text:
    JAMES A. GILBERT, Appellant, v. THE THIRD AVENUE R. R. CO., Respondent.

      Examination of party before trial—purpose of—when vacated.

    If the papers upon which is granted an order for the examination of a party before trial, show upon their face that it is to be used not to obtain evidence for the trial, but for another object, the order should be vacated.
    Whether this so appears is to be ascertained by construing the affidavit as a whole.
    Before Sedgwick, Ch. J., and O’Gorman, J.

      Decided April 9, 1883.
    Appeal from order denying motion to set aside order made for examination of plaintiff before trial.

      D. J. Newland, for appellant.

      William N. Cohen, for respondent.
   By the Court.—Sedgwick, Ch. J.

—The purpose of the Code, in its provisions as to the examination of parties before trial, is to allow the opposite. party to obtain before trial, testimony that may be used as testimony upon the trial. If the papers upon which the examination was ordered, show upon their face, that it is to be used, not to obtain evidence for the trial, but for another object, the order should be vacated.

The affidavit on which the order for examination was granted, uses an ambiguous phrase in averring that deponent “ desires to examine the plaintiff, and purposes to use the testimony so taken upon the trial of this action.” If this were all, and were not afterwards qualified, the appeal would be determined by the real meaning of this averment. It is, however, qualified so as to give a meaning to the whole affidavit, which shows affirmatively that the purpose was not to read the examination upon the trial as evidence in the cause. The affidavit proceeds to aver that the examination is material and necessary in the preparation and defense of the action. It has always been held that an examination cannot be had to prepare for a . defense or for trial. This particular averment means, under the circumstances, that the examination is necessary for the defense, inasmuch as preparation is necessary for defense. For, the affidavit then states, that the facts which render the examination material and necessary, are the following, viz.; that the complaint alleges certain facts, but omits to set forth certain other facts, and “without these and other important facts and details, defendant cannot properly prepare the defense in this action, and safely proceed to trial.” As to the rest of the facts, of which knowledge or information is asked, the affidavit says, “to properly prepare this case for trial, it is material and necessary that an examination of the plaintiff be had before trial.”

In this way the papers affirmatively show that the object of the examination was not to procure testimony upon the trial, but information to use in preparation for trial. For this reason the motion to vacate the order for examination should have been granted.

Order appealed from reversed with $10 costs, and order vacating order for examination- granted with $10 costs to plaintiff, to abide event.

O’Gorman, J., concurred.


source: Caselaw Access Project

author: By the Court.-—O’Gorman, J. Sedgwick, Ch. J.—[Concurring.] Ingraham, J.—[Concurring.]

license: Public Domain

text:
    JOHN H. HUBBELL, as Assignee, Etc., Appellant, v. PETER BOWE, Respondent.

      JEvidence—former affidavit of witness, when cannot he used on his examination.

    A line of examination cannot be allowed, which in effect puts in evidence the affidavit of a witness made a long time previous to the trial, instead of his direct oral statement of his present recollection of the facts therein deposed to.
    Accordingly, where, on the direct examination of a witness, his affidavit sworn to a year before, was read by its respective paragraphs and he was asked, if he swore to that, and if it was true, and his affirmative answers were received,—Held, error, it not appearing that the witness’s recollection was defective, or that the paper was shown to and read by him for the purpose of aiding his memory.
    On an action by an assignee for the benefit of creditors against the sheriff to recover possession of certain goods taken by the latter, in which the sheriff justifies under certain attachments against the plaintiff’s assignor, and claims that the assignment was void as being in fraud of creditors,— evidence is admissible in behalf of plaintiff to show that the creditors who had attached were present at a meeting of creditors, at which, upon plaintiff’s announcing that he intended to withdraw from the trust, a unanimous resolution was passed requesting him to remain. Such evidence tends to show a waiver by said attaching creditors, of their right of priority. Per O’Gobman, J.
    Before Sedgwick, Ch. J., O’Gorman and Ingraham, JJ.

      Decided April 9, 1883.
    Appeal from a judgment entered February 25, 1882, in favor of the defendant and against the plaintiff, with costs.
    The facts and exceptions appear in the opinion.

      William P. S. Melvin and Dewitt C. Brown, for appellant.

      Charles F. MacLean, for respondent.
   By the Court.-—O’Gorman, J.

—The action was brought to recover possession of certain goods valued at $1,300, taken from the possession of the plaintiff by the defendant.

On October 18, 1880, Sigismund Philip and Rudolph Tóense, then copartners in business under the name of “ Sgm. Philip & Tóense,” executed and delivered to the plaintiff an assignment in writing of all their copartnership and individual estate in trust for the benefit of their creditors. The plaintiff thereupon took possession of the property assigned. On October 22, 1880, the defendant seized some of said property, claiming the right so to do as sheriff, and held same by virtue of warrants of attachment duly issued on the applications of various creditors of the firm, and dated respectively October 22, 23 and 25. The defendant claims that the assignment to plaintiff was made with intent to hinder, delay, and defraud the creditors of said assignors. The jury rendered a verdict for the defendant.

The plaintiff’s counsel moved on the minutes of the court to set aside the verdict, and for a new trial on the exceptions, and because the verdict was contrary to law and the evidence. This motion was denied. ,

Among the exceptions taken by the plaintiff’s counsel, the following seem chiefly worthy of notice. Testimony was duly offered on behalf of the plaintiff to prove that at a meeting held by the creditors of the assignors, soon after the assignment, at which meeting the attaching creditors were present, they unanimously passed a resohition requesting the plaintiff to go on as assignee, and the plaintiff on being informed that such was the result of the meeting consented to go on as assignee. This offer and testimony were excluded by the court,- as immaterial and incompetent.

Inasmuch as the defendant’s justification for the taking of the property in question depends on the truth of his allegation that the assignment to the plaintiff was made with intent to hinder, delay and defraud the creditors, and that therefore no title to the said goods became vested in the plaintiff, the fact that the creditors, including those who had attached, unanimously requested the plaintiff to continue as assignee, might raise a question proper for the jury to consider whether these creditors had not thereby waived their claims to priority under their attachments—acquiesced in the assignment and elected to take their chances with the other creditors in the distribution as contemplated by the assignment.

On November 3, 1880, Rudolph Tóense, one of the assignors, made an affidavit describing the conduct of the business of the assignors for some time before the assignment. There is no evidence that any undue influence was used to induce him to make this affidavit, or that he was an unwilling witness at the trial or in any way hostile to the defendant, on whose behalf he was examined. In the course of his direct examination, he was interrogated by the counsel for the defense thus: “Do you recollect to have sworn that piece goods were sold at auction at your house?” This question was objected to, and allowed; and plaintiff’s counsel duly excepted. A paper was then shown to witness and he said: “ That is my signature; I don’t know whether or not it was on that day (November 3,1880), but I know I have sworn to an affidavit.” Thereupon the defendant’s counsel proceeded to question the witness in this manner: “Did you not on that day swear that, from your own knowledge, said Philip bought goods on credit, etc.?” To this question, and others in a similar form, the witness answered thus: “I swore my statement was true. ‘ That was done.’ c That statement was true, etc.’ ”

This mode of examining a witness is for many reasons objectionable. It is, in effect, putting in evidence the affidavit of the witness, and his declarations, made more than a year previous to the trial, in place of his direct oral statement to the jury of his present recollection of the facts.

There was no attempt to show that his memory of these facts was defective and needed refreshment; nor does it appear that the affidavit was presented to the witness and read by him for the purpose of aiding his memory, so that thus aided, it could of itself recall the events in question. Paragraph after paragraph was read out to him, and he was asked: Did you not swear that, and if you did, was the statement true %

This is not the best evidence, nor is it a safe or proper way of endeavoring to elicit the truth. The natural indisposition of one who had sworn to an affidavit to contradict it on the witness stand, was an influence tending to hinder the free, full, and open disclosure of the truth, and although th.e witness was subject to cross-examination,' yet his testimony so elicited by counsel for the defendant is not free from suspicion, and it is impossible to say what effect it may have produced on the jury. .Such a practice is wrong and should be discouraged.

Judgment reversed, with costs, and order appealed from reversed, with $10 costs.

Sedgwick, Ch. J.—[Concurring.]

—I agree with Judge O’Gorman, 'as to the last reason for reversal and differ with him as to first.

Ingraham, J.—[Concurring.]

—I concur with the Chief Judge to reverse on the last ground stated in opinion of Judge O’Gorman.


author: By the Court.—O’Gorman, J.

text:
    GEORGE N. SMILEY, Respondent, v. HORACE B. FRY, as Survivor, &c., Appellant.

      Banking—instrument for payment of money, when deemed certificate of deposit. —Statute of limitations—when runs on certificate.—Demand—evidence of.

    An instrument given by a firm of brokers, who also received deposits on demand, in the following form, viz: “ Due A., Trustee, $4,000, returnable on. demand. It is understood that this sum is specially deposited with us and is distinct from the other transactions with said A.”—is to be construed as a certificate of deposit of the sum named, with said firm, as bankers pro hac vice.

    So indebtedness arises by reason of said instrument, nor does the statute of limitations begin to run thereon until a demand for the return of the amount has been made.

      An action on said certificate against the personal representatives of a deceased member of said firm and the surviving partner, in which the surviving partner is not served and does not appear, is not a demand as against him.

      It seem.% that the rendition of a statement of account by the depositor to said firm in which the claim on- said certificate is included under the head of “ accepted charges,” is not sufficient evidence of a demand to set the statute running.
    Before Sedgwick, Ch. J., O’Gorman, and Ingraham, JJ.

      Decided April 9, 1883.
    Appeal from a judgment .entered September 4, 1883, against the defendant for $4,855.08, and from an order denying a motion for a new trial on the judge’s minutes.
    Defendant’s counsel moved at the close of plaintiff’s case for a non-suit, on the ground that under the evidence in this case the claim appeared to be barred by the statute of limitations; which motion was denied; defendant excepted.
    The facts and other exceptions appear in the opinion.

      F. C. Bowman, for appellant.

      Holmes & Adams, for respondent.
    —In the light of Payne v. Gardner (29 N. Y. 167-170) according to both the civil and the common law writers, this transaction was in every sense a “ deposit.” It is elementary that an action for a deposit with a banker does not accrue until formal demand. Under the law of this State, however, it is immaterial whether the bailee is a banker or not; the question in each case to be determined being whether the transaction is a loan or a deposit (Payne v. Gardner, 29 N. Y. 146; Howell v. Adams, 68 Id. 314, 321; Boughton v. Flint, 74 Id. 476, 482; Munger v. Albany Bank, 85 Id. 580). It rests upon the party claiming the benefit of the statute to show a demand (Sullivan v. Fosdick 10 Hun, 173).
    The suit in Philadelphia was no demand against this defendant ; he was never served with process in that suit; plaintiff does not claim that he even had notice of the suit. The joinder of his name as defendant in such a suit was
      brutumfulmén, for it is familiar law that the representatives of a deceased partner may not be sued for a partnership debt until the insolvency of the survivor has been established in a proper proceeding. The survivor and the representatives of the estate of the deceased partner are not jointly obligated on this certificate, and therefore a demand on the representatives of J. R. Fry is not even a constructive demand on this defendant (Lawrence v. Trustees, 2 Den. 577; Troy Iron & Nail Factory v. Winslow, 11 Blatch. 513; see also, Bloodgood v. Bruen, 8 N. Y. 362; Jessop v. Millen, 1 Keyes, 321).
   By the Court.—O’Gorman, J.

—The contention in the case is as to the liability of defendant as surviving partner of a Philadelphia firm, which was dissolved in 1864, on the following instrument. “ Office of J. R. & H. B. Fry, Philadelphia, May 21, 1864. Due S. K. Ashton, M. D., Trustee, four thousand dollars, returnable on demand. It is understood that this sum is specially deposited with us, and is distinct from the other transactions with said Ashton. J. R. & H. B. Fry.”

In 1880, Ashton assigned his interest in all claims against defendant and said firm, to plaintiff. The defendant pleaded ; (1) statute of limitations ; (2) the acceptance of a claim against one Stephen Coulter in full settlement of all Ashton’s claims against the firm.

The firm carried on business in Philadelphia as stock brokers, and also received deposits payable on demand. The question as to the effect of the statute of limitations on the plaintiff’s claim, depends, first on the nature of the instrument itself, whether it was a certificate of deposit, or a promissory note, and second, at what date the demand for payment was first made. ' -

It is in evidence that in August, 1880, Ashton made demand on defendant for payment on this instrument, and that defendant then acknowledged the indebtedness, promised to pay, and even gave to Ashton certain mining stock which he desired Ashton to 'raise money on, as part pay-merit. Ashton took them, endeavored to dispose of them, found they had no market value, and returned them to defendant. There is no clear evidence as to any previous or other demand of defendant, for this money. In 1885, or 1866, Ashton furnished defendant with a written account of the transaction between the firm and him, in which account, under the head of “accepted charges,” this sum of $4,000 is charged against the firm. As far as appears, defendant acquiesced in the correctness of that charge. In 1869, Ash-ton brought a suit in Philadelphia, in which Cornelia Fry, executrix of J. R Fry, deceased, and the defendant here, Horace B. Fry, lately trading as “ J. R and H. B. Fry,” were named as defendants. The defendant, however, was not served with any papers in this action. It is not proved that the claim now in suit was included in that action, although in a letter written to defendant by Ashton, in July, 1880, Ashton referring to the instrument now in suit writes : “The paper you gave me is in your handwriting— suit was begun against you for the deposit as being a trust deposit,” etc. Plaintiff, however, in a subsequent conversation, told the defendant that he had brought the suit against the executrix, but that he, defendant, had not been served. Frequent conversations had taken place between defendant and Ashton about the state of the accounts between the firm and Ashton, and various abortive attempts at settlement had been made.

There is no force in the argument on the part of the defendant, that the instrument in evidence can be regarded as an ordinary promissory note payable on demand, and due when made. The case of Wheeler v. Warner (47 N. Y. 520), cited in support of that position, is not in point

The instrument here proved is'a certificate, and written evidence of a deposit of $4,000, with the defendant’s firm as bankers “pro Jiac mee,” and no indebtedness arose by reason of such deposit, until demand of return of the amount deposited, and the statute of limitations did not begin to run until demand (Payne v. Gardner, 29 N. Y. 146; Howell v. Adams, 68 Id. 314, 321; Boughton v. Flint, 74 Id. 476, 482).

Unless, therefore, it appeared by competent evidence that a demand was made, other and earlier than that of 1880, the defense depending on the statute of limitations is disposed of. There is no proof of any such demand. There is no sufficient- evidence to prove that Ashton ever accepted from the defendant any assignment of property or consideration in full settlement of Ashton’s claim, for the money in suit, or in any way released the claim.1

The only remaining question then, is whether the learned trial judge erred' in the exclusion of material and relevant evidence, or erred in his charge to the jury. The evidence excluded by the court could only have gone to show that the claim here in suit was included in the action brought by Ashton against the executrixes of the defendant’s deceased partners in 1869. But, as the defendant was not made a party to that litigation by service of papers upon him, the admission of such testimony would not properly have been evidence against him.

With these views of the law and the facts, as they appear in this case, we see no subtantial error in the charge of the learned trial judge, and no force in the exceptions thereto. The judgment should be affirmed, with costs, and the order appealed from affirmed with $10 costs.

Sedgwick, Ch. J., and Ingraham, J., concurred.


text:
    SAMUEL L. SOLOMON, Appellant, v. DONALD McKAY, as President of THE N. Y. STOCK EXCHANGE, Respondent.

      Bill of particulars—when not allowed as to allegation of “ obvious fraud.'1'1

    The complaint alleged that plaintiff was expelled from thg New York Stock Exchange and deprived of his valuable rights as a member thereof, without any violation on his part of the rules of the association. The answer alleged that the said Stock Exchange is a voluntary unincorporated. association having a constitution, etc., to which plaintiff pledged himself on becoming a member, and which provides that any member guilty of “ obvious fraud,” of which the governing committee shall be the judge, shall, on conviction be expelled, and his seat escheat to said exchange. Held, not a case in which defendant was entitled to a bill of particulars of the fraud alleged.
    Before O’Gorman and Ingraham, JJ.

      Decided April 9, 1883.
    Appeal from an order of special term denying a motion made on behalf of the plaintiff for a bill of particulars of the ‘1 obvious fraud ’ ’ alleged in the defendant’s answer.
    The facts appear in the opinion.

      C. E. Davison, for appellant.

      Scudder & Carter, for respondent.
   By the Court.—O’Gorman, J.

—The plaintiff claims in his complaint to have been expelled by the defendant and the other officers of the New York Stock Exchange, and deprived of his valuable rights as a member, without any violation, on his part, of the rules of that association. The defendant answers that the New York Stock Exchange is a voluntary unincorporated association having a constitution and by-laws for the government of its members ; that the plaintiff on becoming a member pledged' himself to abide by, and agreed in the said constitution; and that it is provided by Article XX. of said-constitution, that any member guilty of “obvious fraud,” of which the Governing Committee shall be judge, shall, on conviction, be expelled, and his membership shall escheat to the Stock Exchange Association.

The defendant, as president of the Stock Exchange Association, resists this motion for a bill of particulars of the specific offenses charged against the plaintiff, as constituting “ obvious fraud,” not because of any merely technical ob-1 jection to that particular remedy, but because the subject' of the inquiry is immaterial and irrelevant to the issue made on the pleadings, which is only, whether or not the plaintiff has been regularly expelled from the association in accordance with its constitution, and defendant claims, that if the plaintiff were so expelled, the decision of the ‘ ‘ Governing Committee” thereon is res adjudícala, which plaintiff is precluded from going behind, unless the adjudication be first set aside in some proper manner. In support of this proposition, the learned counsel of the defendant cites, with other cases, White v. Brownell (3 Abb. Pr. N. S. 318; S. C., 4 Id. 194).

The defendant’s objection goes to the foundation and essence of this action, and involves important questions as to the powers of such voluntary associations over the rights of the associates and their pecuniary interests in the property of the association, which should more properly be discussed and determined when the case comes up for trial, than on an appeal from an order.

It is enough for the present to say that on the pleadings, as they now stand, and on the facts which they disclose, the issue is as claimed by the defendant; that the order appealed from was within the discretion of the learned judge at special term to grant or to deny, and that we believe that his discretion, in this instance, was properly exercised ; and that this is not a case in which a bill of particulars should be ordered.

The order appealed from is affirmed, with $10 costs.

Ingraham, J., concurred.


text:
    WILLIAM S. WILLIAMS, Respondent, v. THE WESTERN UNION TELEGRAPH COMPANY, Impleaded, Appellant.

      Injunction pendente lite against the doing acts based on an act done, which, is illegal as contravening a positive statute.

    1. Dissolution of, not granted, either because The plaintiff’s pecuniary interest is small, or because
    the injunction -will afford him. but little protection or relief, or the denial of it inflicts on him but little injury, or because
    persons through the act done, have bona fide acquired rights, and an interest in having the acts done which are sought to be restrained, or because
    the statute violated by the doing of the act done has prescribed the appropriate and only remedy therefor,
    or
    for all these reasons combined.
    2. Issue of injunction in such case, what sufficient gbound fob. That the plaintiff has some pecuniary interest however small, in having the acts restrained, and that the restraint may afford him some protection or relief is sufficient.
    Before Sedgwick, Ch. J., O’Gorman and Ingraham, JJ.

      Decided April 9, 1883.
    Appeal from an order of the special term bearing date December 27, 1882, granting an injunction pendente lite against the payment of any dividend upon the $15,526,590 of capital stock of the defendants, issued under a contract dated January 19, 1881, to the stockholders, of the Western Union Telegraph Company, to represent, as was claimed, past accretions of earnings to the capital stock of the company. •
    The facts fully appear in the opinion.

      Dillon & Swayne, attorneys, A. J. Vanderpoel and Wager Swayne, of counsel for appellant, made the following points
    :—I. The decision of the general term in the first action was, not that the $38,926,590 was “illegal” in the sense of “ absolutely void,” as alleged in this (2d) action. On the contrary, that court proceeds on the assumption that the entire $80,000,000 of shares were of lawful and valid creation, and finds merely that of that sum $15,526,590 were distributed in contravention of the statute above cited.
    II. The shares in question being of valid creation, to distribute them as was done was unlawful only in so far as it was in contravention of the statute.
    III. The statute which has been adjudged to inhibit the distribution of the shares in question is- a statute creating a new right and prescribing its remedy. The shares affected by this order were lawfully paid out, except so far as paid in contravention of this statute. The statute, therefore, as to such a payment, created a new right of restraint.' It fixed at the same time the penalty for violation of that right. In such a case the proprietor of the right is confined to the remedy established by the statute. He can have no relief in equity.
    IV. The whole transaction complained of being lawful in all respects, except so.far as involved with the statute above mentioned, the plaintiff has no right to an injunction against dividends, irrespective of the view that the remedy provided by the statute is exclusive.
    Y. The holders of the stock, the real parties of interest, are not before the court.
    YI. The presumption is that the holders of all certificates are bona fide holders.
    VXI. Irrespective of all the foregoing positions, the rules of equity do not sustain, upon the pleadings and proofs in this case, an error such as has been made. 1. It has not escajDed the attention of the court that mere payment of those dividends, being at most a mere payment of money without warrant of law, cannot possibly amount to a breach of any peremptory statute, but could only be restrained, if at all,' under some common rule of equity. In this connection the fact is here significant that plaintiff has no standing in equity. That he cannot, be heard, for any merit of his own in any court requiring honesty of suitors, is fully recognized in the opinion at general term on which the order appealed from is based. The court thereupon plants its decision expressly upon the ground that complainant has demonstrated an intended breach of a peremptory clause of the revised statutes. In such a case, it declares, a court of equity interferes, not for the sake of the parties but for the sake of the law, and irrespective of the source whence the disclosure came. The law in question, however, relates expressly to dividends from capital and not from profits. The dividends now enjoined are confessedly and undeniably from surplus, profits, and to these the law has no possible application. The situation therefore is that the plaintiff having no right, and there being no public policy involved, there remains no ground whatever for the action of the court. 2. Not only is there here no breach of a peremptory statute ; this distribution of the dividends is only what the plainest equity requires. The contract of January 19, 1881, is now completely executed. The stock agreed to be paid for the properties then purchased is delivered. If dividends were cut off from the shares affected by this order, and were equally declared upon the res t, the spirit of the contract would be violated. The vendees in that contract were to share in dividends on $80,000,000, and not in larger dividends on $61,000,000. The dividend upon the shares affected by this order goes exclusively to the vendors in that agreement, or to their assigns, for it was to them only, those who held Western Union shares before the increase, that the shares affected by the order now appealed from were distributed. The effect is the same as if a dividend had been déclared upon the $65,000,000 only, and an additional dividend declared on the original $41,000,000. The holders of the rest could not complain, for that is the effect of what they agreed to in the contract. Those who held the $41,000,000, of course would not complain, and could not be heard if they did, for they received not injury but benefit. The plaintiff complains, it is true, but he is like the man who having from Jove the promise of his wish, having learned that his neighbor was promised just twice what himself should wish for, wished one of Ms eyes put out, that 1ns neighbor might be blind. That is hardly a case that commends itself to a court of conscience:. £ 6 Conscience never resisteth the law, nor addeth to it, but only when the law is directly in itself against the law of God, or law of reason” (Doctor and Student). 3. Reduced to the last analysis, the action enjoined is simply the payment of a sum of money. It is payable to persons of whom the greater number have probably, as transferees, an incontestable right to it. There is no order restraining transfers, and therefore nothing to prevent the whole of this $15,000,-000 from being sold to-morrow in the market, and to tona fide purchasers. To forbid payment generally, would be, as has been said, as to such purchasers, a lawless injury to persons not before the court. To forbid payment upon those of the shares which may be still in first hands, while transfers are freely allowed, would be an idle thing. 4. Even aside from these considerations, and regarded as misapplication, pure and simple, the proposed payment is mere waste. As a mere money payment, it is capable of full and certain compensation. It is not properly within the scope of equity till shown to be irreparable, or else beyond efficient remedy at law. Averments of fraud were, in the main case, the staple of complaint. On the trial they were not only disproved, but disclaimed. jNo pretense is made of irresponsibility of parties, or of inadequacy of the remedy at law. At most, it is a mere remediable waste (1 High on Injunc. § 699; T. & B. R. R. Co. v. B., H. T. & W. R. R., 86 N. Y. 126, 127.
    The above points were supported by an elaborate argument.

      John Sessions, attorney, and Robert Sewell, of counsel, for respondent.
   By the Court.—O’Gorman, J.

—This litigation has presented itself in so many different shapes, and has, in its various stages and aspects, so frequently received the attention of this court, that a brief statement of the questions that have been heretofore considered and passed upon, is necessary in order to understand the present condition of this action and the precise questions involved in this appeal.

This action was begun on or about December 14, 1882.

It was brought by the plaintiff, as a stockholder in the Western Union Telegraph Company, in behalf of himself and all other stockholders in said company similarly situated, who might join him in the action and be made parties plaintiff therein.

The chief equitable relief sought, as set forth in the prayer of the complaint, was that the Western Union Telegraph Company should be forever restrained from paying any dividend upon $38,926,590 of stock of that company, claimed to have been illegally issued, under provisions of a contract dated January 19,1881, between that company and the Atlantic and Pacific Telegraph Company and the American Union Telegraph Company; and also that payment. of the same pendente lite should be enjoined.

The purpose of the contract in question was the acquisition by the defendants, the Western Union Telegraph Company, of all the property of the two other telegraph companies.

It provided, among other things, that the Western Union Telegraph Company, the defendants, should give in payment to the American Union Telegraph Company for all its property, franchises, &o., except the franchise to be a corporation, 150,000 shares of the capital stock of the Western Union Telegraph Company of the par value of $100 each, to' be issued and to be exchanged for shares of the American Union Telegraph Company, as in said contract provided for, and should give in payment to the Atlantic and Pacific Telegraph Company, for all its property, franchises, &c., except the franchise to be a corporation, 8,400 shares of the capital stock of the Western Union Telegraph Company, the same to be issued and to be exchanged for shares of the Atlantic and Pacific Telegraph Company, as also in said contract provided.

The contract further provided that the Western Union Telegraph Company should cause its capital stock to be increased to the sum of $80,000,000 by an addition of $38,926,590, represented by shares of capital stock of $100 each—$15,526,590 in shares of said capital stock to be issued and delivered to the then holders of its shares, the said shares being thus issued to. represent its investment of earnings in the purchase, construction and equipment of additional line wire and general plant since the first day of July, 1866.

The plaintiff in his complaint goes on to state that, in pursuance of said contract, the defendant company had caused its capital stock to be increased to the sum of $80,000,000, and had issued of such increased capital stock to the stockholders of the American Telegraph Company, $15,000,000; to the Atlantic and Pacific Telegraph Company, $8,400,000 of said increased capital stock ; and had also issued $15,526,590 of said increased capital stock to the holders of ,its own shares; and these issues of stock the plaintiff claims, in his complaint, to have been without authority of law and absolutely void

Plaintiff further avers, that the defendant corporation had distributed the stock so issued among stock brokers ; that • said stock had been dealt in publicly—transferred from time to time since its issue—and is now outstanding to the amount of $38,926,590, that the defendant company has paid dividends at the rate of l-¡- percent, per quarter, as well on this stock which plaintiff claims to have been illegally issued, as on its other and lawfully issued stock, and that the directors of the defendant corporation had declared such a dividend payable on January 15, 1882, that they threatened to anticipate that date of payment, unless restrained by the court, to the irremediable injury of the plaintiff and all the lawful stockholders in said defendant corporation, and that these things had been done, although the superior court, in a previous action brought to prevent the consummation of said contract, begun on February 12, 1881, had declared such issue to be illegal, and said contract to be void.

Immediately on the commencement of this present action, the plaintiff moved for an injunction restraining the defendants pendente lite from paying any dividend on any of the said $15,526,590 of ‘capital stock heretofore divided between the stockholders of the company, or of the said $23,400,000 capital stock issued and distributed to the stockholders of the American Union, and Atlantic and Pacific Telegraph Companies.

This motion, on which the order was granted, which is the subject of this appeal, was heard at special term of this court,, on December 26, 1882, and defendants used on the motion affidavits setting forth these facts, viz.: That on the trial of the said previous action, which was had before Judge Truax, without a jury, it was found that the above mentioned contract, and the acts of the defendants, and of its officers and directors in furtherance of the same,, were lawful and valid ; that since that decision the entire $80,000,000 of the capital stock of said Western Union Telegraph Company had been issued, with the exception of about 700 shares, and had passed into the hands of a large number of persons ; that if the payment of dividends thereon were prevented, great loss would result from depreciation of the stock of the defendant company in the markets of the world; that it was impossible to distinguish the shares of stock which form part of the increase made in 1881 from the shares of capital stock which had been previously issued; and that it was impossible to restore the stockholders of the defendant company to the condition in which they were, at or prior to said increase of capital stock ; that by reason of the many transfers, the different kinds of stock had been so mingled as to be wholly undistinguishable, in respect to the circumstances of its issue, or the persons to whom i t had been originally issued.

The defendants also set forth, as part of their case on the motion, the findings of Judge Truax on the trial of that action, which resulted in his dismissing the plaintiff’s complaint bn the merits and vacating an order of injunction, pendente Hie thereupon made in that action.

. The learned judge found among other things, as matters of fact:

That the property, franchises, &c., of 'the American Union Telegraph Company were fully and fairly worth, on January 19, 1881, the sum of $15,000,000 ; that the property, franchises, &c., of the Atlantic and Pacific Telegraph Company were fully and fairly worth, on that day, $8,400,-000; that the actual value of the investments of surplus earnings of the Western Union Telegraph Company as they existed on January 19, 1881, was more than the sum of, $15,526,590 ; that the investment of such surplus property had been, from time to time, reported to the stockholders of the Western Union Telegraph Company, and approved by them, and no one of the stockholders had ever dissented therefrom ; that at a meeting of the directors of the Western Union Telegraph Company, held on March 26, 1883, they affirmed and redeclared a dividend as of January 19, 1881, on the amount of $15,526,590, payable to the stockholders of the defendant corporation in certificates of stock.

From the judgment entered on these findings, the'plaintiff appealed to the general term of this court, and that appeal was decided on November 6, 1882, by the reversal of the judgment and the order that a new trial should be had.

Written opinions were delivered by Freedman, Presiding Judge, and by Judge Abnoux ; Judge Russell concurring with Judge Fbeedman.

For the purposes of that appeal Judge Fbeedman accepted the facts as found by the learned trial judge, and held: „

That the individual share holders could not insist on a dividend in cash of the earnings of the company which were invested in property, because they had approved the investment:

That the shareholders who had consented to that investment had consented to turn earnings into capital stock.

That the acts of the defendant complained of had all , occurred before plaintiff had acquired title to the stock by purchase.

Taking the facts 'as found by the learned trial judge, and also considering the large powers granted to telegraph companies by the Legislature of this State, Judge Freedman regarded the appeal then under the consideration of the general term, as presenting only the naked question of law, whether the agreement, of January 19; 1881, was contrary to law. '

He held, that the power of the Western Union Telegraph Company to create and issue to the two other telegraph companies, stock in payment for their lines, could not be disputed.

Tiie distribution of the $15,526,590 capital stock among the shareholders of the Western Union Telegraph Company, however, and tiie payment of dividends thereon, he held to be without consideration and wholly illegal, as violating the following provision of law:

“ It shall not be lawful for the directors or managers of any incorporated company in this State to make dividends, excepting from the surplus profits arising from the business of such corporation ; and it shall not be lawful for the directors or managers of any such company to divide, withdraw, or in any way pay to the stockholders, or any of them, any part of the capital stock of such corporation, or to reduce the capital stock without the consent of the Legislature” (2 Rev. Stat. [6 ed.] 398).

As this illegality entered into and permeated the agreement of January 19, 1881, the agreement itself could not be sustained ; and that as the case then stood, the plaintiff was entitled to an adjudication declaring the illegality of the agreement of January 19, 1881, and enjoining the distribution of the $15,526,590 of stock.

The earnings or surplus profits which with the assent of the stockholders, had been from time to time used and absorbed in the business of the corporation, the learned judge held to be no longer profits, but to have become capital stock, and as such subject to the prohibition of the statute.

The judgment of the special term in that action was therefore reversed, and a new trial ordered.

In that decision the general term was unanimous, and by that decision, unless it be reversed by a higher tribunal, or unless new facts appearing in the present action present8 different questions of law, this court holds itself bound.

The order of the special term, here appealed from, enjoined only the payment of dividends on the $15,526,590 shares of capital stock issued and distributed among the shareholders, before the decision of the general term on November 6,1882, above referred to, and claimed to represent past accretions of earnings to the capital of the company.

Of these shares, as has been shown above, all but 700 had been issued and distributed, and with that issue, the injunction order now appealed from has no concern.

The plaintiff alleged in his complaint, that dividends to a large amount have already been paid to the stockholders on the whole amount of stock issued under the agreement of January 19,1881, at the rate of 1|- per cent.; that the amount of dividends so paid amounted to $4,087,291.95 ; and he demanded -judgment that payments of such dividends, so far as illegally issued, should be restrained during the pending of the action.

On a resettlement of the order, and it appearing to the .court that the said stock to the amount of $5,526,590 had been issued by the defendants, except about 700 shares, the court ordered that, upon the defendants giving bonds conditioned, as in the ordér set forth, the defendants might have leave to pay the dividends on said $15,526,590, declared by the directors of the defendant company on December- 1882, in respect to such of said stock as the defendants are unable to separate from the balance of the stock of the defendant corporation, such provision not to apply to any of said stock which remains in the hands of the parties to whom said shares were originally issued, or shares, the title to which is known to be derived from such parties.

The force and effect of this injunction are thus circumscribed and limited ; and it remains for this court now to decide, bearing in mind the former decision of its general term, whether the learned judge in granting this order has erred.

The court at general term then held that the issue of 'shares of capital stock to the stockholders of the Western Union telegraph Company was a violation of the statute law of the State. The payment of dividends on such unlawfully issued stock is also illegal.

The plaintiff must be regarded in this action as asserting only his own individual rights, as owner of 200 shares of capital stock and entitled to equitable relief, only so far as these rights are invaded or threatened with invasion, and because of the pecuniary loss which he may sustain therefrom. But no matter how small his pecuniary interest may be, it is entitled to protection from the court. It may well be, that the granting of this injunction could, under the peculiar circumstances of this case, afford him but little protection or relief, and the denying of it could inflict on him but little injury.

These, however, are not questions with which the court has any legitimate concern. Its only duty is to see that the law be properly applied to the protection of the legal and equitable rights of the parties in this case.

Neither is the fact that these unlawfully issued shares may have reached the hands of some Iona fide holders, to be regarded as affecting the question. If their rights are invaded, they must seek such legal remedy or relief, as on the facts of each case, they may be found to be entitled to.

It is also urged on the part of the defendants, that the statute, the provisions of which are claimed to have been violated by the issue of the said shares of stock to stockholders of the defendant corporation, has, in creating the offense, also prescribed the appropriate and only remedy, by providing that the directors assenting to the wrongful act, shall be jointly and severally liable to the corporation and to the creditors thereof, in the event of its dissolution, to the full amount of the capital stock of said company illegally issued.

This argument does not seem to us conclusive on this appeal.

The principal of law invoked in its support may confine the remedy for the wrong, when committed, to that provided in the act, but it does not, in our opinion, limit or impair the powers of a court of equity to restrain pendente lite the commission of the illegal act, while it is threatened, or inchoate, or incomplete.

The material facts now under consideration are the same as those before the general term in the former action.

The granting or denying the order of injunction, now appealed from, was within the judicial discretion of the court at special term ; and if the order was, as we believe it was, in accord with the decision of the general term and was the logical consequence of that decision, this court feels bound to sustain it.

The order appealed from is therefore affirrped, with $10 costs.

Sedgwick, Ch. J., concurs ; Ingraham, J., dissents.

       See 48 Super. Ct. 349.


author: By the Court.—O’Gorman, J. Sedgwick, Ch. J.—(Dissenting.)

text:
    FANNIE WOTHERSPOON, as Executrix, &c., Respondent, v. GEORGE WOTHERSPOON, Appellant.

      Partnership—accounts—individual liability of partner, evidence of.—Nonjoinder, waiver of.—Domestic relations.

    In 1867 plaintiff’s testator was credited upon the books of W. & Co. upon the direction of the defendant W., who was a member of said firm, with the sum„of $10,000, and thereafter his account was regularly kept on said books, and from time to time accounts current were rendered to him, showing the amount due him, including percentage of profits, etc., each account beginning with the balance carried forward from the preceding account, during which time several changes were made in the membership of said firm. In 1880, defendant, having associated with him other partners, and being the only member of the original firm remaining in the business of W. & Co., was applied to for a statement of the account of plaintiff’s testator; and he rendered a statement entitled as an account of W. & Co. with plaintiff’s, testator, which carried forward the balance of the preceding account and which also contained charges for moneys purporting to have been paid by defendant individually for the use of plaintiff’s testator.

      Meld, in an action against defendant individually to recover the balance appearing on said account which was alleged to have been received by him and wrongfully detained from plaintiff’s testator—that the admission in the said account was the admission of defendant individually, that the amount therein named was in his hands. Further held, that such an admission must be taken by one seeking to recover on it in its entirety, and as it stands, allowing all debits and credits.
    Sedgwick, Ch. J., dissenting, holds upon a review of the evidence, that the judgment for plaintiff cannot be upheld, for the reason that it does not rest upon any cause of action stated in the complaint and supported by the testimony, or upon any cause of action stated in the findings of fact; that the evidence was not sufficient to show that plaintiff’s testator was a member of the original firm of W. & Co., which fact was necessary to uphold the cause of action stated in the complaint.
    In an action against a member of a firm, the objection that the other partners are not joined as parties, will be deemed waived, if not taken advantage of by answer or demurrer.
    An agreement to pay for board will not be implied where a son and his family are living with the son’s father.
    Before Sedgwick, Ch. J., O’Gorman and Ingraham, JJ.

      Decided April 9, 1883.
    Appeal from a judgment in favor of the plaintiff for $8,934.68. The action was tried by Judge Truax, without a jury. The facts.are stated by the court.

      J. P. Kingsford and Stephen P. Nash, for appellant.

      Tracy, Olmstead & Tracy, for respondent.
    —The answer stated no objection for defect of parties. The denial, therefore, that defendant did not alone constitute the firm of “ Wotherspoon & Co.” was immaterial (Kingsland v. Braisted, 2 Lans. 17; Code, §§ 498, 9; Wigand v. Sickel, 3 Keyes, 120). It appeared that the $10,000 which defendant by his answer alleged he had “placed to the credit of” plaintiff’s decedent, was credited to said James Wotherspoon, in the “ account current” for 1867, under the date of 5th of March, and that the balance of each year’s “account current” was carried forward to the next year, and that the “account current” annexed to the complaint, began with such a balance at James Wotherspoon’s credit on the 2d January, 1879, of $9,841.23, and which balance was proved to be correct. The case, as proved by plaintiff, therefore, fell within the rule laid down in Stephens v. Waite (10 N. Y. W. D. 421).
    The action was not for an accounting as between partners, but was for the recovery of a sum of money which an account, as rendered by defendant, showed to be due to plaintiff’s decedent.
    The $10,000 item was credited in an “ account current,” as so much money placed to the credit of James Wotherspoon, and the testimony was that “ it was given to him to be placed in the concern.” There was no proof whatever of a revocation of any such alleged gift, but, on the contrary, it did appear that if the transaction was a gift, the gift was executed. Not only were the amounts credited to, James Wotherspoon upon the firm’s books, but accounts containing such items as having been actually passed to his credit were rendered by the defendant, prepared under his direction.
    The defendant’s counter-claim for the value of the board and lodging of his son in his own house was properly disallowed. It was inconsistent with his defense, that the money was due from “ Wotherspoon & Co.” The evidence showed clearly that it was at defendant’s own request that his son and his son’s family lived in his house, and that plaintiff herself rendered an equivalent in her own services. In such a case the ordinary presumption of a quantum, meruit does not obtain (Williams v. Hutchinson, 3 N. Y. 312; Sharp v. Cropsey, 11 Barb. 324; Elliot v. Gibbons, 30 Id. 498).
   By the Court.—O’Gorman, J.

—The plaintiff is the widow and executrix of James Wotherspoon, a son of the defendant, who died May 2,1881 ; and the action is brought by her as such executrix to recover from the defendant the said sum as being money which belonged to her testator and received by the defendant and wrongfully detained by him. Before May 1, 1866, the «deceased had been a clerk in the employment of the firm of “Wotherspoon & Co.,” which then consisted of George Wotherspoon, D. A. McTavish and D. O. Wotherspoon, as partners. On that day a memorandum was signed by them, of which the following is a copy :

“ Memoeahdum.—From the first of May, 1866, the following are the shares of the respective partners of the firm of Wotherspoon & Co., of the net profits of the business, all expenses, salaries and subsidiary allowances being first deducted: D. A. McTavish and D. O. Wotherspoon to receive one-fourth each and George Wotherspoon- one-half.

“New York, 17th May, 1866.
(Signed) G. Wotherspoon,
D. A. McTavish,
D. O. Wotherspoon.

“Allowance to James Wotherspoon, $2,000 per annum, and 5 per cent, of net profits.”

On March 5, 1867, the deceased James Wotherspoon married the plaintiff, and on the same day he was, by direction of the defendant, credited on the books of the said firm with the sum of $10,000 to be placed in the concern of Wotherspoon & Co. Soon afterward, the deceased became incapacitated, by reason of illness, from rendering any service to the firm, and in 1872 he and his wife went to Europe, where they remained until June, 1874. They then returned and took up their abode with the defendant, who occupied a house on Staten Island. The deceased had become paralyzed and imbecile, and so remained until his death, which occurred on May 2, 1881. From the time of his return he and his wife and children continued (with the exception of a few months), to reside in the house of defendant.

In 1870, McTavish, and in 1872, D. O. Wotherspoon left the firm of Wotherspoon & Co. From 1872 to 1876, the business was carried on by defendant alone. In 1880, the firm was composed of George Wotherspoon and F. W. Scherr, the latter having been a partner since May, 1876. He left the firm on December 6, 1880. From December 6, 1880, to January 1,1881, the firm was composed of George Wotherspoon alone, when Mr. Allien went in with him.

From the time of the signing of the memorandum above set forth, regular accounts were kept on the books of Wotherspoon & Co., between that firm and the deceased, and copies thereof were regularly rendered to him. In the first of these accounts so rendered, deceased is credited with said sum of $10,000 cash, under date of March 5,1867, with interest thereon, $403.96—with salary $2,000—with 5 per cent, from net profit $2,417.60, and with a balance in his favor of $10,166.46 on January 1, 1868. Further accounts are in evidence, carrying on this balance crediting the deceased with interest on the balances in his favor, and for sums due to him as his percentage of the net profits, debiting him with various sums paid on his account, and showing a balance in favor of the deceased on January 1, 1875, of $12,653.70. After January 1, 1869, no amount was-credited to the deceased on account of allowance, but his percentage of the net profits was increased from 5 to 15 per cent. These accounts passed through defendant’s hands, and were prepared by his direction and their correctness testified to by Scherr, the book-keeper of the firm, who became a partner in May, 1876.

About July, 1880, a year before her husband’s death, the plaintiff applied to the defendant for a settlement of accounts, and received from the defendant an account in writing purporting to show the pecuniary relations between her husband and the firm of “Wotherspoon & Co.,” on April 30, 1880. This account shows a balance in favor of deceased on 'that date, of $7,300.50, after charging him with various sums of money—including $1,600 under the head of “house expenses per Gr. W.” and this entry is dated April 30, 1880. The plaintiff alleges in her complaint that “ having no means of verifying said account, and being ^informed that the books of said firm had been destroyed, she is willing to accept the said account as correct, except as to the sum of $1,000 charged there on April 30, 1880, for “house expenses for Gr. W.,” which sum plaintiff states on information and belief should not be charged in said account, and is not a proper and valid charge or claim against the estate of said James Wotherspoon. This charge of $1,600 was a subject of discussion, from time to time, between plaintiff and defendant, until October, 1880, when she proposed to remove her husband from the defendant’s house, and herself to return to her parents, to which defendant objected and said they had better go on as they were till spring. Afterwards, about March or April, 1881, she received from defendant a further account in writing as between Wotherspoon & Co., and James Wotherspoon,' carrying forward the last balance, $7,300.51—charging against said James Wotherspoon various further sums for expenses incurred by her after the date of the former account, and including one other charge under the head of “deducted proportion of bad debt in 1868, 5 per cent, on $20,000 and interest $700—$1,700,” and reducing the balance in favor of the deceased on December 31,1880, to $4,606.84. No evidence, however, was offered to substantiate the last charge.

It is in evidence that the plaintiff took care and management of defendant’s establishment and kept house for him, a service which perhaps he needed, being a man between eighty-five and eighty-six years of age.

The learned trial judge disallowed this charge of $1,600 for “house expenses,” set forth in the account dated April 30,1880, but allowed a charge of $1,285.67, being for moneys expended for the plaintiff and family, after April 30, 1880, and found a balance due to her, as executrix of her deceased husband, by defendant, of $8,443.89, and being in the defendant’s hands on April 30, 1880.

At the close of the plaintiff’s case, the defendant moved for a dismissal of the complaint on the ground, among others, that plaintiff’s claim should have been made against the partners comprising the firm of “ Wotherspoon & Co.” at the time of the beginning of the accounts; and that there was no proof of any individual liability on the part of the defendant, George Wotherspoon, in favor of the plaintiff’s testator, and also because the accounts produced were rendered by the said firm, and are not sufficient evidence to charge the defendant individually with the balance appearing therein. Defendant also claimed that the amounts placed to the credit of said James Wotherspoon on the books of the firm of “Wotherspoon & Co.” by direction of the defendant, were never reduced to possession by said James Wotherspoon, and said amounts were never transferred to him; and that, as between the defendant and said James Wotherspoon, there was not a valid •gift of said amounts. Defendant also claimed that he was entitled to charge the estate of James Wotherspoon for his board and lodging for six years preceding his death, as a counter-claim in this action.

This is an action -for money of the plaintiff’s testator received by the defendant as a member of and representing the. firm of Wotherspoon & Co., and wrongfully retained by him, and the question is whether there is sufficient evidence on which that charge can be sustained.

As far as the firm of Wotherspoon & Co. is concerned, their accounts rendered from time to time are sufficient admission that they recognized the right of James Wotherspoon to have credit for $10,000, as deposited in his name in the concern—for interest on the same from year to year —and credit also on the other sums regularly entered in the books of the firm for his percentage of the profits. These accounts showed a balance in his favor on January 1, 1875, of $12,653.70.

The account rendered by the defendant on behalf'of Wotherspoon & Co., and in their name, to the plaintiff, in July, 1880, showed a balance in favor of her testator oh April 30, 1880, amounting to $7,300.51. This is an admission on the part of the defendant as a member of that firm, that he held that amount of the testator’s money in his hands.

It is alleged in the complaint that he was the only member of the firm, which was carried on by himself alone, at the time of the commencement of the action. But if that were otherwise, and there were in fact other members of the firm who should have been joined as defendants, yet that objection must be deemed to have been waived by reason of the failure of the defendant to take advantage of it either by demurrer or by answer (Code, §§ 498, 499 ; Kings-land v. Braisted, 2 Lans. 17). ,

But apart from that waiver of the objection, there are " other reasons for holding that the accounts rendered by or in the name of the firm bind the defendant as fully as if they were rendered in his own name. When in June, 1881, he received letters from the plaintiff inquiring about the" state of her husband’s accounts, none of the persons who had been partners when the account between James Wotherspoon and “ Wotherspoon & Co.” was opened, had any connection with that firm ; one of them had left it in 1870, and the other in 1872, and there is no evidence that. they retained any interest in the firm or were liable for its transactions. From 1872 to 1876, the defendant had carried on the business alone; Scherr joined the concern in 1876, and left it in December, 1880; and Allien, who had been its book-keeper, seems to have become a partner in January, 1881. Under these circumstances, and in answer to plaintiff’s request, an account is furnished to her, entitled : “Mr. James Wotherspoon, in account with Wotherspoon & Co.,” commencing on the credit side with an entry of a balance in his favor of $9,841.23, and closing with a credit in his favor, “By balance carried forward to new account, $7,300.51.” In this account James Wotherspoon is debited with “ House expenses per G. W., $1,600,” and if the firm name of “ Wotherspoon & Co.” therein, represented any persons or person other than the defendant, this entry, purporting to be an entry of moneys paid out by him individually for the use of James Wotherspoon, would have been out of place, and wholly inconsistent with the argument of the defense, that “ Wotherspoon & Co.,” and the defendant, George Wotherspoon, were two separate and distinct entities.

The allegation in the complaint that the “ former partners had, on their withdrawal from the firm, respectively settled with defendant, so that he vras to retain the assets and business of the firm, including the capital and money of James Wotherspoon, and the profits belonging to him,” is not in the answer distinctly or definitely denied, and there was, in my opinion, enough to warrant the trial judge in inferring, that for all purposes of this action, the defendant and “Wotherspoon & Co.” were one and the. same, and that the money of James Wotherspoon, $7,300.51, admitted to be in the hands of that firm to the credit of James Wotherspoon on April 30,1880, was in fact in the hands of the defendant, and that the admission in the account of “ Wotherspoon & Co,” was in fact and in law the admission of the defendant.

The plaintiff’s claim then rests wholly on the account' rendered by the defendant as of April, 1880, and the admission of the balance therein set forth in favor of testator. But that admission, she must take in its entirety, and accept it as it stands, allowing all debits as well as credits, including the charge of $1,600 for.“household expenses.”

There is no claim on the part of the defendant that the account rendered as of April 30, 1880, was in any way incorrect ; on the contrary, the balance therein, in favor of testator, of $7,300.51, is carried into a later account furnished by defendant, containing entries up to December 31, 1880. This account must be regarded as conclusive and binding on the defendant (Harley v. Eleventh Ward Bank, 76 N. Y. 618).

As to the later account,1 plaintiff admitted all charges on the debit side for payments made after date of the former account, April 30, 1880, and they are all charged against her in the findings of fact, excepting the charge of $1,700 for an alleged bad debt in 1868, which charge the plaintiff disputed, and in proof of which no evidence was offered.

In this view of the case, the claim on the part of the defendant that the sums entered by his direction on the books of the firm to the credit of James Wotherspoon are not an executed or valid gift or received into possession, becomes unimportant, especially when coupled with the allegation in defendant’s answer, that the sum of $10,000 first put to his credit had in fact been spent for his benefit.

As to the claim set up on the part of defendant by way of counter-claim, on account of board, &c., of the testator, it was properly disallowed. There was no evidence of any agreement on the subject, and the mutual relations and obligations of the parties between one another would, in the absence of an agreement, lead to the presumption that no such charge had been contemplated (Williams v. Hutchinson, 3 N. Y. 312).

Except as to the disallowance of the charge of $1,600, I see no error in the rulings of the trial judge

The judgment should therefore be reversed and a new trial ordered, unless plaintiff stipulates to deduct from the judgment the sum of $1,600, and interest from April 30, 1880, in which case the judgment, as modified, should be affirmed without costs of this appeal.

Ingbaham, J., concurred.

Sedgwick, Ch. J.—(Dissenting.)

—In differing with my learned associate, I am of opinion that, as a consequence of applying the ordinary tests, it will be found that the judgment appealed from does not rest upon any cause of action stated in the complaint and supported by the testimony, or upon any cause of action stated in the findings of fact.

The cause of action stated in the complaint, depends upon the averments that the plaintiff’s testator was a partner in the firm of Wotherspoon & Co., and .as such partner had a certain interest in the capital and profits of the business ; that the defendant and certain other persons were, with the plaintiff’s testator, the members of the firm ; that these other .persons left the firm, withdrawing their interests, after settling with the defendant; that thereafter the defendant continued the business, retaining the assets, including the capital and profits belonging to the plaintiff; that in the year 1880, the testator, then alive but unable to transact business, the plaintiff demanded from the defendant an account of the amount of said moneys owing by him to said James Wotherspoon, and then in his possession, on account of the business of said firm, and that said defendant thereupon, on April 30, 1880, rendered and stated his account with the said James Wotherspoon of that date, and delivered the same to the plaintiff on behalf of said James Wotherspoon, a copy of which account is hereto annexed and forms part of this complaint, and in and by said account the defendant admitted himself to be indebted to the said James Wotherspoon on the firm account, at the last mentioned date, in the sum of $7,300.51. That at the time said account was rendered, said James Wotherspoon was of weak and imbecile mind, and unable to transact any business, and plaintiff refused, on his behalf, to accept said account as correct and final, but the plaintiff having no means of verifying said account, and being informed that the books of said firm had been destroyed, is willing to accept said account as correct, except as to the sum of $1,600, etc.”

It may be assumed, without discussion, I think, that an account in a book, or a statement of an account from a book, is not a chose in action in itself. It only contains statements or admissions, or evidence of facts. The facts, if they really exist, are the constituents, of the cause of action. The account is but evidence of one kind, subject to explanation, qualification or contradiction, as is any other kind of evidence. To make an account stated a substantive cause of action, it is necessary to allege and prove that the accounting was had concerning prior dealing ; e. g., sums of money, before due and owing by defendant to plaintiff, and then in arrear and unpaid.

In the present case, the testimony showed that the testator had never been a partner, and the account delivered to the plaintiff did not show any amount due to the testator as a partner.,

Among the findings of fact there is none that is equivalent to a finding that the testator had been a partner at any time. If there were, the testimony would not support it. The finding on this subject was, “that during the year 1867, and subsequently, the said James Wotherspoon was entitled to receive and did receive a share of the profits of the business so conducted by said defendant in said firm name, and that said defendant, from time to time during the year 1867, and subsequently, received and held divers sums of money belonging to said James Wotherspoon, consisting in part of amounts adjusted and paid to said James Wotherspoon as his said share of profits, and in part of other moneys belonging to said James Wotherspoon, 'and that January 2, 1879, there was of such moneys of said James Wotherspoon in the hands of said defendant, the sum of $9,841.23; that thereafter the defendant paid and expended for and on account of said James Wotherspoon, the several sums of money in that behalf mentioned-in the statement thereof annexed to the complaint, except the item of April 30, 1880, of $1,600, and that the said statement was rendered by defendant to said James Wotherspoon, as alleged in the complaint, and that the balance of said moneys in defendant’s hand on April 30, 1880, was $8,900.51.” Rot only is there here no finding that the plaintiff’s testator had an interest as a partner, but there is no testimony to sustain what may be alleged to be facts, contained among the findings. There was no proof that the defendant received or held divers sums of money of the kind described by the findings. The testimony, in its most favorable aspect for plaintiff, showed that from time to time, although the testator was not a partner, certain portions of profits were credited to him. The profits had not been received for the testator, but for the firm. If he had any right to the portions credited to him, it could result only from some contract obligation on the part of the defendant, to pay him that portion of the profit. If the result was that he would be entitled to the portion, it would be an inference from the existence of the contract, and it would be necessary to find from the testimony that there was such a contract. The judge did not find that any such contract was made. On the contrary, he refused to find-otherwise than he had already found in the findings already stated, in reply to a request of defendants to find that a memorandum in James Wortherspoon’s handwriting, marked “Exhibit K,” shows the arrangement between him and the firm, and that there never was any other bargain or agreement than this. The memorandum was as follows:

“ From the first May, 1866, the following are the shares of the respective partners of the firm of Wotherspoon & Co., of the net profits of the business, all expenses, salaries and subsidiary allowances' being first deducted. D. A. McTavisli and D. 0. Wotherspoon to receive one-fourth each, and Greorge Wotherspoon one-half.

“New York, 17 May, 1866. Gr. Wotherspoon,
D. A. McTavish,
D. 0. Wotherspoon.

“Allowance to James Worth erspoon, $2,000 per annum, and 5 per cent, of net profits.”

There can be no doubt that this instrument was the original contract between the parties, but it is now referred to to emphasize the statement that the claims of the complaint were not supported by the evidence, and that the findings of fact do not state the cause of action claimed by the complaint, or, in my judgment, any other cause of action countenanced by the testimony.

In what way then can the judgment be sustained ? Only by looking through the evidence to find whether there' are pieces of testimony which might support an action ; for instance, inferences that might be drawn from the accounts that were handed by defendant to plaintiff. It view of all the testimony, it would seem to me, if it were right to pass upon the question, that the only obligation that ever existed between the defendant’s firm and the testator arose out of an employment of the latter, upon the terms, originally as stated in the memorandum that has been referred to. A condition of receiving compensation under that con-, tract was the performance of or the offer to perform the services intended by it. After a time the son became a confirmed invalid, and by the first part of 1874 was unable to perform the services.. Although the father, after that time, continued to give those credits, the amount of a part of which was recovered in the present judgment, the testator was not entitled to such credits, but they were voluntarily, and without consideration, made in the accounts. .If the accounts delivered create a presumption of obligation, the testimony shows that that arose only out of the contract of employment, and the testimony affirmatively shows that the testator had not performed on his part, and that therefore there was, in fact, no obligation on defendant’s part. But I am of opinion that we can examine no other claim than that on which the plaintiff stood at the trial. And the examination of any ether claim must be remitted to the court of first instance.


author: Br the Court.—O’Gorman, J.

text:
    THE NEW JERSEY LIGHTERAGE Co., Respondent, v. THE NEW YORK MUTUAL INSURANCE Co., et al., Appellants.

      Marine insurance—evidence of contract—deviation.

    In an action to recover on a policy of marine insurance where the answer admits the making of a contract of insurance according to the conditions, etc., contained in said contract, and alleges that among others was a stipulation that the lighter insured, in the performance of her voyage, should not “sail to, touch or stay at any ports, etc., unless thereto obliged by stress of weather, or other unavoidable accident,” and further alleges a breach of said condition; the only proof of the contract of insurance being the following certificate issued to plaintiff: “This certifies that N. J. L. Co. are insured under and subject to the conditions of open policy No. A. issued by this office, in the sum of §3,500 on railroad iron on board the lighter Hebe, at and from Norwalk, Conn., to Jersey City, N. J., loss, if any, payable to them or order hereon and return of certificate. §3,500, at H per cent, premium, $6.35.” It appeared upon the trial that said policy No. A. was in the personal possession of one of defendant’s witnesses then present. ;

      Held, that the certificate itself sufficiently sets forth a contract of insurance binding upon defendants, and that if they desired to take advantage of any conditions not contained in said certificate, it was their duty to put in evidence said policy No. A.

      Also, held, that the question of “ deviation ” must be determined by the motives, ends and consequences of the act, and the fact that the deviation in this case was from necessity, would excuse the insured, even if the conditions in that regard were proven.
    Before O’ Gorman and Ingraham, JJ.

      Decided April 9, 1883.
    The jury in this case having found a verdict for the plaintiff for $126, the court ordered the exceptions of the defendants to be heard in the first instance at general term.

      The facts are stated in the ojfinion.
    Benedict, Taft, & Benedict, for respondent.
    ■ John Berry, for appellants.
   Br the Court.—O’Gorman, J.

—This is an action to recover from the defendants their pro rata share of a loss of railroad iron on board of the Hebe, which capsized in rounding the Battery, about four o’clock in the afternoon of August 15, 1878. The plaintiff claims that the aggregate loss amounted to $1,024. The defendants answered separately. The defendants’ counsel moved the court for a nonsuit on the ground that the proof was insufficient to entitle the- plaintiff to a recovery. This motion was denied and the court directed a verdict for the plaintiff for $126, and ordered the exceptions of the parties to be heard at the general term, the plaintiff to make, the case.

It is alleged in the complaint, that the defendants, being respectively duly incorporated under the laws of New Jersey, were doing business in New York together, for their joint account under the name of the “National Lloyds,”, and that on August 15, 1878, they insured the plaintiff in the sum of $2,500, on railroad iron on board the lighter Hebe, at and from Norwalk, Connecticut, to Jersey City, N. J. The defendants, in their answer, admit that they were so in-, corporated and did, each of them, enter into a contract of insurance with the plaintiff, by which they did insure it in the manner, and on the terms, conditions, and stipulations in said contract contained; and that by the terms of said contract of insurance, it was among other things agreed that the said lighter, in performance of said voyage, should not sail to, touch or stay at any ports or places unless thereto obliged by stress of weather or other unavoidable accident; and that the lighter did sail to, touch, and stay at another place, to wit: the city of Brooklyn.

The plaintiff produced in evidence, the following certificate of insurance: Certificate of Insurance No. 2,134. $2,500. National Lloyds, 73 William St., New York.

New York, August 15, 1878.
“ This certifies, that New Jersey Lighterage Co. are insured under and subject to the conditions of open policy No. A, issued by this office, in the sum of twenty-five hundred dollars on railroad iron on board the lighter Hebe, at and from Norwalk, Conn., to Jersey City, N. J., loss, if any, payable to them or order hereon and return of this certificate. $2,500. At M cfo premium, $6.25.
“Arthur Leary, Attorney.
“ Not valid unless countersigned by John Newman.
“Juo. Newmau.”

The open policy No. A, was not produced on either side, although one of the witnesses, examined on behalf of the plaintiff, said that it was in his pocket. Evidence was given on the loss, and that the lighter had, during her voyage up the East River, made fast to a dock alongside Martins’ stores in Brooklyn, and had so remained there about three-quarters of an hour, beacuse in the then condition of the wind and tide, she could not go any further without a tugboat; that the captain sent word for a tugboat, and got one; and that while passing out from the East River into the Battery, he got into a kind of slack water, and going from one tide into the other, in a kind of whirlpool, the vessel capsized. The defendants’ counsel during the course of the trial objected in effect that plaintiff’s case was incomplete without production of policy No. A; that the certificate proved is not a contract of insurance, and does not contain the elements necessary to make a perfect and certain contract of insurance. This objection is not tenable. The defendants in their answer admitted that they had entered into a contract of insurance with plaintiff, by which they did insure the plaintiff’s railroad iron on board the lighter Hebe, in the manner, and upon the terms, conditions and stipulations, in said contract contained. If any terms, conditions, or stipulations, not set forth in the certificate proved by the plaintiff, were of a nature to defeat the plaintiff’s claim, it-was the duty of the defendants to put in evidence the policy' No. A, referred to in the certificate, and in which such conditions may have been contained. The certificate itself sufficiently sets forth a contract of insurance of the plaintiff in the sum of $2,500, of railroad iron on board the lighter Hebe at and from Norwalk, Conn., to Jersey City, N. J. The defendants, having failed to show any other terms or conditions, must be bound by the certificate as it stands.

But the only one of the alleged terms or conditions set up in defendants’ answer, the violation of which they relied on as a defense, was one prohibiting deviation, and they claim that making fast to a dock in Brooklyn, on the voyage, was a deviation, on account of which the insurance became discharged. This act of the master of the vessel was not deviation, of a nature to avoid the policy, but a proper precaution, and necessary to overcome the force of the wind, and of the ebb tide from the Hudson River, which might have swept the vessel down the Bay. It worked no injury to the defendants, and added nothing to their risk. •

The question of deviation must be determined by the motives, end and consequence of the act. The fact that deviation was from necessity, excuses the insured. The defendants’ exceptions should be overruled and judgment entered for the plaintiff, with costs. '

Ingraham, J., concurred.


author: By the Court.—Ingraham, J.

text:
    JAMES C. BOLTON, et al., Appellants, v. WILLIAM SCHRIEVER, Respondent.

      Adverse possession—what sufficient to constitute.

    It is not necessary, in order to establish title by adverse possession, to show that the inclosure relied on, was such an one as would prevent persons from climbing over or breaking in, but it must be a substantial inclosure, and one that will give notice to the world that the ownership of the property is claimed; and what is sufficient depends much upon the character of the property in each case.
    The evidence in this case reviewed and considered by the court, and held sufficient to establish an “actual, open, continuous and hostile” possession, in defendant’s grantors, of the premises in question for twenty years under claim of title founded on a written instrument.
    Before O’Gorman and Ingraham, JJ.

      Decided April 9, 1883.
    Appeal from judgment in favor of the defendant entered on a verdict of a jury, and from order denying motion for new trial on the minutes.
    The facts are stated in the opinion.

      James C. Bolton and J. Alfred Davenport, for appellant.

      Lewis Johnston and Albert Matthews, for respondents.
   By the Court.—Ingraham, J.

—This is an action of ejectment for a lot of land on Tenth avenue, between Thirty-second and Thirty-third streets,, in the city of Yew York, known as Yo. 398 Tenth avenue.

It appears to have been conceded on the trial, as it was in the argument of the appeal, that plaintiff showed a valid title to the property in question, except for an adverse possession ; and the learned chief judge before whom the action was tried, substantially charged that the jury must find a verdict for the plaintiff, unless they should find that the defendant and her grantors had had adverse possession of the premises in question ; and the question on the appeal is, whether there was sufficient evidence from which the jury could find such possession.

It appeared that in the year 1853, the City Fire Insurance Company made a loan to one John B. Wright, and as security for such loan took a mortgage on the property in question from said John B. Wright, who claimed to be in possession of the property at that time. That mortgage was foreclosed, and the insurance company, on March 13, 1857, purchased the property at' that sale and received a deed therefore, dated on that day, and immediately went into possession under the deed ; for six years it rented the property and received the rents and profits, and during that time was in exclusive adverse possession ; in 1863 the building on the property became untenantable, and the company was unable to rent it. It remained untenantable, except that it was at one time used for the storage of some' barrels, until 1874, when the company sent and had the building taken down, and had a fence put up in front; and it remained in that condition until 1877, when the company sold it, and shortly after that time a building was erected that still remains on the property. From the time that the insurance company purchased the property until they sold it, they paid the taxes, assessments and Croton water rents, and the president of the company swore that it never intended to abandon the possession of the premises, and had no knowledge that any one claimed the title to it or was ever in actual pessessien of it except the company.

It further appeared that during this period some one, under what purported to be a judgment of the supreme court in an action to which the company was not a party, put a gate in the fence and put up a sign ; but that immediately after' the gate was put in the company had the gate taken down and the fence rebarricaded ; that the president went to see the property very, often, but that sometimes four or five months might have elapsed between his visits. There was also evidence that the house on the property was built in the year 1844, and was occupied from that time until the year 1863 ; that no one lived in the house in the years 1864 to 1868 inclusive ; that occasionally it would - be occupied by squatters, and on the complaint of some one (it does not appear who), the police had turned the squatters out ; that after the roof fell in the outside door was left open, and one of the policemen had fastened it up.

This action was commenced in May, 1880. If there was sufficient evidence for the jury to find that the possession of the insurance company continued while the building was untenantable and unrented, from 1864 to 1874, when the insurance company had the fence put up, there then was an adverse possession of the premises. It was established that the insurance company entered into the possession of the premises under a claim of title exclusive of any other right, founding the claim upon another instrument, as being a conveyance of the premises in question, so that the requirements of the adverse possession can be determined by section 370 of the Code of Civil Procedure (that section being substantially a re-enactment of section 83 of the Code of Procedure)—and that for a period of six years they were in exclusive adverse possession, renting the property and receiving the rents thereof and exercising all the acts of ownership over it.

It is undoubtedly true that the possession must be “actual, open, continuous, hostile and exclusive” for twenty years ; that if there is any breach in the possession the adverse possession is not established ; but the statute does not require an impossibility. The property is by the statute to be usually cultivated or improved, or “ protected by a substantial inclosure”; either of these is sufficient to constitute the “possession.” It is nowhere required that the inclosure should be such a one as would prevent persons from climbing over or breaking in, but it must be a substantial improvement or use of the property, or a substantial inclosure, one that would give notice to the world that the ownership of the property is claimed, and what is sufficient to constitute such a possession depends very much upon the character of the property.

Here as long as the property remained in a condition to be rented and tenants could be obtained, the company rented it and received the proceeds. It then became impossible to obtain tenants and the building was uninhabited ; but the building was still on the property, it was still inclosed by a fence on three sides and the building in front, and the fact that squatters and stragglers at times broke in, made no such entry or divested the insurance company of the possession of the premises.

The evidence is direct that there was no intention of abandoning the possession. The president of the com pan y paid frequent visits, the company paid the taxes and Croton rents, and when from the condition of the building it appeared as if it would fall down, so that it would be an inclosure the company took it down and replaced it by a fence, and that fence was continued down to the time the building which is now on the property was erected ; during all the time the property in question was unrented, however, the company exercised all the acts of ownership over it that are usually exercised by the owners of a piece of property in the condition of the premises in question ; the officers of the company went frequently to see it, and there was no entry of the plaintiff or any one else adverse to the possession of the insurance company.

We have examined the authorities cited by appellant, and do not think that they apply to the questions in this case, from the facts, and are of opinion that there was sufficient for the jury to find that the possession had been continuous, and adverse and sufficient to support the verdict. There were no exceptions taken to the charge. And without an exception an objection to it cannot be considered on appeal. There was no error committed on the trial and the judgment should be affirmed.

O’Gorman, J., concurred.