, were found by the trial judge to be true. In such a case § 265 of the Code does not apply, but all of the defendants may be proceeded against, although only a part of them were served (Code, § 1932). All that is necessary is that in docketing the judgment the requirements of. § 1936 of the Code, and that upon issuing execution ■ the requirements of §§1934 and 1935, should be observed.

The judgment should be affirmed, with costs.

Sedgwick, Ch. J., and McAdam, J., concurred.