author: Putnam, P. J.:

text:
    The Village of Fort Edward, Appellant, v. Wilbur W. Fish, Respondent.

      Sale of municipal bonds at less than pm — ■ contrcoct conditional on another’s certificate ■ — ■ effect of a failure to waive the condition — withdrawal of an offer — voluntary payment in case of a municipal corporation — ultra vires acts of the water commissioners of Fort Edward.

    A contract made by the water commissioners of a village to sell bonds issued thereby for less than par is expressly prohibited by statute and void. The interest which has accrued on the bonds at the time of their sale is as much a part of the amount secured thereby as the principal, and an agreement to sell such bonds for a sum representing their par value, exclusive of interest, is an agreement to sell the bonds at less than par.
    The doctrine is well established that it is not just that one party should be bound by a contract when the other party thereto is not, and when by a contract one of the parties is not compelled to take certain bonds, which the other party thereto agrees to sell to him for a specified price, unless the regularity and validity of such bonds are first certified to by a third person, if such third person notifies the vendor that he declines to certify to the regularity and validity of the bonds, the vendor is then free from any obligation to the vendee under the contract, provided the vendee does not waive the provision requiring the approval of such third person to the bonds, before the vendor has acted on the assumption that the contract is at an end.
    Prior to its acceptance a party making an oiler may withdraw it.
    The doctrine as to voluntary payment will apply to a municipal corporation when the officers thereof act within the scope of their powers.
    If a controversy arises in reference to the performance of a contract which a municipal corporation had power to execute, and that controversy is duly settled by the corporate officers, such settlement will be binding and conclusive upon the corporation in cases where there has been an irregular exercise of a power conferred upon the corporation; but it is otherwise when an individual has no legal claim against a municipality, under a contract executed by its water commissioners, which they had no power to make.
    The water commissioners of the village of Port Edward are merely the agents of the village, and, except as their acts are within the powers conferred upon them as agents, they do not represent the village. ■
    The officers of a municipal corporation are agents with limited powers, and cannot bind the corporation by any act or contract not authorized by the authority conferred upon them, and in an action on such contract the corporation may interpose the plea of ultra vires. In- fact, a contract made by the officers of a corporation beyond their power is not the contract of a corporation, but is the wrongful act of the corporation’s agents.
    Appeal by the plaintiff, The Village of Fort Edward, from a judgment of the Supreme Court in favor of the defendant,-entered in tlie office of the clerk of the county of Washington on the 7th day of November, 1894, upon the decision of the court rendered after a trial at the Saratoga Special Term dismissing the plaintiff’s complaint.

      R. 0. JBascom and Edgar T. Bracleett, for the appellant.

      Ed/wa/rd G. Eerendeen, for the respondent.
   Putnam, P. J.:

It was shown upon the trial that the plaintiff at the times stated in the complaint was a municipal corporation, with a board of trustees and president. In the year 1893 said board of trustees, for the purpose of supplying the village of Fort Edward with water works, organized themselves into a board of water commissioners. And the proper proceedings having been had, pursuant to the provisions of chapter 181 of' the Laws of 1875, and chapter 30 of the Laws of 1893, coupon bonds of said village were issued to the amount of $97,000, by their terms drawing interest from May 1, 1893.

Thereupon the water commissioners entered into a contract with the defendant in writing, dated July 20, 1893, whereby they agreed to sell him $50,000 of said bonds with the accrued interest from May 1, 1893, thereon, for $50,000. The interest that had then accrued amounted to the sum of $444.44. The contract at the end thereof contained the following clause: “ This agreement is not to be binding on the party of the second part unless Miller, Peckham & Dixon, of No. 80 Broadway, N. Y., approve of the regularity and validity of said bonds in writing.”

It appeared upon the trial that after several interviews and communications had between the agents of the water commissioners and Miller, Peckham & Dixon, named in said contract, the latter, on the morning of July 28, 1893, telegraphed to R. A. Armstrong, Jr., who was acting for the water commissioners, as follows :

“July 28,1893.
R. Armstrong, Jr., Stanwix Hall, Albany :
“Yesterday wrote you ; think that the present board of trustees • must reorganize as water board and give new bonds before bonds can be issued. MILLER, PECKHAM & D.”

It does not appear that Miller, Peckham & Dixon ever approved said bonds. It was not claimed on the trial that in fact they were not reemlar and valid.

On the same day that Armstrong received the said telegram, and, I infer, after its receipt, the water commissioners arranged with the Comptroller of the State to take the bonds in question, and subsequently telegraphed to defendant their election to withdraw from said contract. The defendant, after receiving such telegram, answered that he was satisfied with the opinion of the Attorney-General, and that he claimed the delivery of the said bonds in pursuance of the contract.

On August 4, 1893, the agents of the water commissioners and the defendant met at the Comptroller’s office in Albany, and the defendant then insisted upon the delivery of said bonds under the contract or the payment of damages. He claimed that the clause in the contract requiring the approval of Miller, Pecldiam & Dixon was for his benefit and that he waived such approval. After some negotiation the board of water commissioners and defendant entered into the following contract:

“ A dispute having arisen concerning the fulfillment of a certain agreement made and entered into by and between the Board of Water Commissioners of the Tillage of Fort Edward, Washington County, N. Y., and W. W. Fish, of Elmira, N. Y., relative to the sale by said board and the delivery of certain water bonds to said Fish, now, for the purpose of settling said dispute, the said board agrees to pay and the said Fish to accept the sum of seventeen hundred and fifty dollars in full settlement, payment and satisfaction and discharge of' all claims and liability of the said water commissioners to the said W. W. Fish for and on account of the failure of said board to deliver said bonds to said Fish under the terms stated in said agreement, said sum to be paid within five days.
“ Dated August éth, 1893.
“W. W. FISH.
“THE BOARD OF WATER COMMISSIONERS OF THE TILLAGE OF FORT EDWARD,
“By John R. Durkee, President.”

In pursuance of said agreement the board of water commissioners paid the defendant $1,150, to recover which sum this action was brought.

The case was tried at a Special Term of this court, and the complaint was dismissed at the close of plaintiff’s case.

The question is presented to us whether the board of water commissioners of the village of Fort Edward had power to execute the agreement of August 4, 1893, and make the payment as therein agreed, and whether plaintiff was bound by the settlement effectuated by that contract.

We have reached the conclusion that the contract in question was absolutely void, on the ground that when it was executed defendant had no legal claim against the village of Fort Edward, and the statute conferred no power upon the board of water commissioners to make such a settlement or to give away the funds of said village.

When the original contract of July 20, 1893, between the parties was executed, there was secured by the bonds, of principal and interest, the sum of $50,444.44, which by the agreement in question-.the -water commissioners agreed to sell for $50,000. The agreement, therefore, was a sale of bonds for less than par. Such a contract • was expressly prohibited by the statute, and hence it was void. The interest accrued on the bonds when they were sold was as much a part of the amount secured thereby as the principal, and hence the agreement in question was a sale of bonds at less than par.

In the case of The State of Illinois v. Delafield (8 Paige, 521), where a State had authorized its officers to borrow moneys for its use and to sell its bonds or stock for that purpose, but for not less than their par value, it was held that a sale of bonds or stock drawing interest from the time of sale, but which were to be paid for in future installments without interest, was a sale of bonds or stock for less than the par value, and Walworth, Chancellor, said: “ The very idea of a sale of a bond or draft or other security for. the payment of money at par is that it is to be sold dollar for dollar of the amount due and payable thereon.” (Affirmed, 2 Hill, 159-172; 26 Wend. 192-225.)

The very question discussed in this case was passed upon-in the-case cited adversely to the position taken by the respondent. In that case, as in this, the bonds were issued at a rate of interest less than the rate authorized by statute, and yet it was held that a sale for less than par and interest accrued was a violation of law, and that the bonds were void. So in this case the board of water commissioners in entering into the contract of July 20, 1893, with defendant not only acted without power in arranging to sell the bonds at less than- the sum secured thereby, but in fact made a contract actually prohibited. Hence it was void, and defendant, under it, derived no legal claim against plaintiff or its board of water commissioners.

Again, under the contract of July twentieth, defendant was not compelled to take the bonds unless the regularity and validity thereof were first certified to by Miller, Peckham & Dixon. The latter, after several interviews and communications with plaintiff’s agent, declined to certify to the regularity and validity of said bonds. When plaintiff’s agent, on the morning of July 28, 1893, was informed of such refusal, plaintiff then (if not before) was freed from any obligation to defendant under the contract. Miller, Peck-ham & Dixon refused to c.ertify in writing to the regularity of the bonds, nor does it appear that they have ever made such certification. Therefore, under the contract, by its very terms, on July 20, 1893, the defendant was not bound to take the bonds. It follows that plaintiff was not bound to deliver them. The doctrine that “ it is not just that one party should bo bound when the other is not ” is well established. (Routledge v. Grant, 3 Carr. & Payne, 267-273; Rathbone v. Warren, 10 Johns. 587-594; King v. Warfield, 67 Md. 246.)

It is true that the provision requiring the approval of Miller, Peckham & Dixon was for the benefit of defendant, and probably ■could have been waived by him. But he did not make such waiver .until after plaintiff, as it lawfully might, had acted on the assumption that the contract was at an end. The waiver was too late. After the final refusal of Miller, Peckham & Dixon of July twenty-eighth to approve the regularity and validity of the bonds, if not before, plain’tiff’s position was like that of one who had made an ■offer before the acceptance thereof. Plaintiff offered the bonds to defendant at a certain price. He accepted if Miller, Peckham & Dixon approved in writing the regularity and validity of the bonds. Miller, Peckham & Dixon refused such approval. Plaintiff, therefore, had made an offer to defendant to sell the bonds to him, which offer remained unaccepted. Prior to acceptance a party making an offer may withdraw it. (See Chicago & G. E. Ry. Co. v. Dane, 43 N. Y. 240; Pars. on Cont. 481.)

If the views above advanced are correct when the contract of August 4, 1893, was made tbe defendant had no legal claim against the village of Fort Edward or its board' of water commissioners, and it follows that such water commissioners had no authority to make the settlement in question.

But it is claimed that plaintiff, through the water commissioners, who are the same persons as the trustees of the village of Fort Edward, when defendant asserted a claim for damages under the •contract of July twentieth, voluntarily settled such claim and paid the defendant thereon the sum of $1,750, and that the transaction was an accord and satisfaction, a. voluntary payment by plaintiff, ■and that the same cannot be recovered in this action.

It is doubtless the fact that if the controversy in this case was between individuals or between defendant and a private corporation the settlement made would have been conclusive and the money paid to defendant could not be recovered. The contract of August fourth would have been an accord and satisfaction and the payment made thereunder a voluntary payment.

We see no reason why the doctrine as to voluntary payments should not apply to municipal corporations when the officers thereof act within the scope of their powers. If a controversy arises in reference to a contract which a municipal corporation had power to execute, or in reference to the performance thereof, and that controversy has been duly settled by the corporate officers, such settlement will be binding and conclusive upon the corporation. (People v. Stephens and Others, 71 N. Y. 527-561.) And this is so in cases where there has been an irregular exercise of power conferred upon municipal corporations. (Moore v. The Mayor, 73 N. Y. 238.)

But in this case, as we have seen, the defendant had no legal claim against the plaintiff or its water commissioners when the contract of August 4, 1893, was made. The statute conferred no power on the water commissioners to make the contract in question. They were merely agents of the village of Fort Edward, and except as their acts were within the powers conferred upon them as agents they did not represent it.

It is held in Delafield v. The State of Illinois (26 Wend. 193) that “it is a universal rule that in order to bind the principal upon a contract made by an agent the contract must be within the authority committed to that agent, and that the authority must be strictly foilowed. If tbe agent’s acts vary substantially from his authority in nature or extent or degree they are void as to the principal and do-not bind him.”

The officers of a municipal corporation are agents with a limited power and cannot bind the corporation by any act or contract beyond their power, and in an action on such a contract the corporation may interpose the plea of ultra vires. (Dillon’s Mun. Corp. [3d ed.] 457, m. p. 381 Moore v. Mayor, supra.)

In fact a contract made by the officers of a municipal corporation beyond their power is not the contract of the corporation. It is the wrongful act of the corporation’s agents.

In The People of the State of New York v. Fields (58 N. Y. 491) an action was brought by the People against the defendant to recover moneys illegally paid to him by the comptroller of the city of New York. It was held that the People could not maintain the action, that right being in the People of the city of New York. The following doctrine, which seems decisive of the question involved in this case, was stated in the opinion: “ The payment was made and received without any lawful power in the comptroller to make it. The defendant is chargeable with knowledge of this. It was a payment by an agent -who had no authority as such to make it. It was, then, no payment by the principal in mistake of law or ignorance of facts. The principal, in legal view, had no part in the payment, and it was made against its will. It was equivalent to an appropriation by the appellant of the moneys to his own use, with the acquiescence and help of the officer of the city who was authorized to pay them out no otherwise than in accordance with law. ITe having made the payment unlawfully, it was an act not within the scope of his agency, and does not bind his principal. (U. S. v. Bartlett, Daveis, 9 ; Stevenson v. Mortimer, Cowp. 805; Taylor v. Plumer, 3 Maule. & Sel. 562.) Títere is, for these reasons, a right of action somewhere against the appellant to recover the whole or a part of these moneys.”

In Board of Supervisors v. Ellis (59 N. Y. 620, 624, 625) it is held that a board o'f supervisors has no power to allow accounts not legally chargeable to the county, and if it does so the act is in excess of jurisdiction and void. That the board, as an agent of the county, has only a limited jurisdiction, and acts beyond such jurisdiction are void. Tlie same doctrine has been held in regard to the common council of a city. (People ex rel. Coughlin v. Gleason, 121 N. Y. 631; Lyddy v. Long Island City, 104 id. 218.)

In Supervisors of Richmond County v. Van Clief (1 Hun, 454; affd., 60 N. Y. 645) it was held that money illegally paid to a supervisor of the county can be recovered back. (See, also, People v. Starkweather, 10 J. & S. 333, 334.)

The cases cited by respondent relating to voluntary payments or the effect of an accord and satisfaction are generally those referring to controversies between individuals or private corporations, and not where a municipal corporation was a party. In the ease of Flynn and Ors. v. Hurd (118 N. Y. 19) it wras held tliat the action of the highway commissioner in making a settlement was an individual act, and hence the rule as to voluntary payments applied.

It follows from the doctrines laid down in the authorities above cited that the action of the water commissioners of the village of Port Edward in making the contract with the defendant of August 1, 1893, and in paying him $1,750, was not the action of the village of Port Edward. The water commissioners acted beyond their power, and hence did not bind their principal. The act of the agent is the act of the principal only when it is within the power conferred on him. There has been no accord and satisfaction, no voluntary payment, in this case, because the village of Fort Edward never acted in the matter. The wrongful action of the assumed agents or water commissioners are not corporate acts. The water commissioners wrongfully and without any authority, as the defendant was bound to know, put their hands into the treasury of the village of Port Edward and wrongfully took therefrom the sum of $1,750 and delivered it to the defendant. It had no right to give the money to the defendant, and he had no right to receive it.

We are of opinion that the plaintiff can recover the sum of money so wrongfully abstracted from its treasury by the illegal action of the water commissioners and the defendant.

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

Herrick, J., concurred; Stover, J., not sitting.

Judgment reversed and new trial granted, costs to abide event.


source: Caselaw Access Project

license: Public Domain

text:
    Webster Sherwood and Another, Respondents, v. The New York, Ontario and Western Railway Company, Appellant.

      Negligence, not presumed — liability of a common carrier for delay — the burden of proof is on one assuming the risk of loss.

    Negligence, being a wrong, will not ordinarily be presumed, but must be proved. Upon the trial of an action brought to recover damages sustained by the failure of the defendant, a common carrier, to deliver at its destination, at a sufficiently early date, certain property shipped by the plaintiff, where the plaintiff had .agreed with the defendant to take the risk of any loss occasioned by any delay, the plaintiff, in order to recover, must show facts taking the case out of the operation of such agreement. It devolves upon him to show not only the delay of the defendant in transporting the property, but that such delay was occasioned by the wrongful negligence of the defendant.
    Appeal by tlie defendant, The New York, Ontario and Western Railway Company, from a judgment of tlie County Court of Sullivan county in favor of the plaintiffs, entered in tlie office of the clerk of the county of Sullivan on tlie 22d day of October, 1894, upon the verdict of a jury, iqion an apjieal from a judgment of a justice of the peace of the town of Rockland, Sullivan county, in favor of the plaintiffs, and also from an order entered in said clerk’s office on the 18th day of October, 1894, denying the defendant’s motion for a new trial made upon the minutes.

      George II Carpenter, for the appellant.

      J. M. Maybee and T. F. Bush, for the respondents.
   Putnam, P. J.:

On July 4, 1893, plaintiffs delivered to defendant a carload of calves at Livingston Manor, N. Y., to be transferred to Sixtieth street, New York. The calves were shipped on the train known as No. 30, which should have left Livingston Manor on or before ñve-thirty p. m., and reached New York, about 129 miles distant, on the morning of the fifth about four a. m. But No. 30 did not reach New York until after three o’clock in the afternoon, too late for the market on that day, so that plaintiffs could not dispose of the calves until July sixth. In consequence of the delay plaintiffs suffered damages.

Defendant introduced in evidence a contract between the parties purporting to have been executed at the time of the shipping of said calves, by which the plaintiffs agreed to take all risk of any loss or damage which may be sustained by reason of any delay in Such transportation.” A question of fact was raised on the trial whether this contract was executed by the plaintiffs when the calves were shipped or otherwise, which was properly submitted to the jury. The trial court, as we will assume in our discussion of the case, properly instructed the jury that the release, if duly executed on the day it bears date, did not release defendant from liability occasioned by the negligence of its servants.

The only question we deem it necessary to consider arises from the instructions given by the learned trial court in his charge to the-jury as to the burden of proof. The charge is as follows : “ The duty, therefore, devolves upon the defendant to show or to excuse the delay in the transportation of this car; that is, if you find this delay was an unreasonable delay on the part of the defendant.”' Again, the court,"in his charge, said : “ I explained that when the delay of the freight had been shown it devolved upon the defendant to explain the delay; if they failed to explain it satisfactorily the plaintiff is entitled to recover.” To the last statement the defendant duly excepted.

The judge, therefore, instructed the jury that the plaintiffs, showing the delay of ten hours in the delivery of the calves, could rest their case and recover unless defendant proved that said delay was-not caused by its negligence. His instruction was not that the jury could consider the delay on the question of fact as to defendant’s negligence, but as matter of law that the delay being shown, unless excused, the plaintiffs were entitled to recover. We think the judge in thus instructing the jury went too far. There was a contract, or evidence from which the jury could have found one between the parties, by which the plaintiffs took the risk of damage occasioned by delay in transporting the calves, and the defendant, hence, could not be made liable for such delay, unless occasioned by its negligence. It is well settled that negligence, being a wrong, will not ordinarily be presumed, but must be proved. The contract exempting the defendant from liability for damage occasioned by delay it was, we think, for the plaintiffs to show that such delay was on account of defendant’s negligence.

In Lamb et al. v. Camden & Amboy R. R. & T. Co. (46 N. Y. 271) it appeared that the plaintiffs bad delivered a quantity of cotton to the defendant for transportation. There was a contract exempting the corporation from liability for loss occasioned by fire. Th% cotton was destroyed while on the pier of the defendant. The court held that the exemption from loss by fire did not exonerate defendant if the fire resulted from its wrongful negligence; that plaintiffs to maintain the action must have shown affirmatively such negligence, and that the trial court erroneously instructed the jury that the burden was on the railroad corporation to show that the destruction of the cotton by fire was not caused by negligence on its part. In French v. Buffalo, N. Y. & E. R. R. Co. (4 Keyes, 108 ; 2 Abb. Ct. App. Dec. 196) it was held that when the liability of a common carrier is limited by contract the burden of proof that the loss occurred in consequence of the negligence of the corporation rests upon the plaintiff. To the same effect see Whitworth et al. v. Erie R. R. Co. (87 N. Y. 413-419). In the case last cited there was a clause in the contract limiting the liability of the company. ANDREWS, J., in delivering the opinion of the court, says : “ The burden was upon the plaintiff to show facts taking the case out of the operation of the exemption clause.” (See, also, Cochran v. Dinsmore, 49 N. Y. 249.)

The case of Tierney v. N. Y. C. & H. R. R. R. Co. (76 N. Y. 305) and other cases cited by respondents are not parallel. A different rule from that above stated will apply in cases where the liability of a common carrier was not limited by any contract.

Under the authorities above cited it devolved upon the plaihtiffs on the trial to show not only the delay of defendant in transporting the calves, but that such delay was occasioned by the wrongful negligence of defendant. The plaintiffs had agreed with defendant to take the risk of any loss occasioned by any delay, and it was for them on the trial, as held in Whitworth et al. v. Erie R. R. Co. (supra), to show facts taking the case out of the operation of the exemption clause contained in the contract. The court, however, instructed the jury that the delay being shown, unless explained by defendant, the plaintiffs were entitled to recover. In other words, that the burden was upon the corporation to show the absence of negligence.

We think the court erred in so instructing the jury, and, hence, that the judgment should be reversed, a new trial granted, costs to abide the event.

Herrick and Stover, JJ., concurred.

Judgment reversed, a new trial granted, costs to abide the event.


author: HeRRICK, J.:

text:
    David Curry, Respondent, v. The Union Electric Railway Company, Appellant.

      Contributory negligence, in crossing electric railway trades, a question for the jury.

    It is the duty of a person about to cross the tracks of an electric railway to look both ways. If he looks along the tracks in one direction to a point where he can no longer see in that direction and then looks along the tracks in another direction, his attention being detained there a moment, and then looks again in the first direction and discovers almost upon him a car by which he is run down, thereby sustaining personal injuries, it is a question for the jury to determine, in an action brought to recover damages for such personal injuries alleged to have been sustained by reason of the defendant’s negligence, whether or not such person was guilty of contributory negligence.
    Appeal by the defendant, The Union Electric Railway Company, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Saratoga on the 24th day of October, 1894, upon the verdict of a jury rendered after a trial at the Saratoga Circuit, and also from an order entered in said cork’s office on the 19th day of October, 1894, denying the defendant’s motion for a new trial made upon the minutes and the rulings of the judge upon the trial, with notice of an intention to bring up for review upon such appeal said judgment, order and rulings.
    This action was brought to recover damages for personal injuries sustained by the plaintiff in being run into by a car upon the defendant’s electric railway, by reason of the defendant’s alleged negligence.

      John L. Henning, for the appellant.

      John Foley, for the respondent.
   HeRRICK, J.:

Tlie only point in this case that strikes me is as to whether there was any evidence of a lack of contributory negligence on the part of the plaintiff to submit to the jury.

It appears that on the east side of Nelson avenue there were several buildings that somewhat obstructed the view of the defendant’s tracks; also, a barn east of the Wiggins house. That the plaintiff, as he approached the track, looked between the house and the barn and saw nothing upon the track. It appears, also, that for a space of some feet the Wiggins house entirely obstructs the view of the tracks, looking east, until a point is reached distant 80 feet from the south rail of defendant’s tracks, at which point said tracks can be seen for a distance of 100 feet from the center of Nelson avenue. At 60 feet from the south rail defendant’s track can be seen for a distance of 136-| feet, and 46 feet therefrom the defendant’s tracks can be seen for a distance of 289 feet.

The ]ilaintiff, it appears, was standing on the right-hand or east side of the wagon; his attention was directed to a car to the west of Nelson avenue, and some 500 feet distant from the crossing, at which point it turned off on Adams street. He does not seem to have looked continuously, (but as he turned and looked to the east he discovered the car forty or forty-five feet distant, his horses at that time being almost upon defendant’s tracks. Going at any rate of speed that was testified to upon the trial, either at eight or twenty miles an hour, it would take the defendant’s car but a few seconds to traverse the difference between 40 or 45 feet and 136 feet, at which it appears the plaintiff could have seen the car when 60- feet away, or 289 feet when 46 feet away from the south rail.

It will thus be seen that the diversion of plaintiff’s attention from the car coming from the west, for but a very short period of time, would enable defendant’s car coming from the east to cover the distance at which it could be seen after the line of plaintiff’s vision reached beyond the Wiggins house, until the car would be almost upon plaintiff’s vehicle.

It was the plaintiff’s duty to look both ways; he looked to the east at one point; he then reached a point where he could no longer look to the east; he then looked to the west; his attention was detained there for a moment, and when he looked to the east again the car was almost upon him.

It seems to me, therefore, under the circumstances, that this was a case for .the jury to determine.

The judgment should, therefore, be affirmed, with costs,

Putnam, J., concurred; Stover, J., not acting.

Judgment affirmed, with eoáts.


author: Stover, J.:

text:
    Osmer B. Wheeler, Appellant, v. Edward F. Robinson, Respondent; Merchants and Manufacturers’ National Bank of Middletown, N. Y., Appellant.

      Material misrepresentation as to the quantity of land sold — mutual mistake requiring reduction in price — laches.

    Where the owner of a farm innocently, but untruly, states the quantity of land contained therein, and a purchaser, in reliance upon such statement, enters into a contract and takes a deed of the land, and subsequently finds that the quantity is materially less than that stated, he is entitled to the interposition of a court of equity to correct the mistake upon the theory that there was a mutual mistake as to a material fact.
    A material variation enables the purchaser not to avoid the entire contract, but to abate the price.
    A purchaser- will not be allowed to shut his eyes, either carelessly or willfully, and receive a conveyance of property, without using the ordinary means and care that a business man of ordinary capacity would use under the circumstances, and then afterwards claim that at the time his deed was executed he understood that some other or different estate or interest than that specified therein was to be granted by the deed. Relief should be granted only in cases where the evidence is clear, and where the party claiming the benefit of the rule has exercised that care which the law requires of men who engage in business transactions.
    There is a wide difference between a mutual mistake and a false representation that induces a purchase; when a vendor says that he does not know the exact number of acres in the parcel of land to be conveyed, but thinks there are a certain number therein, he can be held liable for a false representation only in case he had not reasonable grounds for his belief as stated, and in order to avoid the deed given under such circumstances there must be a finding to that effect.
    It is the duty of a grantee if he desires to repudiate a conveyance of property to him and the giving of a mortgage by him to secure the purchase price thereof, on account of the false representations of the grantor, to do so as soon as the fraud is discovered by him.

      Gross-appeals by the plaintiff, Osmer B. Wheeler, and by the defendant Merchants and Manufacturers’ National Bank of Middletown, N .Y., from a judgment of the Supreme Court in favor of the defendant Edward E. Robinson, entered in the office of the clerk of the county of Sullivan on the 24th day of April, 1894, upon the report of a referee adjudging a certain deed and a certain mortgage to be fraudulent and void, canceling the same, and determining the rights of the parties in certain premises to foreclose which this action was brought, with notice of an intention to bring up for review upon such appeal all questions of law and fact, and the rulings of the referee.
    The action was brought to foreclose a mortgage given by the defendant Robinson to the plaintiff to secure purchase moneV upon the lands described in the complaint. The answer sets up false representation made by the plaintiff at the time of the purchase. The'mortgage was not accompanied by a bond and created no personal liability on the part of the defendant, but did contain a stipulation that it was the intention of the mortgage to create a lien on the premises, and that no personal liability on the part of the mortgagor should be created or inferred. The referee found in favor of the defendant Robinson, and adjudged the deed and mortgage to be void, and the plaintiff and the defendant bank appeal.

      John P. Poosa, Jr., for plaintiff, appellant.

      Fardel Fvnn, for defendant, appellant.

      T. F. Bush, for the respondent.
   Stover, J.:

The false representations relied upon to defeat the plaintiff’s claim are:

That the plaintiff falsely and fraudulently represented that the premises consisted of 1,200 acres of good quarry land, and that he was the owner thereof, free and clear of incumbrance. . That he knew, from his experience and inspection, that the stone was pure bluestone, easily elevated and quarried, and superior to other quarries in the vicinity where the premises were situated. That he had quarried stone, and had made money in working the quarries. Also, that he owned certain lands which it appeared he did not own, and that he had represented that certain docks which were on the premises were owned by him. Further, it is alleged that the premises did not contain 1,200 acres of land; that it was not good quarry land; that the plaintiff did not own certain docks, and that he was not the owner of the premises free and clear, but that he had agreed to sell and convey the same to one Thomas Wilson and others, the legal title to be taken by one Everett, in trust.

As to the allegation that there were not 1,200 acres of land in the premises, it appears that the tract of land sought to be conveyed was wild, uncultivated land, and described in the deed as portions of certain lots situated in the town of Forestburgh, and the referee has found that the purchase price was agreed upon on a basis of ten-dollars per acre. The referee has found that at the time of the negotiations “ the plaintiff represented to said defendant that said premises consisted of 1,200 acres of good quarry land.” He has also made a further finding That the plaintiff told Robinson, before the contract dated February 10, 1893, was executed, that he was selling all the property he owned on the westerly side of the railroad. That he had built the stone docks at liis own expense, and that he was selling his rights in the docks. That he thought that there was about 1,200 acres in the tract, but was not positive as to the exact number of acres.” The docks were built alongside the railroad, and were, it seems to me, apparently upon railroad lands.

The referee has found also that there was not, altogether, including the land covered by the pond or reservoir of the Canal Company, to exceed 1,120 acres,” and that there were seventy-five acres of this subject to some "rights of the canal company.

It is true, as contended by the defendant, that a material misrepsentation as to the quantity of land might be sufficient to invalidate a deed, and it has been held that where the owner of a farm innocently, but untruly, states the quantity of land contained therein, and a purchaser, in reliance upon the statement, enters- into a contract and takes a deed, and subsequently discovers that the quantity is materially less than that stated, he is entitled to the interposition of a court of equity to correct the mistake. (Paine v. Upton, 87 N. Y. 327.)

That case, however, went upon the theory that there was a mutual mistake upon a material fact, no fraud or misrepresentation, it being understood that both parties entered into the agreement upon the understanding that there was a certain number of acres, and that a material variation entitled the purchaser, not to avoid the entire contract, but to abate the price. There is no question of a mistake of fact in this case, but it is alleged that the plaintiff lias made a false representation. What is the false representation that he has made ? I think we must assume that the plaintiff is entitled to the benefit of the finding set forth, viz.: “ That he thought that there was about 1,200 acres in the tract, but was not positive as to the exact number of acres.” If under such a statement of facts the defendant had bought 1,200 acres of land, and his deed covered 1,200 acres of land, it might be said that he had relied upon the statement of the plaintiff in that regard. But it must be, I think, quite evident that he did not, and could not, have relied upon 'the statement of the plaintiff as to the quantity of land described. This was a tract of wild land; there had been various conveyances from time to time. Defendant had an abstract of the premises, and'was notified of these conveyances at the time, and yet, knowing the uncertainty that was existing, and the plaintiff having told him that he did not know the exact number of acres in the lot, he takes a deed describing a tract of land which contains various reservations, with references to deeds by which such reservations were created, and containing this statement: “ This description above given being intended to include all the lands owned by said Wheeler, in lots 33, 34 and 35, of the first division of the Minisink patent, which lies west of the lands of Port Jervis, Monticello and New York Railroad.”

A purchaser of land may rely upon the representations of the vendor, but if he intends to rely upon such representations he ought at least to obtain by his deed, and his deed should describe, the interest and the extent of the purchase made by him. A purchaser ought not to be allowed to shut his eyes, either carelessly or willfully, and receive a conveyance of property without using the. ordinary means and care that a business man of ordinary capacity would use under the circumstances, and then afterwards claim that, at the time his deed was executed he understood that some other or different estate or interest was to be granted by the deed. To permit this practice would be to open the door to fraud, and would invite purchasers of land to speculate at the expense of vendors, if, when called upon to perform on their part, they were permitted to-repudiate their contracts upon such excuses. The rule should not be extended, but should be applied only in cases where the evidence is clear, and where the party claiming the benefit of the rule has exercised that care that the law requires of men who engage in business transactions. There is a wide difference between a mutual mistake and a false representation that induces a purchase. In this case the vendor says he does not know the exact number of acres, but thinks there are 1,200. He can' be held liable for a false representation only in case he had not reasonable grounds for this belief as stated, and in order to avoid the deed there must be a finding to that effect.

Another representation made was that the land was quarry land. The evidence show's that the first contract was entered into in the winter, when there was some snow and ice on the ground, but that some of the quarries were being worked at the time. The respondent’s claim is that he at that time could not see the property. But the evidence shows that he did go upon the property, and that he did look at a portion of it at least. He testifies that in March following the sale he employed experts, and went over the land for the purpose of determining their value as quarry lands, and there was nothing to prevent his making a full examination when the snow went off in the spring. . The original contract for the sale of the property provided that the defendant should execute his bond and mortgage for the purchase price. When the time came for the delivery of the deed, there having been some negotiations before that, and the respondent having had the abstract examined by his counsel, the respondent made a demand for a modification of the contract, and the referee finds that the respondent was relieved from executing the bond mentioned in the contract for the reason that on account of the premises being covered with snow and ice he was unable to see the premises, and was forced to rely upon the representations made by the plaintiff respecting the same. Respondent testifies that he made the statement that he relied upon plaintiff’s statement at the time the contract was made.

It is difficult to see why the respondent should be relieved from the payment of the purchase price if he relied upon the representations of the plaintiff. The very fact, it seems to me, that he was relieved from the personal obligation to pay the purchase price secured by tbe mortgage, after lie bad contracted to give bis bond, indicates that lie did not rely upon the representations of the plaintiff, but protected himself by having the property itself only liable for the balance of the purchase price.

I shall not discuss the other representations upon which considerable time was taken on the argument, and which seem to have impressed the referee, viz., as to the payment for the release of the quarry rights of other persons. A large amount of testimony was taken on this subject, but it is clear that this was a matter that was understood perfectly by the parties at the time the deed was given, the deed itself referring to quarry rights, and an abatement of purchase price to the extent of $500 was agreed upon on account of the existence of those rights.

The other representation is as to the failure of title. The evidence shows that there had been a contract to convey the premises to Everett as trustee, but upon the trial of the cause deeds and releases were presented, releasing whatever interest the trustee or the beneficiaries under the deed had in the premises. It appears that the property had for thirty years been in the possession of the plaintiff, and at the time the deed was delivered an abstract was furnished, which abstract showed the conveyance to said Everett by the plaintiff. The referee has found that the interests of the parties under that deed had been conveyed to the plaintiff at the time of the trial of this action, and has not found that the conveyance to the trustee was valid, but only that it was a cloud upon the title. I am unable to see how the statement of plaintiff, conceding the most claimed for it by respondent, can be construed as a false representation as to the title. The defendant Robinson entered upon the premises after the delivery of his deed, and continued in possession down to December, 1891, after the commencement of this action, when he sent notice to the plaintiff that he would give him possession of the property, and plaintiff thereupon took possession of the property. At this time default had been made under the conditions of the mortgage, and this action had been brought for foreclosure. There was no offer to reconvey, and the referee does not find that there was any intent to abrogate the sale.

The referee finds that “ The defendant Robinson is not entitled to recover as damages any part of the loss he sustained in operating the quarries, as the main part of the business was carried on by him after he had discovered the fraud, or had reasonable grounds to suspect that he had been deceived.”

He further found: “ That the defendant Robinson, about the first of April, 1891, went over the property and looked at and examined the quarries.”

It was the duty of the defendant, if he desired to repudiate the transactio2i 021 aecomit of the false representations, to do so as soon as the fraud was discovered. It would see2n from the finding of the referee quoted above, that he went on with full knowledge of the fraud, if any had been perpetrated upon him, and had continued the quarrying down to and after the commence2nent of this action. From the language used by the referee it is quite evident that he has been misled as to the effect of the agreement with regard to the quarry rights, and has attached more or less weight to the representation made by the plaintiff in regard to the quarry rights of various parties in occupa2icy of the premises. And so as to the deed to the trustee which is found to be a cloud upon the title. It would be very difficult to find, from the evidence in this case, that there was a2iy false representation with regal'd to that deed, as the abstract was Í21 possessio2i of the attorney for the defendant for some time before the conveyance to him was made.

The referee having found upon insufficient evidence, as I think, upon some of the material branches of the case, we cannot say how far his findings upon the other questions involved have been affected by these erroneous findings.

I think the judgment entered upon the report of the referee should be reversed, a new trial granted, and the referee discharged.

Putnam and Herrick, JJ., concurred.

Judgment reversed, referee discharged, a new trial granted, costs to abide the event.


author: Stover, J. :

text:
    The People of the State of New York, Respondent, v. James Altman, Appellant.

      Indictment for the crime of foi'gery — statement of an attempt to negotiate the forged instrument — competency of’that fact as evidence.

    An indictment of a person for the crime of forgery, after alleging that such person forged the name of another upon a check, alleged that he offered such check to another in payment of certain property with intent to defraud. Upon the trial the indictment was demurred to on the ground that more than one crime was charged therein. The demurrer was overruled and the defendant then pleaded “not guilty” and was thereafter convicted of the crime of forgery and moved in arrest of the judgment on the same ground stated in the demurrer.

      Held, that the conviction should be affirmed;
    That the indictment itself would have been complete without the allegation of the offering of the forged check although proof of the offering of the check with intent to defraud might he proper as a part of the transaction and as evidence of the intention of the prisoner in the making of the forged instrument; That the statement in the indictment that the prisoner offered the check to another with intent to defraud should be treated as a surplusage and as a statement of evidence which might be given upon the trial.
    Appeal by the defendant, Lewis Altman (named in the indictment James Altman), from a judgment of the Court of Sessions held in and for the county of Warren, rendered on 5th day of December, 1894, upon the verdict of a jury convicting him of the crime of forgery in the second degree.

      A. Armstrong, Jr., for the appellant.

      Iym<m Jenlams, District Attorney, for the respondent
   Stover, J. :

The appeal is from a conviction of forgery in the second degree, had at the Warren County Sessions December, 1894.

The indictment is as follows : “The said James Altman, on the 5th day of September, 1894, at the village of Glens Falls, in this county, feloniously did falsely make, forge and counterfeit a certain check or order on the Glens Falls National Rank, for the payment of money, in form and manner and to the tenor and effect following, that is to say:

“ c Glens Falls, N. Y., Sept. 6iA, 1894. No. 4.
“‘Glens Falls National Bank, pay to bearer ($25) twenty-five dollars.
“ ‘ JAMES ALTMAN.’
“ And with intent to defraud one Rufus M. Cole, did feloniously, upon the back of the above mentioned check, falsely make, forge ■and counterfeit the name, endorsement and signature of one Henry H. Bush, the same purporting to be the act of said Henry H. Bush, whereby a pecuniary demand against said Bush to the amount and value of twenty-five dollars purported to have been created, which said falsely made, forged and counterfeited signature in tenor and effect is as follows, ‘ H. II. Bush,’ and offered the same in payment of certain goods, wares and merchandise, which he, said James Altman, had, at the time and place above mentioned, purchased of •said Rufus M. Cole, with intent to defraud said Cole, against the form of the statute in such case made and provided, and against the peace of the People of the State of New York and their dignity.”

Defendant demurred on the ground that more than one crime was charged in the indictment, and that two separate and distinct ■crimes wej,-e charged in the indictment. The demurrer was overruled ; the defendant pleaded not guilty; the defendant moved an arrest of judgment on the same grounds as stated in the demurrer, which was denied, and appeal is taken to this court.

I think the conviction should be affirmed. The indictment itself would have been complete without the allegation of the offering of the forged check to Cole, and yet evidence of the offering of the check to Cole, with intent to defraud, might be proper, as a part of the transaction, and as evidence of the intention of the prisoner in the making of the forged instrument. I think the statement in the indictment that the prisoner offered the check, to Cole with intent to defraud should be treated as surplusage, and as a statement of evidence which might be given upon the trial.

The other question which was discussed upon the brief of the appellant, viz., that the court erred in admitting the paper found upon the defendant at the time of his arrest, upon the ground that it was an invasion of the defendant’s right in compelling the defendant to give evidence against himself, was fully discussed and finally settled in the case of The People v. Gardner (144 N. Y. 119), and no discussion of it is necessary here.

I can discover no error which tended to prejudice any substantial right of the defendant, and the conviction should be affirmed.

Putnam and Herrioic, JJ., concurred.

Judgment of conviction affirmed.


text:
    In the Matter of the Probate of the Last Will and Testament of Ephraim H. Bender, Deceased. Sarah W. Bender and Others, Appellants; William Howard Bender and Another, as Executors, etc., of Ephraim H. Bender, Deceased, Respondents.

      Allowance of costs in Surrogates' Courts — expert witness fees not taxable ■ — •review of surrogates practice.

    The allowance of costs in the Surrogates’ Courts is regulated by the Code of Civil Procedure, and the surrogate has no power to make an allowance for any purposeunless he is authorized so to do by the Code.
    Under section 2559 of the Code of Civil Procedure no disbursements can be allowed in the Surrogated Courts except those that are allowed in the Supreme Court. The surrogate; however, is made the taxing officer instead of the clerk. Under the provisions of section 3318 of the Code of Civil Procedure the fees of witnesses are limited by law to the per diem compensation and mileage as provided by statute, and the party to whom the costs are awarded in an action is entitled to tax only the legal fees of witnesses.
    The fact that the statute has expressly limited the allowance of witness fees to the legal fees is of itself a prohibition to a surrogate, or any officer acting under the statute, to allow more than the legal fees for the attendance of witnesses. The surrogate has no power to permit the taxation of expert witness fees at a greater amount than the fees prescribed by section 3318 of the Code of Civil Procedure.
    While a surrogate may make rules and adopt a practico in relation to the conduct of proceedings in his court, ho may not in so doing contravene a statute in such wise that a judgment may be entered against a party and his property be taken -without redress and without right of review.
    Appeal by the contestants, Sarah W. Bender and others, from that portion of a decree of the Surrogate’s Court of the county of Albany, entered in the Surrogate’s Court of the county of Albany on the 10th day of July, 1894, directing and allowing out of the estate of Ephraim IT. Bender, deceased, a sum fixed as the proponents’ taxable costs and disbursements and allowances, with notice of an intention to bring up for review upon such appeal the allowance, award and taxation by the surrogate of the sum of $500 paid as a fee to an expert medical witness as a part of the proponents’ bill of costs.

      Robert G. Seherer, for the appellants.

      George L. Stedman, for the respondents.
   Stover, J. :

The appeal is from so much of a decree made by the Albany Surrogate’s Court on the 10th day of July, 1894, as allows $500, paid as a fee to an expert medical witness as a disbursement.

The proceeding in-which the item of $500 was allowed was fertile probate of the will of Ephraim II. Bender, and one of the questions for the surrogate to determine in this proceeding was the= mental capacity of the testator at the time of the making of the will. The sole question presented here is as to the power of the surrogate to allow the item in dispute. Allowances of costs in the Surrogate’s Court are regulated by the Code of Civil Procedure, and unless authority can there be found for the allowance, the decision of the suiTOgate was erroneous. Section 2559 of the Code of Civil Procedure, relating to costs and disbursements in the Surrogate’s Court, is as follows:

“ Costs, when awarded by a decree, include all disbursements of the party to whom they are awarded, which might be taxed .in the Supreme Court. The sum allowed for costs must be fixed by the surrogate and inserted in the decree.”

It will be seen that, under this section, no disbursements can be-allowed, except such as are allowable in the Supreme Court, but the surrogate is made the taxing officer instead of the clerk.

Section 3256 of the Code of Civil Procedure specifies the disbursements which a party is entitled to, when costs are allowed, and is-as follows : “A party to whom costs are awarded in an action is entitled to include, in his bill of costs, his necessary disbursements, as follows : The legal fees of witnesses and of referees and other officers ; the reasonable compensation of commissioners taking depositions ; the legal fees for publication, where publication is directed, pursuant to law; the legal fees paid for a certified copy of a deposition or other papers, recorded or filed in any public office, necessarily used or obtained for use on the trial; copies of opinions and charges of judges; the reasonable expenses of printing the papers for a hearing, when required by a rule of the court; prospective charges for the expenses of entering and docketing the judgment, and the sheriffs fees for receiving and returning one execution thereon, including the search for property, and such other reasonable and necessary expenses as are taxable, according to the course and practice of the court, or by express provision of law.”

Section 3318 of the Code of Civil Procedure regulates the amount of fees to which a witness is entitled in an action in the Supreme Court, and is as follows : “ A witness in an action or a special proceeding, attending before a court of record, or a judge thereof, is entitled, except where another fee is specially prescribed by law, to fifty cents for each day’s attendance; and, if he resides more than three miles from the place of attendance, to eight cents for each mile, going to the place of attendance.”

It will be seen by this section that the fees of witnesses 'are limited by law to the per diem compensation and mileage as fixed by statute, and that the p>arty to whom costs are awrarded in an action is entitled to tax only the legal fees of witnesses, etc. The witness is compelled to attend upon payment of the fees prescribed by law, and has no right to demand more from the party. Hence, legal fees, as used in the section fixing the costs, must mean only such fees as the party is legally bound to pay in order to secure the attendance of witnesses. But it is claimed that expert witnesses are not within the statutory definition of witnesses, but, by reason of the peculiar character of their testimony, the compensation paid, whatever it may be, becomes a necessary disbursement in an action. No precedent is cited for such contention, nor do I think any can be found. It was held in Mark et al. v. City of Buffalo (87 N. Y. 184) that the sums paid an expert for plans and measurements, in an action brought to recover for granite, dressed and prepared for use, in the construction of a city and county building, was not a necessary disbursement. And in Rothery et al. v. New York Rubber Company (90 N. Y. 30) it was held that in an action brought to compel the lowering of a clam, which set the water back upon plaintiff’s lands, the allowance of items for engineer’s fees, maps and services were not proper, necessary disbursements in an action, and could not be allowed.

As was said in Mark et al. v. The City of Buffalo (supra),If allowed, the precedent would draw after it the expense of every preparation for trial, and open the door to a flood of evil.” I do not think there can be any distinction between the fees of an expert witness in actions of the character of those cited above, and the one in the case under consideration. It may be seen at once that the services of the engineer are as necessary in an action like that of Rothery v. The Rubber Company as were those of a medical expert in the proceeding to determine the mental condition of the testator in the case under discussion. But it is contended by the respondents that this item was properly allowed under the last clause of section 3256. “ Such other reasonable and necessary expenses as are taxable according to the course and practice of the court, or by express provision of law.” If I am correct in the views above stated, this was not an item taxable by express provision of law, and authority, if any, must be found under the other clause, viz., “taxable according to the course and practice of the court.” The surrogate has made what is called a finding that expert witness fees are taxable according to the rules and practice of the Surrogate’s Court, and it is claimed that this court is precluded by such finding. I cannot consent to such a proposition. . While it is true that in questions of practice only, in other courts, this court will assume that the judges of the court itself are the proper judges of rules and practice of their own court, yet where, as in this case, such practice affects the substantial rights of the party and not the conduct of the proceeding simply, but undertakes to enforce and create a judgment against the party under which he would be deprived of his property, this court should go beyond the finding of the surrogate, and determine for itself whether such action is within the authority of the surrogate, and whether he has power to make such rule or follow such practice. And while we may concede that the surrogate may make such rules and adopt such practices as lie may, relating to the conduct of proceedings in his court, he may not make a rule or adopt a practice which contravenes the statute and under which a judgment may be entered against a party and his property taken without redress and without right of review.

The fact that the statute has expressly limited the allowance of witness fees to the legal fee, is, of itself, a prohibition to the surrogate, or any officer acting under the statute, to allow more than the legal fees for the attendance of witnesses. The statute nowhere gives authority to the surrogate to increase or allow other than legal witness fees, but expressly limits his authority, so that whenever the surrogate allows witness fees, he can allow only the legal fees, viz., theper diem allowance and mileage.

I do not think the court is precluded by the statement or finding of the surrogate that expert witness fees are taxable according to the practice in the Surrogate’s Court, for, as we have seen, such practice, if it exists, must be without warrant of the statute, or of precedent, or of law in any manner, and the Surrogate’s Court has no power to adopt a rule or practice which would permit the taxation of expert witness fees.

The decree should be modified by disallowing the allowance of $500 paid for expert witness fees, with the costs of this appeal.

Putnam and Herrick, JJ., concurred.

Decree of the surrogate modified, with costs and disbursements of this appeal to the appellants.


text:
    Charles L. Blakeslee, Respondent, v. Jean B. Cattelain and Others, Defendants. Nestor Cattelain, Appellant.

      Attachment — sufficiency of the moving affidcmts.

    In proceedings by attachment the court will not be eager to prevent the enforcement of concededly legal and just claims of creditors in order to aid persons who voluntarily take at least questionable assignments of claims, of the . character of which they must be charged with having notice, and particularly when such questionable transactions are between members of the same family.
    The affidavit upon which a warrant of attachment was granted, after setting forth the usual facts as to the cause of action, stated : “ That the defendants are about to remove their property from this State or secrete property with intent to defraud their creditors; that a sum of money is to be paid to defendants, and they are arranging to place the same so that the same cannot be found ; that their agent has so declared and this deponent knows that they are busy to-day to accomplish this.”

      Held, that the fact therein stated, that the defendants were about to receive a sum of money and to place it so that it could not be found, and that their agent had declared that they would do this, was some evidence of the facts stated, and while perhaps it was slight, and not as convincing as might be required under some circumstances, it was sufficient to call upon the judge who passed upon the application in the first instance to exercise his judgment as to its sufficiency, and that his conclusion in granting an attachment thereon was binding on the General Term of the Supreme Court upon an appeal from an order denying a motion to vacate the same;
    That, under such circumstances, the General Term would not interfere with the determination of the judge who heard the application unless it appeared that he acted under a misapprehension of the facts or without jurisdiction to pass upon them.
    Appeal by Nestor Cattelain from an order of the Rockland county judge, made on the 24th day of November, 1894, and entered in the office of the clerk of the county of Albany on the 20th day of December, 1894, denying a motion to vacate a warrant of attachment made by the appellant, a party acquiring an interest in the attached property after the levying of the warrant.
    The motion was made on behalf of one Nestor Cattelain, a person who claims to have acquired an interest in the property attached subsequent to the attachment, and before the actual application of the attached property to the payment of the judgment recovered in the action.

      Paid F. De Fere, for appellant.

      George L. Stedmcm and George W. Stedmcm, for the respondent.
   Stover, J.:

The affidavit upon which the attachment was granted, after setting forth the usual facts as to the cause of action, stated : “ That the defendants are about to remove their property from this State, or secrete property with intent to defraud their creditors; that a sum of money is to be paid to defendants, and they are arranging to place the same so that the same cannot be found; that their agent has so declared, and this deponent knows that they are busy to-day to accomplish this.”

The property attached was a deposit of $2,000 which became due to the defendants upon the determination of an action in which one Buck was plaintiff and the defendants herein were defendants. The attachment was issued September twentieth and levied September twenty-first, the attached property being then in the custody of the clerk of Bockland county. On the twenty-sixth day of September an assignment of the judgment against Buck was made by Oscar Cattelain for himself and the other defendants, the defendants constituting the firm of J. B. Cattelain & Sons. The assignment was to Nestor Cattelain, a son of one of the defendants and brother of others, for a consideration of $100, expressed in the assignment.

The motion to vacate the attachment was made upon the papers upon which the attachment was issued and additional affidavits showing the assignment and proceedings in the case of Buck v. Cattelain, and some proceedings had subsequently to the levying of the attachment.

There was no defense interposed in this action, and judgment had been entered by default before the hearing of the application by the county judge. The appearance by the attorney states that he appears for Nestor Cattelain as a lienor, subsequent to the granting of the attachment, and the notice of motion is signed “Attorney for Nestor Cattelain, subsequent lienor.” The affidavit of Nestor Cattelain states that he is the sole owner of the judgment against Buck, and the defendants covenant in the assignment that the sum of $1,270 is due up>on the said judgment.

I think the order of the county judge should be affirmed. It may be that had the application been made to this court, or to either of the members thereof, more evidence of the facts with regard to the disposition of the property by the defendants would have been required, and it may be that an attachment would have been refused upon that affidavit, yet we cannot say that there was not sufficient to give the county judge jurisdiction of the matter and to permit him to pass upon the question of the'sufficiency of the affidavits. ~We must assume that the facts therein stated are true,.viz., that the defendants were about to receive a sum of money, and to place it so that it could not be found, and that their agent had declared that they would do this. It cannot be said that if the agent of the defendants had made such a declaration it is not some evidence of the facts stated; and while, perhaps, it is slight, and not as convincing as might be required under some circumstances, yet it was sufficient to call upon the county judge, or whoever passed upon the application in the first instance, to exercise his judgment as to its sufficiency, and his conclusion thereon should be binding on this court. We ought not to interfere with that judgment, unless it appears that he acted under a misapprehension of the facts or without jurisdiction to pass upon the facts.

The evidence on the part of the defendants, on the application to set aside the order, shows that, for the consideration of $100, an assignment was made to the son of one of the defendants, and a brother of the others, of a claim upon which the defendants themselves covenanted there was $1,270 due, and to secure which a deposit of $2,000 had been made. This of itself appearing from the moving papers before the county judge, in connection with the affidavit of the plaintiff, would seem to be sufficient to warrant the county judge in denying the application, for he would have the right to consider whatever was before him at that .time, and it would appear almost conclusively that not only had the intention to transfer the money beyond the reach of creditors existed at the time the warrant of attachment issued, but that, in furtherance of that design, the assignment to the son and brother for a nominal consideration had been- actually made before the motion herein to vacate the attachment. Standing without explanation, I think it must be held that the papers show a design to place the moneys deposited as a security for the judgment in the Bucle case beyond the reach of the plaintiff, a creditor of the defendants, who has. since obtained a judgment for his claim. While every care should be taken to see that the provisions of the statute are carried out, and that the property of the individual should be secure, and his right to its enjoyment amply protected, yet the court ought not to be eager to prevent the enforcement of concededly legal and just claims of creditors in order to aid persons who voluntarily take at least questionable assignments of claims, of the character of which they must be charged with having notice, and particularly when such questionable transactions are between members of the same family.

The order of the county judge should be affirmed, with ten dollars costs and disbursements.

Herrick, J., concurred.

Order affirmed, with ten dollars costs and disbursements.


author: Hekbick, J. :

text:
    In the Matter of the Application of The Amsterdam, Johnstown and Gloversville Railroad Company for a Certificate Required by Section 59 of the General Railroad Law.

      Review of the determination of the Railroad Commissioners, under section 59 of chapter 676 of 1892 — burden of proof — duty of thebom'd — franchise, how obtained — 1 a certificate does not issue as a matter of right — determination of the boom'd is a matter of discretion — charging excessive rates — presumption as to the performance of duty by public officers.

    While section 59 of chapter 676 of the Laws of 1892 grants to the General Term of the Supreme Court power to review the action of the Board of Railroad Commissioners in refusing to grant the certificate therein provided for, such act plainly indicates that the court is to treat the application as in the nature of a review of the decision of a subordinate tribunal, and not as it would an original application made to it in the first instance.
    The burden rests upon the petitioner to show affirmatively that the commissioners erred in their determination, and the commissioners should be credited with some technical knowledge which the court is not presumed to possess, and unless the court, upon the review, can see that the decision of the Board of Railroad Commissioners was founded upon erroneous legal principles, or that it proceeded contrary to the clear weight of the evidence in arriving at its conclusion upon any question of fact, or that it has abused the discretion vested in it, and has arbitrarily refused to issue the necessary certificate, the court will not reverse the determination of the board and compel it to issue such certificate.
    The Board of Railroad Commissioners is vested with the supervision of the railroads of the State. It is made its special and peculiar, duty to investigate and inform itself as to the condition of existing roads, and as-to the needs of the various parts of the State for transportation facilities; and its opinion upon such matters, in regard to which a proper discharge of its official daty requires it to be specially informed, is entitled to respect and consideration.
    Local sentiment, aroused by the alleged misuse or abuse by a railroad company of an existing franchise, affords no sufficient reason for granting to another corporation a railway franchise to erect and maintain a practically parallel road, upon the ground that public convenience and necessity require the construction of another road, nor is the expression of the opinion and desire of various witnesses “ that public convenience and necessity require the construction” of a certain road evidence of such public necessity and convenience, and it cannot take the place thereof.
    The privilege of constructing and operating a railroad is not one that exists in the incorporators of a railway company as a common right. It is a privilege or franchise that is granted by the State, and can only be obtained by complying with the laws adopted by the State regulating the granting of such franchises.
    Prior to the enactment of section 59 of chapter 676 of the Laws of 1892 it was within the power of fifteen or more citizens to form a railroad corporatioh and to lay its tracks through any section of the State upon securing from the property owners the necessary right of way, but under such section, before a new corporation can construct a railroad, the corporation must secure from the Railroad Commissioners their certificate that “public convenience and necessity require the construction of said railroad,” and the corporation applying for such certificate necessarily holds the affirmative upon that question, and it devolves upon it to show that its construction is required by public convenience and necessity.
    The certificate does not issue to it simply upon its filing its application as a matter of right, nor is the company entitled to the certificate as a matter of right in the event of no one appearing to oppose its application, nor if any one does appear in opposition is he obliged to prove the negative and convince the board that public convenience and necessity do not require the construction of the road.
    The burden of proof is upon the corporation to establish the performance by it of the requirements of the law and to establish the existence of that condition of affairs which will authorize,the State authorities to grant a franchise authorizing the corporation to operate its road in the locality proposed. It must prove its claim for a franchise under the laws, the same as any person who attempts to establish any other claim or right.
    The determination of the Board of Railroad Commissioners as to whether it will grant the certificate of public convenience and necessity under section 59 of chapter 676 of the Laws of 1893, is necessarily a matter of discretion, not an arbitrary discretion, but a discretion enlightened and guided by its experience in the affairs of railroads, the problems of transportation and the needs of the people, together with the special facts brought before it in each particular case. To guide it, where it is claimed that existing roads do not afford the necessary facilities, the commissioners may properly take into consideration the means that the law affords to regulate the management of railroad corporations and to correct mismanagement and enforce the providing of proper service.
    The fact that a railroad company charged exorbitant rates for freight and passenger traffic does not make out a case for the building of a practically parallel road; such charges may indicate either that there is insufficient business to support the road with lesser charges, or it may indicate bad management and a grasping disposition on the part of the operators of the road. The remedy in the latter case is to apply to the Board of Railroad Commissioners for a reduction of the rates, pursuant to section 161 of chapter 565 of the Laws of 1890.
    It will be assumed by the General Term of the Supreme Court that the Boai;d of Railroad Commissioners will do its duty, and that the Attorney-General of the State of New York will perform the duty devolved upon him by law.
    Application by tlie Amsterdam, Johnstown and Gloversville Railroad Company to the General' Term of the Supreme Court for the certificate provided by section 59 of chapter 676 of the Laws of 1892, upon a certified copy of all maps and papers on file in the office of the Board of Railroad Commissioners of the State of New York, in the matter of the application of said railroad company for such certificate, said Board of Railroad Commissioners having, by an order made at the capítol, in the city of Albany, on the 20th day of November, 1894, denied the application of said railroad company for such certificate.

      Matthew Hale and Andrew J. Nellis, for the petitioner.

      Hamilton Harris and A. H. L. BaTcer, for property owners and others, in opposition.
   Hekbick, J. :

The Amsterdam, Johnstown and Gloversville Railroad Company was incorporated July 12, 1894, jiursuantto chapter 565 of the Laws pf 1890, and the laws amendatory thereof, for the purpose of constructing a steam railway between Amsterdam, Montgomery county, and Johnstown and Gloversville, Fulton county, a distance of about fourteen miles.

The company hás paid to the State Treasurer the taxes upon the capital stock as required by statute.

Section 59 of chapter 676 of the Laws of 1892 provides that No railroad corporation hereafter formed under the laws of this State shall exercise the powers conferred by law upon such corporations, or begin the construction of its road, until the directors shall cause a copy of the articles of association to be published in one or more newspapers in each county in which the road is proposed to be located, at least once a week for three successive weeks, and shall file satisfactory proof thereof with the Board of Railroad Commissioners, nor until the Board of Railroad Commissioners shall certify that the foregoing conditions have been complied with, and also that public convenience and necessity requwe the construction of said railroad as p>ropjosed in said articles of association. *' * * After a refusal to grant such certificate, the board shall certify a copy of all maps and papers on file in its office, and of the findings of the board when so requested by the directors aforesaid. Such directors may thereupon present the same to a General Term of the Supreme Court of the department within which said road is proposed in whole or in part to be constructed, and said General Term shall have power, in its discretion, to order said board, for reasons stated, to issue said certificate, and it shall be issued accordingly.”

The corporation so formed complied with the necessary preliminary requirements of this statute, and made application to the Board of Railroad Commissioners for a certificate that public convenience and necessity require the construction of said railroad.”

The said Board of Railroad Commissioners, holding that it did not appear to the board that “ public convenience and necessity ” required the construction of said road as proposed in said articles of association “ and as set forth on the maps and profiles filed,” denied the application for such certificate.

Whereupon, the directors of said railroad corporation procured certified copies of all maps, papers and evidence presented on said application, and have presented the same to this court, and ask for au order to compel the Board of Railroad Commissioners to issue the certificate applied for.

In The Matter of the New Hamburgh Railroad (76 Hun, 76), where a similar application was made to the General Term of the Supreme Court, after stating the manner in which the application was brought before it under the statute, the court said: “ This mode of proceeding, while it grants the court power to review the action of the commissioners, plainly indicates that the court is to treat the application as in the nature of a review of the decision of a subordinate tribunal, and not as it would an original application made to it in the first instance. The burden rests upon the petitioner to show affirmatively that the commissioners erred in their determination, and the commissioners should be credited with some technical knowledge which this court is not presumed to possess.”

I concur with that view of the province of this court in these proceedings. Unless the court can see that the decision of the Board of Railroad Commissioners was founded upon erroneous legal principles, or that it proceeded contrary to the clear weight of evidence in arriving at its conclusion upon any question of fact, or that it has abused the discretion vested in it, and has arbitrarily refused to issue the necessary certificate, I do not think that the court should reverse its determination and compel it to issue a certificate.

The Railroad Commissioners are vested with the supervision of the railroads of the State; it is made their special and peculiar duty to investigate and inform themselves as to the condition of existing roads, and as to the needs of the various parts of the State for transportation facilities; aud their opinion upon these matters, in regard to which a proper discharge of their official duty requires them to be specially informed, is entitled to respect and consideration.

Upon the hearing before the Railroad Commission oral testimony was given by witnesses sworn both on behalf of and in opposition to the application. Petitions signed by hundreds of the residents of Amsterdam, Gloversville and Johnstown were presented to, and filed with, such Board of Railroad Commissioners.

Some of the petitioners certify that public convenience and necessity require the construction of the proposed road, and others certify that public convenience and necessity do not require the construction of the proposed road.

The Board of Railroad Commissioners, in making its order denying the application, filed a memorandum, which, amongst other things, contains the following statement: “In the pending application the route of the proposed road from Akin, a small settlement about three miles west of the Amsterdam station on the New York Central, westerly for about three miles to Tribes Hill, on a line substantially parallel with the line of the Central and lying a few hundred feet north of it. There are stations on the New York Central at both Akin and Tribes Hill. From Tribes Hill the proposed line runs northwesterly on a course gradually diverging from the line of the Central, passing at the most distant point, within from two to two and one-half miles of the Fonda station of the Central, which station is some five miles west of the Tribes Hill station on the Central. The proposed line then turns northerly and runs to Johns-town on a course in the immediate neighborhood of and parallel to the lines of the Cayadutta Electric Railroad and the Fonda, Johns-town and Gloversville Railroad, and in fact crossing these roads in several places.

“From Johnstown to Gloversville it follows practically a route already occupied by three existing railroads, viz., the two just mentioned and the Johnstown, Gloversville & Kiugsboro Horse Railroad. Considered as a whole it offers a route from Akin to Gloversville of fourteen miles in length, as against an existing route of about sixteen miles by the New York Central to Fonda, and from thence to Gloversville by the Cayadutta Electric road; and a second route of about twenty-one miles by the Central to Fonda and the Fonda, Johnstown & Gloversville. Conceding that the new road may make a saving of a few miles this saving is of no consequence except for passenger traffic. The only manner in which the proposed road would reach the city of Amsterdam would be by a connection with an existing electric street railroad now running to Akin, which from Akin to Amsterdam parallels and is adjacent to to the New York Central. The proposed road does not touch any community or inhabited region not now amply supplied with railroad facilities. The evidence is undisputed that the existing roads are abundantly able to transact all business now offered or that is likely to be offered for many years to come. If the charges made for transacting such business are exorbitant, there is a better method for curing this evil than by inviting superfluous competition. Furthermore, if the existing roads between Fonda and Gloversville are making exorbitant charges, this fact- may indicate that there is hardly business enough to support them upon reasonable charges, in which case there is obviously no occasion to build another road in a neighborhood already oversupplied.

“ The board is of the opinion and finds that public convenience and necessity do not require the construction of said railroad.’ ”

The testimony offered and produced, not only oral, but that contained in the petitions filed, seems to have been confined almost entirely to expressions of opinion that “ public convenience and necessity ” require the construction of the road in question without giving any facts upon which such opinion is based, excepting the alleged fact that one of the present railroads, and the principal one, which the Board of Railroad Commissioners finds the proposed road will practically parallel, is making excessive charges for freight and passenger transportation.

Petitions presenting no facts, nor the evidence thereof, but simply expressing the opinions and desires of the petitioners, are not evidence, and cannot take the place of evidence. Local sentiment, aroused by the alleged misuse or abuse of an existing franchise, affords no sufficient reason for granting another franchise, upon the ground that public convenience and necessity require the construction of- another road.

No evidence was given to show that the amount of passenger traffic or freight traffic is so great as to require an additional road for its accommodation; and I tliink the evidence before the commissioners abundantly justifies their statement that “ The evidence is undisputed that the existing roads are abundantly able to transact all business now offered, or that is likely to be offered for many years to come.”

The privilege of constructing and operating a railroad is not one that exists in the incorporators as a common right; it is a privilege or franchise that is granted by the State; and can only be obtained by complying with the laws adopted by the State regulating the granting of such franchises.

Prior to the enactment of section 59 of chapter 676 of the Laws of 1892, it was within the power of fifteen or more citizens to form a railroad corporation, and to lay its tracks through any section, upon securing from the property owners the necessary right of way.

This section effected a change. It was evidently intended to restrict the building of roads not actually needed, in order to protect not only existing railroads, but also citizens from investing in alluring but profitless enterprises.

The propriety and necessity of constructing a road was not left to be determined by enterprising, but perhaps ill-informed or ill-advised citizens, or by those seeking by threats of destructive competition to levy tribute upon existing roads, but was placed in the hands of accredited officers of the State, who should act for, and in its behalf, in determining whether the interests of the State, or of the community immediately affected, would be promoted by the building of a road.

Provisions had theretofore been made, to be hereafter referred to, for the correction of abuses in the management of roads already constructed, so that it was no longer necessary to correct evils in the management of existing roads by constructing competing ones.

And before a new corporation can construct a road the coloration must secure from the Railroad Commissioners their certificate, <£ that public convenience and necessity require the construction of said railroad.”

. The corporation applying for such a certificate necessarily holds the affirmative upon that question; it devolves upon it to show that its construction is required by public convenience and necessity.

The certificate does not issue to it simply upon its filing its .application, as a matter of-right, unless evidence is produced before the board to show' that public convenience and necessity do not require its construction. It is not entitled to it as a matter of right in the event of no one appearing to oppose its application; nor if any one does appear in opposition is he obliged to prove a negative and convince the board that public convenience and necessity do not require the construction of the road.

The burden of proof is upon it to establish the performance by it ■of the requirements of the law and to establish the existence of that condition of affairs -which will authorize the State authorities to grant a franchise, authorizing it to operate its road in the locality proposed.

It is applying for something from the State, and it must prove its ■claim to it under the laws the same as any person who attempts to ■establish any other claim or right.

So, also, in applying to this court the burden is upon the applicants to show to ns affirmatively that the Railroad Commissioners have erred in their refusal to grant the necessary certificate.

Their determination as to whether they will grant a certificate of public convenience and necessity is necessarily and properly largely ■a matter of discretion, not an arbitrary discretion, but a discretion enlightened and guided by their experience in the affairs of railroads, the problems of transportation, the needs of the people, together with the special facts brought before them in each particular case. To guide them, -where it is claimed existing roads do not afford the necessary facilities, the commissioners may properly take into con-sideration the means that the law affords to regulate the management of railroad corporations and correct mismanagement and enforce the providing of proper service.

From an examination of the records in this case it seems to me that the Railroad Commissioners were abundantly justified in finding that it did not appear that “public convenience and necessity” require the construction of the said railroad “as proposed in said articles of association and as set forth on the maps and profiles filed,” .and that they have not abused their discretion, nor can I say that they erred in its exercise.

As I have before stated, the opinions of the witnesses sworn in behalf of the application, and the certificates of the petitioners, ■residents in Amsterdam, Gloversville and Johnstown, certifying that public convenience and necessity required the construction of the road, are almost entirely based upon the alleged exorbitant charges of the existing railroads and their belief that rates of passenger and freight, traffic will be lessened by the construction of the applicant’s road.

In the memorandum of the Railroad Commissioners before referred to it is stated that if the existing roads are exorbitant in their charges “ this fact may indicate that there is hardly business enough to 'support them upon reasonable charges, in which case there is obviously no occasion to build another road in a neighborhood already over supplied.”

But it is claimed that the principal company already in existence has recently declared a dividend of eight per cent, and has in addition a surplus in its treasury, and that those facts show that there is-no necessity for charging the present rates.

Without inquiring into the truth of such claims nor for how long a time the existing company has been running and declaring dividends upon its stock, or whether the original investors have from the time of the commencement of their road down to the present-time received reasonable returns for their investments, but for the-purposes of this case, assuming that their charges are, under all the circumstances, unreasonable, I think that the Railroad Commissioners did not err in holding that that was not a sufficient reason for certifying that public convenience and necessity required the construction of the road.

Where there is no railroad in existence in a locality, or when the traffic is so great as not to be properly cared for by one road, or even where there is traffic sufficient to adequately support more than one road, we may say that public convenience and necessity require the construction of another. But where, as in this case, it appears that “ existing roads are abundantly able to transact all business now offered or that is likely to be offered for many years to come,” I do not see how it can be said that public convenience and necessity require the construction of another.

The charging of exorbitant rates does not, in the present state of law, make a case for the building of another road.

Such charges may-indicate either that there is insufficient business to support the roads with lesser charges or it may indicate bad management and a grasping disposition on the part of their operators.

There is no pretense that there is too much business for the capacity of the existing railroads, and the remedy for the present high charges, if they are unnecessarily high, is not by building an opposition road which may cripple those already in existence and destroy the value of the investments in them or lead to the purchasing of the new road by the old companies, but, as indicated in the memorandum of the Railroad Commission, the remedy is to apply for a reduction of the rates.

It is provided by section 161 of chapter 565 of the Laws of 1890, that if, in the judgment of the Board of Railroad Commissioners, after a careful personal examination of the same, it shall appear “ that any change of the rates of fare for transporting freight or passengers * * * is reasonable and expedient in order to promote the security, convenience and accommodation of the public, the board shall give notice and information in writing to the corporation of the * * * changes which they deem to be proper, and shall give such corporation an opportunity for a full hearing thereof, and if the corporation refuses or neglects to make such * * * changes * * the board shall present the facts in the case to the Attorney-General for his consideration and action, and shall also report them in its annual or in a special report to the Legislature.” Section 162, as amended by chapter 676 of the Laws of 1892, provides that a Special Term of the Supreme Court shall have power “ in its discretion in all cases of decisions and recommendations by the board, which are just and reasonable, to compel compliance therewith by mandamus, subject to appeal to the General Term and the Court of Appeals, and upon such appeal the General Term and the Court of Appeals may review and reverse upon the facts as well as the law.”

These provisions of the statute, together with others which I have not quoted, seem to me to afford a remedy for the alleged grievances against the existing roads.

If an application had been made to the Railroad Commissioners to compel a reduction of the rates, and it had been made clearly to appear that they were exorbitant, and notwithstanding that fact the commissioners had refused to recommend the needed relief, so that the only relief attainable was by building another road, the case would appear before us in a different aspect.

The court must assume, however, that the Railroad Commission will do its duty in the premises, and upon its being made to appear to it tliat the existing railroads are charging unnecessarily high rates for transportation, that it will recommend their reduction. And it must also be assumed tliat the Attorney-General will do bis duty and present their recommendation to the court, in the event of the railroads refusing to comply with the recommendation of the Railroad Commission, and upon its being so presented, the court will endeavor to do its duty in the premises.

The only substantial reason, therefore, given for the opinion that public convenience and necessity require the construction of the applicant’s road, being the alleged excessive charges of the existing railroads for freight and passenger transportation, and there being a remedy provided for tliat by existing law’s, it seems to me that the Railroad Commissioners were correct in declining to issue the certificate in question, and that there is no reason either upon the facts or from their construction of the law, for reversing their determination and compelling them to issue the certificate.

. The application should, therefore, be denied, with the costs and disbursements in this court.

Putnam, J., concurred; Stover, J., not acting.

Application denied, with costs and disbursements in this court.