author: Daniels, J. :

text:
    LEOPOLD SCHEPP, Respondent, v. LEWIS E. MANLEY and THE SAMUEL CRUMP LABEL COMPANY, Appellants.

      Arbitration — when a pm'ty may withdraw therefrom — Code of Civil Procedure, sec. 3383 — effect of withdrawal — when equity will not restrain legal actions. .
    A controversy having arisen between certain parties relative to goods purchased, they entered into a written agreement which fixed the prices to be paid and received for some of the articles in dispute, and appointed an arbitrator to decide ■other questions. Before anything had been done before the arbitrator, differences of opinion arose as to what questions it had been intended to submit to the arbitrator, and thereupon some of the parties withdrew from the arbitration.

      PLeld, that they had a right thus to withdraw. (Code of Civil Pro., § 3883.)
    That the effect of such withdrawal was to terminate the arbitration and to remit ■the parties to their rights, as these stood before entering into the agreement of arbitration, except that the agreements contained in such written instrument, not connected with the arbitration, would remain in force.
    Before entering into the written agreement actions for damages and for the price of the goods in dispute had been begun by the respective parties, which covered all the questions at issue.

      Held, that these actions should be tried, thereby determining the matter, and that an action, which was brought by one of the parties to have the written agreement declared binding, and also to restrain the further prosecution of one of the actions already begun, could not be maintained.
    Where it appears that no settlement was accomplished by a submission to arbitration, and cross-actions, proceeding upon strictly legal grounds, are pending between the parties, it is not a case where equity can be invoked, on the ground that a compromise should be maintained, nor one where the extent of litigation possible between the parties will be limited to prevent a multiplicity of suits.
    Appeal by the defendants from a judgment, entered in the office ■of the clerk of the county of New York on the 10th day of January, 1890, after a trial at the New York Special Term.

      J. Hampden Dougherty, for the appellants.

      Theron G. Strong, for the respondent.
   Daniels, J. :

The action was brought to secure a judgment declaring an agreement entered into on the 11th of July, 1888, between the plaintiff and the Samuel Crump Label Company, to be valid and binding and a settlement of the controversies between the parties, and. to restrain and enjoin the prosecution of an action brought by the defendant Manley as the assignee of the company, against the plaintiff, and to settle the disputes which had arisen between the plaintiff and the company. The plaintiff had previously been engaged in manufacturing and selling desiccated eocoanut and pudding preparations, and the company had manufactured and delivered to him wrappers and labels used upon the packages in which these articles were contained and sold. Early in the year 1837 they entered into an agreement, by which •the company was to make and deliver to him 25,000 half-pound and 25.000 pound eocoanut cartons. These articles were to be in the nature of samples of a new manufacture, and if they proved satisfactory an order .was to be placed with the company for a much larger quantity of the samé or similar articles. The company entered upon the performance of this agreement and order and continued to do that until about the close of the year 1887. On .the fourteenth of November of that year a further agreement was made between the parties, by which the company was to manufacture 600.000 one-half pound and 100,000 one-pound pudding cartons There were to be manilla-lined, coated one side and having a. straw board back. And early in the year 1888 the company began the delivery of these additional articles to the plaintiff, but disagree, ments arose concerning these and also, as there is some reason for-believing from the plaintiff’s testimony, as to some of the other cartons made and delivered to the plaintiff. The complaints; however, as to those made under the contract and order of the 14th of November, 1887, were more general and comprehensive, including-certainly a very large number of cartons delivered and offered to the plaintiff, he complaining that they were not according to the: agreement which had been entered into, and the president of the-company insisting that they were manufactured as well as that could be done from the material mentioned in the contract.

The misunderstanding arising out of the objections made by the: plaintiff continued until the early part of July, 1888; and on the eleventh of that month' these parties entered into an agreement for the adjustment of their differences. By this agreement it was.

“Agreed, between Samuel Crump, Pres’t, in behalf of Samuel’ Crump Label Co. and L. Schepp, that the controversy now existing-between them regarding cartons for cocoanut and puddings, shall be settled on the following basis, viz.:
“ All cartons that have been used by L. Schepp shall be paid for at contract-price, less fifty per cent (i. e., half invoice price). Those that are perfect and those that are not perfect, but can be made so, or like sample, are to be taken at full contract-price.
“ It is understood that there is no sample to guide regarding the cocoanut cartons, and the umpire is to judge for himself as to what, is a perfect carton. Those which are unmerchantable are to be discarded, i. e., imperfect.
“ The expense attending the cartage to corporation yard, and the railroad charges to Canada and Montclair, N. J., are to be equally divided between Samuel Crump Label Co. and L. Schepp.
“ Each party is to pay his own legal expenses.
“ All labels are to be paid for in full.
“ Cash is to be paid by L. Schepp for amount of referee’s award! when same is made.
“ Each and every question mentioned and not mentioned in this agreement is left to Charles F. Conant, if he will serve as referee j and if lie will not serve we are to agree ■ upon some other person,, and the terms of the agreement shall be equally binding on us. And it is understood, further, that the referee has no power to make any reconstruction on anything that is provided for in this agreement.
“ On the conclusion and settlement of this agreement L. Schepp agrees to withdraw all his claims for business damages.
“L. SCHEPP. [seal.}
“ SAM’L CKUMP, Prest.” [seal.}

In the first instance this instrument contains an agreement as to-prices to be paid by the plaintiff, and the obligation of the company concerning what should be found to be imperfect cartons. Then it was agreed, after providing for the payment of the expenses of taking a large number of cartons, which had been unloaded upon the sidewalk in front of the plaintiff’s store, and which he refused to receive, and for that reason they had been carted by the officials, of the city to the corporation yard, that the labels which had been manufactured prior to making of either of these agreements should be paid for in full, and then that the other questions between the parties, either mentioned or not mentioned in the agreement, were to be left to Charles F. Conant, or some other person in case he declined to act, as referee to settle and adjust. Mr. Conant was willing to act in this capacity. But soon after the agreement was made, differences arose between the parties to it concerning its construction and effect and the extent to which it should be applied. And these differences prevented the submission of the matters referred to in the agreement to Mr. Conant for settlement. And for that reason the president. of the company, acting in its behalf, early in the year 1889 revoked the submission of these matters to the arbitrator or referee. Mr. Conant wrote to him inquiring whether it was desired that he should act. And on the 28th.of February, 1889, the president replied that they had commenced a suit, and stating that as a reason for not proceeding with the arbitration. And on the fourth of March of the same year, in answer to another letter from Mr. Conant, the same fact was reiterated, as to which the president of the company added: I suppose I am now relieved from any further action ? ” Further correspondence took place between these persons in which the president of the company .stated tbat they bad no other alternative but to consider the agreement at an end on account of the action taken by the plaintiff. And notice of this final conclusion was given by Mr. Conant to the plaintiff on the 18th of March, 1889. This was clearly a revocation of so much of the agreement of the 11th of July, 1888, as that has been permitted by the provisions of the statute, as well as the rule previously sanctioned by the authorities, not brought to the attention of the Special Term. (Code of Civil Pro., § 2383 ; Frets v. Frets, 1 Cow., 335.) And the effect of it was to terminate and annul so much of the agreement as included and provided for this arbitration. And as the company was vested with the legal right to revoke the submission in this manner, the court had no authority after that to establish or maintain the submission. For it was as much out of existence as though no agreement had been made at any time providing for it. And that necessarily remitted and restored the parties to all their rights against each 'other, which they had previous to the making of this agreement. .

These rights were the enforcement of the claims made by the plaintiff against the company for' the defective manufacture of the cartons, and on the part of the company for the prices agreed to be paid for the cartons made and delivered, in case they conformed to the description of them contained in the agreements. So far as the parties entered into stipulations by the instrument of the eleventh of July, unconnected with the submission to arbitration, they remain unrevoked and require to be construed and applied, in view of the attendant circumstances, the same as other agreements made between parties competent to contract. (Dodds v. Hakes, 23 N. Y. St. Rep., 193.) And so far as such agreements or stipulations were made a part of the instrument, they undoubtedly will be applicable to the disposition, in future, of the contracts or claims existing between these parties. But these stipulations created no independent right of action in favqr of the plaintiff. He had, previous to the making of the agreement, commenced two suits against the company for the recovery of the damages he claimed to have resulted from the cartons being defectively manufactured. And when the submission to the arbitration was revoked he was left at liberty to proceed with either one or both of these actions, the same as though no submission had ever been agreed upon: and the company, proceeding upon tbo same principle, assigned their demands to the defendant Manlej, who commenced an action against the plaintiff: for their recovery. These actions, and probably one action on the part of each of these parties, will be sufficient to settle the entire dispute arising out of their different positions. The disputes were the proper subjects of actions at law, arising as they did out of no more than claims for damages on the one side and of prices for articles manufactured and delivered on the other side. These were all strictly grounds for legal actions as distinguished from suits in courts of equity. Full and complete relief can readily, by the simplest course of proceeding, be attained through the instrumentality of these suits. And the subjects included in them formed no equitable grounds of action.

. It is true that courts of equity'may, under certain circumstances, maintain and establish compromises and settlements between parties. But this is not a case of that description. For no settlement was effected by this agreement, but it provided a means through, which a settlement or adjustment should be reached, and that was by the consideration and decision of the matters agreed to be submitted to Mr. Conant, which were prevented entirely by the subsequent disagreements of the parties and the revocation of the submission. That has left all the disputes intended and designed to be settled under the agreement as completely unsettled as they were before, except so far as they may be affected by the covenants or stipulations contained in the instrument aside, from those relating to the arbitration. ■ This action, therefore, cannot be maintained for the purpose of establishing a settlement or compromise, for the grounds of complaint and demands of the parties have not been settled by what has taken place. And the legal mode now for securing that settlement is by the actions-on the.one side for damages and on the other side for the prices of the cartons which have been made and delivered. And a full and complete adjustment and determination of these matters will be made in the actions for damages on the one part, and for the prices of the goods on the other. There is no necessity, nor is there any propriety for prosecuting an action in equity to attain these ends. They are the appropriate sub jects of actions at law, and are there required to be prosecuted and determined. Neither is there any ground for maintaining this suit as one to prevent a multiplicity of actions. For tbe range and extent of possible litigation between tbe parties is limited, and, as tbeir affairs •at present are made to appear, will not transcend tbe suits wbicb bave already been commenced, and probably will not require tbe prosecution of more tban two of these actions.

Tbe judgment wbicb bas been entered in this case bas undertaken to go no farther than to sustain tbe agreement of tbe eleventh .of July, and to restrain the prosecution of tbe action commenced by ’Manley as tbe assignee of tbe company, and tbe entry of judgment for want of a complaint in tbe actions commenced by tbe plaintiff •against tbe company. It to no extent settles, or bas undertaken to ‘ .settle, either of these disputed matters between these parties. But it bas declared in its third subdivision: “ That no cause of action exists in favor of either of tbe defendants, excepting upon compliance with tbe terms and provisions of said agreement of July 11,1888.”

And that seems to be an erroneous conclusion, for tbe reason that the company was at liberty under tbe law. to revoke tbe submission which bad been agreed to be made. Tbe case in this respect differs from that of Delaware, etc., Canal Company v. Pennsylvania, etc., Coal Company (50 N. Y., 250). For, the province of the arbitrator was to settle tbe disputes existing between tbe parties, and not to perform a condition precedent to tbe right of either to maintain an action at law. And the objection, that adequate relief' could be obtained by tbe plaintiff in an action at law, bas been taken by -the answer in this action.

Tbe judgment should be reversed and a new trial ordered, but it should be without costs to tbe appellants.

YaN BbuNt, F. J., and Beady, J., concurred.

Judgment reversed and new trial ordered, without costs to tbe appellants.


source: Caselaw Access Project

author: Daniels, J.:

license: Public Domain

text:
    JOHN C. SHAW, Appellant, v. FRANCIS S. WELLMAN and Others, Respondents.

      /Foreclosure — option, on a failure to pay taxes, to heme the whole amount of the mortgage become due — where the moi'tgage has been assigned as a collateral, the consent of the assignee is necessary to the exercise of such option — payment of taxes, .pending the action, a defense— t may be set up by supplemental answer.

      A. bond and mortgage for $5,000 provided that upon a failure to pay the taxes upon the mortgaged premises the whole amount secured to be paid thereby, at the option of the holder, should become due. In March, 1887, the mortgagee assigned the bond and mortgage to one Ross as security for the sum of $4,000. In May, 1889, for a default in the payment of taxes, the mortgagee began an action for the foreclosure of the mortgage, to which Ross, at his own instance, was made a party defendant. Ross at no time had elected that the whole amount should become due.

      Held, that the action could not be maintained.
    That the covenant relied on was for the benefit of the entire security, and that, to the extent to which it had been assigned to him, Ross was entitled to the benefit of each covenant in the mortgage, and that-his assent was necessary to an action brought to enforce any covenant thereof.
    Where, after foreclosure begun for default in the payment of taxes covenanted to • be paid by the terms of a mortgage, the same are paid, the rule in equity is that .the default is redeemed; and where this fact is set up by supplemental answer it is a defense to the action.
    Appeal by plaintiff John C. Shaw from a judgment in favor of the defendant Francis S. Wellman, entered in the clerk’s office of the county of New York on the 21st day of January, 1890; and from an order, entered in said office on the 17th day of January, 1890, granting an additional allowance to said defendant.

      Grata Nathan and John G. Shaw, for the appellant.

      Edga/r J. Nathan, for the respondents.
   Daniels, J.:

The judgment recovered dismissed the complaint for the foreclosure of a mortgage, executed by the defendant Francis S. Well-man and Cora his wife, to secure the payment of $5,000, with interest, to the plaintiff, his heirs, executors, administrators or assigns, on the 1st of October, 1891. The action was commenced in or about the month of May, 1889, because of a default by the mortgagors in the payment of the taxes for the years 1886, 1887, and 1888. The mortgage provided, in case of such a default for the space of sixty days, that the principal sum secured should, at the option of the mortgagee or his legal representative, become due and payable immediately. And that option was made by the plaintiff before this suit was commenced. But the further fact appeared in the case that, on the 17th of March, 1887, the plaintiff assigned the mortgage and the debt thereby secured to Reuben Ross, who, at his own instance and during the pendency of the action, was made a defendant therein. The assignment to this defendant was absolute in form, but, in fact, made to secure to him the payment of the sum of $4,000, which still remained unpaid, and he at no time elected to declare the debt secured by the mortgage to be due for the nonpayment of these taxes.

The object to be attained by this part of the mortgage was to prevent the security from- being reduced or diminished by the unnecessary existence of -taxes upon the property. • It was for the benefit of the security and its complete preservation. And after the assignment the assignee became entitled to its benefit to the extent of four-fifths of the secured indebtedness. For by the assignment the entire mortgage, with each of its covenants and provisions, was to that extent assigned to him. And after that the mortgagee had not the power to exercise control over it, so far as it had been transferred by the assignment. (Browne v. Blydenburgh (3 Seld., 141, 145). That was the clear nature and effect of the assignment. It gave the assignee control over the security to at least the extent of the interest assigned to him. And whether the debt secured should become due, because of this default of the owner of the equity of redemption, was so far confided to him to determine. ' That resulted from the assignment, which was subject to no reservation or exception beyond a right of redemption in the plaintiff, lie could have redeemed the security by paying what was owing from him to the assignee, and thereby have re-acquired the sole right to exercise this option. ' But that he.did not do. On the contrary, without the authority or concurrence of the assignee, and without ascertaining whether he deemed it for his interest that advantage should be taken of this clause in the mortgage, the plaintiff declared the debt to be due. The right to do this was equally for the benefit of the entire debt. It was an entirety consisting of an option affect-in <>■ the whole debt secured, and not a part of it. To take advantage of it was an authority vested in the owners of the debt, not in a portion of it. And as long as the assignee did not assent to the exercise of the option, the term of credit was not forfeited or lost by the act alone of the assignor This subject, under circumstances quite similar in their effect, was examined in Marine Bank, etc., v. International Bank (9 Wis., 57), and the same conclusion was adopted by the court.

It further appeared that these taxes were paid on the 21st of October, 1889, and that fact was alleged by a supplemental answer as a defense to the action. This payment in its effect fully restored all the rights intended to be protected by this part of the mortgage. It indemnified both the plaintiff and his assignee against all possible prejudice or loss arising from the default. And when that appears to be the fact, it is the policy of courts of equity to consider the default to have been redeemed by the payment. (2 Story’s Eq. [5 th ed.], § 1314.) When indemnity can, in this manner, be secured, and that shall in fact be made, then the rule in equity is not to enforce the forfeiture otherwise coming into existence. (Id., § 1319.) On this fact of payment of the taxes, a defense was also presented to the action.

The allowance complained of was made to the mortgagor, amounting to the sum of $ 100. It was authorized in the suit, as one for the-foreclosure of a mortgage upon real property, by section 3253 of the Code of Civil Px’oeedure, and was by no means unreasonable in its amount.

Without, therefore, considering whether the action was regularly brought by the plaintiff without, in the first instance, making his assignee a party, and which was so much discussed on the argument, both the judgment and the order should be affirmed, with costs.

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

Judgment and order affirmed, with costs.


author: Barrett, J.:

text:
    THE PEOPLE OF THE STATE OF NEW YORK, Respondent, v. FRANK A. PIERSON, Appellant.

      Indictment — violation of chapter 720, Laws of 188 7, relative to fire-escapes in hotels — this act does not apply to New YorJc city — when a special act is not affected by a general act on the same subject.

    The provisions of chapter 720 of the Laws of 1887, which took efEect June twenty-fifth of that year (the general act relating to fire-escapes in hotels), does not apply to the city of New York, the subject being fully covered, so far as that city is concerned, by section 499 of chapter 410 of 1882, the Consolidation Act, as amended by chapter 5G6, Laws of 1887, which took efEect July 5, 1887.
    "Where it appears that the legislature has passed an act relating to a certain subject in a particular city, said act being in all respects more precise and far-reaching than a general act relative thereto passed subsequently, but going into efEect a few days earlier than the special act, the court will assume that the general act was not intended to repeal, supersede or modify the special enactment.
    Appeal by tbe defendant from a judgment of conviction of a violation of chapter 720 of the Laws of 1887, in that he had neglected to place “ a rope, or other better appliance to be used as a fire-escape, in every room of (the Sturtevant House) a hotel, used as a lodging-room, except the rooms on the ground floor,” which judgment was rendered against him, in the Court of General Sessions of the city and county of New York, on the 13th day of March, 1890.

      W. J. Farming, for the appellant.

      McKenzie Semple, assistant district attorney, for the respondent.
   Barrett, J.:

, This appeal brings up the question whether the city of New York is excepted from the operation of chapter 720 of the Laws of 1887, entitled “An act to provide fire-escapes in hotels,” commonly known as the “ rope act.” The appellant claims such exception under section 499 of the consolidation act, as amended by chapter 566 of the Laws of 1887. The latter amendment was passed on the fifteenth day of June and was made to take effect twenty days •thereafter, while chapter 720 was passed on the 25th day of June :and took effect immediately.

Chapter 720 is a general law, on its face applicable to the whole State, requiring the proprietors or managers of every hotel exceeding two stories in height, which is not fire-proof, to “ place or cause to' be placed a rope or other better appliance, to be used as a fire-escape, in every room of said hotel used as a lodging room, except the rooms on the ground floor.” Yiolation of this requirement is punishable as a misdemeanor, and, as a means of enforcement, provision is made for semi-annual inspections of every room in every' •city and village hotel in the State. The appellant’s contention is that the amendment of the Consolidation Act, to which we have referred was intended to provide a comprehensive and exclusive •system for the city of New York, adequate to remedy all the mischiefs aimed at, embracing a much wider area of subjects than the general act, and conferring authority to effect its objects by Letter and more appropriate means than a single crude make-shift. This contention is well founded and the amendment in question ■certainly does create such a system. It is entirely clear, from an examination of these acts, that the general law was not intended to repeal, supersede or modify the carefully framed and broad provisions of the special enactment. The real question is whether .these acts are both applicable to the locality. Was it intended to superadd the single and special safeguard, provided for in the general act, to the elaborate system of safeguards furnished by the •■special act ? After a careful review of these acts, we think this ■question must be answered in the negative. The requirement of the single safeguard in the general act is absolute. The authority •conferred by the special act is plainly inconsistent with the absolute requirement of any one particular safeguard. That act leaves the ■entire subject to the judgment of the superintendent of buildings, ¡acting with the concurrence of the board of fire commissioners. 'This is expressive of the inadequacy of any iron-clad legislative formula, and of the intention to substitute therefor the judgment of a skilled expert, acting from time to time upon progressive ideas, with the approval of the local officials, whose functions best qualify them to co-operate with him. Under this special act the hotel-keeper may be required to provide the rope called for by the general .act. But he may also be required to do much more. He may, in fact, be required to provide genuine and adequate fire-escapes based •upon experience and scientific principles. Can it be possible that where this has been done the> hotel-keeper must also, to satisfy the legislative intent, lumber up each room in his house with a coil of rope ? An appliance which, in case of fire, would tend to distract attention from other and better means of escape, and jiossibly jeopardize the guest’s life by suggesting an attempt to utilize the first and poorest device at hand ? It seems reasonably clear that that could ' not have been the legislative purpose. It seems equally clear that the single and imperfect safeguard required by the general act was not intended to operate, where special provision for a complete and thorough system was made for any particular locality in the State. "Where no such special provision has been made, the general law is, of course, operative. The legislature thus, in effect, says, where we have nothing better, we will at least have this. Everything in the two acts points to this construction. The general act excludes from its operation fire-proof buildings. In such not even a rope is required. The special act makes no such distinction. The practical enforcement of the general act is placed in the hands of the chief engineer of each fire department in the State (or some person deputized by him) and the mayor or other chief executive officer of cities and villages. The special act, as we have seen, intrusts the execution of its requirements to the superintendent of buildings acting in one line of duty alone, and in another with the concurrence of the board of fire commissioners. This last consideration suggests a seeming inaccuracy in one statement made, in his brief, by the learned counsel for the respondent. He says that the only provision in the special act on the subject in question is that which authorizes the superintendent of buildings to direct what fire-escapes and means of egress shall be provided for buildings occupied as hotels “ more than three stories in height and having more than fifteen rooms” If this were all, there might be some force in the argument that the mischiefs aimed at were not fully covered. But reading .further on in the same section, we find the following additional provisions:

“ In all buildings of a public character already erected, or hereafter to be built in said city, such as hotels, churches, theatres, restaurants, railroad depots, public halls and other buildings used or intended to be used for the purposes of public amusement or instruction, the halls, doors, stairways, seats, passage-ways and aisles shall be arranged as the superintendent of buildings, with the concurrence of the board of fire commissioners, shall direct, to facilitate egress in cases of fire or accident, and to afford the requisite and proper accommodation for the public protection in such cases. * * *

u The superintendent of buildings, with the concurrence of the board of fire commissioners, may, at any time, serve a written or printed notice upon the owner, lessee or manager of any said buildings■, directing any act or thing to be done or provided in or about the said buildings and the several appliances therewith connected, such as halls, doors, stairs, windows, seats, aisles, fire-walls and fire-escapes, so as to afford such security to the public in the uses to which they may be severally applied, as they may deem necessary?’

Thus buildings of every kind and class, used for hotel purposes, ¿re brought within the operation of the law, and the local officials are authorized to exercise their judgment with regard to hotels of the character specified in the general act as fully as with regard to any other structure. It will be observed that the general act was passed but a few days after the special act. Now, the latter exhibits the utmost care in its preparation. ' It is minute, detailed, comprehensive and seemingly all sufficient. It is scarcely conceivable that, after all this, the legislature intended a few days later to say to the officials upon whom they had conferred such broad powers — there is one point, however, upon’which you shall not exercise any discretion, and that is, as to having a rope or other better appliance in every room. Thatmwi be, whether you can improve upon it or not, whether it mars your more scientific methods or not.

Finally, the argument is pressed upon us that as the special act repeals all former provisions of the local law for criminal prosecution of offenders against fire-eseajie laws, it must have been because a substitute was contemplated in the criminal provisions of the rope law. "We think that this suggestion of legislative “ looking forward ” is quite gratuitous. There was nothing in the surroundings to justify such an implication. A substitute for these criminal provisions, and an exceedingly effective one, was provided in the special act itself, namely, the provision of section 513 authorizing the fire department, in case the directions of the superintendent are not complied with, to ask the Supreme Court for an order directing the department to vacate the building until compliance is made ; also authorizing the department to do the work itself and to charge the expense as a lien upon the building. With such practical and efficient remedies, resort to the criminal law became unnecessary. The object of punishment was to compel the result. It was a means to an end. Here the end was accomplished directly, and indirect means are superfluous.

Our conclusion is that the city of New York is not within the operation of the general act in question, and that, therefore, the judgment should be reversed and the defendant discharged.

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

Judgment reversed and defendant discharged.


author: Bárrett, J.:

text:
    SIMON ROTHSCHILD, Respondent, v. THE RIO GRANDE WESTERN RAILWAY COMPANY, Appellant.

      Pleadings■ — the laws of another State are facts which must he pleaded — legal conclusion.

    In an action brought to recover of a foreign corporation interest due upon certain bonds of another corporation, for which, as alleged, the former was liable by reason of a consolidation of the companies, the.complaint alleged that “ thereby, and under the laws of the Slate of Colorado, and of the Territory of Utah aforesaid, all the debts, liabilities and duties of said consolidating companies and corporations, respectively, thereupon attached to said new corporation, the defendant herein, and became enforceable against it to the same extent as if said debts, liabilities and duties had been incurred or contracted by it.”
    On the hearing upon a demurrer, interposed to the complaint, it was

      ITeld, that the laws of Utah and Colorado were facts which should have been pleaded, since it was under those laws that plaintiff expected to recover.
    That the bare allegation that, under such laws, a liability attached was a legal conclusion, and established no cause of action.

      Berney v. Drexel (33 Hun, 34) distinguished.
    Appeal by the defendant from an interlocutory judgment, entered in the clerk’s office of the county of New York on the 9th day of July, 1890, overruling defendant’s demurrer to the complaint; and from an order, entered in the same office on the same day, upon which latter order said interlocutory judgment was entered.

      Theodore F. H. Meyer, for the appellant.

      William, Strauss, for the respondent.
   Bárrett, J.:

The defendant is a foreign corporation, created by the laws of Colorado and Utah. It is sued upon interest coupons attached to mortgage bonds of another corporation. The plaintiff claims that the defendant is liable upon these coupons by reason of a consolidation of the corporation,- which issued the mortgage bonds, with another corporation, and he claims that the present defendant by this consolidation became liable upon these coupons. The only allegation in the complaint from which this legal liability can be inferred is in these words :

“ Thereby and under the laws of the State of Colorado and of the territory of Utah, aforesaid, all the debts, liabilities and duties of said consolidating companies and corporations, respectively, thereupon attached to said new corporation, the defendant herein, and became enforceable against it to the same extent as if said debts, liabilities and duties had been incurred or contracted by it.”

The demurrer is upon the grounds that the laws of Colorado and Utah are facts which must be pleaded, and that the bare allegation, that under these laws the' liabilities of the consolidating companies became attached to the defendant and enforceable against 'it, is insufficient to constitute a cause of action. We think the demurrer was well founded. The allegation is not a statement of fact, but of a legal conclusion from undisclosed facts. It is, in effect, saying that under foreign laws, of which we know nothing, one person has become liable for another person’s debts, and it differs in no substantial particular from an allegation, which has always been treated as a mere conclusion, that the defendant is indebted to the plaintiff. It is clear that the foreign law should have been pleaded. The law of a foreign state is a fact to be alleged and proved like any other fact. It is not necessary to plead the evidence of the fact, whether such evidence be embodied in the statutes of the foreign State, or in the decisions of its courts. But the fact that a given proposition is the law must be stated, if such fact is essential to a recovery. The case of Berney v. Drexel (33 Hun, 34) does not conflict with this conclusion. There a faot was stated, namely, that upon the testator’s death his personal property, under the laws of France,” vested immediately in certain of the plaintiffs. That was, in substance, an allegation that these persons were the owners of the property, which the defendants were charged with having concerted; in other words, an allegation of the fact of plaintiff’s title. It is true that this allegation was coupled with a disclosure of its legal source. But such disclosure was superfluous. It was simply a suggestion of the nature of the proof which would be adduced upon the trial to support the fact of title as alleged. It will be observed, too, that the defendants in that case were sought to be charged with a common-law liability, while the defendant here can only be held under the statutes of Colorado and Utah. The plaintiff here has neither pleaded such statutes, nor any fact from which the conclusion, that a liability for the coupons in suit attached to the defendant and became enforceable against it, can be deduced.

The judgment should, therefore, be reversed, with costs, and the demurrer sustained, witli leave to the plaintiff to amend his complaint within twenty days, upon payment of the costs of the demurrer and of this appeal.

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

So ordered.


author: Brady, J.:

text:
    CATHARINE SCOTT, as Administratrix, etc., of FRANK SCOTT, Deceased, Respondent, v. THE THIRD AVENUE RAILROAD COMPANY, Appellant.

      Corporations — negligence, not wanton nor willful — plaintiff must be free from, contributory negligence — right of the jury to consider that objections were made and, evidence excluded.

    In an action against a corporation to recover the damages resulting from its alleged negligence, where the circumstances of the acccident were such as seemed to indicate contributory negligence upon the part of the deceased, the court charged the jury that “ there may be mutual negligence and yet one party have a right of action against the other;!’and, also, that “the plaintiff may recover, notwithstanding his own negligence exposed him to the risk of the injury, if the defendant, after becoming aware of the plaintiff’s danger, failed to use ordinary care to avoid injuring him.”

      Held, that both propositions were erroneous.
    That in cases of ordinary negligence, not wanton nor willful, the plaintiff must be free from contributory negligence in order to recover.
    That the error, resulting from this portion of the charge, was not cured by the charge of the court, made at defendant’s request, “that if the negligence of the dead man in any manner contributed to the cause, the collision which resulted in the injury, the verdict must be for the defendant.”
    The defendant requested the court to charge, that the jury were not to draw any deductions against either party from objections made and evidence excluded, which the court refused to charge.

      Mild, error; as the refusal to charge to this effect affirmed the converse of the proposition, i. e., that the jury could draw deductions against either party upon such grounds.
    Appeal by the defendant from a judgment, entered in the clerk’s ■office of the county of New York qn the 2d day of January, 1890, in favor of plaintiff and against defendant; and also from an order, entered in said office on the 21th day of December, 1889, denying defendant’s motion for a new trial, after a trial at the New York Circuit before the court and a jury.
    The plaintiff’s intestate received injuries while crossing One Hundred and Twenty-fifth street, in the city of New York, upon which ■street defendant maintained a cable road, from the effects of which injuries the plaintiff’s intestate died.

      William _ZV. Cohen, for the appellant.

      George W. Wilson, for the respondent.
   Brady, J.:

This action was brought by the plaintiff to recover damages for the loss of her husband, who, it was alleged, was killed by the negligence of the defendant. During the trial several exceptions were taken by the defendant and several also by the plaintiff, and several also to the charge, refusals to charge as requested by the defendant and to requests to charge by the plaintiff, which were granted. In the view taken of some exceptions it will not be necessary to consider the others. It was charged as follows:

“ There may be mutual negligence, and yet one party have a right of action against the other; ” and also “ the plaintiff may recover, notwithstanding his own negligence exposed him to the risk of the injury, if the defendant, after becoming aware of the plaintiff’s danger, failed to use ordinary care to avoid injuring him.”

For the accuracy "of the first request excepted to, the learned counsel for the plaintiff relies chiefly upon the cases of Thomas v. Kenyon (1 Daly, 142); Thurber v. Harlem Bridge, Morrisania and Fordham Railroad Company (60 N. Y., 326); Murphy v. Orr (96 id., 14); Seybolt v. New York, Lake Erie and Western Railroad Conypany (95 id., 562) and Moebus v. Herrmann (108 id., 349).

In Thurber v. Harlem Bridge, Morrisania and Fordham Railroad Company, the plaintiff was a boy about nine years old. He was-knocked down by one of the horses attached to the defendant’s railway cars and run over while in the act of crossing the Boston road in the town of IVIorrisania, a part of which is occupied by their railway. The accident occurred in midday and the plaintiff was in plain view of passengers and the person who was acting as driver. All the witnesses-agreed that the car might have been stopped while running over the space of a few feet, and a very slight check on the s]3eed at which it was running, would have prevented the collision and consequent injury. The omission of the driver to check the progress of the car was said to be culpable negligence, for which the defendant must respond, “ unless, ”■ said the court, “ it appear from the whole case, that the injury is not attributable to that cause.”' The question of contributory negligence was considered, nevertheless, and regarded as a controlling element. This is not, therefore, an authority for the proposition that the plaintiff may recover if the defendant, after becoming aware of the plaintiff’s danger, failed to use ordinary care to avert it. It was a case of culpable negligence, gross negligence, displaying a reckless disregard of the obligations or duty, an indifference, cruel and wanton, of the safety of life and limb’ upon a public highway. It is correctly asserted even in this State, where the doctrine of negligence is limited as contrasted with other States, that defendants may be held responsible for injuries, received on the highway, resulting from their gross negligence, amounting to willful indifference or disregard of the protective duties which they may owe to the public; but that rule is not applicable to this case,, assuming it to exist in this State, inasmuch as the defendant’s conduct does not present the elements which must be present.

When these are the features of the defendant’s conduct, the1 plaintiff’s contributory negligence cannot be invoked by it for protection. As justly said in Beach on Contributory Negligence' (§ 22, p. 69), When the wrong-doing of the defendant is merely negligence, the contributory negligence of the plaintiff may, as is well, understood, operate as a defense, but when the defendant’s conduct is willful, it is no longer negligence, alnd when the injury-sustained by the plaintiff is the result of the wanton and willful act of the defendant, the question of the plaintiff’s contributory negligence as a defense cannot arise.” But to pursue these cases: In Murphy v. Orr the plaintiff was an infant between three and four years of age, and the appellant attributed no want of care to the plaintiff. The question was as to the sufficiency of the proof of the negligence of the driver of the horses attached to a truck, which proof was considered abundant. In Seybolt v. New Work, Lake Erie and Western Railroad Company there was no question involving in any way the contributory negligence of the decedent, who, at the time he was killed on the defendant’s road, was there as a postal clerk. In Moebus v. Herrmann (108 N. Y., 349) the person injured was a lad of seven years, and the jury found that the child was not careless, but the defendant’s driver was negligent, and this finding was made after the propositions, on which the case was made to turn, were formulated with due regard for the defendant. The doctrine of contributory negligence, was carefully observed and presented. The liability of the defendant, as asserted in the charge under consideration, was not declared in that case, or the principle advocated, although it was said that the driver either saw the child and recklessly drove over him, or failed to see him because of inattention; that is, he was looking another way and conversing with a fellow-servant, a fact approaching and suggesting the doctrine of gross or willful negligence. The case of Thomas v. Kenyon was brought to recover damages, caused by the negligence of the defendant, in permitting water to run from his premises upon those of the plaintiff. In that case it is said, that there may be mutual negligence and yet one party have a right of action against the other. This is the formula adopted by the plaintiff’s counsel herein, taken from that case and employed as we have seen. The illustration of this proposition shows how inappropriately it was invoked herein. It is, “ If a man negligently lie down and fall asleep in the middle of the public road, and another failing to exercise ordinary care should drive over him, the party injured would have a right of action against the other,” and the cases cited to sustain it are Kerwhacker v. Cleveland C. and C. R. R. Co. (3 Ohio [N. S.], 172); Trow v. Vermont Central R. R. Co. (24 Vt., 494) ; Davies v. Mann (10 Mees. & Welsby, 546) and Butterfield v. Forrester (11 East, 60).

In Trow v. Vermont Central R. R. Co., Kerwhacker v. C. C. and C. R. R. Co. and Ramies v. Mann, the doctrine declared is, that the plaintiff may recover if he has used ordinary care to avoid the injury sustained, but this is only another method of stating the proposition that he may recover if he be free from contributory negligence. If he could avoid the injury by the exercise of ordinary care, he should do so, and the omission of that duty would undoubtedly show negligence. How far these authorities sustain the bald proposition, laid down in the case of Thomas v. Kenyon, may be easily understood.

This case illustrates the danger of employing detached sentences taken from opinions and urging them upon the attention of the trial court, evidently without sufficient consideration of their bearing upon and relation to the case in hand, and which, at first blush, seem to be applicable, because expressive of an instinct of natural justice, but which have only a special significance, and that wholly dependent on facts upon which they must rest. There is no adjudication in this State, in a case kindred to this, which declares the proposition, that there may be mutual negligence and yet one party have a right of action against the other. See, on this subject, Wilds v. Hudson River Railroad Company (24 N. Y., 430); Cordell v. New York Central Railroad Company (75 id., 330). If the proposition had been that a recovery might be had, although there was mutual negligence, provided the defendant’s conduct was wanton and willful, as contradistinguished from ordinary negligence, it might be sustained by authority, to be inferred from adjudications of the court of last resort in this State, but not -otherwise; inasmuch as the authorities are superabundant, declaring that the person injured must be shown to have been free from contributory negligence. The appellant, as we have thus seen, has two points, therefore, favorable to a reversal of the judgment, namely, the charge that the plaintiff may recover, notwithstanding his own negligence exposed him to the risk of injury, if the defendant, after becoming aware of his danger, failed to use ordinary care to avoid injuring him, and the further unqualified charge, that there may be mutual negligence and yet one party have a right of action against the other. It is supposed that the charge that “ if the negligence of the dead man in any manner contributed to the cause, the collision which resulted in the injury, the verdict must be for the defendant,” overcame the errors mentioned, but this is incorrect. The charges considered were pointed, specific, and were so broad that, standing upon the record unrecalled, they were fraught .with danger to the defendant’s right.

It must be further said that the defendant was entitled to the-charge refused, namely, that the jury were not to draw any deductions, against either party from objections made and evidence excluded, a request made, doubtless, to protect it from the prejudicial impression that might be created by a close contest and ingenious effort and device, resorted to by their counsel unsuccessfully. It is secondary in importance, but, the refusal to charge it affirmed the converse of the proposition, namely, that the jury could draw deductions against either party from objections made and evidence excluded. The evidence on the part of the plaintiff was such as to-require careful consideration of the question of negligence on both sides of the controversy, and the issue should have been left unembarrassed by any element, which would permit erroneous conclusions to be indulged in prejudicial to the defendant. The struggle by it, through its counsel, to avoid responsibility was marked and impressive, from the numerous objections and exceptions taken.

Judgment reversed and new a trial ordered, with costa to the appellant to abide the event.

Van Bbunt, P. J., and Daniels, J., concurred.

Judgment reversed and new trial ordered, with costs to the-appellant to abide event.


author: Beady, J.:

text:
    MARIETTA L. LANE, as Executrix, etc., of RICHARD H. LANE, Respondent, v. MALVINA A. De METS, Appellant, Impleaded.
    Insurance— life policy payable on a contingency — “ surviving ” means surviving the insured — when the children of the insured take as a class.

    A life insurance company, by its policy, promised to pay the amount mentioned thereinto the wife of the insured “for her sole use, if living, in conformity with the statute, and if not living, to the children of said person whose life is hereby insured, or their guardian, for their use ; or if there be no such children surviving, then to the executors, administrators or assigns of said person whose life is hereby insured.” When the policy was issued the insured had a wife and two children. His wife and one child died before him, the latter leaving children.
    In án action brought to obtain a construction of the above clause:
    Held, that, in so far as concerned the rights of the wife, the phrase “if living " meant if living at the time of the death of the insured; and she having died before him her representatives had no interest in the policy.
    That the further stipulation relative to his children, considered in connection with the clause “or if there be no children surviving,” was intended as a provision for such of them, and'only such, as should survive him; that the moneys were payable to them as a class, and those of the class who were in being when the policies became payable would take the entire amount.
    That if no children of the insured had survived him. under said clause his grandchildren would not have taken as against his executors.
    Appeal by tbe defendant, Malvina A. De Mets, from a judgment, ■entered in tbe office of tbe clerk of tbe county of New York on tbe 20tb day of October, 1890, adjudging that tbe plaintiff became entitled to a one-balf interest in a certain policy of life insurance, and directing the New York Security and Trust Company to pay to said plaintiff the sum deposited with it to tbe credit of this action; and also from a judgment, entered in said clerk’s office on tbe 22d day of October, 1890, for costs, allowance and interest in favor of plaintiff and against tbe said defendant.
    At tbe time tbe policies were written the family of the insured consisted of the following named persons: His wife, Elvina A. Lane; a son, Richard H. Lane; a daughter, Malvina A. De Mets.
    The wife died April 18, 1886. The son, Richard H. Lane, died July 1, 1886, leaving a widow and two children, and an after-born ■child, also, who survived tbe insured.

      The son did not die intestate, but left a last will and testament -whereof the plaintiff is sole executrix. The insured died July 1, 1889, leaving him surviving, as heirs-at-law and next of kin, a daughter, Malvina A. De Mets, defendant in this action, and three grandchildren, the issue of Richard H. Lane, the son of the insured.
    All the material facts set forth in the complaint were substantially admitted by the answer; and the only question for the court to •determine was, whether or not the view of the apportionment of the moneys payable under the policies, entertained by the insurance company, be correct in law. The insurance company, upon the proofs of death, determined and stood ready to pay the amount due upon the two policies in equal proportions to the daughter, Mrs. De Mets, and to the executrix of the last will and testament of the son.
    The words of contract embodied in the policies and submitted to the court for equitable construction are as follows: “And the said •company doth hereby promise and agree to pay the amount of the said insurance, at its office, in the city of New York, to the assured under this policy, to wit: Elvina A., wife of Maltby G. Lane, for her sole use, if living, in conformity with the statute, and if not living, to the children of said person whose life is hereby insured, or their guardian for their use; or if there be no such children surviving, then to the executors, administrators or assigns of said person whose life is hereby insured, in sixty days after due notice and satisfactory proof of the death, during the continuance of this policy of the said person whose life is hereby insured as above, deducting therefrom all indebtedness to the company.”

      Goles Morris, for the appellant.

      G. S. Hastings, for the respondent.
   Beady, J.:

It is claimed that the appellant, Malvina A. De Mets, having survived her father, Maltby G. Lane, as well as her mother, became entitled at his death to the whole of the moneys under the policies in question. It is not doubted that Elvina A., the wife of the insured and mother of the defendant, did not take a vested interest in these moneys, her right to them depending upon the contingency of her survival of her husband. It is apparent from the provision in the policies that such money was to be paid to her if living, which meant living at the time of the death of the insured, at which time the policies matured, and not before. According to the terms of the policies, if the wife of the insured was not living at the time of his death, the amount of the insurance was to be paid to the children of the insured or their guardian for their use. And if there were no such children surviving, then it was to be paid to the executors, administrators or assigns of the insured, i. <?., to the executors, administrators or assigns of Maltby G. Lane. From this phraseology the conclusion seems to be inevitable, that the children of the insured had not, nor had either of them, a vested interest during the life of the insured, it being expressly provided by the policies that, if there should not be any surviving children of his, the insurance money should go to his executors, administrators or assigns. It was a provision that was exclusively for the children of the insured who should survive him, and not for his grandchildren, a result conclusively indicated by the declaration, that in case there were no surviving children it should be paid to the representatives of his estate or assigns, and the absence of any provision for the payment of it, or any part of it, to the personal representatives of a deceased child. It is contended, on the part of the appellant, that, by the well-settled principles of construction in analogous cases, these insurance moneys, if they became payable to the children of the insured, would be payable to them as a class, and those of the class would take it who were in being when the policies became payable. This proposition would necessarily include after-born children of the insured of his second wife, if there had been any, as participants of the fund. In a ease in which a legacy of £2,000, in equal shares, was given to the children of a deceased sister of the testator, of whom there were three at the date of the will, but one of whom had died in his lifetime, it was held that the two survivors were entitled to the whole sum. ( Viner v. Francis, 2 Brown’s Chancery Cases, m. p. 658 ; see, also, Doe v. Sheffield, 13 East, 526.)

This rule is recognized and approved by the Court of Appeals in United States Trust Company v. Mutual Benefit Life Insurance Company (115 N. Y., 152) and in Downing v. Marshall (23 id., 374). Independently, however, of this rule, a proper construction of the language employed in the policy which embraces the subject under consideration, removes all doubt that by the words “surviving children ” the insured meant “ his children only who should survive him.” The construction contended for on behalf of the plaintiff, if the appellant had not survived the insured, would have made the moneys under consideration payable to her personal representatives, and not to those of the insured, as expressly provided for in the policies, in case there should be none of his children surviving. The adjudications, upon which the plaintiff depends are not applicable to the facts and circumstances of this case. In Whitehead v. New York Life Insurance Company (102 N. Y., 143), the policies were issued in consideration of a sum stated, paid by the wife of the insured, and the amount of the policy was to be paid to her or her personal representatives. In one of the policies it was specified, “ that in case she died before the injured the insurance should vest in the heirs of the insured; ” and in one of the other two policies, “ in case of such death the insurance was to vest in his children.” In the United States Trust Company v. Mutual Benefit Life Insurace Company (115 N. Y., 152), the policy was issued on the life of a husband for the sole use of his wife, in which it agreed to pay to her, or her executors, administrators or assigns, after the death of the husband, the sum insured, and in case she should die-before him, that then the amount should, after his death, be payable to their children, or to their guardian if under age. It will have been observed, that, in neither of these cases, as very justly remarked by the learned counsel for the appellant, is’there a contingent limitation to the personal representative of the husband, in ease there should be no surviving children of his as in the .case in hand, thus showing an absolute intention that the children should enjoy the amount of insurance, if they survived father and mother. And it will be perceived upon a perusal of the case in 115 New York, that the Court of Appeals expresses the opinion, that upon the death of the wife before her husband, the policy was payable to her children as a class and those of the class would take, and they only, who were in being at the time when the policy became payable; that is to say, the whole policy would be payable to the survivor of the class. It appears, therefore, to be an express authority for the proposition that tlie appellant, being the surviving child of Maltby G. Lane at the time of his death, was entitled to the whole fund in question. These views are not antagonistic to the decision in the case of Connecticut Life Insurance Company v. Palmer (42 Conn., 60), in which it appeared that the wife insured the life of her husband for her sole and separate use and benefit, the sum insured, however, to be paid to the wife, if living, and if not, to their children, inasmuch as there was no contingent limitation to the personal representatives of the husband, in case there should be no surviving children at the time of his death. The intention of Maltby G. Lane, the insured, seems to have been, briefly stated, as follows: If my wife survives me, she is to have the whole of the sum insured, if not my children, if they survive me, shall have it. If they do not and neither of them survives me, it shall form a part of my estate to be distributed either as I shall direct by my last will and testament, or according to the laws of the State of New York. It is my design to provide for my wife and my children, and none others, through the instrumentality of these policies. For these reasons it is thought that the judgment appealed from was erroneous and should be reversed and a new trial ordered, with costs to appellant to abide event.

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

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


author: JBarrett, J.:

text:
    LEOPOLD WISE and CHARLES WISE, Respondents, v. HUGH J. GRANT, Appellant, and MAIER ROTHSCHILD, Defendant.
    Shidence— declarations of the defendant subsequent to the levy under an attachment are not admissible as against the sheriff.

    Certain goods which had been sold to one Rothschild, upon the faith of certain representations made by him, as to his financial responsibility, were, three days later, levied upon by the sherifE under an attachment obtained by creditors of Rothschild, and, while the goods were thus in custody of the law, the agent of Rothschild made to the vendors of the goods admissions which tended to show the falsity of his principal’s representations.
    Soon after such vendors brought an action of replevin for the recovery of the goods, and therein proved, under objection by the sheriff, the admissions of Rothschild’s agent.

      JBeld, that as the goods were out of Rothschild’s possession, and were in the custody of the law when the admissions were made, they were inadmissible in evidence as against the sheriff.
    That the sheriff’s position, in defense of the title secured by the levy, could not be assailed by hearsay evidence, nor by any testimony which would not be competent, as against Rothschild’s transferree, or his privy in estate or legal representative.
    Appeal by the defendant Hugh J.' Grant from a judgment, entered in the clerk’s office of the county of New York on the 10th day of May, 1889, in favor, of plaintiffs; and also from an order, entered in said office on the same day, denying a motion of said defendant for a new trial, after a trial at the New York circuit before the court and a jury, at which the value of the goods in question was fixed by the verdict of the'jury at $1,075.24.

      .-Abraham, Gruber, for Grant, appellant.

      Horvñtz da Ilershfield, for the respondents.
   JBarrett, J.:

There is but one serious question presented by this appeal, and that is, whether the declarations of the debtor’s son and agent, made after the levy, were admissible against the sheriff. The action was replevin for goods sold by the plaintiffs to Maier Rothschild. Rothschild did not defend, and the question presented was raised solely by the defendant Grant. The goods were sold on the 23d day of August, 1887. Three days later the sheriff levied upon these and other goods under an attachment against Rothschild in favor of other creditors. Thereupon the plaintiff, Leopold Wise, had an interview with Ahraham Rothschild, who was Maier Rothschild’s son and agent, at which the levy was discussed and the declarations in question made. The result of this interview was, that the plaintiffs determined to rescind the contract of sale made on the twenty-third, and to replevy the goods. They accordingly brought this action, and upon the trial they proved that the goods were sold to Rothschild upon the faith of certain representations as to the extent and situation of his real estate, and as to the amount of his indebtedness. It then became incumbent upon them to prove the falsity of these representations, and, to that end, Leopold Wise was permitted, under the plaintiffs’ objection and exception, to testify to Abraham Rothschild’s declarations and admissions made at the interview already referred to. We think this was error; and as there was no other evidence of the fact, it is necessarily fatal to the verdict. Rothschild was not in possession of the goods when the admissions were made, and, consequently, the cases where declarations of an assignor in possession have, under certain circumstances, been admitted against his assignee (Adams v. Davidson, 10 N. Y., 309) are inapplicable. The discussions on this general subject have generally related to declarations of the assignor made prior to the assignment. The inadmissibility of his subsequent declarations to affect the title of an assignee in trust for creditors seems to have been universally conceded. There can, indeed, be no doubt that the ■ declarations in question would have been clearly inadmissible, as against either a bona fide purchaser for value from Rothschild or an assignee in trust for Rothschild’s creditors. (Truax v. Slater, 86 N. Y., 632; Beste v. Burger, 110 id., 644; Bush v. Roberts, 111 id., 278.) Is there any distinction in principle which makes, such declarations admissible against the sheriff? We think not. By his levy the sheriff acquired a right in the property, of which the defendant in the attachment could not deprive him by any subsequent act or declaration. Then, too, the plaintiffs in the attachment secured a lien upon the goods in question by the levy thereon, and they could not be deprived of that lien by any subsequent act or declaration of the defendant against whom they were proceeding. It is said that the sheriff and the attaching creditors proceeded in the right of Rothschild and stood, so to speak, in his shoes. In a qualified sense this may be true, although the attachment proceeding was strictly in invitum. But the question is not whether the sheriff acquired a right superior to that possessed by Rothschild, which, of course, he did not, but whether Rothschild can, by a subsequent statement, admit away whatever right he did acquire. Such subsequent declaration was not admissible as a. declaration against interest, for- the reason that the property was-then in custodia legis, and not in Rothschild’s possession. It was simply a declaration in the interest of one of two contending creditors. In Alexander v. Mahon (11 Johns., 185), the action was trover by a sheriff (who had levied on goods under a fi fia), against one who had distrained the same goods, claiming as landlord of the ■defendant in the execution. The landlord offered parol evidence to prove an acknowledgment of the tenancy by the defendant in the execution, which evidence was rejected, and, as the Supreme Court held, correctly. The reason assigned by the Supreme Court, namely, that as the testimony of the tenant was excluded at the instance of the landlord, it did not lie with the latter to complain of the rejection of the confession, has been criticised; but the rule itself has been fully approved. This case was referred to by Kennedy, J., in his elaborate opinion in Gibblehouse v. Strong (3 Rawle, 437), and the following observations made thereon :

“ In the report of this case referred to, it does not appear when the acknowledgments of Churchill, so offered to be given in ■evidence, were made ; whether before or after the seizure does not appear. If made subsequently to the seizure, as we may presume that they were, the decision is perfectly correct. The right of the sheriff, who was the plaintiff, commenced with the seizure of the goods; and to admit the subsequent declarations of the defendant in the execution to be given in evidence to defeat the sheriff’s right under the seizure would be to open a door to let in collusion and false pretenses, got up between defendants in executions and third persons, for the purpose of defrauding and hindering creditors in the ■collection of their just debts.”

This reasoning is entirely applicable here. At the time of the levy, the title to the goods was in Rothschild, “ subject,” as was said by Andrews, J., in Goodwin v. Wertheimer (99 N. Y., 152), to the right of the vendor, on the discovery of the fraud, to reassert Ms original right and reclaim the property, unless it has come to the .hands of a bona fide purchaser.”- This title was secured by the levy, and the sheriff’s position in defense thereof cannot be assailed ' by hearsay, or by any testimony which would not be admissible as .against Rothschild’s transferree, or his privy in estate or his representative.

Because of this error the judgment should be reversed and a new trial ordered, with costs to abide the event.

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

Judgment reversed and new trial ordered, with costs to abide event.


author: Barrett, J.: Barker, J., Yan Brunt, P. J.:

text:
    THE NATIONAL BROADWAY BANK, Appellant, v. THE WESSELL METAL COMPANY and Others, Respondents.

      Corporations — a transfer in contemplation of insolvency, void— what amounts in law to such a transfer.

    One Riggs, the secretary of an insolvent corporation, in accordance with an understanding with it, began, on June 1, 1889, an action against the corporation upon its note, in which an oifer of judgment was made by the corporation, and on which judgment was entered against it on June eighth On that day execution was issued and returned unsatisfied, although the corporation then had property sufficient to pay Riggs. An action was at once begun upon Riggs' judgment to sequestrate the property of the corporation, and on June tenth a temporary receiver thereof was appointed. The attorney for the corporation actually prepared the papers in the Riggs action, although he did not appear as attorney of record. The receiver subsequently sold the property of the corporation, which Riggs purchased at a wholly inadequate price.
    On June 14,1889, the National Broadway Bank had recovered a judgment against the corporation, to avoid a levy being made under which there was evidence tending to show that the proceedings in the Riggs action had been taken.
    In an action brought to set aside the proceedings had in the Biggs case as collusive:

      Held, that the whole transaction amounted to a transfer of the property of the corporation to Riggs, and that such transfer violated the provisions of the Revised Statutes (pt. 1, chap. 18, tit. 4, § 4), which forbids any transfer or assignment by a corporation, in contemplation of insolvency, and declares the same to be utterly void.
    That it was immaterial that Riggs’ debt was a bona fide obligation of the corporation, or that the corporation sought the appointment of a receiver in order to-divide its assets ratably among all its creditors.
    Appeal by the plaintiff, the National Broadway Bank, from a judgment, entered in the clerk’s office of the county of New York on the 4th day of March, 1890, dismissing the complaint, with costs; also from an order, entered in said office on the 21st day of February, 1890, granting an extra allowance to the defendants, the Wessell Metal Company and Karriek Riggs; and also from an order, entered in said office on the 27th day of February, 1890, granting such an allowance to the defendant George W. Yan Sicklen, as receiver of said Wessell Metal Company.
    One Riggs, the secretary of an insolvent corporation, in accordance with an understanding with it, began, on June 1, 1889, an action against the corporation upon its note, in which an offer of judgment was made by the corporation, and on which judgment was entered against it on J une eighth. On that day execution was issued and returned unsatisfied, although the corporation then had property sufficient to pay Riggs. An action was at once begun upon Riggs’ judgment to sequestrate the property of the corporation, and on June tenth a temporary receiver thereof was appointed. The attorney for the corporation actually prepared the papers in the Riggs action, although he did not appear as attorney of record. The receiver subsequently sold the property of the corporation, which Riggs purchased at a wholly inadequate price.
    On June 14, 1889, the National Broadway Bank had recovered a judgment against the corporation, to avoid a levy being made under which there was evidence tending to show that the proceedings in the Riggs action had been taken.

      W. F. Mac Rae, for the appellant.

      E. D. Worcester, Jr., for respondent Wessell Metal Company.

      Thorndike Saunders, for respondent Karrick Riggs.

      John J. Gleason, for respondent George W. Yan Siclen, receiver.
   Barrett, J.:

The real question in this case is, whether the directors of an . insolvent corporation have a right, by improper indirection, to prevent an honest creditor from obtaining the preference which his diligence entitles him to. To put it more fully and precisely, have ■ these directors a right to secure equality of distribution for all the creditors by means, other than those pointed out by the various statutes regulating their duties and powers, and which, apart from the object sought to be obtained, would clearly be irregular and a fraud upon the law ?

That it is not their duty to take measures to procure a disposition of the company’s property among the creditors, without preference, •was expressly held in Varnum v. Hart (119 N. Y., 105). “ They may,” says Earl, J., “ like an insolvent person, permit the creditors to take hostile proceedings, and allow those to obtain preferences who are the most vigilant. The statute places no restraint whatever upon the creditors, and they are permitted to pursue their remedies in all the ways allowed by the law and to procure satisfaction of their claims if they can.”

But while no such duty is imposed upon the officers of a corporation, there can, of course, be no objection to any lawful act on their part tending to effect equality of distribution. The statute (it. S., pt. 1, chap. 18, tit. 4, §4) is aimed at an unjust discrimination by the company or its officers among the creditors of an insolvent corporation, and these officers cannot be condemned for any lawful or proper effort to prevent one creditor from obtaining an advantage over the rest. We think, however, that the officers are limited to such direct remedies as the statute affords, or at least to such methods as may be pursued without an abuse of the forms of law, and that they cannot effect their ends by legal shams or other improper indirection. If the authority conferred by the statute, or the remedy afforded by a proper use of some- of its provisions, is insufficient to prevent an impending preference by judgment and execution, the officers must submit. However pure their motive, they cannot, to effect their end, transgress the law, or by an abuse of its forms and processes work an equity for which the legislature has made no provision.

Speaking of the legislative purpose to prevent “ unjust discrimination,” Earl, J., in the case cited, observed that it “was to be accomplished in only one way, to wit: by 'resti'cdnt upon the action of the corporation and its officers. They having the best and the earliest knowledge of the actual or impending insolvency were not 'to transfer or assign any of its property, so as to give any preference or advantage therein to any person ; but the purpose was in such cases to leave the property to be taken or disposed of by due course of law.”

The officers of a corporation must not be wiser or more just than the law. When they find what they imagine to be a casus omissus, they must not attempt to supply the remedy by artifices foreign to ■the statute, and which, but for an undoubtedly good motive, would be morally, as well as legally, corrupt and fraudulent. Let us apply these principles to the facts of this case. The present plaintiff had sued the defendant company and the directors found themselves face to face with an impending judgment and execution. What were they to do? The company had personal property amply .sufficient to satisfy the impending execution. The directors could let the law take its course, and they were under no legal obligation to do otherwise. They could not stop the plaintiff by any remedy pointed out in the statute. Proceedings for the voluntary dissolution of the corporation would not have authorized an injunction until final order. (Matter of E. M. Boynton Saw and File Company, 34 Hun, 371 ; In re Waterbury Trustees, 8 Paige, 380.) Proceedings founded upon the company’s insolvency could not have been instituted for upwards of a year. The statute gave them no general power to apply to the court for an injunction and receiver because of the insolvency of the company or because creditors were menacing it. It is well settled that the court could not, under such circumstances, aid the directors by virtue of its general or inherent powers, for whatever power there is is purely statutory. Nor'could the directors prevent the collection of the plaintiff’s debt by making a general assignment for the equal benefit of all the ■creditors, as the statute expressly forbids the making of any assignment whatever, preferential or non-preferential. .

The device, then, and the sole device at hand, was to obtain a receiver in sequestration proceedings under section 1784 of the Code. But the right to institute proceedings under this section was not conferred upon the directors.. They could only invoke the remedy indirectly, namely, by an arrangement with a judgment-creditor. This proceeding, however, plainly excludes a case where the company, though insolvent, is possessed of sufficient property, real or personal, within the county where it transacts its general business, ■or where its principal office is located, to satisfy the judgment-creditors’ execution. It is a proceeding looking solely to the sequestration of such assets of the company as are not leviable. It thus contemplates the possibility of the very preference by due course of law which the directors desii'ed to prevent. For it is only when the vigilant creditors have had all the tangible property of the company, within one or the other of the specified counties, applied upon their ■executions, and there is still a balance unpaid thereon, that the court is authorized to appoint a receiver. And it is only the assets which are left, after the application, thus preferentially, of -the tangible property, that are to be distributed in the sequestration proceedings equally among all the creditors. In the present case the directors arranged, we might, without intending any reflection u]ion their good motives, say colluded, with one of their number, Mr. Riggs, who was also the secretary of the company, to confess judgment in his favor, “ for the purpose,” to quote the resolution of the board, “ of at once placing the company in the hands of a receiver in order, equitably, to protect the interest of all creditors.” Mr. Riggs had an entirely bona fide claim against the company, and there can be no question on that head. It was a debt, however, which the statute expressly forbade the company to pay (after its notes had gone to protest) by the assignment or transfer, directly or indirectly, of any of its property. And although Mr. Riggs might have lawfully proceeded to judgment upon his claim, any levy thereunder would have been a fraud upon the statute, and such levy would have been treated as void. (Kingsley v. First National Bank of Bath, 31 Hun, 337.)

Thus the statutory prerequisite to sequestration proceedings was intended to be, and was, a mere form, for Mr. Riggs frankly avowed that he had no intention of levying under his execution, and that his sole object, and that of his fellow directors, was a mere nominal compliance with the law, which required that such an execution should be returned unsatisfied in whole or in part. In other words, the purpose was to proceed by means of an avowedly false return, for there was ample property to satisfy Mr. Riggs’ execution. There was also enough to satisfy the plaintiff’s execution, even if Mr. Riggs had proceeded under his. Mr. Riggs’ judgment was for $4,108.70, while the two judgments recovered by the plaintiff amounted to $6,100. The tangible property was subsequently sold by the receiver appointed in the sequestration proceedings to thievery Mr. Riggs for $10,000, which is but $175 less than the total amount of all the judgments ; and this sum of $10,000 was but a fraction of the real value of the property. The receiver reported to the court that, although no fraud or deception was practiced on the sale, the price was grossly inadequate, so much so that, as an officer of the court, he would not carry out the sale, because of the “ great hardship ” and “ actual injustice to the creditors of the company ; ” and, in fact, he refused to do so until directed by the court.

The sequel is thus a singular commentary upon the high-sounding professions of all concerned, and it illustrates what not unfrequently happens when, to avert some pretense or assumption of evil, the machinery of the law is diverted from its precise statutory uses. What, in the end, was accomplished here was the practical preference of Mr. Riggs. Iiis judgment was for but a fraction of his claim against the company. In fact, the company owed him some $30,000, and the property he has thus secured (even at the valuation put upon it by the president, Mr. Wessell, in his affidavit in the sequestration proceedings) is worth far more than that sum. We are quite aware that this action is not to set aside this sale, nor to hold Mr. Riggs as a trustee with regard to his purchase, and these facts are only adverted to because they prove, with incisive clearness, the character and extent of the sham which permeated these proceedings throughout. They show most conclusively that if Mr. Riggs’ judgment and execution had been enforced, if the sheriff had been permitted to do his ordinary duty and to respect the command of the writ, the present plaintiff, though following that confessed judgment, would have collected every dollar of its-execution. It was only because Mr. Riggs’ judgment could not be legally enforced that it was confessed ; only because the sheriff was not to malee the amount of the execution that it was issued. In Freeman on Executions the learned writer says (p. 216) that, “ According to a very considerable preponderance of the authorities no actual intent to hinder, delay or defraud any one (in the issuing of an execution) need be shown. An execution and its lien may be avoided by such conduct on the part of the plaintiff as shows an improper use of his writ, though, the motives influencing such conduct, instead of being fraudulent, were grounded on kindness and charity toward the defendant, and free from the slightest design to inf ire others. The only proper use of an execution is to enforce the collection of a debt, and to enforce it with a considerable degree of diligence. To employ it for other objects is inconsistent with its nature, and such a perversion from its legitimate purpose as brings it under the penalty prescribed by the statute of Elizabeth.” (See, also, Smith v. Erwin, 77 N. Y., 471, and Forbes v. Waller, 25 id., 430.)

Thus it may fairly be said that the plaintiff here has been frustrated solely by the acts of the parties, not by the true or genuine operation of the law. The statute has simply been diverted ■from its natural and well-defined channel and made to serve the defendant’s purposes. The entire proceedings were actually instituted, conducted and carried through by the defendant company. Mr. Riggs was, in fact, but the name in which the company applied for sequestration against itself. His participation in the matter was, it is true, active and personal, but it was at all times jointly with the company and its directors and attorney. This is apparent from the findings of the learned judge at Special Term. They are as follows :

Thirteenth. The action in which said judgment of Riggs was recovered was commenced by the drawing of a summons and com. plaint in the name of Karrick Riggs against said Wessell Metal Company, by one E. I). Worcester, Jr., an attorney-at-law, and a director of said Wessell Metal Company, who procured the same to be subscribed by one D. Frank Lloyd as said plaintiff’s attorney, -on the 29th day of May, 1889; a notice of appearance for said Wessell Company was written out by said Worcester, and the name -of his firm, Saunders, Webb & Worcester, subscribed thereto by him on June 3, 1889, and an offer of judgment for $4,000 and interest was written out and prepared by said Worcester and executed by said Wessell Metal Company, and dated as of June 8, 1889, and an acceptance of said offer was written out and prepared and dated as of said June 8, 1889, by said Worcester, and subscribed by said Lloyd.

“ Fourteenth. That said Worcester wrote out a form of judgment, and on said June 8, 1889, caused to be put together and filed with the clerk of the city and county of New York said papers in said action, and thereupon judgment was entered on said day with said clerk therein, in the name of Karrick Riggs against the Wessell Metal Company, at the hour of eleven o’clock and twenty-one minutes, for the sum of $4,075.

Seventeenth. That after the return of said execution as aforesaid, defendant Karrick Riggs began an action to sequestrate the property of said defendant company,, being the same action in which the defendant George W. Yan Siclen was appointed receiver. That the summons and complaint therein were prepared by said Worcester in advance of June 8,1889, and were subscribed by Saunders, Webb and Worcester as attorneys ; and on said day an order was obtained by said Worcester to show cause, returnable on the 10th day of June, 1889, for the appointment of a receiver of said defendant company’s property; and on said return day an order was made for the appointment of the defendant George W. Yan Siclen as such receiver.”

Mr. Worcester was the attorney for the company. His firm were its attorneys of record in Mr. Riggs’ common-law action, and they were Mr. Riggs’ attorneys of record in his sequestration action. Although Mr. Floyd was nominally Mr. Riggs’ attorney in the common-law action, yet it was Mr.-Worcester who procured his signature to the various papers, who handed the execution to the sheriff and who directed that officer to return it forthwith. It was also Mr. Worcester who moved the resolution in the board of directors authorizing the president to confess judgment to Mr. Riggs, and who moved a subsequent resolution authorizing tlie president to consent to the appointment of Mr. Higgs, or any other proper person, as receiver. Nearly every word in both records, the common-law action and the sequestration proceedings,.was written by Mr. Worcester, and his firm moved the court for the appointment of the receiver. Mr. Yan Siclen was appointed upon the written suggestion of Mr. Riggs, and upon'the consent of the defendant corporation. . It is not too much to say, therefore, however it may appear in form, that this company appUedfor its own sequestration and obtained its own receiver. If such proceedings as these are to-be sustained, what, then, becomes of the statute forbidding an assignment or transfer of any kind, even n'on-preferential, in trust for creditors % What have these gentlemen effected if it be not the-transfer thus forbidden ? Formally, the transfer is by operation of law; substantially, it is by their own act. It wa,s held in Kingsley v. First National Bank of Bath (supra;) that a corporation by offering to “ allow judgments to betaken against it (in certain actions) before its time to answer therein had expired, in effect transferred and assigned its property, in contemplation of insolvency, in violation of section 4 of title 4 of chapter 18 of part 1 of the Revised Statutes, and that the judgments entered upon such consent were thereby avoided and rendered of no effect.”

Barker, J.,

speaking for the General Term, said that “there is no real distinction between a conveyance or transfer, directly from the corporation to its creditor, and one from the sheriff by means •of legal proceedings against its property. The sheriff realizes the money by a sale of the property, and hands the same over to the creditor, with the consent of the debtor. In the eyes of the law it is a sale, with the consent of the latter, for the purpose of paying his debt. A perfect levy upon property by execution, issued on a valid judgment, followed by a sale, is, in every, sense of the term, a transfer of the property to pay the judgment.”

The decision against confessed judgments in that case was not placed solely upon the ground that a preference was thus effected. That ground was specially applicable to officers of the company. But the court, in what we have quoted, was considering the cases of •ordinary creditors, and the decision was expressly placed upon the ground not merely of a preference, but of what amounted vn law to a transfer or assignment of property forbidden by the statute. This is evident from Mr. Justice Barker’s subsequent language.- “ The statute,” he says, declares the assignment or transfer void, in case the same is made in contemplation of insolvency. The question to be determined is not one of fraud, or of an intent on the part of the creditor to obtain a preference in the payment of his debt; but the simple inquiry is, was there actual or contemplative insolvency and a transfer of property for the benefit of creditors. If both these acts are established, then the transaction is void.” (And he cites Brouwer v. Harbeck, 9 N. Y., 589; Burris v. Thompson, 15 Barb., 62, cited and approved in Sibell v. Remsen, 33 N. Y., 96; Robinson, as Receiver, v. The Bank of Attica, 21 id., 406; Dutcher v. Importers and leaders’ Bank, 59 id., 5; Bump on Fraudulent Conveyances, 256; In the Matter of Burst, an Insolvent Debtor, 7 Wend., 239.)

The question, then, is unimportant whether by means of the confession and subsequent proceedings there was a transfer for the benefit of a particular creditor or of creditors generally. Any transfer is forbidden, and if, in fact, such transfer was effected without direct statutory authority, and .without even the genuine application of a judgment-creditor, operating in good faith under the provisions of the statute as to sequestration, such transfer is unauthorized and void; and being unauthorized and void, it is, in law, a,fraudulent obstruction to the plaintiff’s judgment and execution. We do not mean to intimate that in the sequestration proceedings the court had not jurisdiction, nor do we doubt that the defendant company could waive all objections to the proper return of the execution. (Whittlesey v. Frantz, 74 N. Y., 456.) We lay no technical stress upon the admitted fact that the sequestration action was actually commenced before the execution was returned. The return of an execution unsatisfied is undoubtedly a jurisdictional prerequisite to sequestration proceedings, but the company could waive the point. It could even admit the false allegation that the execution had been returned before the commencement of the action, and a third person in a collateral suit could not question the jurisdiction acquired by such admission. The plaintiff’s rights in this action do not depend upon the question of jurisdiction at all, nor has the company’s waiver of technical difficulties anything to do with it. The question is as to the acts of the parties within the jurisdiction, and how the exercise of jurisdiction was set in motion and utilized. The defendant seems to think that the bona fides of Mr. Riggs’ claim is the only important factor, and that when that is conceded all else is condoned. Their position, however, would be but little worse in principle if l)Ir. Riggs’ claim had not been bona fide. He could still have alleged (we will assume in an unverified complaint) a bona fide debt, the company could have admitted it, and judgment could have been taken on the admission or upon an offer. Now, if this proceeding were attacked, the same argument could be made — our object was not to collect a debt at all, but to effect an equal distribution of property. And, after all, what harm have we done ? It was for the corporation, not you, the aggressive pursuing creditor, to complain if the alleged debt was assailable. If the company was satisfied and the court had jurisdiction of parties and subject-matter, that is the end of it. You cannot attack our proceedings collaterally. We have prevented an unjust preference and the means adopted are immaterial. Anything to prevent the collection of a preferential judgment.

Such a doctrine would lead to perpetual evasions of the statute and in the end to its practical nullification. Our judgment, then, rests on no narrow or technical point, but on the broad ground that <unlawful means were here used to effect a forbidden end, namely, the means of a eollusively confessed judgment, an equally collusive execution, issued as a sham and returned as a sham, followed by sequestration proceedings founded upon these shams, instituted by the defendant company against itself through its own counsel, all to effect the end of a practical transfer by the directors themselves (using the court as their agent, and moving it with apparent frankness, but real concealment and deception) to an official trustee (of their own selection) for the benefit of creditors. We think the plaintiff was thus, in a legal sense, hindered, delayed and defrauded and that it was entitled to proceed in the due course of law without being obstructed by the proceedings in question.

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

Yan Brunt, P. J.:

I concur in the foregoing opinion, except the proposition that in this action the question of the jurisdiction of the court in the sequestration proceedings could not be inquired into, and that the defendant company could waive all objections based upon the want of return of the execution at the time the sequestration action was commenced. The authority cited, Whittlesey v. Frantz (74 N. Y., 456), does not sustain the proposition.

This was an action by the receiver of a corporation to recover a debt, and it was held that, in such an action, the regularity of the appointment of the receiver could not be called in question, as that would be assailing such appointment collaterally.

In the case at bar the sequestration proceedings are not attacked collaterally, but an action is brought to set them aside because of fraud; they are attacked directly. If the admission of the corporation that an execution has been returned unsatisfied, where, in fact, it has not been so returned, is binding in this action, then I can see no reason why sequestration proceedings may not ripen into the appointment of a receiver, which cannot be assailed, where there is not even a judgment, in fact. All that would be necessary would be to have the complaint allege a judgment and the answer of the corporation admit it, and jurisdiction would be conferred. This, of course, cannot be so. In an action brought to set aside such proceedings, jurisdiction depending upon admission can certainly be inquired into.

Bartlett, J., concurred.

Judgment reversed and new trial ordered, with costs to abide event.