author: By the Court.—Sedgwick, Ch. J.

text:
    GEORGE H. SEELEY, Appellant, v. JAMES MORGAN, et al., Respondents.

      Corporation.—Ultra vires.—Estoppel, by receipt of consideration.—Evidence.—- * Presumption as to execution of instrument.

    For the purposes of a suit against a third party upon a chose in action held by plaintiff as transferee from a corporation, it is enough if plaintiff prove an existing transfer, which¡ as against the corporation, vested him with title at the time of delivery or thereafter, though the corporation, its stockholders, or creditors may have had rights that would enable them to avoid or annul such transfer.
    Such an assignment which recites the receipt by the corporation of “ valuable considerations,” and is executed by the treasurer in the name of the company with'the corporate seal, and duly proved by a commissioner’s certificate, cannot be excluded, on the ground that the evidence shows lack of authority in the treasurer to act for the corporation, there being no proof that the corporation had disaffirmed his act, or offered to return the consideration, or that plaintiff knew of any informality or irregularity in the execution of the transfer.
    In such a case, the seal and the treasurer’s signature are pi'imafaeie evidence of execution by proper authority, and there is a further presumption from the seal and the recitals, that the company received “ valuable consideration,” retention of which operates to estop it, as well as a defendant sued under such transfer, from asserting that it was invalid or had not been made. Nor can the transfer be attacked on the ground that in its execution the provisions of the by-laws and the statute under which the corporation was formed, regulating the manner of transacting its business, were infringed.
    It seems that a formal resolution of the directors made after the action upon such assignment is begun, ratifying the act of the treasurer in executing it, is sufficient proof of the existence of an assignment at the time of the beginning of the action. In any event it is admissible as evidence of an actual acquiescence in and ratification of such act before the action.
    Before Sedgwick, Ch. J., Freedman and O’Gorman, JJ.

      Decided December 3, 1883.
    Appeal by plaintiff from j ndgment entered on report of referee dismissing the complaint.
    The action was for alleged equitable cause. The plaintiff sought to enforce a cause of action in a Massachusetts corporation assigned to him. He gave facts tending to prove the cause of action, and to show that it had been assigned to him he offered in evidence a written transfer signed in the name of the corporation, by its treasurer, with the corporate seal affixed. The referee refused to receive it in evidence, on the ground that it conclusively appeared by the testimony that the person filling the office of treasurer-had no authority to sign the name of the company or to affix its seal. The complaint was dismissed solely on this ground. Further facts appear in the opinion.
    Stafford, Graff & Roman, for appellant.
    —I. As the instrument complied with the statutory requisites for documentary proof, it was plaintiff’s absolute right that it should be admitted in evidence, (a) The statute is that when an instrument is acknowledged or proved as a conveyance of real property must be for record, “ thereupon it is evidence.” (Code Civ. Pro. § 937). (b) Considering other evidence in order to determine the admissibility of this documentary evidence was error. It was a manifest and utter confounding of the question of admissibility of evidence and of the question of the effect of evidence. The assignment was clearly admissible, and its exclusion was a legal error for which the judgment should be reversed (C. B. & Q. R. Co. v. Lewis, 52 Iowa, 109-12).
    II. Plaintiff having produced an assignment of the cause of action valid on its face, the defendants could raise no further question as to its validity, nor raise the question that the assignment was not authorized by the corporation (Flint v. Craig, 59 Barb. 332; Eno v. Crooke, 10 N. Y. 66; City Bank of N. H. v. Perkins, 29 Id. 566; Castle v. Lewis, 78 Id. 134).
    Passing from an assignment of this character, made under these precise circumstances, to the general subject of a written assignment of a cause of action, the authorities uniformly hold that the production of such an assignment gives the plaintiff a perfect and absolute right to maintain the suit, and bars all further inquiry on that point (Stone v. Frost, 61 N. Y. 614; Sheridan v. The Mayor, 68 lb. 30).

      III. The validity of the written assignment offered in evidence is in no wise affected by statutes or by-laws prescribing methods of formalities of corporate action. (a) Statute or charter provisions, prescribing methods of corporate action merely, confer no rights upon individuals (Eaton v. Aspinwall, 19 N. Y. 121 ; M. E. U. Church v. Pickett, 19 Id. 485-6; Trustees of V. S. v. Hills, 6 Cow. 23; Brower v. Appleby, 1 San. 158; Stafford v. Wyckoff, 4 Hill, 442; Barnes v. Ontario B’k, 19 N. Y. 152; Morawetz's Private Corporations, § 48; Angell & Ames on Corp. § 253; Boone on Corp. § 99). (b) By-laws of a corporation have no force or effect except between the officers and stockholders. They do not affect the rights of third parties in their transactions with the corporation had in the ordinary and usual way of business among individuals in similar transactions (Morawetz Priv. Corps. §§ 46 and 370; Boone Law of Corp. § 59; Angell & Ames on Corp. § 325; Driscoll v. W. B. &c. M. Co., 59 N. Y. 109; Mechanics’ & Farmers’ Bank v. Smith, 19 Johns. 123; State v. Overton, 24 N. J. L. 440). (c) It will be conceded that it is a much graver offence for a corporation to enter into a contract which it has no power to make than it is to omit prescribed formalities in making a contract which it has a right to make ; and yet, rights of the parties to it will be enforced, and such a violation of laV can be invoked against the corporation only by the state in an action to dissolve the corporation (Angell & Ames on Corp. §§ 152-3; Morawetz's Priv. Corp. §§ 118-19; Boone on Corpor. §§ 99-101; Kent v. Quicksilver Mining Co., 78 N. Y. 159; Whitney Arms Co. v. Barlow, 63 Id. 62; Groundie v. N. W. Co., 7 Pa. St. 233; Grant v. Henry Clay C. Co., 80 Id. 208; Natoma Water Co. v. Clarkin, 14 Cal. 552; Union W. Co. v. Murphy, F. Co., 22 Cal. 630; Chambers v. City of St. Louis, 29 Mo. 543; Martindale v. K. C. & St. J. R. Co., 60 Mo. 508; C. B. & Q. R. Co. v. Lewis, 53 Iowa, 113).
    IV. One who deals with a corporation is not held to a knowledge of statutes or by-laws prescribing the formalities of its action, and is not bound to see that they are complied with (Smith v. Smith, 62 Ill. 497).
    V. A formal resolution of the board of directors authorizing the execution of the assignment was not necessary to render the assignment valid (Conover v. Mutual Ins. Co., 1 N. Y. 292; Hoag v. Lamont, 60 Id. 101; Bank of Middlebury v. R. & W. R. R. Co., 40 Vt. 160; Kelsey v. Nat’l B’k of Crawford Co., 69 Pa. 430). Even if there had been no legally constituted board of directors who could formally authorize an officer to execute the assignment, its execution by him would be valid and would bind the corporation (Castle v. Lewis, 78 N. Y. 134; Sherman v. Fitch, 98 Mass. 64).
    VI. The assignment is valid. Its execution was authorized. (a) It has upon its face all the indicia of being an authorized and valid assignment. It recites that “ the Tournaphone Music Company hereby sells, assigns and transfers to George H. Seeley,” &c. “In witness whereof the said The Tournaphone Music Company, by its treasurer, F. L. Faulkner, has hereunto set its hand and seal.” These recitals raise the presumption that the document was made by the corporation (Trustees v. McCechnie, 90 N. Y. 628-9; N. E. Iron Co. v. G. El. R. Co. 91 Ib. 162-4). It has the seal of the corporation affixed and the presence of the seal alone, without a signature is a sufficient execution by the corporation. Clark v. Farmers’ Mfg, Co., 15 Wend. 258; Union Bridge Co. v. T. & L. R. R. Co., 7 Lans. 244). The presence of the seal is prima facie evidence that it was affixed by proper authority (Trustees v. McCechnie, 90 N. Y. 629). The seal was affixed by the officer who had the custody of it and who was therefore presumptively authorized to affix it. The corporate name being signed by an officer of the corporation, the assignment would be valid and binding without a seal (Angell & Ames on Corp. § 219, 228; Morawetz Priv. Corp. § 167; Boone Law of Corp. §§ 44, 101.) The term “written contracts,” in the by-laws does not apply to the assignment in question in this case (N. E. Ins. Co. v. De Wolf, 8 Pick. 56; Sanborn v. Fireman’s Ins. Co., 16 Gray, 448; Merchants’ Bk. v. Bank of Columbia, 5 Wheal. 326; Barnes v. Ontario Bank, 19 N. Y. 152). Making the assignment was a transaction falling within the scope of the ordinary duties and powers of the treasurer of the corporation (Hoyt v. Thompson, 5 N. Y. 354). A single officer of a corporation may direct the institution of a • suit in its name and behalf (Am. Ins. Co. v. Oakley, 9 Paige, 496). The assignment may have been made simply as means of instituting a suit in the courts of this state, and this is permissible and legal (Peterson v. Chemical Bank, 32 N. Y. 21). If it be true that two of the directors had resigned, so that at the time the assignment was executed there were but two directors, while the law required three and the by-laws four, this would not deprive the corporation of power to act (Sherman v. Fitch, 84 Mass. 64; Castle v. Lewis, 78 N. Y. 133-5; Smith v. Smith, 62 Ill. 496).
    VII. If the assignment had not been authorized prior to its execution it would have become authorized by ratification. (a) The assignment would be ratified by the failure to repudiate it since its execution became known, which is an admission that its execution was authorized (Angell & Ames on Corp. § 304; Morawetz Priv. Corp. § 304; Boone Law of Corp. § 104; Kent v. Quicksilver Mining Co., 78 N. Y. 184; S. H. B. Co. v. E. H. B. M. Co., 90 Id. 613; Sherman v. Fitch, 98 Mass. 59; Kelsey v. National Bank, 69 Pa. 426). (b) The assignment was formally ratified both by the stockholders and by the directors of the Tournaphone Music Company, May 10, 1883. The assignment was not rejected by the referee as invalid till June 8, 1883. v The referee is therefore in error when he says that this formal ratification did not take place until after he had excluded the assignment. The' formal ratification was not proved until the referee had once refused to admit it without such proof ; but when he held such proof necessary, it was furnished, and the assignment was then offered again but was still rejected, (c) Ratification is equivalent to prior authorization (S. H. B. Co. v. E. H. B. M. Co., 90 N.

      Y. 613; Sherman v. Fitch, 98 Mass. 64; Story on Agency, § 244; Wharton on Agency, § 75; Broom’s Legal Maxims, 867; Angell & Ames on Corp. § 304; Morawetz Private Cory. § 78). (d) It is true that ratification cannot operate retroactively so as to divest rights that have become vested in third parties intermediate the ratification and the act. But the defendants’ interest in the subject matter of the transaction ratified is only of that indirect and incidental nature which the retroactive effect of ratification always disregards (Story on Agency, § 248; Wharton on Agency, §§ 80-1; Phillips v. Campbell, 43 N. Y. 271; Morris v. Shulter, 1 Mackey [D. C.) 201).

      E. S. Babcock, Q. McAdam, and H. T. Ketcham, for respondents.
    —I. The defendants are entitled to competent evidence of plaintiff’s alleged ownership of the cause "of action, or to a dismissal, because they are entitled to due proof of every issuable allegation on which they join issue, and because in respect of plaintiff’s title they are now expressly authorized by law to raise the defense that he is not the real party in interest, and because they are entitled, if defeated, to a judgment which will protect them from another action for the same cause by any other party (Hays v. Hathorne, 74 N. Y. 486). The plaintiff below argued that his title “was none of the defendants’ business” unless they could show actual mala fides in the assignment or notice thereof, and cited City Bank of New Haven v. Perkins (29 N. Y. 554). The court, from which that case proceeded, have repeatedly criticised as obiter the passages in their former opinion, from which the plaintiff seeks aid, and have stripped it of the significance suggested by plaintiff (Sanford v. Sanford, 45 N. Y. 727; Hays v. Hathorne, 74 Ib. 489).
    II. The transaction sought to be proved by the paper offered on the trial was not in the ordinary course of the business of plaintiff’s alleged assignor, nor had it been sanctioned by any custom or previous course of dealing on . the part of that corporation. That which was attempted to be sold was its capital property, and the sale was tantamount to corporate suicide, and would be set aside at the suit of a dissenting stockholder (Abbott v. Hard Rubber Co., 11 Abb. Pr. 205-206, aff’d 33 Barb. 578).
    III. On its face the paper when offered was not evidence of the alleged assignment, for it failed to show corporate authority for its execution, the only proof of execution being that contained in the commissioner’s certificate, which states the contents of the deposition made by the “subscribing witness”—i.e., the treasurer who executed the paper—before him, and this fails to show either that the corporation or the board of directors authorized the execution. It says only, “ being authorized so to do by the directors of said corporation.” Though the presence and proof of the seal does under some decisions raise a presumption of authority, yet it is always open to rebuttal, and like any presumption which may be rebutted at all, falls to the ground the moment the fact is shown by direct evidence.
    IV. Before the paper was offered plaintiff had proved that from the organization of the corporation to a period long after the commencement of the trial, the corporation had not authorized this act at any stockholders’ meeting; that it had never authorized it at any directors’ meeting ; and that at the time it purports to be made, December 2, 1882, the corporation had no board of directors, and had had none from October 27, 1882, up to a period long after the commencement of the trial, thus destroying the presumption raised by the proof of the corporate seal. In a case quite like that before the court, the court held, against the statutory proof of the document, that it could not be an act authorized by the board of directors, 1 ‘ because there was no meeting of the board for that purpose” (Murray v. Vanderbilt, 39 Barb. 140).
    , V. The supposed assignment was imperfect and ineffective, for the further reason that it ,was not signed by the ■president and treasurer of the company, as required by the Lby-laws. A body corporate can act only in the mode prescribed by the law creating it. To enable its agents to bind the corporation they must act in pursuance of the provisions of the act of incorporation (Beatty v. Marine Ins. Co., 2 Johns. 109; People v. Utica Ins. Co., 15 Ib. 358; N. Y. Fire Ins. Co. v. Ely, 2 Cow. 678; Hosack v. College of Physicians, &c., 5 Wend. 547). And a by-law adopted in accordance with the law of the State has all the force of a statute (Presb. Church v. City of N. Y., 5 Cow. 538; Stuyvesant v. Mayor, &c., 7 ld. 588; McDermott v. Board of Police, 5 Abb. Pr. 422).
    VI. The attempted “ratification” at a meeting of the Tournaphone Co. and its directors, held during the trial and after the paper had been twice rejected in court does, not aid the plaintiff. The retroactive effect of subsequent ratification cannot be applied to the prejudice of those who-are strangers to the transaction, nor especially so as to impair their rights after suit brought (Dunlap's Paley, 191; Story Agency, §§ 245-246; Evans Agency, 74, [Am. Ed.] 99, note). Defendants must have the right when notified by the suit of plaintiffs’ claim to shape their course by the facts as they exist then. It would be very unjust to compel them to accede to an unlawful claim, because a third party might make it good thereafter by the retroactive effect of a ratification (Lord Ellenborough, in Right. dem. Fisher v. Cuthill, 5 East, 496, followed in Doe dem. Mann v. Walters, 10 Barn. & Cr. 634). The rights of the parties should be determined as they exist at the commencement of the action (N. Y. Shot & Lead Co. v. Carey., 10 Abb. Pr. 44-46). And see Hare v. Van Deusen (32 Barb. 92); Wattson v. Thibon (17 Abb. Pr. 174); Tiffany v. Bowerman (2 Hun, 643); McCullough v. Colby (4 Bos. 603).
   By the Court.—Sedgwick, Ch. J.

—The answer of one of the defendants denies that the alleged claim and rights of the Tournaphone Music Company mentioned in the complaint, have been duly or otherwise assigned to the plaintiff, and denies that the plaintiff is the owner of the said claim and rights or any of them. The answers of the other defendants make the same denials, and aver “that the plaintiff herein is not the real party in interest, but that the Tournaphone Music Company in the complaint mentioned is the real party in interest,” one of the answers averring “ that the action in truth is prosecuted by and in the interest, and on behalf of the Tournaphone Music Company . . . which company is the real, and ought to 'be the nominal plaintiff herein.” The learned referee, in his able opinion, expressed regret in having been obliged to exclude the paper presented by the plaintiffs as an assignment, because he was satisfied that the plaintiff had been able to make a prima facie cause of action in respect to the other matters charged. On the point on which his decision turned, I do not think it would have been inadmissible for him to have inquired, after the assignment presumptively had been proved, as to the bearing of an averment in the answers that the company which made the assignment was the real party in interest. Such a position possibly may imply that the pleader knew that the company, as a corporation, executed the paper in fact, but executed it for its own, and not for the transferee’s benefit. As, however, one of the answers did not contain such a position, no further reference will be made to this matter.

I do not doubt that unless the"plaintiffs could show that the company transferred its rights to them, he would have no cause of action, nor that the defendants could interpose all legal objections to the manner of proving this, or to the sufficiency of the testimony to prove it. After sufficient proof had been given to show that the transfer had been made, I am of opinion that the defendants could raise no further question. When once the transfer was perfected, although the corporation itself, the stockholders, or the creditors, might invalidate it for cause, the defendants could not. These propositions do not involve a denial that the defendants may rely for the purpose of showing that the transfer was not made by the company, upon some ground that would also invalidate it after it had been made, but they are confined to the former purpose. The cases of Hays v. Hathorn (74 N. Y. 486), and Sanford v. Sanford (45 lb. 723), in their allusions to the City Bank of Newhaven v. Perkins (29 Ib. 554), affect it only so far as any attempt might be made to consider it as authority for a proposition that a defendant, if he raised the issue, might not contest an allegation that the plaintiff was the transferee of the right on Which he brought the action as transferee. The law was recognized to be, that if the legal title was in the plaintiff, all methods of assailing the transfer were unavailing to a defendant situated as the present defendants. Sheridan v. Mayor (68 N. Y. 30), was cited with other cases to sustain this. The matter is clear in the case of a transferor who is a natural person. It becomes complicated sometimes when the plaintiff claims to be the assignee of a corporation. The only question then that the defendants could raise was whether the paper in proof was a transfer which, as against the corporation, vested title in the plaintiff at the time of delivery, or at any subsequent time. For the purposes of this action, the transfer would be sufficient even though the corporation might have had rights that would enable it to avoid the transfer or to succeed in an action to annul it if the corporation had not exercised such rights. The plaintiff was entitled to the benefit of the transfer if it were not altogether void against the corporation up to the time that the present action was begun.

The case involves the following facts : On the trial the plaintiff offered in evidence a paper purporting to be a transfer by the corporation of certain rights of action, among which was the present right of action. The referee held that there was sufficient proof of its execution in the commissioners certificate attached to it. The case requires us to assume that the seal which made the impression upon the paper was the corporate seal. On the face of the paper F. L. Faulkner appeared to have signed for the company as treasurer and to have affixed the seal. The referee, however, refused to receive it in evidence, on the ground that the testimony in the case showed that F. L. Faulkner had no authority from the company to sign for it or to affix its seal, and therefore it was not a transfer by the company. The result was a dismissal of the complaint on this ground.

I am of opinion, that if the paper had been received in evidence, it would not have conclusively appeared that the plaintiff was not the transferee of the company. The decision made, in my judgment, failed to give full effect to the presumptions from the actual execution of the paper, and to the rules of law that bind corporations by estoppel. In Trustees Can. Academy v. McKechnie (90 N. Y. 618), it was objected that it did not appear that the person signing as president had been authorized to execute the mortgage. The court said, quoting section 224 of Angell & Ames on Corporations, that: “Where the common seal, of a corporation appears to be affixed to an instrument, and the signatures of the proper officers are proved, courts are to presume that the officers did not exceed their authority, and the seal itself is prima facie evidence that it was affixed by proper authority.” “The certificate of the acknowledgment of a deed is received without proo’f of the official character of the officer presenting it. The contrary must be shown by the objecting party.” The paper thus being properly in evidence, there would be the further presumption from the seal and the statement of the paper that the corporation, as a corporation, had received the “other valuable considerations” for which the transfer was made, which were in value as great as the thing transferred. This being a presumption against the corporation, it extends to a knowledge of the facts on the part of all having power to act, for the corporation in affirming or disaffirming anything alleged to have been done by an officer without authority. There would be no presumption that the individual who acted for the corporation, and received the considerations retained them personally, but the presumption would be that they went to corporate uses. It is further to be considered that all the officers and all beneficially interested in the corporate affairs, were witnesses in the case. Their testimony is not given, but as the transfer should have been received in evidence, unless the evidence otherwise affirmatively showed that it was not the act of the company, it ought to be taken that none of them disaffirmed the transfer. Particular attention will be given to the proof of formal ratification after the action begun. There was no proof that the corporation had returned or offered to return the consideration received by it, nor that the plaintiff knew of any irregularity or .want of formality, in what occurred before the execution of the document.

On account of these facts, the corporation, by the laws of this state was estopped from asserting that the' transfer was not valid or had not been made. In Whitney Arms Co. v. Barlow (63 N. Y. 62) the following principles are announced: It is now very well settled, that a corporation cannot avail itself of the defense of ultra vires, when the contract has been, in good faith, fully performed by the other party and the corporation has had the full benefit of the performance and of the contract. If an action cannot be brought directly upon the agreement, either equity will grant relief, or an action in some other form will prevail. The same rule holds if the other party has had the benefit of a contract fully performed, he will not be heard to object that the qontract and performance were not within the legitimate power of the corporation.” The case approves the opinion of Comstock, Ch. J., in Parish v. Wheeler, (22 N. Y. 494), "That the executed dealing of corporations must be allowed to stand for and against both parties, where the plainest rules of good faith require.”

' Upon a corporation coming into existence, besides the special laws of its creation and mode of action, it is the subject of the general law of the land, and therefore bound by equitable obligations. If it receive and use a consideration paid, that affirms the transaction in which it was paid, the corporation is estopped from going into other matters of power, regularity, etc. (Scott v. Middletown R. R. Co., 86 N. Y. 200; Sheldon H. B. Co. v. Eickemeyer H. B. M. Co., 90 N. Y. 607).

Without holding that the various objections, taken to the validity of the transfer would be sound, in behalf of the company, if it were not for these considerations, it must be held that, in view of them, the corporation could not raise the objections. It was argued that the foreign statute under which the corporation was formed made it incapable of authorizing the transfer, as that statute required that the business of the corporation should be done by at least three directors, whereas, at the time, there were but two directors ; that the by-laws required that the business should be done by four directors, three-fourths of whom should constitute a quorum ; that the by-laws directed that all contracts of a certain kind should be executed by the president and treasurer; that no direction was given by such directors as these were, that the transfer should be made. These matters were immaterial, inasmuch as the transfer bound the company by force of equitable principles which was not impaired by any of these matters, and the company would be estopped from setting them up.

Hoyt v. Thompson (5 N. Y. 320), illustrates the position, that has been taken. ' In it, it was held that the act of certain officers in affixing the seal of the company, was unauthorized, according to the averments of the bill which had been demurred to. The case was one where the transfer had been made as collateral- security for an antecedent debt. Judge Paige specifically referred to this, in saying, “But inasmuch, as the state of Michigan received the .assignments as collateral security merely for an antecedent debt, the Merced Canal and Banking Company, or its representatives, are not estopped from denying the authority of its president and cashier to execute and deliver the assignment. In a subsequent appeal, after trial on issue of fact (Hoyt v. Thompson’s ex’rs., 19 N. Y. 207), Judge Comstock held that the corporation, like an individual, might ratify the acts i of its agents done in excess of their authority, and that | such ratification might in many cases be inferred from an (informal acquiescence in and approval of these acts.

In Murray v. Vanderbilt (39 Barb. 140), Judge Ingraham examined the facts to ascertain whether the presumption from the seal being affixed had been rebutted. This one conclusive fact appeared, the seal had been attached to a press, and they having been sold by the sheriff, were bought in by Mr. Cross, who afterwards signed as president, and affixed the seal. There were other important facts, but it clearly appeared that there had been no re-adoption or use of the seal by the company. The assignment was not made upon consideration received by the corporation.

In Moore v. Rector, &c. of St. Thomas (4 Abb. N. C. 51), the narrowest case was made for the decision of the court. Judge Gilbert says, in his opinion, that the only authority claimed “was derived from a resolution recorded in the minutes of a meeting of the vestry. There were but four vestrymen at the meeting. The act of incorporation said, that no board of trustees should be competent to transact any business unless a majority of vestrymen were present. In the case five vestrymen were required to make a majority. Of course the facts of the case disposed of the presumption on the ground which the parties selected to rely upon.

After the referee had made the decision which has been reviewed, the plaintiff offered to give in evidence a formal resolution of the board of directors of the corporation, made after the action was begun, and which ratified the act of Faulkner in executing for the company the transfer. The proposed evidence was excluded on the ground that if it was not a valid assignment when first offered in evidence, it could not during the progress of the trial be ratified so as to give it retroactive effect as between the litigants in this action without their assent thereto. I am of opinion, however, that however cumulative such a ratification might be, under the facts as they were, yet that it was, in connection with the other facts, some evidence as to whether or not there had not been before the beginning of the action an actual acquiescence and ratification afterwards put in the formal shape of a resolution.

My personal opinion is, that the resolution would have ' been of itself sufficient and competent proof of an assignment at the beginning of the action. It was only evidence, and would not have called for a supplemental complaint. And on the facts of this case, I do not perceive that between the time of the assignment and the formal act of ratification there had been anything involved in the issues which conferred at the time, on the defendants, any right which would have made it unlawful or inequitable to give full force to the retroactive effect of a ratification. I prefer not to make a decision on this ground, as it would require the examination of several cases, such as Tiffany v. Bowerman (2 Hun, 643); McCullough v. Colby (4 Bosw. 603); Gilbert v. Sharp (2 Lans. 412); Bliss v. Cattle (32 B. 325); Gorham v. Gale (7 Con. 739), and this seems not to be necessary in view of the other facts.

The judgment should be reversed with costs, new trial ordered, and the order of reference vacated.

Freedman and O’Gorman, JJ., concurred.


source: Caselaw Access Project

license: Public Domain

text:
    BENJAMIN M. STILLWELL, Appellant, v. THE MAYOR, &c. OF NEW YORK, Respondents.

      Municipal corporations—liability as to streets.—Bo idenae—ordinances, when ' admissible against city. ,

    No cause of action accrues against a municipal corporation, from the mere fact that its officers have neglected their duty in the enforcement of its ordinances, e. g., in regard to the condition of streets and highways.
    In an action for breach of an obligation on the part of a municipal corporation, involving knowledge of certain facts, its ordinances are. competent evidence, when they show such knowledge or notice.
    In an action for damages against the city for alleged negligence in permitting to remain upon the sidewalk an iron vault-cover, having a surface so smooth and slippery that it did not furnish a sure foot-hold for passengers: Held, that ordinances that all vault-covers shall be placed •within twelve inches of the area coping, or within twelve inches of tlie curbstone, and that all sidewalks shall be raised from the curbstone two inches in ten feet, do not of themselves tend to show knowledge on the .part of the city that if the provisions thereof are not observed, there will be danger to passengers of slipping on said vault-cover.

      An ordinance directing the removal by certain city officials, of all vault-covers presenting a smooth surface, and the substitution therefor of covers presenting a rough surface and affording a secure foot-hold for pedestrians, etc., -while it tends to show knowledge by the city that there was danger of slipping upon a smooth vault-cover, does not enlarge its legal obligations, and to recover for such cause it is necessary to prove neglect in failing to prevent the maintenance of such a cover. The duty of a municipal corporation as to sidewalks, etc., is to use ordinary care to furnish a reasonably safe place to step upon.
    The evidence in this case considered and held insufficient to prove that the city was negligent in allowing the vault cover to be placed on the sidewalk or to remain there.
    Before Sedgwick, Ch. J., and O’Gorman, J.

      Decided December 3, 1883.
    Appeal by plaintiff from judgment in favor of defendant dismissing the complaint, upon the order of the judge at trial term.
    The action was for damages to plaintiff, through the alleged negligence of defendants in permitting to remain in the sidewalk of a street an iron vault-cover having a surface so smooth and slippery that it did not furnish a safe foot-hold for passengers.
    On a stormy day, when half melted snow was upon the vault-cover, the plaintiff, stepped upon it, slipped, fell, and was seriously injured. It was claimed that the defendants were negligent in three respects : First, in permitting the cover to remain in the sidewalk ; second, in allowing it to remain as placed upon a stone, which and the sidewalk itself, had an unsafe pitch towards the curb; third, in-allowing it to remain so far from the curb and from the area coping.
    Further facts appear in the opinion.
    On the trial, the complaint was dismissed.

      Stilwell & Swain and Charles P. Miller, for appellant.
    —The iron vault-cover in the street being therein violation of the city ordinances, both as to its position and nature, was an unlawful and unauthorized obstruction in the street. An unlawful and dangerous obstruction in a public street is a nuisance per se (Hume v. Mayor, &c., 74 N. Y. 270; Reich v. Mayor, Com. Pl., 17 Week Dig. 140; Wenzlick v. McCotter, 87 N. Y. 126; Mairs v. Manhattan Ass., 89 Id. 503).
    The defendants are liable for injury received from a nuisance maintained by them (Hume v. Mayor, 74 N. Y. 270; Dillon Mun. Cor. 2d ed. §§ 794, 795, et seq.; 3d ed. § 730, p. 722, note 1). The municipal police are expressly directed by the statute to remove such nuisances or unauthorized obstructions (N. Y. City Consol. Act 1882, § 282; Laws 1864, ch. 403, § 20; Rehberg v. Mayor, &c., 91 N. Y. 137). The police are bound to know the city ordinances prohibiting obstructions, or providing for the safety of the streets ; and for the negligence of the police in failing to remove any obstruction prohibited by ordinance, the defendants are liable (Rehberg v. Mayor, &c., 91 N. Y. 143). It was not necessary that the defendants should know that this vault cover was in fact dangerous (Rehberg v. The Mayor, &c., 91 N. Y. 144).
    The complaint alleged also that the plaintiff’s damage arose from the failure of the defendants to perform their obligation to keep their streets in safe condition for travellers ; and there was ample evidence to entitle plaintiff to go to the jury. The plaintiff is entitled to the most favorable inference possible to be drawn from the evidence (Rehberg v. Mayor, &c., 91 N. Y. 138; Clemence v. Auburn, 66 Id. 334). He showed that the vault-cover was raised above the sidewalk; that it was dangerously smooth in wet weather and obviously so ; that the portion of the sidewalk in which the coal-cover was placed was out of level, so as to raise the cover still higher; and that the vault cover and sidewalk had long been in this condition ; and that a safer cover had come into use ; that the defendants had recognized by their ordinances that this vault-cover was dangerous—1st, by its location in the sidewalk; 2d, by its character. These ordinances taken in connection with the proved condition of the vault-cover and sidewalk, and the injury to plaintiff therefrom, are more than sufficient to make out a prima facie case of negligence against the defendants (Reinhard v. Mayor, &c., 2 Daly, 249). The ordinances in evidence, are obviously intended to further the fulfillment of the city’s obligation ; and so far as they are regulations for the guidance of the city’s own officers in taking care of the streets, violations of them are competent evidence on the question of negligence (Wood v. N. Y. C. & H. R. R. Co., 70 N. Y. 199). That all the ordinances were not enforced, is also evidence of the negligence of the defendants. They show what the corporation regarded as essential—quoad vault-covers—to the safe and proper condition of the streets; and a recognition by the corporation that the vaul t-cover and the sidewalk in this case, formed a dangerous obstruction (Wood v. N. Y. C. R. R. Co., supra; Rehberg v. Mayor, 91 N.Y. 245).

      George P. Andrews, corporation counsel, and D. J. Dean, for respondents.
    -—The corporate authorities are only bound to use reasonable skill and diligence in making the street safe a nd convenient for travel (Dillon Mun. Cor. § 1015; Ring v. Cohoes, 77 N. Y. 86). The defendants are net responsible for the accident so far as the same was caused by the mere slipperiness of the walk produced by snow, &c., then falling (Dillon Mun. Cor. § 1006; Stanton v. Springfield, 12 Allen, 566; Cook v. Milwaukee, 24 Wis. 270; McCarthy v. Syracuse, 46 N. Y. 194; McGinty v. Mayor, 5 Duer, 674; Griffin v. Mayor, 9 N. Y. 456; Battersby v. Mayor, 7 Daly, 16). In order to establish actionable negligence in respect to the sidewalk and vault-cover, the plaintiff must establish a condition of manifest unsafety, so evident and notorious that it was neglect not to have discovered the dangerous condition and procured the amendment thereof (Masterton v. Mt. Vernon, 58 N. Y. 394; Smith v. Mayor, 66 Id. 295; McCarthy v. Syracuse, 46 ld. 107; Hume v. Mayor, 47 ld. 646; Mayor v. Sheffield, 4 Wall. 189; Colley v. Westbrook, 57 Me. 181; Griffin v. Mayor, 5 Selden, 546; Dillon Mun. Cor. § 797; 2 Thompson Neg. 762; Hart v. Brooklyn, 36 Barb. 227).

      If the action of the plaintiff in this case was against the person who caused the vault opening to be made, or who has maintained it, or against the owner who procured the sidewalk to be laid, then the ordinances in question would, as against such persons be some proof of negligence. But it is no proof of neglect against the city, which has committed no act in violation of the ordinances, that its ordinance has been violated by the owner or occupant of the property (Levy v. Mayor, 1 Sand. 467). A city is not liable for failure to enforce its ordinances (Fowle v. Alexandria, 3 Peters, 466). The violation of a corporation ordinance does not ipso facto create a right of action, where none existed before (Fuch v. Schmidt, 8 Daly, 318).
   By the Court.—Sedgwick, Ch. J.

—The plaintiff was hurt by slipping upon an iron vault-cover in the sidewalk of East Fourteenth street. The cover was about eighteen feet from the curb of the .gutter, and about seven feet from what was assumed to be the coping of the area of the adjoining house. In a photograph of the premises no area appears, but the decision did not turn upon there being no area.

The plaintiff read in evidence certain city ordinances ; one (§ 188), was that the opening of the vault shall be either within twelve inches of the curb-stone of the sidewalk or within twelve inches of the area in front of the house, under the penalty of one hundred dollars. Another (§ 199), was that the commissioners of police are hereby directed to report to the commissioner of public works the owners or occupants of any store having vaults under the sidewalk, with covering over the opening thereto presenting a smooth surface, and the commissioner of public works is thereby directed to remove such covering and substitute therefor coverings presenting a rough surface and affording a secure foothold for pedestrians, and that any owner or occupant neglecting or refusing to comply with the directions contained in such notification for a period of six months should incur a penalty of $5 for every day in excess of said six months, that such neglect or refusal should continue. Another (§ 99), was that all sidewalks should be raised from the curbstone in the proportion of two inches in ten feet, under the penalty of ten dollars, to be sued for from the person laying the same and the owner of the lot fronting on the sidewalk.

The plaintiff claimed that if these ordinances had been enforced, the accident would not have happened, and therefore their non-enforcement, under the circumstances, gave an action against the city.

It is manifest that the passing of these ordinances, and the city providing officers whose duty it should be to enforce them, are acts indicating care, and are not acts of negligence ; and decided cases show that an individual has no cause of action against the city from the officers of the ■corporation neglecting their duty to . enforce ordinances (Levy v. Mayor, 1 Sanf. 465; Griffin v. Mayor, 9 N. Y. 456; Lorillard v. Town of Monroe, 11 Id. 392). If this were not the law, it would be necessary to inquire whether it appeared that the ordinances had not been enforced, of that if they had been, how the enforcement would, have prevented the accident.

If, however, irrespective of the ordinances, there was an obligation toward the plaintiff on the part of the city, a failure to perform it giving him a right of action, and that ■obligation involved knowledge or notice of certain things, then if the ordinances proved that the city had such knowledge or notice, they would be competent evidence, to be properly applied to the facts proven.

The plaintiff’s case assumes that it was the duty of the ■city to use ordinary care and diligence to keep the sidewalk reasonably safe for passers in walking upon it, and that this comprehended the coveringof the vault. This duty existed, irrespective of the ordinances. The ordinance in section 192, does not tend to show that the city had knowledge that there was danger to passengers, of their slipping upon a vault-cover, more than twelve inches from the curb of the sidewalk, or more than twelve inches from the coping of the area. It implies no more than that there were reasons, which it does, not appear were applicable to the danger of slipping. It may have been directed to the chance of passengers stumbling over the cover, or falling into the opening if the cover were displaced.

The ordinance in section 199 seems to imply that there was to the knowledge of the city danger of passengers slipping npon a vault covering, that presented a smooth surface and that did not present a rough surface which afforded a secure foothold for,pedestrians. This ordinance, however, did not enlarge the obligation of the city, beyond what the law otherwise deemed to be the duty of the city. In both instances, it would be necessary to prove that the city had been guilty of some want of care, in not preventing the maintenance of a smooth vault cover.

The ordinance in section 99, does not tend to show that it was passed because the city knew that unless the sidewalk was raised from the curbstone in the proportion of two inches in ten feet, there would be danger of passengers slipping upon it, or that the sidewalk would not be reasonably safe from that danger. If the ordinance meant' the proportion of two inches in ten feet, and no more, there-were other purposes, such as drainage, that were to be sub-served by such a pitch and if the danger of slipping was considered, then it intended that such pitch would be safe, while it did not pretend that any particular greater pitch would be unsafe.

The question therefore comes, did the plaintiff make a case, irrespective of these ordinances, which should have been submitted to the jury.

The vault-cover had been upon the sidewalk more than four years, and therefore the city was presumed to know of it being there, or to have been guilty of negligence in not learning of its being there. There was no proof that the city was negligent in allowing the vault-cover to be placed in the sidewalk or to remain there. The duty was, to use ordinary care to furnish a reasonably safe place to step upon. There was no proof that in the performance1 of this duty, the city could resort to any test but the appearance presented by the exterior of the cover. It appeared by a witness for the plaintiff, who had a wide knowledge of the kind of covers used for vaults for many years back, that this cover was of a kind in common use. Of course, if the evidence had otherwise proved that this cover was dangerous, then that it was like other covers in common use, would not have tended to show, that the plaintiff had no action. But when the appearance of the cover is the test, then inasmuch as what is commonly used, may be considered to be reasonably safe, a similarity of appearance would tend to show that there was no negligence. There was no proof that this vault-cover had something peculiar to it, that distinguished it, individually, from others of its class, and that made it dangerous. What has been said particularly applies to the vault-cover as first placed in the sidewalk. There was nothing in the evidence to show that from use, it had apparently become dangerous. Common information enables us to say that continually stepping upon the-iron of the cover would make it smooth and slippery at some time, but not at some point of time before the accident, so that it would present an appearance of danger. The evidence on that point was given by the plaintiff himself, who testified that he slipped because it was a smooth surface; that he only noticed the cover after he was taken up, after his fall; that he could llot tell how near the-center of the cover he placed his foot; that it had been snowing, and that the sidewalk was covered with slush from the melting snow. The vault-cover was produced to the witness, and he was asked: “ Where is the smooth surface about that % A. It is all smooth. Q. Where ? A. The whole surface, if you put some snow on it you will find it smooth enough. Q. You mean to say, that because it is iron and because these little grooves run from the center to the edge here, it is a smooth surface ? Is that what you mean \ A. I mean it presents no foothold for the foot, so that on slippery days a man would slip off it, as if it was a piece of ice.” It is evident that the plaintiff did not mean to testify that there were places on the cover, where the iron had been so worn that they presented a slippery surface, irrespective of the slush that had been on it, at the accident; but that the cover and the slush upon it presented a smooth slippery surface.

It might have been a question for the jury, perhaps, if the condition of the cover before the accident had been sufficiently proven, to say whether it was proper caution to leave the cover as it was, in view of the possibility or probability of a fall of snow making it slippery. The defect is, .that it does not appear on this appeal, that before the accident the cover presented such an appearance that the question could go.to the jury.

The cover itself was produced on the trial but not on the appeal. A photograph of the sidewalk and the cover in it, was proven. Oral testimony that made reference to its appearance was given. On this appeal, it does not appear that there was an appearance of a slippery surface, or one likely to become slippery when snow fell, in any other sense than would apply to the cover when it was first put in, or indeed, to all vault covers whatever. It appeared that all covers, however rough in construction, would be slippery after the recesses in them were filled with snow.

There was no negligence shown as respects the pitch of the cover and the stone in which it was, being dangerous. It was shown by a witness for plaintiff, that the pitch was not greater than was commorily in use in the streets.

There was no negligence, in respect of the place where the vault cover was inserted in the sidewalk, for as respects the actual cause of the accident defendant’s duty is performed when a safe place to walk upon is furnished.

The judgment is further attacked as containing an extra allowance of $500. This had been granted after the verdict was rendered, but without notice and as the plaintiff thought, ex parte. He therefore,-made a motion to set the order giving the allowance aside, on the ground that the order should have been made upon notice. I think the denial of this motion was correct, because if there had ■been originally an incorrect practice, the hearing of the motion was practically as to whether there should be an. allowance. But I think the amount of the allowance should fctf reduced to $100.

Judgment modified by the reduction of the allowance, z ad as modified, affirmed with costs.

Order denying motion, as to insertion of allowance, in judgment modified by making the allowance $100, and as modified, affirmed with costs.

O’Gorman, J., concurred.


author: By the Court—Sedgwick, Ch. J.

text:
    THE PEOPLE, &c. ex rel. EDWARD G. DUMAHAUT, v. THE BOARD OF FIRE COMMISSIONERS of the CITY of NEW YORK.

      Officers—removal for violation of duty—Intent.

    The relator was the chief clerk in the Bureau of Inspection of Buildings of Hew York city, and his duty was, among other things, to receive applications for permits to alter buildings and generally to direct the operation of the bureau in its practical relation to the enforcement of the-building laws, which said laws provided that no alterations shall be made in any building until apian thereof shall be examined and approved by the Inspector of Buildings, nor until the building has been examined by the department to ascertain if it be in a good and safe condition to be; altered. An application for permission to make a certain alteration having been duly filed with relator, he informed the applicant, the Inspector being absent, that he might proceed with the work without the approval of the Inspector, whereupon the applicant proceeded therewith, and the next day the relator sent an examiner to the building, who reported against the application.

      Held, that relator’s action was illegal and a sufficient ground for his removal from office ; and this, though" he acted by direction of the Inspector, his superior ; that it cannot be contended in relator’s behalf that what he said was unofficial ; and that what he did being intentional was therefore willful.
    Any conduct of the relator’s of a personal kind that was likely to result in a violation of the building laws was a neglect and violation of his official duty.
    Before Sedgwick, Ch. J., Freedman and O’Gorman, JJ.

      Decided December 3, 1883.
    Hearing upon a writ of certiorari, the return thereto, and the papers upon which the writ was granted, under Code of Civil Procedure, § 3138.
    The following facts appeared on the record: The relator was chief clerk in the Bureau of Inspection of Buildings, a subordinate bureau of the Fire Department of the city of Hew York, and charged with the duty of administering and enforcing the building laws of the city {Laws 1883, Ch. 410, § 417).
    An owner of the building presented himself before the relator while acting as chief clerk of the bureau with plans and specifications for an alteration of the building, and made application in due form for permission from the Inspector of Buildings to proceed with the alteration, and also said that he would like to go on with the alteration before the permission would be given. The relator answered, that it was necessary to have the Inspector’s approval, as well as the examiner’s report; but as the Inspector was out of town, it could not be done, but that the Inspector having left instructions to act in matters that “ we thought the Inspector would approve of during Ms absence,” he, the relator, told the applicant that he could, proceed with the work. The applicant began to make the alteration on the day of the application. The next day the relator sent an examiner to the building who, on the following day, reported against the application. The Fire Commissioners notified the relator that they proposed to dismiss hirfi from his clerkship, specifying as the cause of the removal, the facts that have been stated. The relator was heard before the Board, and thereupon was dismissed by order. The relator procured the writ of certiorari to review the proceedings of the Board in the matter.

      A. J. Vanderpoel, and Geo. B. McCloskey, for relator.

      William L. Findley, for the Fire Department.
   By the Court—Sedgwick, Ch. J.

—Section 503 of chapter 410 of the Laws of 1882, enacts, that before the alteration or repair of' any building is commenced, the owner shall submit to the Fire Department a full copy of the plans of such proposed alteration and a detailed statement of the specifications in writing, and that the statement and copy shall be kept on file in the office of Inspector of Buildings in the Fire Department; and the alteration shall not be commenced or proceeded with until the statement shall have been filed and said specifications and plans shall have been approved by the Inspector of buildings.

Section 498 declares that before any building shall be altered, the same shall be first examined by the department to ascertain if the building is in a good and safe condition to be altered, and no building shall be altered until after such examination and decision.

The relator was chief clerk in the bureau of inspection of buildings. According to Ms statement of what he actually did, it was his duty to receive applications for permits to alter, to place the application in the hands of an examiner, whose duty was to examine the buildings, to instruct inspectors of districts, to report violation, of the building laws, to see that the application and the report of the examiner be forwarded to the Inspector of buildings for his action, and to issue to the proper persons the decision of the inspector, in. approval or disapproval. Other clerks performed a similar kind of duty. He was the superintendent of their action. His duty, in substance, was to direct the operation of the bureau, in its practical relation to the enforcement of the building laws, under directions of the orders of the department. Any conduct of Ms of a personal kind that was likely to result in a violation of the building laws was a neglect and violation of the official duty imposed upon him personally. Especially was this true when his conduct by his wrongful act took the color of office and was the opposite or negative of the thing he was bound by his office to do. It may have been true, that he intended that in the end the public should have the same protection in the illegal course that it would have had if the law had been respected. But the law had separated the particular thing from its practical consequences, and had unequivocally declared that it should not be lawful. What the relator did was intentional, and therefore willful (People v. Brooks, 1 Den. 459).

It is said that it was no part of his official duty to give permission to applicants to proceed with their alterations or refuse that permission; and that as this is presumed to have been known to the applicant in this case, what the relator said must be deemed to* be unofficial. This position disregards the consideration that the office being one to assist in the enforcement of the law, it is implied that to perform its duties, it will be necessary not' to advise or suggest to any one that the requirements of the law may be disregarded.

The relator testified that he took the course he did, in pursuance "of what he thought had been the instructions of his. superior, the Inspector of Buildings. The Inspector,. in fact, had not given such instructions. The instruction's that were given had not disregarded the necessity of having the building first examined while the relator told the applicant to proceed to alter before any examination had been made. The instructions, if they had been as the relator testified he thought they were, would not have justified the relator in obeying them, for as they were invalid, the Inspector had no power to give them and it was the relator's dq.ty to disregard them.

The action of the Board in removal is dffirmed with costs.

An order should be entered confirming the determination reviewed with costs, fixed at the sum of $25 and disbursements.

Freedman and O’Gorman, JJ., concurred.


text:
    MARY L. DAY, RESPONDENT, v. JOSEPH A. JAMESON, et al., APPELLANTS.

      Reference—when ordered—long account when directly involved in issues.— Costs.

    In an action to recover moneys alleged to have been deposited with defendants as bankers, where the answer states that such deposit was made with defendants as brokers, for margin with which to speculate for plaintiff, and sets out a long account showing a counter-claim for losses arising therefrom, the court has power to order a reference, though on the motion therefor, it appears that plaintiff’s liability upon the account depends upon the question of her husband’s authority to act as her agent.
    It is within the discretion of the court to deny the motion where the plaintiff offers a stipulation that if such agency be proved, the account will not be disputed ; but where it appears that such agency may be proved as to part only of the transactions covered by the account, the general term will modify the denial by providing that it shall be without prejudice to a motion for a reference before the trial judge in a proper case.
    Where the order in such a case does not state that the motion was denied on the ground of lack of authority, the defendant will be charged with costs of appeal.
    Before Sedgwick, Ch. J., and Freedman, J.

      Decided December 3, 1883.
    Appeal by defendants, from an order denying their motion for a reference.
    Defendants are stock-brokers. The plaintiff claimed judgment in the sum of $9,861.43., for money, which she alleged she deposited with them as bankers. The defendants that she deposited the money with them as brokers, as a margin for speculations, and that it was wholly applied by her authority to meet losses by her in those speculations, and that the speculations were made for her by her authority ; and they set up a counter-claim of $2,030.70, for losses not covered by the margin. On the motion by defendant for a reference, it appeared that if the transactions in stock were on her account, it was because she had directed them through her husband as her agent, who was the one who, in fact, gave defendants order and directions. To-meet the motion, among other objections, the plaintiff offered a stipulation which was recited in the order after-wards made and filed with the papers. It was: “The plaintiff hereby stipulates that if this case is tried before a jury, and the jury or the court decide that the plaintiff’s husband was authorized as her agent, to purchase and sell stocks and securities upon a margin in her name, with her money, on deposit with the defendants, that she will not dispute any of the items of the account annexed to defendants answer, but will admit that said account is in all respects correct.” The account contained more than two hundred items.
    The motion was denied.

      Henry A. Root, and Joseph H. Choate, for appellants.

      Daniel P. Hay, for respondent.
   By the Court.—Sedgwick, Ch. J.

—I am of opinion that it was within the power of the court below to grant ■the motion, because the matters to which the account set up in the answer pertained, were directly involved in the defense and counter-claim, and were not collateral to the issue or details of evidence only ; and that it was within the discretion of the court to deny the motion, if the stipulation offered by plaintiff would render an accounting before a jury unnecessary. There seems to me to be no doubt, that if the evidence the defendant might produce to show that the plaintiff gave authority to her husband to give' orders, etc., to the defendants for her, would be applicable to the matters of account in solido, there should be no reference. Further, there should be no reference, if the defense be upon an account stated, but no decision as to this is made, one way or the other..

. The defense claims, however, that on the trial, the defendants may be, able to show that plaintiff’s husband was her agent as to some matters in account, but not as to others, and that the stipulation will not cover the case of the jury being obliged to take the whole account, and to make up a new account that excludes those particulars as to which sufficient proof of agency was not given. As to this, perhaps it might be right to think that the defendant should not affect the action of the court-upon a possibility, as suggested by them, of a partial failure of proof on. their part. But beyond this, while the application of the stipulation may be what it is argued to be by the defendants, yet, on the facts of this case, as shown by its intrinsic nature and the affidavits read, it is not probable that the defendants will, in fact, meet on the trial the danger they fear. To entirely prevent an unforeseen contingency happening, which it may be too late to remedy, a modification of the order should be made, by properly inserting “without prejudice to the court upon the trial directing a-reference on motion of defendants, if a reference then appears to be necessary or proper.” The order made below does not state that it was made because the court had no power to order a reference. The defendants should, therefore, pay the costs of this appeal.

Order modified as directed, and affirmed as modified, with $10 costs.

Freedman, J., concurred.


author: By the Court.—Freedman, J.

text:
    ELIZABETH A. L. HYATT, Respondent, v. JOSHUA K. INGALLS, et. al., Appellants.

      Licensee of patent—when estopped from contesting validity of—Royalties, construction of agreement to pay.—Re-issue of patent.— Jmediation.—J'idgment.

    When a patent is apparently valid and in force, the party using it, receiving the benefit of its supposed validity, is liable for royalties agreed to be paid by him, and he cannot set up as a defense the actual invalidity of the patent under which he is manufacturing. If lie intends to manufacture in hostility to the patent, he must give notice of such intention,, in order that the presumption to the contrary may not attach or the patentee be misled.
    Accordingly, where the agreement which contained various covenants for the benefit of the licensee, provided that the license should “ continue for the full, term of the patent and for any term of any extension, or renewal,” and contained the licensee’s acknowledgment of the validity of the patent, and his consent that the patentee might, “without prejudice to this agreement, hereafter re-issue, when and as often as she shall choose, the said patent of August 37, 1867, as re-issued August 6, 1878, and a re-issue of said patent was taken out in 1881, in good faith, but which, though substantially for the same invention, did not correspond with the patent nor the prior re-issue, in that it included additional matters not strictly patentable, because not contained in the prior specification, and the licensee continued to manufacture without giving notice that he was hostile to the patent. t

      Held, in an action for royalties, that the State court had jurisdiction, that the licensee could not interpose the invalidity of said last re-issue as a defense ; and that the words “ as re-issued August 6, 1878,” were words of description and not of limitation.
    The patentee, in 1883, served upon the defendants a notice that the license was revoked, and thereafter brought this action for royalties, and a rescission, in which a decree forfeiting the license, etc., was entered and accepted by plaintiff

      Held, that while plaintiff was not by service of the notice, barred from an accounting under tbe contract, if defendant continued to manufacture thereafter, nor was the court deprived of its jurisdiction thereby ; yet, the judgment as a whole must be founded on an affirmance or rescission of the contract, and plaintiff’s election to take a decree of rescission entitled her to an accounting only to the date of the decree, and dis-entitled her to injunctive relief in the State court against future acts.
    Before Sedgwick, Ch. J., Freedman and O’Gorman, JJ.

      Decided December 3, 1883.
    Appeal from judgment. . The facts appear in the opinion.

      F. H. Angier, and E. D. McCarthy, for appellants.

      Geo. W. Van Slyck, for respondent..
   By the Court.—Freedman, J.

—A patent for illuminated basements and basement extensions, etc., was issued to the plaintiff in 1867, and re-issued August 6, 1878.

By an agreement, dated November 21, 1878, the plaintiff agreed to, and did, license, among others, the defendants to manufacture and sell within certain territorial limits the articles covered by the patent of 1867, as re-issued in 1878.

The defendants thereafter, manufactured and sold these articles, and up to the autumn of 1881, under the said license, they accounted for the articles so manufactured, and sold and paid royalties thereon. Then they refused to account or pay any longer, though they continued to manufacture and sell, whereupon, in October, 1882, this action was brought, in which the plaintiff, among other things which will be hereinafter considered, asks for a forfeiture of the license, the cancellation of the agreement, and an accounting.

If these were substantially the only facts and the only relief sought, the jurisdiction of the court to entertain the action and to grant relief would be beyond question.

But upon the trial the plaintiff found it necessary to move for leave to amend the complaint by setting up a reissue of the patent on September 27, 1881. The motion was granted and the amendment allowed, and thereupon leave was granted to the defendants to amend their answer by inserting as follows : The defendants, answering the amended complaint of the plaintiff, allege that the re-issued patent of September, 1881, is invalid and void, for the reason that it claims more than the patent of 1878 ; and that its descriptions and specifications do not correspond with those of the patent of 1878; and that it also omits specifications and claims made in the patent of 1878. And further answering, defendants say that the court has no-jurisdiction over the issue thus raised.”

The trial proceeded upon the issues thus amended, and the plaintiff, upon proof of the re-issue of September 27, 1881, and of the refusal of the defendants to account and pay since that time, though they continued to manufacture and sell, had judgment against the objections and exceptions of the defendants, who throughout insisted that the court had no jurisdiction.

The questions presented by these exceptions áre of great importance.

A grant to a patentee of an exclusive right to manufacture and vend an article described therein, is a grant of property ; and if the validity of the patent is unquestioned, state courts will protect the owner of such property in the enjoyment thereof, by means of a decree of injunction, to the same extent as they would do, were the subject matter of the litigation of any other description. But where the validity of the plaintiffs patent is put in question by the pleadings in a state court, and the defendant presents such proofs upon the trial as render it necessary for the court to examine and pass upon conflicting patents or claims of priority in invention, in- order to determine whether the plaintiff has such a property in the subject matter of the grant as entitles him to the exclusive and unmolested use of it, and an objection is taken to the jurisdiction of the court for that reason, the bill must be dismissed ; for, in such cases, the jurisdiction is in the courts of the United States exclusively (Hovey v. Rubber Tip Pencil Co., 33 Super. Ct. 522; affirmed 57 N. Y. 119).

There is, however, a class of' cases in which the defendant cannot question the validity of the plaintiff’s patent, because by his contract he has estopped himself from so doing, and of these a state court may take cognizance. In them the question concerning the validity of the patent is merely a question collateral to the main issue, and goes only to the question whether there is a consideration to support the promise to pay. A case arising on a contract to pay royalties, or, in other words, a case between patentee and licensee, falls generally within the class last referred to, and in every such case the true rule to be deduced from the authorities, as stated by the court of appeals in Marston v. Swett (82. N. Y. 526), is as follows: Where the patent is apparently valid and in force, the party using it, receiving the benefit of its supposed validity, is liable for royalties agreed to be paid, and cannot set up as a defense the actual invalidity of the patent. The reasons for the rule are that the party has got what he bargained for ; that he cannot be allowed at the same time to affirm and disaffirm the patent; and that he cannot in this way force the patentee into a defense of his right and compel him to try it in a collateral action. While the manufacture goes on under such an apparently valid patent, it is presumed to be under and in accordance with the agreement to pay royalties. If the manufacturer does not so intend, and chooses to make the patented article, not under the patent but in hostility to it, he must give notice of that intention, in order that the presumption may not attach or the patentee be misled. But if the patent is annulled or destroyed by due and effective legal proceedings and priority of invention and a patent'is awarded to another, no notice is necessary, for. there is no presumption or inference of manufacture under a patent judicially avoided and anulled. It ceases to exist. The manufacture is either absolutely free or an infringement upon the rights of the prior inventor, or in submission to his claims.”

Mow the parties to the present action, in the agreement of November 21, 1878, and the license executed contemporaneously therewith, did make provision concerning reissues of the patent. By the agreement it was provided that the license should continue for the full term of the patent and for any term of any extension or renewal.” The license which was also executed in the form of an agreement under the hands and seals of the parties to this action, contains a similar provision together with the defendant’s acknowledgment of the validity of the letters patent and their express consent that the plaintiff may, “ without prejudice to this agreement hereafter re-issue, when and as often as she shall choose, the said patent of August 27, 1867, as re-issued August 6, 1878.”

These provisions, taken in connection with the other facts already referred to, would seem to be a complete answer, within the rule as stated by the court of appeals, to the claim of the defendants that the court had no jurisdiction to determine the issues, especially as no notice had ever been given to the plaintiff that the defendant had elected to manufacture and sell in hostility to the patent as re-issued in 1881.

It. is insisted, however, that the words, “ As re-issued August 6, 1878,” are words of limitation which restrict the consent given to a re-issue that corresponds with the re-issue of 1878; that, ■ inasmuch as the re-issue of 1881 covers more ground than the re-issue of 1878, neither their consent nor their license, attached to it, and that consequently no notice was necessary.

It is true that the re-issue of 1881 corresponds neither with the re-issue of 1878, nor with the original patent, inasmuch as it embraces more ground and more claims than either. To enumerate the points of correspondence and of difference, would serve no useful purpose. Suffice it to say that áfter all, it is for the same and not for a different invention, and that at most the plaintiff included therein additional matters which perhaps were not strictly patentable because not fairly included in the prior specifications. But it is difficult to perceive why the defendants should be heard to complain of this, as in this respect the re-issue of 1881 was rather a benefit than an injury to them. At- any rate the question is not now whether the plaintiff patented too much, but whether the re-issue of the patent was within the contract existing between the parties.

Construing the contract, as I think it should be construed, I cannot satisfy myself that the words now relied on were used as words of limitation in the sense contended for. They evidently were used as words of description. The very object and effect of a re-issue is to make valid specifications which originally were defective and insufficient, and the original patent is therefore deemed to have been continued as re-issued, though the re-issue involves a surrender of the original letters. Nevertheless, the re-issue and the proceedings on which it is founded, liave relation to the original transaction. So a second re-issue relates back to the original patent, and not to the first re-issue, and it is a rule in direct proceedings to determine the validity of a second re-issue that such re-issue must be compared with the original patent and not with the first re-issue, and that, unless it is on its face for a substantially different invention than the original, it is valid. These matters and considerations must be presumed to have been in the minds of the contracting parties when they completed their agreements. They evidently intended, and their interest was, that both the patent and the license should be made to cover as muchas possible, and they contracted accordingly, and other covenants were made with reference thereto. The plaintiff bound herself not to license other new parties except as provided in the agreement, and she also bound herself not to manufacture and sell, herself. The defendants on the other hand, who, up to that time ■ had been infringers and had been sued, on securing immunity from prosecution and in taking the license and accepting the privileges thereby conferred, not only recognized the validity of the patent and agreed to •extensions and re-issues, but they also agreed to pay a royalty of 70 cents per square foot, from and after the time of the determination by judicial decree of the validity of the patent, and until such time, 30 cents per square foot, and to continue such payment of 30 cents even after an adverse decision, provided the plaintiff should appeal therefrom within three months. 0 Provision was also made for the prosecution of infringers for the benefit of the licensees. It therefore, clearly appears upon a full consideration of all the covenants between the parties, that in using the words “as re-issued August 6, 1878,” it was never intended to provide thereby that any future re-issue should strictly correspond with the re-issue of 1878, but that the defendants, on account of advantages to be derived from other •covenants, meant to confer general authority upon the plaintiff to procure re-issues, when and as often as in the exercise of good faith she might deem it proper.

Moreover, the defendants may be deemed to have heretofore admitted that the re-issue of 1881 was necessary and proper. In a suit brought for the benefit of the licensees named in the agreement of November 21, 1878, against Tice and Jacobs, the complaint was verified by Ingalls, one of the' present defendants. Among other things it alleged that “ said patentee finding that said specification was still defective and insufficient, surrendered said patent to the commissioner of patents, in accordance with the statutes of the United States in such cases made and provided, and having amended the claim and specification in accordance with the decision of said commissioner in the premises, and in all other things complied with the statutes of the United States made and provided in such cases new letters patent of the United States for the same invention were, on the 27th day of September, 1881, duly issued and delivered to said Elizabeth Adelaide Lake Hyatt, according to law, and entitled “ Illuminating Roof and Roof Pavement,” whereby there was granted unto her, for the then unexpired term of seventeen years from the 27th day of August, 1867, the full and exclusive right and liberty of making, constructing, using and vending to others to be used, the said invention and improvement, a description whereof is given in the schedule annexed to the said reissued letters patent.”

From the views expressed, and it further appearing that the re-issue of 1881 was procured by the plaintiff in good faith, and upon the assumption that it was necessary for the preservation of the interests of all parties concerned, and the grant of the re-issue by the commissioner of patents being prima facie evidence of the validity of the patent as re-issued, it follows as a necessary corollary, that the defendants, at the trial, could no more be permitted-to deny the validity of the re-issue of 1881, than they could have been permitted to deny the validity of the original patent, or of the patent as re-issued in 1878, and that the court had ample jurisdiction to determine the issues and award the proper judgment. The defendants had evidently got from the plaintiff just what they had bargained for, and nothing short of the annullment of the patent re-issued in 1881, by a final decree of the supreme court of the United States could relieve them from the obligation voluntarily assumed by them, as long as the plaintiff herself did not rescind on account of the breach committed by the defendants.

The only remaining questions which require to be noticed relate to the measure of relief and the form -of the judgment.

The service of the notice by the plaintiff on January 12, 1882, declaring the license forfeited, is not of itself a bar to plaintiff’s claim to an accounting under the contract since that time, because the defendants continued to manufacture and sell notwithstanding the notice (The Union Mfg. Co. v. Lounsbury, 41 N. Y. 363). Nor was this court deprived in consequence of such service of any part of the-jurisdiction it otherwise had to grant relief commensurate to the violations of the contract obligations found to have been committed within the issue raised by the pleadings (Hartell v. Tilghman, 99 U. S. 547).

The court therefore would have had the power not only to direct the accounting which was ordered, but also t» grant injunctive relief against threatened continuous violations of the contract-, if it were not for one consideration, which is, that the judgment as a whole must be founded either upon an affirmance or a rescission of the contract, for the plaintiff cannot be permitted to affirm in part and rescind in part.

By taking a judgment, as prayed for in the complaint, declaring the license forfeited and directing that the same be delivered up to the plaintiff to be cancelled, the plaintiff' elected to take a decree of rescission of the contract" which puts an end to the contract and entitles her only to an accounting qp to the time of the entry of the judgment and disentitles her to injunctive relief against future acts. This sets her free to license other parties, and to manufacture and' sell herself, but it also frees the defendants ■from the further observance of the obligations of their agreement. Thereafter they can only be proceeded against' by the plaintiff as infringers of her patent, and that must: be done in the courts of the United States. The fact that the defendants accepted that part of the judgment which directs the surrender and- cancellation of the license, and appealed only from those parts by which an accounting was directed and injunctive relief granted, can make no difference. Under the peculiar ‘ circumstances of this case as affected by the question of jurisdiction, these different parts of the judgment are not so connected and dependent that it can be held, that the defendants by accepting one .waived their right of appeal .from the others, especially as the plaintiff can have no right to any other judgment than one which is consistent throughout. Having elected to sue for a rescission, for the complaint expressly asks that the license and the agreements be declared forfeited and be delivered up to be cancelled, and followed up the election by taking judgment in accordance therewith, the plaintiff must be held to her election.

The judgment should therefore be modified by striking from it the injunctive relief granted, by limiting the accounting to the time of the entry of the judgment, and by adding a provision declaring all the agreements between the parties as well as the license at an end, and enjoining all the parties to the action from claiming any right or rights under or by virtue by the said agreements or license subsequent to the entry of the judgment, and as thus modified it should be affirmed without costs to either party upon this appeal.

Order to be entered hereon to be settled on notice.

Sedgwick, Ch. J., and O’Gorman, J., concurred.


text:
    THE SHOE AND LEATHER REPORTER ASSOCIATION, Respondent, v. ISAAC H. BAILEY, Impleaded, etc., Appellant.

      Inspection of writings—when granted.

    'The provisions of the Code have not changed the chancery rule in regard to a bill of discovery, viz.: that plaintiff may have a discovery of matters necessary to maintain his own title, but is not entitled to a discovery of the title of his adversary, which he denies, and that it only where plaintiff is entitled to the discovery of deeds, etc., for the purpose of establishing his own case that his right to the discovery will not be affected by the fact that the same deeds, etc., are evidence of defendants’case.
    Before Sedgwick, Ch. J., Freedman and O’Gorman, JJ.

      Decided December 3, 1883.
    Appeal from order denying defendant’s motion, after issue joined, for discovery and inspection of writings.
    It appeared from the petition that the action was for an alleged conversion by defendants of the contents of a certain printing office of which plaintiff claimed to be the -owner, and that the defense was that the property was taken in execution on a judgment against one Belden, the the real owner thereof, and on the 26th of August, 1875, bought in good faith, and for value, by defendants, on a .•sale by the sheriff; further, that any transfers of the property by Belden to the plaintiff were made in pursuance of a scheme to defraud said Belden’s creditors, part of which scheme was the filing of the certificate of incorporation of plaintiff, which was done but one day prior to •said sale to defendants. The petition also set forth other facts tending to support the charge of fraud; stated that defendants had remained in undisturbed possession till ■September 1,1881, the time this action was begun; and finally prayed an inspection and discovery of any and all conveyance or conveyances in writing, and other instruments in writing upon which the plaintiff or its said attorney intends to rely, or which the plaintiff, or its said. attorney intends to produce on the trial of this action for the purpose of proving or establishing the title of the plaintiff or its interest in or its right to the possession of the property mentioned in the amended complaint herein.
    The affidavits in opposition verified by plaintiff’s attorney denied possession or knowledge of such papers by him, and also denied generally the allegations of fraud in the petition.
    The motion was denied on the authority of Andrews v. Townshend (48 Super. Ct. 162).

      W. B. Winterton, for appellant.
    —The application should be granted if it.would be just and reasonable to-grant it, and it should not be refused on merely technical grounds (Lefferts v. Brampton, 24 How. 261). The order should be granted when in the exercise of discretion the court deems such discovery proper (Powers v. Elmendorf, 4 How. 61; Code Civ. Pro. §§ 807, 803, 806; 2 R. S. 199, § 21; 3 Ed. p. 262). “As the object of this jurisdiction in cases of bills of discovery is to assist and promote the administration of public justice in-.other courts, they are greatly favored in equity ” (2 Story Eq. § 1488).
    Andrews v. Townshend, a case of ejectment, is not an authority against the motion. We set up a general scheme of fraud that antedates the suit itself, which is a part of the fraud, and one of the fraudulent acts was making fraudulent and merely colorable conveyances to hinder and delay creditors. That the allegations of fraud will sustain the motion, see Brevoort v. Warner, 8 How. 326; Apthorpe v. Comstock, Hop. 149; 8 Cow. 386, 1 Dan. Ch. Pl. Pr. Perkins’ Ed. [4 ed. 579], 632. Where either party shows conclusively that the evidence sought is material to his case, their right to a discovery is not affected by the fact that it is also material to the case of the adverse party (Riccard v. Inclosure Comm., 4 Ell. & Bl. 329; London Gas Light Co. v. Chelsea, 6 C. B. U. S. 411). Sections 1490-1493, 2 Story Eq. Jur., show the application of the rule as to production of title papers, and that it has primary reference to questions of title to land between heir and devisee and the like (1 Sand. Ch. 98, supra), and that the rule, even in such cases, is not sweeping or inflexible. And see Story Eq. Pl., §§ 591-594; Harris, J., in Powers v. Elmendorf (4 How. Pr. 61 et seq.).

    That the court will assume that the papers can be produced, and that defendant is entitled to an inspection. See Lefferts v. Brampton (supra); Hepburn n. Archer, (20 Hun, 537); Amsinck v. Northrup (12 Week. Dig. 573); Thompson v. The Erie Railway Co. (9 Abb. N. S. 212); Casard v. Hinman (6 Duer, 695); Kimberly v. Sells (3 Johns. Ch. 467); Price v. Harrison (8 C. B. N. S. 617).

      Henry Brewster, for respondent.
    —This application is in the place of the former bill of discovery in the court of chancery (2 R. S. 199; Townsend v. Lawrence, 9 Wend. 458). One of the rules there was that the discovery must relate to the title of the party seeking the discovery, and the evidence must be for him and not as to the title of the opposite party (Story's Eq. Pl. § 317; also, note 2, p. 258; Cooper Pl. 58, 197; Mitford Pl. 189).
    This rule also applies to proceedings under the Code (Brevoort v. Warner, 8 How. 321; Davis v. Dunham, 13 How. 428; Commercial Bank of Albany v. Dunham, 13 Id. 545; Pegram v. Carson, 18 How. 522; Strong v. Strong, 1 Abb. N. S. 233; Andrews v. Townshend, 48 Super. Ct. 162; 2 Wait's Pr. 531).
    The law does not authorize a discovery as a precautionary measure or to enable a party to prepare to answer his adversary’s case. It must appear to be necessary (Woods v. Figarine, 25 How. 528; Campbell v. Hoye, 2 Hun, 309; Holtz v. Schmidt, 2 J. & S. 28-31).
    The existence of the papers must be shown positively, and that they are material and contain material evidence (Speyers v. Forstitch, 5 Rob. 606; Walker v. Granite Bank, 4 Barb. 39; 19 Abb. 111; Harison v. Vanvalkenburgh, 5 Pun, 454; Mott v. Consumers’ Ice Co., 2 Abb. N. C. 144).
   By the Court.—Freedman, J.

—Upon an application for a bill of discovery the rule in chancery was; that the plaintiff might have a discovery of matters necessary to maintain his own title, as for example, deeds under which he claimed. But he was not entitled to have a discovery of the title of his adversary from whom he sought the discovery and whose title he denied. It was only when the plaintiff was entitled to a discovery of deeds or documents for the purpose of establishing his own case, that his right to such discovery was held to be not affected by the circumstance that the same deeds or documents were also evidence of the defendants’ case. These principles have not been abrogated or changed by the Code of Civil Procedure.

In the case at bar, the applicant did not bring himself within the exception, for the allegations and the prayer of his petition show, that all he wanted was to discover and inspect conveyances and instruments in writing which he could not specify, which he- did not even know to exist, but which he suspected the plaintiff might produce on the trial for. the purpose of establishing its title to, or its interest in, or right to the possession of, the property mentioned in the amended complaint.

Thó order should be affirmed, with costs.

Sedgwick, Ch. J., and O’Gorman, J., concurred.


text:
    JANE L. MELVILLE, Appellant v. ANDREW J. MATTHEWSON, Respondent.

      Motions—renewal of—when leave must be obtained.—Reopening of judgment— order upon.

    A motion addressed to the discretion of the court cannot be renewed upon the same or substantially the same state of facts, unless leave thereto has been obtained; and failure to • obtain such leave furnishes ground for reversal of the order granted on the second application.
    Amotion to reopen a judgment, addressed to the discretion of the court, should not be granted where the applicant fails to establish either default, surprise, inadvertence or excusable neglect.

      Upon an application to reopen a judgment, after,trial upon the merits, before a referee, appointed to try the whole issues, an order cannot be made directing the referee to take certain testimony concerning the issues and report with his opinion to the court the judgment meanwhile to stand as security, etc. A judgment on a referee’s report cannot be so reviewed.
    Before Sedgwick, Ch., J., and Freedman, J.

      Decided December 3, 1883.
    Appeal from order opening judgment, • and referring case back to referee. The facts are stated in the opinion.

      John Sidney Davenport, for appellant.
    —-Failure to obtain leave to renew is ground for reversal (Hall v. Emmons, 8 Abb. Pr. N. S. 451). Leave to renew could not properly have been granted if applied for, inasmuch as on the second motion no facts not stated at the first were adduced (Pattison v. Bacon, 12 Abb. Pr. 142).
    If there are any additional facts, there is no pretense that they are discovered since the first motion. A party moving cannot bring forward his objections by installments (Mills v. Thursby, 11 Abb. Pr. 114).
    In the absence of the first, order, the second order was beyond the power of the judge.
    It is an order of reference to take testimony on the issues in an action, after trial and judgment, while the judgment is in force. Ho authority is cited against it, because it is believed to be absolutely without precedent. The jurisdiction of the court over the subject matter of the action, and over the parties, in respect to all matters involved in it, terminated with the entry of final judgment therein, except, to enforce the judgment or correct mistakes in the record (Kamp v. Kamp, 59 N. Y. 215).

      Nelson J. Waterbury, Jr., for respondent.
   By the Court.—Freedman, J.

—The action was brought for the conversion of moneys consisting of rents collected by the defendant as plaintiff’s agent. The defendant was arrested and gave bail. He also answered putting in issue the amount claimed by the plaintiff and setting up counterclaims of which he served a bill of- particulars. The counter-claims were put in issue by a reply. The issues were referred to a referee to hear and determine the same. The defendant appeared before the referee by counsel, and, after having obtained an adjournment, proceeded with the trial on the day to which it stood adjourned, and in the course of it expressly waived the cross-examination of plaintiff’s witnesses. Plaintiff proved her case by these witnesses and rested. Defendant’s counsel obtained another adjournment, and on a subsequent day the defendant was sworn and his examination in his own behalf commenced. Before he had said anything material, he stopped, refused to offer any further testimony, and left the room. Thereupon, the referee determined the amount due to the plaintiff, and upon his report judgment was on October 16, 1882, entered in favor of the plaintiff against the defendant for $2,618.60.

On October 18, 1882, execution-against the property was issued and returned unsatisfied December 4, 1882. On December 23, 1882, execution against the person was issued, and while that was still outstanding, the defendant, on April 6,1883, obtained an order to show cause from the chief judge of this court why said judgment should not be opened, vacated and set aside, and why defendant should not be restored to his hearing therein, and for such other relief, etc.” This motion was, after argument, denied by the chief judge, and the denial was accompanied by the following opinion, viz : “ There is no ground on which the judgment can be opened, there being no default, no surprise, no inadvertence. In addition to this, the laches have been so great that to overlook .them wbuld be a bad precedent. Motion denied.” On May 1, 1883, an order denying the motion was duly entered. On May 16,1883, the defendant obtained from another judge another order to show cause, and therefore, after opposition and hearing, the following order, which is the order appealed from, was entered Lon May 25, 1883, viz: “That the judgment be opened so ' far as to permit, and this action is hereby referred back ta the referee by whom the same was tried, to take the cross-examination of the witnesses of the plaintiff ; defendant to produce such witnesses and such testimony as the defendant may be advised to submit, and report the same with his opinion thereon to the court; that the said judgment meanwhile stand as security, and that in all other respects the said motion be denied, without costs to either party as against the other. And it is further ordered, that the referee proceed on one day’s notice by the attorney for the defendant.”

This order should not be allowed to stand for two reasons. (1.) Because no leave to renew the motion had been obtained ; and (2.) Because it would have been improper on an original motion.

As to the first: The first and the second motion were essentially the same. Both were addressed to the discretion of the court. Aside from a few additional, but wholly immaterial facts, concerning which there was not even the pretence that they had been discovered since the first motion, there were no facts presented on the second motion which were not presented on the first. The affidavits were simply re-shaped to conceal, if possible, their identity in substance, and even then a balance was admitted to remain due to the plaintiff. Under such circumstances, failure to ask for and obtain leave to renew, is ground for reversal. This is within the decision of this court in Hall v. Emmons (32 Super. Ct. 396), so far as the same was approved by the court of appeals in 9 Abb. Pr. N. S. 370.

As to the second : On the second motion the defendant failed, as he had done on the first, to establish a default, surprise, inadvertence, or excusable neglect. His laches remained about the same. Beyond all that no authority can be found for making the order in the form it was made. It is an order directing a referee to take, after trial and judgment upon the merits, testimony concerning the issues and to report the same with an opinion. For what purpose the order does not specify. It cannot be for the information of the court in'determining the motion, for the motion, was determined by granting to the defendant a re-hearing-in the manner specified and denying him any other-relief. But if it were, it would involve an improper mode of taking proof in support of a motion. The order’clearly is one which directs the taking of testimony generally concerning-the merits of an action already determined to enable thecóurt to judge, at a subsequent period, and on a new application to be made for the purpose, whether the issues were-correctly determined. In other words, the order is intended, to serve as the foundation for a future review of the j udgment on the merits. In this aspect the new difficulty presents itself that, on tbe coming in of the testimony with, the referee’s opinion thereon, t'he. court could not act on it, for a judgmeni on a referee’s report cannot be reviewed in such manner, and by such means, any more than a judgment entered upon • the verdict of a jury. The remedy is-by appeal.

If the case were a proper one, we might perhaps-remodel the order so as to provide for an opening of the-judgment and a re-trial of all the issues by the referee.. This could only be done, if at all, upon terms. But upon the facts as presented I do not think it should be done.

The order appealed from should be reversed with costs..

Sedgwick, Ch. J., concurred.