author: By the Court.—Curtis, J. Monell, Ch. J.

text:
    MARY LUDINGTON, Admx. &c., et al., Plaintiffs and Appellants, v. ABRAHAM B. MILLER, et el., Defendants and Respondents.
    Before Monell, Oh. J., and Curtis, J.

      Decided January 4, 1875.
    RECEIPT IN FULL.—COMPROMISE.—MISTAKE AS TO THE LAW, &c.
    A party who has been prejudiced by a mistake as to the law, and who seeks relief from the consequences, should evince a disposition, by his acts or offers, to restore his opponent to his original position existing at" the time the alleged mistake occurred.
    A party should not seek to hold all the advantages gained by the mistake, and thus seek’to profit by his own oversight.
    In the case of a compromise between parties, and the payment of the moneys provided for therein, and a receipt in full given, that compromise, settlement, and payment can not be reopened, in consequence of a party being ignorant at the time of a statutory provision, or having overlooked some feature of the law, or the proofs, and because he believes afterwards that if he had not so overlooked the law or proofs he might have obtained better terms.
    In the case at bar, it was held that there was such a compromise and settlement between the parties that the receipt in full constituted a complete accord and satisfaction, and so far in the nature of a written contract that its terms can not be varied by parol proof.
    In cases where interest is allowed, not as a part of the contract, but as an incident and in lieu of damages, or as compensatory for some loss, by reason of a breach or default, after the payment of the principal of the debt, and its receipt in full, no action lies to recover the interest, it being extinguished with the debt (S. Central R. R. Go. d. Town of Moravia, 61 Bwrb, 189).
    Appeal from an order.

      The action was brought under the act of March 16, 1870, to recover damages resulting from the death of the husband of the administratrix. At an assessment of damages at the trial term, December 18, 1873, a verdict was rendered in favor of the plaintiffs for three thousand dollars. Pending some subsequent proceedings, a settlement was made by the payment to the plaintiffs on January 5, "1874, of two thousand dollars, and on January 15, 1874, of one thousand eight hundred and thirty-four dollars and thirty-six cents, and a receipt was given the defendants “in full of damages and ■costs” in the action. In May following, the plaintiff’s counsel learned of the provision in the act of March 16, 1870, “that the amount of damages recovered in any such action shall draw interest from the time of the ■death of such deceased person, which interest shall be added to the verdict, and inserted in the entry of judgment in such action.” The defendant’s counsel was not aware of this provision of the statute when the settlement was made. The plaintiffs thereupon applied at the special term, for leave to enter up judgment for four ■thousand two hundred and ninety-nine dollars and thirteen cents, and to issue execution for four hundred and sixty-four dollars and seventy-five cents, the latter being the alleged,interest on the verdict. This motion was denied at the special term, and the plaintiffs appeal to the general term.

      George W. Lord, for appellants.

      A. H. Dana, for respondents.
   By the Court.—Curtis, J.

There are difficulties ■in the way óf granting the relief sought in this application. It ought not to be granted under any circumstances, unless the defendants were restored to the position in the case that they occupied at the time of the settlement and closing- up of the controversy, which appears, on the whole, not" to have been an unwise or unfair disposition of the litigation at the stage when it was terminated, by the act of the parties through their respective counsel. To restore the defendants to their position, the money paid to the plaintiffs should be returned to them, and they should be restored to all their rights at the time of the settlement in respect to appeals, and to proceedings for a new trial now lapsed. There is nothing disclosed in the papers, that indicates, either willingness or ability on the part of the plaintiffs to place tile defendants in their original position. If the plaintiffs have been prejudiced by a mistake as to the law, it properly devolves on them, when asking to be relieved from the consequences, to evince a disposition to restore their "opponents to their original position, and least of all, to seek to profit by their own oversight.

Heither would it be just to reopen a controversy, because the counsel for one of the parties thinks that if he had previously known about a provision of the-statute that he has since discovered, that he would have claimed more in the statement of his demand than he did at the time he was paid, and believes that in the-contingencies of a further prosecution of the litigation, he might have recovered it. It would be a dangerous precedent to reopen a compromise, in consequence of a party thinking that if he had not overlooked some feature of the law, or the proofs, he might have obtained better terms. The payments to the plaintiffs were made under circumstances that may be regarded as such a compromise, that the receipt in full constituted a complete accord and satisfaction, and so far in the nature of a contract, as not to be varied by parol evidence (Coon v. Knap, 8 N. Y. R. 402).

A question also arises whether the payment of the verdict, the principal, did not extinguish the interest. Where interest is made payable by the terms of the contract, its collection maybe enforced, although the principal-of the debt has been paid (Fake v. Eddy, 15 Wen. 76). But in that class of cases where interest is allowed, not as a part of the contract, but as an incident and in lien of damages, or as compensatory for some loss, by reason of a breach or default, it has been often held that after the payment of the principal of the debt, and its receipt in full, no action lies to recover interest, it being extinguished with the debt (S. Central R. R. Co. v. Town of Moravia, 61 Barb. 189). In the present case, the verdict is the principal of the debt, which the statute directs shall draw interest from the time of the-death of such deceased person, and be inserted in the-, entry of judgment. The statute declares a rule of damages by which the amount of a verdict may be increased,, by adding interest in the nature of a compensatory incident. There is no element of a contract in reference to this interest, and nothing that would seem to change « the rule, that when the principal, the verdict, is extinguished, the interest and all right or claim to it, is. extinguished.

There seems to be no good reason to disturb the-determination of this question made by the judge at. the special term, and the order appealed from should be affirmed, with costs to the defendants, to be paid out of the assets in the hands of the plaintiff, as administratrix.

Monell, Ch. J.

Fully concurring in the foregoing-opinion, I desire to state an additional reason for affirming the order.

The damages were assessed, and judgment entered in December, 1873, and paid January 6, 1874. This motion was not noticed until more than four months thereafter. However absolute the right to interest may be under the statute, it is a right which may be lost by laches, and the delay here amounted to laches. The judge below may very probably have considered this, and put his decision, in part at least, upon that ground.

Besides, I think, the damages were very liberal, and all the jury intended the plaintiff should have. Had they known that the court could add interest to the damages found by them, they might have given a less sum than they did.


source: Caselaw Access Project

author: By the Court.—Curtis, J.

license: Public Domain

text:
    JAMES O’BRIEN, Sheriff, &c., Plaintiff and Appellant, v. THE MERCHANTS’ FIRE INSURANCE COMPANY, Defendant and Respondent.
    -JURORS.—Improper communications to and influences upon.
    The ancient rule that the delivery of any paper touching the mat ter in issue by a party to any of the jurors after they leave the bar, should avoid the verdict, was at an early period relaxed in this State ; and it is now held that if no one of the jurors looked at such a paper, and were not influenced by it, that it affords no just cause for setting aside the verdict (Hackley v. Hastie, 8 John, 252). A verdict should not be overturned unless there be some reason to suspect that the irregularity may have had an influence on the final result (Wilson v. Abraham, 1 Sill, 207).
    In the case at bar, the affidavits fail to show that the paper irregularly placed before the jury, could not have had an influx ence on the •result, but on the contrary, it may with reason be suspected that it did influence the verdict.

      Eeld, That the verdict should be set aside, without reference to the source or motive of the influence.

      Before Monell, Ck. J., and Curtis, J.

      Decided January 4, 1875.
    Appeal by the plaintiff, from an order denying a motion to set aside a verdict, on the ground of the defendant secretly making an improper communication to the jury. The facts in the case appear fully in the opinion of the court.

      William W. Badger, for appellant,
    presented the following points;—I. Will the court please look at the original in the clerk’s office, trial term, part II. “ Look out for pencil memorandums ; they could be rubbed out, and an inventory inserted again if necessary.” This alluded to Mr. Candler’s inventory of goods, of the amount of which a pencil memorandum appeared in the book, which had been sworn to by Candler, and properly put in evidence without objection. It was a suggestion to the jury that said memorandum was altered, or manufactured by Mr. Candler or his counsel, to suit his purpose. So the allusion to Dixon T. Cross is a suggestion to the jury that Candler had paid Cross, a magistrate, five dollars for certifying the preliminary proofs of loss. ‘1 Refused afterwards ’ ’ refers to evidence of Cross, which had been excluded from the jury. So the allusion to Amos Baker, page 8, is a suggestion to the jury that he was employed and payed as a watchman, which Candler had denied. So-of every item of this statement, which was evidently intended to disparage and discredit Mr. Candler and his accounts with the jury, the books having been put in. evidence by consent of defendant’s counsel.
    II. In this case it is not necessary to show that the verdict was actually influenced by the improper communication, though it is a moral certainty that it was so influenced. “It is sufficient that statements were made, and that they were likely or calculated to influence the verdict ’’ (Thomas v. Chapman, 45 Barb. 99, and cases therein cited). “If it appears that the jury have been approached in such a way as might have influenced their verdict, it should be set aside without reference to the source or motive of the interference" (Nesmith v. Clinton Fire Ins. Company, 8 Abb. Pr. 141). “For any, even the least intermeddling with jurors, a verdict will always be set aside” (Reynolds v. The Champlain Transportation Company, 9 How. Pr. 7-15). Such are the words of high-minded and able judges in well considered cases, and unless a new rule of law is to be made for the accommodation of this defendant, this verdict must be set aside.
    III. The affidavit of Mr. Brokaw, the juror, should not have been received on this motion, on the well settled^ principle that a juror capable of receiving such a communication would of course be easily capable of misrepresenting it and its effect. The plaintiff objected to this affidavit being considered below, and cited the following authorities against it: Affidavits of jurors or others that they were not influenced can not be received (Reynolds v. Champlain Trans. Co., 9 How. Pr. 7-14 ; Knight v. Freeport, 17 Mass. 218; Whitney v. Whitman, 5 Mass. 405 ; Coster v. Merritt, 3 Brod. & Bing. 257 ; Taylor v. Everett, 2 How. Pr. 23 ; Clum v. Smith, 5 Hill, 560 ; Graham on Trials, 47, 54).

      William Allen Butler, for respondent,
    presented he following points ;—I. There is a total absence of any evidence that the paper complained of, in any manner, influenced the verdict, and there is positive evidence that it had no influence whatever. There is, therefore, no ground for setting aside the verdict (Wilson v. Abrahams, 1 Hill, 207; Taylor v. Everett, 2 How Pr. 23; Hacklie v. Hastie, 3 Johns. 252). In the case last cited, the court say, “If the jury have never looked at the papers, nor been influenced by them, there can be no just cause for setting aside the verdict.”
    II. The apparent irregularity was fully explained before the jury separated, and there is not the least ground for any imputation of unfairness. The judge before whom the cause was tried, heard the motion and denied it with full knowledge of the facts which the trial had disclosed, and his decision was correct.
   By the Court.—Curtis, J.

This cause was tried "before Mr. Justice Speib, and a'jury, in May, 1874. The trial occupied several days, and was submitted to the jury, May 22. The jury were out over three hours, and returned a verdict for plaintiff for two thousand three hundred and twenty-seven dollars.

The plaintiff's total claim in the action was about three thousand three hundred and thirty-six dollars. The action was to collect a policy of insurance, issued by defendants, to E. S. Candler, Jr., in July, 1868, the plaintiff having levied certain attachments upon all sums due thereon from defendant to Candler, and the main question in issue on the trial was as to the amount of loss incurred by Candler.

The evidence of the amount was conflicting, and part ■of it consisted of two account books of Candler, containing entries of the amounts of his sales, and a certain memorandum of the amount and date of an inventory taken by him, which books were produced from defendant’ s possession, having been furnished to defendant at the request of Candler, and were put in evidence by plaintiff without objection from defendant.

JohnL. Douglass, secretary of defendant, was sworn as a witness for defendant, on the trial, and testified that he was an expert book-keeper, and as to the contents of said books, which he had examined, and that he had prepared a statement from the contents of said books, which purported to show in brief the contents, and the amounts, and total sales. The then counsel for defendant asked leave to submit to the jury the statement of the contents of the books so prepared by Douglass. Plaintiff’s counsel consented to such submission, on condition that he might also submit a counter-statement to the jury, which condition was refused by the then counsel for defendant, and it was understood and agreed that neither side should submit any written statements to the jury, and none was submitted, on behalf of the plaintiff. When the jury retired from the court-room to deliberate upon their verdict,, one of them, in the presence of the court, and with the consent of plaintiff’s and defendant’s counsel, received the two books, and with them a written paper not in evidence, all of which he then immediately took with-him into the jury-room.

The plaintiff’s counsel did not see or know of this written paper which was folded and pinned to one of the leaves inside of one of the books, so as not to be visible until the book was. opened.

The jury were out over three hours, and on their return to the court, the same juryman handed the two books to defendant’s counsel, when plaintiff’s counsel first saw the paper so pinned inside one of the books, and not visible until the book was opened.

The court directed the paper to be placed in the custody of the clerk. There are allusions and remarks in this paper tending to create suspicion in respect to-Candler’s good faith, and the accuracy of his accounts. The paper was put in the book by the defendant’s secretary, after the testimony had closed, and the counsel on each side had summed up.

The plaintiff’s counsel, in his affidavit, states that-two of the jury have stated to him, that they, in the jury room had read the paper in question, and he claims and charges, that the jury in this case were-improperly influenced by the defendant’s secretary.

It was fully and justly conceded on the argument, that the defendant’s counsel had no complicity in the matter complained of, and that he was in no way a consenting party thereto.

The defendant’s secretary states, that he prepared the paper referred to, as a memorandum for the private use of defendant’s counsel, and at their request, and pinned it to a leaf in the book for safe keeping, after all the testimony had been closed, and argument of counsel completed, and after he had been assured by defendant’s counsel, that the books would not be submitted to the jury, and that when the books were handed to the jury, it did not occur to him that this-memorandum was in one of them.

It is apparent that if this paper was thus placed before the jury, simply by the oversight of the defendant’s secretary as claimed, it was still an improper com munication to the jury, and one for which the verdict should be set aside, unless it is shown that none of the jury read the paper, and that they were not influenced by it.

The history of the law discloses a struggle for centuries, to prevent juries from being approached by improper com munications and influences. Every expedient of human ingenuity has been thus resorted to, in order to effect decisions upon the purity and justice of which society depends for its existence.

It is undesirable to have the long trial of this case repeated, unless we arrive at the conclusion that not to set aside the verdict would establish a precedent, and sanction a transaction which would tend to impair the upright and faithful administration of justice.

The defendant alleges, that this paper thus reached the jury room by the oversight of its secretary, so that, if the verdict is in consequence set aside, it will be a result due to a negligent act on the part of the defendant.

The question arises whether this paper was read by any of the jury. The juryman who carried the books into the jury-room, states in Ms affidavit, that he laid the books on the table in the room, and that they remained there during the entire deliberations of the jury, and that no one, so far as be knew or believed examined either of the books or their contents, or sa w the paper inside the small book, and that neither the paper nor its contents were alluded to in the discussion of the jury. This may be quite correct, and yet it fails to show that the paper was not seen or read by some of the jury. His affidavit simply shows that he failed to observe any of the jury reading it.

The Stenographer’s notes of a colloquy after the verdict, between the plaintiff’s counsel and the foreman of the jury, and apparently two other jurymen, are presented. One of the jurymen stated he saw the paper, but did not read it, and the foreman and another juror state it was not read by any juror. The foreman saw it.

Even if weight is attached to this conversation after the verdict, it fails to show that the paper was not read by any of the jury. It simply shows that two or tlnve of the jury stated in the presence of the others, that the paper was not read by any juror.

This evidence, upon its face, fails to establish that the paper was not read by one or more of the jury.

The paper was there before them, in the jury-room, seen by some, and perhaps by all of them, and the presumption must be, in the absence of more convincing proof to the contrary than that presented, that it was read wholly, or in part, or referred to, by some one of those who saw it.

It was competent for the defendant to offer the affidavits of the jury to sustain the verdict, by showing that the paper was not read. This the defendant has omitted to do (Dana v. Tucker, 4 John. R. 487).

The ancient rule that the delivery of any paper touching the matter in issue by a party to any of the jury after they leave the bar, shall avoid the verdict, was at an early period relaxed in this State, and it is mow held, that if the jury never looked at such a paper, and were not influenced by it, that it afforded no just cause for setting aside the verdict (Hackley v. Hastie, 3 John. R. 252).

In the opinion, Bronson, J., in Wilson v. Abraham, 1 Hill, 209, after a careful consideration of several English and American cases, the principle is sustained, that a verdict should not be overturned, unless there be some reason to suspect that the irregularity may have had an influence on the final result.

The affidavits on this motion fail to show that the paper, irregularly placed before the jury, could not have had an influence on the result, but, on the contrary, it may with reason be suspected that it influenced the verdict.

There appears to be no case where the courts have sustained a verdict upon the facts appearing that are disclosed in the present application. On the other hand, the tendency is to look with distrust upon all irregularities in respect to approaching jurors during the trial of a cause, or after they have withdrawn from the bar to consider' the verdict. It has been held, that where they were approached in such a manner as might have influenced their verdict, it should be set aside, without reference to the source or motive of interference (Nesmith v. Clinton Fire Ins. Co., 8 Abb. P. R. 141 ; Reynolds v. The Champlain Trans. Co., 9 How. P. R., 14; Watertown Bank v. Mix, 51 N. Y. 558).

It is desirable to avoid any relaxation of the existing rules, and, governed by them, it is difficult to see how this verdict can be sustained. The only conclusion I have been able to arrive at is, that the verdict should be set aside, with costs to plaintiff to abide the-result of the action, and a new trial ordered.

Monell, Ch. J., concurred


text:
    MARY E. PORTER, Executrix, &c., Plaintiff and Respondent, v. ELEAZAR PARMLY, Defendant and Appellant.
    Before Monell, Ch. J., and Curtis, J.

      Decided January 4, 1875.
    APPEAL FROM ORDER.
    An appeal to the General Term from an order should be taken-within thirty days after written notice of the order (Oode, % 333). .
    In the case at har, an order of reference was made in the action, April 33, 1873, and a copy of the order served on this-appellant, April 33, 1873, and on the 14th of November, 1874, the notice of appeal was served. In the meantime, the hearing and trial of the action before the referee had been proceeded, with and terminated, and a report made and confirmed, after overruling exceptions to it taken by this appellant.

      Held, That the appeal was without force and validity, because of being taken too late ; Also, That a party can not go on. with the proceedings under an order, and enjoy any advantage under it, without waiving bis right to an appeal from the order (Ubsdell o. Root, 3 Abb. Pr. Sep. 143; Radway n. Graham, 4 Abb. Pr. Sep. 463).
    Motion to dismiss an appeal from an order.

      An order of reference was made on the 22nd of April, 1873, and on the following day a copy of it was served on the appellant. On the 14th of November, 1874, the notice of appeal from this order was served. In the meantime, the hearing before the referee had been proceeded with, a report made by the referee, and confirmed after overruling exceptions to it taken by the present appellant.
    The plaintiff move's to dismiss the appeal from the order of reference.

      Mr. Chandler, for the motion.

      Mr. Vanderpoel, opposed.
   By the Court.—Curtis, J.

This appeal should have been taken within thirty days after written notice of the order, in conformity with § 332 of the Code, so far as it is an appeal from the order of reference of April 22,1873. Whatever right the General Term may have to review this order of April 22nd, 1873, as an intermediate order, that right, can not be exercised in an appeal that is without force or validity.

It appears to be clearly settled, that a party can not go on under any order, and take an advantage from it, without waiving his right to appeal. The administration of justice could not be properly, conducted, if a party could proceed with a trial before a referee, and then, after an adverse result, be held not to have waived the right to appeal, but to be entitled to a,n appeal from the original order of reference, a year and a half after it was served upon him (Ubsdell v. Root, 3 Abb. Pr., 142; Radway v. Graham, 4 Abb. Pr., 468).

It is not claimed on the part of the appellant, on the hearing of this motion, that he was compelled to proceed with the trial in a mode that the law does not allow, nor are the papers upon which the order of reference was granted, before us.

The appeal from the order of reference of April 22nd, 1873, should be dismissed.

Monell, Ch. J., concurred.


author: By the Court.—Monell, Ch. J. Van Vorst, J. (concurring). Sedgwick, J. (dissenting).

text:
    LEWIS ALEXANDER, Plaintiff and Respondent, v. JACOB BENNETT, Defendant and Appellant.
    Before Monell, Ch. J., Curtis, Sedgwick, Van Vorst, and Speir, JJ.

      Decided Jan. 11, 1874.
    I. CONSTITUTIONAL LAW.
    1. Marine court act of 1874, the fourth, section relating to the transfer-of causes to the marine court, is constitutional,

      a Power of the legislature to pass acts authorizing the transfer of causes from one court to another, and affecting remedies-discussed.
    II. Order op removal made under said act oe 1874.
    1. It is final, and can not be reviewed on appeal.

      a. The case of Morehouse ®. Yeager, ante, 50, cited and followed.
    Appeal from an order directing the removal of this-action from this court, for trial, in the marine court of" the city of New York. Heard at the November general term, 1874, before all the judges, except Judge Freedman, from whose order the appeal was taken.
    The action was for the recovery of the sum of two thousand seven hundred dollars, the balance unpaid. of a loan from the plaintiff to the defendant of four-thousand five hundred dollars.
    The answer was a general denial, and a counterclaim of three hundred dollars.
    Upon the following affidavit, and upon the motion of the plaintiff, and after hearing counsel for the defendant, the court made an order, removing the action from this court into the marine court.
    “City and county of New York, ss.: Matthew P. Breen being duly sworn, says he is one of the attorneys for the plaintiff in above entitled action. That this action is brought to recover for moneys loaned and deposited by the plaintiff with defendant. That issue was joined herein by the service of tile-plaintiff’s reply to counter-claim of defendant on August 26, 1874, and deponent says that, he would have brought this suit in one of the inferior courts of' jurisdiction in this suit, could he have done so, as the plaintiff is anxious to have a speedy trial thereof. That plaintiff will suffer great inconvenience and loss if he is-obliged to wait for the trial of this action brought regularly on in its order on the calendar of this court, wherefore deponent prays for its removal to the marine-court of the city of New York.”
    The defendant appealed.

      Sullivan, Kobbie, & Fowler, attorneys, and Algernon S. Sullivan, of counsel for appellant,
    urged;—1_ The order appealed from was made under sec. 4, chap. 545, of the 97th Session Laws of New York,, entitled “An act in relation to the marine court of the city of New York,” passed May 22,1874. This section of the act is unconstitutional. The superior court of the-city of New York (the court of common pleas, and two-other local courts) are continued, with the powers they then had in the state constitution of 1870. The language of section 12, of art. 6, of that constitution is,. that such courts “ are continued with the powers and jurisdiction they now severally have, and such further civil and criminal jurisdiction as may be conferred by law.” If this language means anything, it means that so long as this constitutional renomination of this court stands, that its jurisdiction shall remain unabridged, and the legislature has no right to abridge it. The mode of appeal before the constitution of 1870 was thus: an appeal from an order made at special term, would, in certain cases (of which this is one), lie to the general term of this court. By the constitution of 1870, therefore, this method of practice was confirmed, viz., that all appeals should be from the special term of this court to the general term, and thence to the court of appeals (Code of Pro. § 348). Chapter 545 then abridges this right of appeal to the general term of this court, which right was fixed by the service of summons and appearance in this court. The appellant insists that the suitor can not be deprived of such right without his consent, in the absence of a constitutional amendment. If the case at bar is sent to the marine court, it becomes discretionary in the general term of the court of common pleas, as to the right of appeal to the court of appeals from a judgment of such court. And yet a judgment in the marine court in this cause would be a judgment in a suit over which this court alone has exclusive and entire jurisdiction. After process has been served in this court, the legislature has no power to pass a statute abridging the jurisdiction of this court to the prejudice of suitors summoned to the forum of this court. The legislature may extend this court’s jurisdiction, but can not deprive suitors of the right to travel directly to the court of appeals, according to the way pointed out by law prior to the constitution of 1870, and confirmed by such constitution. Chapter 545 does deprive suitors of such right, and, therefore, abridges the jurisdiction of this court, and is in this respect unconstitutional.
    II. Chapter 545 is a local bill, “in relation to the "marine court of the city of New York.” Section 16 of art, 3, Constitution of New York, 1846, reads: “No private or local bill which may be passed by the legislature shall embrace more than one subject, and that shall be expressed in the title.” Local statutes are those whose operations are intended, to be restricted within certain limits (Dwarris on Stat. 384; 1 W. Blacks. 246 ; Williams v. The People, 24 N. Y. 407). “The provisions of an act in relation to police justices may be considered local.” Thus overruling matter of Wakker (1 Edm. 575). “ An act in relation to fees of the sheriff, and to the fees of referees, is a local act, embracing more than one subject” (Gaskin v. Meek, 42 N. Y. R. 186 ; Vide 38 N. Y. 193, The People of the State of New York v. O’Brien; Also 49 N. Y. 132, Huber v. The People of the State of New York). Chapter 545 is evidently in conflict with this section of the •constitution, for, being a local bill, it proposes to alter the whole system of practice on appeals, in so far as the cases sent from other courts are concerned.
    III. That the interpretation of chapter 545 should ■foe construed in furtherance of justice. An interpretation which leads to the forfeiture of the right of appeal should not be favored (Pearson v. Lovejoy, 53 Barb. 407; 35 How. Pr. 193). An interpretation of chapter 545, which permits the common pleas to determine the propriety of appeals in cases begun in the .superior court is great injustice to suitors.

      Breen & Gearon, attorneys, and Matthew P. Breen, of counsel for respondent,
    urged;—I. The order appealed from was made in pursuance of chap. 545, Laws 1874.

      II. The order of special term should be affirmed with costs.
   By the Court.—Monell, Ch. J.

The legislature of 1874 (ch. 545, Laws of 1874) passed an act entitled “An act in relation to the marine court of the city of New York,” the fourth section of which is as follows : .

“ Any other court of record may, in its discretion, by an order to be entered on its minutes after the joining of issue, send any action pending therein, or that may hereafter be brought therein, to the said marine court for trial; and a certified copy of such order shall be delivered to and filed with the clerk of said marine1 court, and be entered by him on its minutes, and, thereupon, the said marine court shall have immediate1 and exclusive jurisdiction of such action as full and comprehensive in that particular as that of the court from whence the same proceeds.”

The power of an appellate court to review decisions.resting, in part or wholly, in the discretion of the court below, was at one time not supposed to exist. Such decisions were regarded as final, and could not be disturbed. But the Code has designated the orders which, may be appealed from. Among them are any which involve the merits of the action, or affect a substantial right (Code, § 349, subd. 3).

In a recent case in this court (Morehouse v. Yeager, ante, p. 50) we held, that it was immaterial whether the order was discretionary or otherwise, the test, and the only test, of its appealability being,, whether the merits of the action were involved, or a substantial right was affected.

The act referred to allows any court of record, in its = discretion, to remove a pending action into the marine court, and the question is, does the order making the removal affect a substantial right of the appellant %

Reasons for the judicious and wise use of discretionary power, are obvious. Such power is not and can not be governed by fixed or well defined rules or principles. It rests upon constitution, temper, and passion, and often upon caprice, and always must, or should, be directed by the peculiar facts and circumstances which call it into exercise. The judicial power, under the constitution and laws, is so great, that it may oppress as well as benefit. In protecting rights and redressing wrongs, it may be used benignly or to-the injury of suitors; and, therefore, the use of so-great a power should be regulated by wise and prudent counsels, and only in furtherance of justice.

As an original question, we should differ with the-learned judge who made the order. Ho sufficient reason, in our judgment, was furnished for transferring the action to another tribunal. There was no peculiarity in the cause of action which entitled it to a more speedy trial than the large body of similar actions at all times pending in the courts of, this city. And if there was reason to believe the defense was interposed for delay, the action could have been placed on the-special calender, under the rule of this court.

But we think the order final, unless the act authorizing the removal, is in conflict with some provision of' the constitution.

H o substantial right is affected. The action is merely transferred to another tribunal, presumedly as competent to administer justice as this court, and the parties, will have the same opportunities of a fair, impartial and intelligent hearing, as if they had remained here.

As, in a precisely analogous case, the question has-been determined by the court of appeals (Illius v. The N. Y. & New Haven Railroad Co., 13 N. Y. 597), it need not be further examined. That was an appeal from an order removing a cause from the state into the federal court; and it was held not to be appealable, on the ground that no substantial right was affected. The court say, “ Whatever ground of preference the plaintiff may have for one tribunal over another, the right supposed to be affected, must relate to the merits of the controversy in the court below, and these are, in theory at least, as safe in the federal as in the state courts.”

Does the act violate any provision of the constitution %

The first objection is, that the subject of the fourth section is not embraced in the title of the act. The title is, “An act in relation to the marine court of the city of New York,” and the subject of the section, or part of it, is authority to courts of record to transfer actions into that court. In the same section, however, and a necessary part of it, is the provision, that, upon such transfer, the marine court shall have immediate and exclusive jurisdiction of the action. The power or authority to remove, and the actual removal, were necessary to give that court jurisdiction, and it is a subject, therefore, “relating to the marine court.”

It is only necessary that the title express the subject of the act, and not the provisions of the act, or the details by which the objects of the act are to be accomplished (Sun Mutual Ins. Co. v. The Mayor, &c., of New York, 8 N. Y. 241; Brewster v. City of Syracuse, 19 Id. 116; People v. McCann, 16 Id. 58; People, ex rel. Crowell v. Lawrence, 41 Id. 137). No one can ■doubt that a provision for removing actions into the marine court, relates to that court; and the subject •could not be better or more clearly expressed, unless the provision and its details were included in the title, which is never required.

The subject is, therefore, sufficiently, expressed in the title.

But even if it was not so, the act can be upheld Tinder the authority of The People v. McCann (16 N. Y. 58). Assuming that the act is local, and that so much of it as relates to the removal of causes, is not sufficiently expressed in the title, it can be sustained on the ground that general provisions a,re. not void, by reason of being contained in the same act, with other provisions of merely local application. In that case, an act to enlarge the jurisdiction of the general and special sessions of Hew York contained general provisions applicable to all the courts of oyer and terminer in the State.

As the authority to remove causes into the marine court applies to all courts of record in the State, the provision, in one sense, is as general as in the case referred to, yet, upon the authority of that case, it can be upheld.

It is further objected that the act in effect invades the jurisdiction of this court, and by indirection deprives it of some of its constitutional powers.

It is quite true that the constitution (of 1870), in continuing this court with the powers and jurisdiction it then had, placed it beyond the reach of the legislature to diminish or abridge such powers and jurisdiction ; and, therefore, if an effect could be given to the act in question, which could deprive this court, without its consent, of any of its constitutional powers, it would be clearly void. But no such effect can be given to the act. It is permissive merely, and defers to the court itself, to determine whether it will or not deprive itself of jurisdiction. And it is only with the approbation and consent of the court, that the removal can be had..

Courts have always claimed the right, in certain cases, of assuming or declining jurisdiction (McIvor v. McCabe, 26 How. Pr. 257), but it can not be said that by declining jurisdiction in a particular case, which is merely the exercise of a discretionary power, they are deprived of jurisdiction in any other and similar case,, if in the latter they assume it.

The act, therefore, does not diminish, abridge, or deprive this court of any of its jurisdiction, but merely allows the court, in its discretion, to transfer actions pending in it do another tribunal. This is an increase and not a diminution of power.

The legislative power is vested in the senate and assembly, and, except as restricted or limited by the State or federal constitutions, is absolute.

In determining the validity of a legislative enactment, it is only necessary to look into the fundamental law, to see if the powers of the legislature have been exceeded; and if no limitation or restriction is found, the validity of the act is established.

I am not aware of any provision which limits the power of the legislature in respect to the act in question. The marine court was created by the legislature, and its jurisdiction was given to it by the legislature. It has been altered and enlarged from time to time, and may be diminished, or the court itself abolished, at the will of the legislature.

As to the authority given to other courts to transfer causes, it was granted under a power which has always been claimed for the legislature, as necessary to perfect the system of practice in the courts.

Additional tribunals have been created to relieve others. Old remedies have been taken away, and new ones furnished ; and where the obligations of contracts have not been impaired, the legislative power to alter, or even ■ destroy, remedies, has been admitted (Van Rensselaer v. Snyder, 13 N. Y. R., 299 ; Conkey v. Hart, 14 Id. 22). So the legislature may give a new remedy for the enforcement of contracts already made (Hauptman v. Gatlin, 20 N. Y. R., 247). And recently the legislature restricted appeals to the court of appeals, in certain cases (Laws of 1874, ch. 322).

The validity of the several acts of Congress providing for the removal of actions from the state to federal courts, has never, in either courts, been ques"tioned, bat have uniformly been recognized as being within the legislative power of Congress. Yet Congress derives its power only from the implied exclusiveness of the jurisdiction of the federal courts over actions, among others, between citizens of different states, by which it can exclude jurisdiction elsewhere.

From time to time, provision has been made by law for transferring causes to the supreme court from county courts (Laws of 1860, ch. 459); from supreme court to superior court of Buffalo (Laws of 1854, ch. 96, § 17); from district courts to common pleas (Laws of 1857, ch. 344, § 3); from one district to another (Laws of 1850, ch. 15); and, upon consent, from the supreme court to this court (Laws of 1873, ch. 339, § 8).

The act in question, by fair implication from a mass of other similar legislation, which has not been deemed •invalid, was clearly within the legislative power. It does not impair the obligation of any contract; it does not abridge or diminish the jurisdiction or power of this court; it does not even affect the remedy. It merely furnishes another tribunal, governed by the same rules, and administering justice in the same manner.

The argumentum ah inconvenienti must be addressed to the legislature. It is an inappropriate appeal to the courts.

There may be reasons why parties would prefer to remain in the tribunal of their selection. Especially might that be so in removals from the state to the federal courts, where the law is differently administered. And it is urged that in the marine court, the right to appeal is restricted, which, it is claimed, deprives parties of a right subsisting in this court. But if there is any such limitation to the marine court, which is doubtful, it being confined to actions originally commenced in that court {Code, § 11, subd. 3), it was competent for the legislature to impose its effect upon the parties. It has done so in the recent act already referred to {Laws, 1874, ch. 322).

We have no misgivings of the effect of sustaining, the act in question.

The decision at the special term will not be a precedent for any other similar motion ; and while recognizing the competency of the legislature to give us this new and increased power, we shall exercise it sparinglyy, and only in furtherance of justice.

The order appealed from must be affirmed, with, costs.

Curtis, J., concurred.

Van Vorst, J. (concurring).

I agree with the Chief Justice, that the order in question, upon the authority of Illius v. The N. Y. & N. H. R. R. Co., cited by him, does not affect a substantial right, and I concur in his conclusion, that the order appealed from should be affirmed.

Sedgwick, J. (dissenting).

The court of appeals-in Illius v. The N. Y. & N. H. R. R. Co. (13 N. Y. 597), held that an appeal does not lie from an order removing an action commenced in a state court to the-U. S. circuit court, on the ground that the defendant is a citizen of another State, and gave as one reason, that such an order does not affect a substantial right within section 11 of the Code. The court said ‘Moreover, in the view suggested, it did not affect a substantial right within the meaning of the Code. Whatever grounds of preference the plaintiff may have for one tribunal over another, the right supposed to be affected must relate to the merits of the controversy in the court below.”

In De Camp v. The N. J. Mutual Ins. Co. (32 N. Y. Superior Ct. 486 ; Stevens v. The Phoenix Insurance, &c., a later case in the court of appeals (cited from MSS.) is relied on. It is cited to support the conclusion, that when the special term, and the general term refuse to direct the removal under the act of Congress, the court of appeals will review that determination of the inferior courts. Judge Jones says in De Camp v. The N. J. Mutual Ins. Co., that the decison in Stevens v. The Phoenix Ins. Co. establishes “that upon a strict compliance with section 12 of the act of Congress, the state court loses jurisdiction, and the U. S. court gains it without any formal order to that effect, and consequently, if it is attempted to proceed in the State court after such compliance, the fact of such compliance will constitute a defense to be interposed by way-of plea to the jurisdiction, and this, although a formal order of removal has been refused.” Judge Jones then reasoned that whatever could be pleaded,, related to the merits of the action. He so held in a case where the special term refused to remove the cause. In a case where the proper steps for a removal had not been taken, we can see that a plaintiff would have a substantial right of the same character, to demand that the State court proceed to adjudicate upon his claim.

I think, therefore, that even under section 11, we are not compelled by Illius v. The N. Y. & N. H. R. R. Co., to hold that a substantial right of the defendant in this case is not affected by an order which prevents his asking of the court, what, but for the order, he would havé a substantial right to ask, viz., not only that he be freed now and always from the pursuit of the plaintiff, but that he have the affirmative relief claimed by his answer.

But the language of section 11 is markedly distinct from the language of section 349, which regulates appeals to the general term. The subdivision 3, of section 349, is that an appeal from an order at special term to the general term, may be made, “when it involves the merits of the action, or some part thereof, or .affects a substantial right.” Under this section, it is ■clear that there may be a substantial right affected which does not relate to any part of the merits of the controversy. It seems to me that there is substance in defendant’s claim that he shall receive justice, that is, be dismissed from further litigation, as far as plaintiff’s claim is concerned, and have judgment in his favor on the counter-claim. He may get the same dismissal and the same relief in another court of justice, but his right to be relieved in every court where he is compelled to appear, is not a matter of fornq but is substantial. That right to be relieved, is affected by an order which sends the action to be tried elsewhere. Under section 349, to allow an appeal, it is only necessary that a right of the kind described should be affected. The manner and the extent of its being affected is not important, and it is immaterial that the court should suppose or adjudge that he has in the place of the right affected, a right bestowed upon him of equal value. I have, therefore, come to the conclusion that the order appealed from may be reviewed here, in case we further see that we can review an order which by the statute may be made in the discretion of the court.

It has been decided in this court, that the general term should review the action below, even when the order appealed from is made in the exercise of a discretion. The question in such cases is whether the court below used a sound discretion, in a case calling for its exercise. “Discretion must be governed by rule; it must uot be arbitrary, vague and fanciful, but legal and regular” (2 Burr. 25, 39 ; 1 Burr. 570). The same faculties are employed in the use of discretion, as in the adjudication of absolute rights. The only difference is that in the one case, no fixed and general .rules can be applied, and in the other, the law has ■made such fixed and general rules.

In the present case, the plaintiff, moving below for the removal of the cause to the marine court, gave no reason that did not exist in all cases, or at least, very-many on our calendar. I think the court below should not have used the discretion given by the statute in a ■case where no facts were stated as peculiar to it which tended to show that it was expedient that that particular case should be removed. The rule would be different, if the language of the statute described certain classes of cases, assault, slander, &c.., which might be removed. The intent would be evinced to permit removal because of the character of the cause of action.

I therefore think that the order should be reversed. I am further of opinion that the fourth section of the act of 1874, ch. 545, is unconstitutional. The constitution continued this court with all the power and jurisdiction it had at the passage of the constitution (§ 11 of Art. 6). It seems to me that when a cause is removed for trial and determination from this court, the court loses, from the time of removal, jurisdiction of the ■action. If the legislature directs the removal, or ■enables some other body to direct it, it is an attempt to provide that in a certain contingency this court shall have no power, to exercise that jurisdiction which was possessed at the passage of the constitution. It is said that empowering this court to make an order of the kind in question, is giving additional power, is an increase of j urisdiction. But if in that one regard a new power is gained, the exercise of the power is suicide of jurisdiction, as it puts an action in a position where the court will have no power to adjudicate in it.

In my view, this court can not consent that the constitutional provision referred to shall not have effect in a specified case. The constitution forbids the superior ■court in the same terms it forbids the legislature lessensening the powers of the court. The constitution says, the superior court shall be continued in its jurisdiction. This court had no power of its own, before the statute, to remove a cause pending in it to another court. The-legislature had no power to cut off by statute the jurisdiction of a specified case, or of a class of cases, at any stage of the litigation. It can not give to this court power to do what the constitution impliedly says-shall not be done. Neither the legislature nor the court can do what will result in this court not being continued in its jurisdiction.

On both the grounds thus imperfectly stated, I think the order appealed from should be reversed.

Speib, J., concurred in the foregoing opinion of’ Sedgwick, J.


author: By the Court.—Monell, Ch. J.

text:
    EDWARD C. GRAHAM, Plaintiff and Appellant, v. ELLA N. HOY, Executrix, &c., Impleaded, &c., Defendant and Respondent.
    I. CORPORATIONS.
    J. StoOK-HOLDEBS, WHEN TBUSTEBS EOB CBEDITOBS OB COMPANY.

      a. When they are in the actual possession, and have under their immediate control the property of the corporation, they are-trustees of its creditors in respect to such property.

      a. Therefore, they are liable for any act done by them in disposing of such property to the injury of the creditors.

    1. That the disposition of the property, e. g., a sale as-between the stockholders and the vendee, was perfectly valid, and passed to the vendee a good title, not only as-against such stockholders and the company, but also-as against the creditors of the company, does not affect such liability of the stockholders.
    H. PARTIES DEPENDENT TO ACTION IN EQUITY.
    1. TbUST, BBEACH OB-ACTION BOB, BY CESTUI- QUE-TBUST.
    The trustees who have committed the breach are jointly and severally liable.

      Before Mobell, Ch. J., and Cubtis, J.

      Decided January 11, 1875.
    The plaintiff may join all as defendants, or may proceed against one only, or against as many of them as he sees fit, and may join the representatives of a deceased trustee, or of deceased trustees, with such of che surviving co-trustees as he proceeds against.

      a. Bulb at law stated.
    Appeal from judgment sustaining a demurrer to the complaint.
    The complaint alleges that the defendant, Ella 1ST. Hoy, is the executrix of James Hoy, deceased.
    That the Frostburgh Coal Company was a corporation created by the State of Maryland.
    That one Frost recovered a judgment in the courts of Maryland, against said company, upon which an -execution was issued and returned unsatisfied, and which judgment has been assigned to the plaintiff.
    It is then alleged that the defendants (except Ella M. Hoy), and James Hoy, now deceased, made an instrument in writing under their hands and seals, as follows:
    “ Whereas, the whole capital stock of the Frost-burgh Coal Company is now owned by the several persons following in the number -¡ May'íefw6í". } of shares set opposite to their respective names, viz. :
    Mames. Mo. of Shabes.
    Livermore, Clews & Co....... ..... 2,373
    Moses B. Bramhall........... ...... 1,500
    do. ........... ...... 275
    David Stewart............... ...... 302
    James Hoy................. ...... 300
    Henry Delafield.............. ..... 200
    4,950
    Stamp 25 cts. May 16, 1864.

      “And whereas the said Frostburgh Coal Company, by the direction of the said stockholders, have subscribed for twelve thousand shares of the capital stock of the-Consolidation Coal Company of Maryland, and in payment therefor, have by an indenture of conveyance, bearing even date herewith, granted and conveyed to-the Consolidation Coal Company, all the estate, real and personal, of the Frostburgh Coal Company, excepting the cash and cash assets, and debts belonging to said company, owned prior to May 1,1864, and the coal received prior to that day :
    “And whereas, for the purpose of collecting and securing the property and assets so reserved, and for the winding up of the affairs of the said company, for the benefit of the stockholders and creditors thereof, it is deemed advisable to continue the rights and interests of the present stockholders in the several proportions above specified :
    “And whereas it has been agreed between said stockholders and the said Consolidation Coal Company,, that all the stock of the said Frostburgh Coal Company shall be assigned and transferred to the Consolidation Coal Company, when the present stockholders shall have realized the assets of the Frostburgh Coal Company, and the debts of said company shall have been fully paid and satisfied :
    “Now, therefore, we, the undersigned, being the-several stockholders of the Frostburgh Coal Company, above named, in consideration of the premises, and of' the sum of one dollar to each of us in hand paid, doll ereby covenant and -agree to and with the Consolidation Coal Company, that we will transfer and assign, unto the said Consolidation Coal Company, the whole-capital stock of the Frostburgh Coal Company, whenever and as soon as the assets and property of such last, named company, and the stock of the Consolidation Coal Company, which the Frostburgh Coal Company is entitled to receive by virtue of their subscription, as-aforesaid, shall have been distributed among the stockholders of the Frostburgh Coal Company, and the debts-of said company shall have been paid in full.
    “ Witness our hands and seals, this day of May,, one thousand eight hundred and sixty-four.
    “LIVERMORE, CLEWS & CO.,.[l. s.]
    “M. B. BRAMHALL, [l. s.]
    “D. STEWART, [l. s.]
    “ JAMES HOT, [l. s.]
    “ HEFTRY DEL AFIELD, [l. s.j ”
    It is then alleged that said defendants (except Ella FT. Hoy) and James Hoy, did become possessed, in the city of Hew York, of all the personal estate, all the cash, and cash assets and debts belonging to said Frost-burgh Coal Company, to a large amount, and more than was required to pay all the debts of the company, for the benefit of the creditors of the company, and became trustees of such funds, assets, and property, for the benefit of the creditors of the company, but that, in violation of their duty, they transferred a portion of said property, money, and assets to the Consolidation Coal Company, and converted á portion of them to their own uses, without paying the debts of the said Frostburgh Coal Company. And that since such transfer of the property, the said company has suspended its ordinary business, and is dissolved ; and the said defendants (except Ella H. Hoy), and James Hoy, had the management and direction of its affairs at the time of such dissolution.
    The relief prayed for, is,
    I. That the defendants account, under direction of the court, for the property received by them, as aforenamed.
    II. For the payment to him of nine thousand four hundred and sixty-eight dollars, and two cents, and. eight dollars and twenty-five cents costs, with interest thereon from the 30th day of April, 1867, and costs, out of said funds, or out of any funds which they have, ■or may collect.
    III. That the defendants proceed without delay to discharge the trusts devolved upon them in the premises.
    IV. That the plaintiff may have such further and other relief, both by final judgment and interlocutory order, as he may in equity be entitled to, and as to the court shall seem just.
    The defendant, Ella N. Hoy, who, as executrix of the last will of James Hoy, deceased, was made a party, demurred to the complaint, assigning the following objections to it:
    1. It does not state the facts sufficient to constitute a cause of action.
    2. It does not show that the defendant joined in or executed the covenant of May, 1864, therein mentioned.
    3. It shows that the other defendants are the surviving covenanters in said covenant.
    4. It shows that the covenanters were joint contractors and sureties.
    5. This defendant, as executrix of James Hoy, is not liable to be sued in this action jointly with the other defendants on or by reason of said covenant.
    6. The death of James Hoy, one of the joint sureties in said covenant, took away all cause of action ■thereon.
    7. The complaint does not state that this defendant became possessed of the personal estate, cash, cash assets or debts therein mentioned, or became trustee thereof, or came under any duty to pay debts, or the plaintiff’s claim, or violated any duty, or committed any fraud, or transferred any portion of said property, ■money, or assets, or converted any part thereof to her own use.

      8. The complaint shows that the other defendants -charged with the matters last above referred to, have survived said James Hoy.
    9. This defendant, as executrix of James Hoy, is not liable to be sued in this action jointly with the other defendants for or by reason of any of said matters last above mentioned, and that the said other defendants are the surviving trustees.
    10. The complaint shows that others than the plaintiff are creditors of the Frostburgh Coal Company, and interested in said covenant and paid trust, and it shows no reason why they are not joined as plaintiff.
    11. Said other creditors are necessary parties to an action brought upon or for the matter sued upon in this action, and there is a defect of parties in this,—that said other creditors are not made plaintiffs or defendants.
    The demurrer was sustained at special term, and judgment entered in favor of the defendant, Ella H. Hoy.
    The plaintiff appealed.

      John Hewitt, attorney, and of counsel for appellant,
    urged:—
    I. This is an equitable action to charge the defendants, as trustees of the stock and assets of the Frost-burgh Coal Company, with the payment of a debt of that company (Tinkham v. Borst, 31 Barb., 407; Thornton v. St Paul & Ch. R. R. Co., 45 How., 416 ; Laws of 1873, ch. 239).
    II. The capital stock and assets of a corporation ■are a trust fund for the security of its creditors and the payment of its debts. (Man v. Pentz, 3 Comstock, 415; Tinkham v. Borst, 31 Barb., 407 ; Nathan v. Whitlock, 9 Paige, 152; Wood v. Duemmeo, 3 Mason, 308 ; Spear v. Grant, 16 Mss. 92 ; Case v. Grant, 15 Id.,
      505; 2 Story Eq., (9) sec. 1252; 6 Paige, 304; 4 Id.,, 127, 134).
    III. Defendant Hoy’s testator was liable, antecedent to, and independent of the contract set out in the complaint, and his liability was joint and several in. equity, and having received the benefit of the company’s property, his estate is liable for its debt (York v. Peck, 14 Barb., 644; Lane v. Williams, 2 Vern., 292 ; Underhill v. Howard, 10 Ves., 209, 227; ex parte Kendall, 17 Id. 520 ; Story Eq. Jur., secs. 162, 164). Whenever a Court of Equity sees that by a contract joint in form, the real intent of the parties was that'it should be joint and several, it will give effect to such intention (2 Williams on Ex’rs., 5 Eng. Ed. 1580 ; Lane v. Williams,, Vern., 277, 292). The alleged assignment of the contract could transfer no covenant to the plaintiff on. which to base an action at law, aud his only remedy is. by a suit in equity (Pope v. Cole, 55 N. Y. R., 125).
    IV. The executrix of James Hoy, deceased, is a necessary party defendant to enable the court to make a complete and final judgment in this action. Should the other defendants be compelled to pay this claim, she would be liable to a contribution (Sherman v. Parish, 53 N. Y. R., 483 ; Code, secs. 118, 119, 122).
    V. Defendant Hoy’s testator was a wrong-doer, and therefore his liability several.
    Tracy, Olmstead, & Tracy, attorneys, and Charles Tracy, of counsel for respondent,
    urged:
    I. The instrument sued on is a joint obligation of all who signed it (Platt on Covenants, 117, 118). If the instrument had been, in form, joint and several, this action is based on it as joint only, and the plaintiff has elected to treat it as joint for the purposes of this, suit.
    II. James Hoy, the testator having died before this action was brought, the action will lie only against the' survivors. The executors can not be joined without the plaintiff showing in his complaint that all the survivors are insolvent (Voorhis v. Childs Ex., 17 N. Y., 354; Platt on Covenants, 133 ; Voorhis’ Code, 106, Notes, § 118).
    III. The testator, James Hoy, was only a surety; and therefore neither his estate nor his executrix is liable (Gretty v. Binsse, 49 N. Y., 385, 388, and cases therein cited ; Fielden v. Pickersgill, 6 Blatchford, 524; Pickersgill v. Lahens, 15 Wallace, 140).
   By the Court.—Monell, Ch. J.

I think the learned judge below was in error in supposing that this action is upon the instrument or agreement set out in the complaint.

That is an agreement between the stockholders of the Frostburgh Coal Company, in which they agreed, among themselves with the Consolidated Coal Company, to transfer the property of the former company to the latter company. It contains no covenant or obligation which can be enforced by the creditors, and therefore no cause of action can be predicated upon it. The parties to it, comprising all the stockholders, had a right, probably, to make such an agreement, and to transfer to the other company all the property owned by them. They not only represented, but actually owned the company, and were not bound to consult the-wishes or obtain the consent of any one. And, doubtless, by such transfer the new company obtained a good title, not only as against the old company, but, also as against the creditors of the old company.

But while the stockholders could lawfully make the-transfer, it by no means follows that they are exempt from liability to the creditors of the old company, if by reason of this act, the creditors were deprived of the means of collecting their debts,

The stockholders of a corporation, who are in the actual possession of, and have under their immediate control, the property of the corporation, are trustees, in respect to such property, of the creditors of the corporation ; and any act of theirs, in disposing of such property, to the prejudice and injury of the creditors, will render them liable to the creditors.

Mr. Justice Story, among the implied trusts mentions (2 Story Eq. § 1252), the case where the property of a private corporation is deemed a trust fund for the payment of the debts of the corporation. He says, creditors have a lien or right of priority of payment on it; and if the corporation is dissolved, the creditors may enforce their claims against any property of the corporation which has not passed into the hands of a tona fide purchaser, “ for such property will be held affected with a trust primarily, for the creditors of the company.” And see Mumma v. The Potomac Co. (8 Peters, 286).

It is quite clear, I think, that the only cause of action set forth in the complaint, grows out of the act of the defendants, as trustees of an implied trust, in disposing of the company’s property, and the only reason or purpose for setting out the agreement was, to furnish the evidence of the breach of the trust with which the defendants were charged ; and not as laying a foundation for the action. So that, had it been left out, and the allegation had merely been, that having possession of the company’s property, the defendants had transferred a portion, and converted another portion, the complaint would have sufficiently stated what I regard as the only cause of action. And for such a cause, an action is maintainable (Tinkham v. Borst, 31 Barb. 407; Bangs v. Blue Ridge R. Co. 45 How. Pr. R. 169 ; Mann v. Pentz, 3 N. Y. R. 415).

In Mann v. Pentz, it was held that the creditors of a dissolved corporation had a remedy against the stockholders to recover their unpaid subscriptions, on the ground that “ the capital stock of a corporation is a trust fund for the security of its creditors.” Referring to some cases in Massachusetts, and to Nathan v. Whitlock (9 Paige, 152), Judge Pratt says (p. 433) “In these cases, the corporations had attempted to distribute their stock among their stockholders, leaving debts against the corporation unpaid, and it was held, that creditors in proper suits might compel such stockholders to refund sufficient to pay these debts.”

The case of Tinkham v. Borst was very much like this case. The defendant, the principal, if not indeed the only stockholder of a corporation, appropriated its assets to his own use, leaving debts of the corporation unpaid, and it was held the creditors had a lien on its assets for the payment of their debts, and could maintain the action. And, although in that case the defendant was charged with a fraudulent conversion of the assets, Judge Mullir says (p. 411) it is not material how they came into his hands, unless the holder has acquired a higher or better equity to such assets than the creditors. Nor is it material whether the person holding them, came by them fairly, or by force or fraud.

Having ascertained the nature of the stockholder’s liability, let us see whom the creditor’s must, or may, pursue to enforce it.

The disposition of the assets of the corporation by the stockholders, was alleged to have been their joint act. They all united in the transfer, and for such act they rendered themselves liable for a breach of the trust which, in respect to such property, had been raised in favor of creditors.

At law it is probable that a joint action only could be maintained, and in that case, only the survivors could be sued. But the rule is otherwise in equity, where obligations and liabilities, joint at law, are frequently treated as joint and several (1 Story Eq. §§ 162, 168, 164).

The rule at law is definitely settled against uniting the representatives of a deceased joint debtor with the survivors, unless upon allegations of insolvency (Pope v. Cole, 55 N. Y. 124). And that is so irrespective of the question, whether there was at the time of the death of the joint debtor any joint property, owned by the debtors, which vested in the survivors.

The liability of trustees for a breach of their trust, where they all unite in the breach, is several as well as joint, and the cestui que trust, seeking relief against the breach of trust, may proceed against all or either of the trustees (Gilchrist v. Stevenson, 9 Barb. 9, 16), and the rule which requires the remedies at law to be exhausted against the surviving joint debtor, has no application.

The stockholders in this, case having’ made themselves severally liable as trustees, the right to pursue the representatives of a deceased trustee in an action in equity is fully recognized in Pope v. Cole (ubi sup.), and in such an action it is proper to unite the surviving co-trustees (Bailey v. Inglee, 2 Paige, 278 ; Story Eq. Pl. § 169).

The cause of action stated in the complaint, being upon the liability of the defendants as stockholders, and therefore as trustees for the creditors, it was merely necessary to aver that they had wrongfully—wrongfully in respect to the trust—disposed of the company’s property; the insolvency of the corporation, and a deficiency of assets to meet its liability. All this is sufficiently alleged, and the action being to recover a ■debt for which the stockholders had made themselves liable, it was proper to unite in the action the representative of the deceased stockholder.

If these views of the nature of the defendant’s liabilily are correct, the complaint, as a pleading, is sufficient, and the facts stated therein constitute a cause of action against the several persons who are made parties defendants therein.

The judgment in favor of the defendant Ella Nora Hoy, sustaining the demurrer to the complaint, should be reversed, with costs.

The defendant should be allowed to withdraw her ■demurrer, and answer on payment of all costs since the demurrer was served.

Curtis, J., concurred.


text:
    JAMES O’BRIEN, Sheriff, &c., Plaintiff and Respondent, v. THE COMMERCIAL FIRE INSURANCE COMPANY, Defendant and Appellant.
    I. INSURANCE, EIRE.
    1. Clause in policy requiring the assured to produce Ms hooks of account, and other vouches and. certified copies of all bills and invoices, the originals of which have been lost, is sufficiently complied with if

    the assured furnished all the information he had, made no concealment, furnished copies of all bills and invoices that he had in his possession, and produced any and all invoices and other papers under his control, or that he could reasonably get, and acted in good faith

      he is not hound as matter of law

    to send to persons from whom he was in the habit of purchasing and obtain new invoices, but he is bound to procure everything that he reasonably can.
    3. demise in policy that if the premises shall become meant and unoccupied, without the assurer’s assent, the policy shall be void.

      1. When not to be considered as matter of law vacant and-unoccupied under this clause.

      a. The premises do not as matters of law become meant and unoccupied by the occasional and necessary absence therefrom of the assured, his family, and servants.
    1. It is a fact, however, which may be considered in connection with other matters as bearing on the question, as to whether there was an intent to leave permanently.
    8. Clause in policy that if premises shall be occupied or used so as to increase the rish, the policy shall be void.
    1. The assured’s leaving the premises closed during ordinary business hours, and being absent during the twenty-six days prior to the fire, and engaging with his clerk in business at another place eighty miles distant, will not under this alamse vitiate the policy ;

      especially

    when there is no evidence that by reason thereof the rish was increased.

    but,
    if the assured upon leaving the premises closed on the last-occasion before the fire did not intend to return and carry on-business in a regular and usual course, the policy would be vitiated under the abandonment clause.

    4. Negligence of assured, in the absence of fraud, will not prevent a recovery, even though it be very great in degree, n. EVIDENCE.
    1. Instrument sued on, non-production oe.
    1. Although a plaintiff neither produces the instrument, nor after excusing its non-production introduces secondary evidence of its contract, yet the complaint will not be dismissed for that cause,
    when the assured admits tne making of the instrument, and the instrument itself is put in evidence by the defendant, and was in the hands of plaintiff’s agents, one of whom wag-examined as a witness in defendant's behalf.
    IH. ATTACHMENT AGAINST PROPERTY.
    1-. Suit by sheriee to recover attached claim.
    1. When to be deemed commenced.

    At the time of the service of summons in the suit.
    NOT
    at the time of the service of the attachment.

      Before Monell, Ch. J., and Curtís, J.

      Decided January 4, 1875.
    Appeal by defendant from a judgment, and from an order denying a motion for a new trial.
    This is one of four actions brought in this court by the plaintiff, to collect four policies of insurance for two thousand five hundred dollars each, by virtue of seven warrants of attachments against E. S. Candler, Jr.* the party insured. The defendant’s answer admits making the policy, but denies knowledge of the fire,' and due notice and proof of loss, and alleges false representation and overvaluation in obtaining the policy, and increase of risk thereafter by leaving the store without protection.
    The policy contained the following clauses: “If the above mentioned premises shall be occupied or used so as to increase the risk, or become vacant and unoccupied, or the risk be increased by the erection or occupation of neighboring buildings, or by any means whatever, within the control of the assured, without the assent of this company, indorsed hereon ; then and in every such case this policy shall be void.”
    “The assured shall, if required, submit to an examination or examinations under oath by any person appointed by the company, and subscribe thereto when reduced to writing, and shall also produce their books of account and other vouchers, and exhibit the same for examination at the office of the company, and permit extracts and copies thereof to be made ; the assured shall also produce certified copies of all bills and invoices, the originals of which have been lost, and shall exhibit all that remains of the property which was covered by this policy, damaged or not damaged, for examination by any person or persons named by the company.”
    At the close of plaintiff’s case, defendant moved for a dismissal of the complaint on the ground (among others) : That plaintiff had failed to produce and put. in evidence the policy of insurance upon which the action was brought, and had failed to supply any. evidence to excuse the non-production of it, and had not given or offered secondary evidence of its contents ; which motion was denied, and defendant excepted. On the close of the evidence on both sides, defendant moved for a dismissal of the complaint, on the following (among other) grounds:

      First. That such proofs of loss as have been furnished, did not comply with the terms and conditions of the insurance, and that Candler, on whose account the action was sought to be maintained, had neglected or refused to comply with the said terms and • conditions in respect to furnishing such proofs as were required, and also in respect to furnishing bills, vouchers, inventories, and other proofs and information, as required of him by defendant or its agent.

      Second. That the last pretense of proofs was served after February 11, 1869, from which time sixty days must elapse before suit could be brought, or any claim under the contract would mature. That this action must date from the time the first attachment was issued. That it did not appear in evidence that such proofs were served more than sixty days before any of the attachments were issued.

      Third. ' That the non-occupancy of the premises at and for some time previous to the fire, as disclosed by the evidence, was a breach of warranty contained in the policy, and rendered it void.

      Fourth. That such non occupancy was a manifest increase of the risk, and avoided the policy.

      Fifth. That the risk was increased by means within the control of the insured, in withdrawing the occu- ■ pancy of the store at night, either by his clerk, or any other person.

      Which motion was denied, and defendant excepted. Defendant’s counsel thereupon requested the court to charge as follows :
    “ If the jury believe from the evidence that the risk insured was increased by any means whatever within the control of Candler, and during the pendency of the policy, then their verdict must be for the defendant.”
    .” If the jury believe from the evidence that, in leaving the store-house closed during ordinary business hours, and during the days or time after October 1, 1868, as shown in the evidence, and being absent, and finally with his clerk engaged in business in another place eighty miles distant, the risk to the said store premises of being burned by fire was increased, then their verdict must be for defendant.”
    The court refused to charge as requested, and defendant excepted to such refusal.
    The court among other things charged :
    “ As to the other point made by the counsel respecting these preliminary proofs that Mr. Candler did not furnish duplicate copies of the invoices, I differ with him as to its being a question of law, and I shall leave it with you as a question of fact. The insured was bound to furnish copies of all bills and all invoices that he had in his possession. If they have shown to you by evidence,- or it appears by circumstancés that they were burned, the insured was not bound to send off to the persons from whom he was in the habit of purchasing, :and require new statements of the items ; he was only bound to furnish the contents of the invoices sent to him, so far as his memory served. For instance, as matter of illustration, if you find from the facts of the case that, although his invoices were burned, he still knew enough of the facts of the case as to the goods sent him to go into greater particulars than in fact he did, and he intentionally omitted to do so, was evasive, and made the answers he did as an excuse simply not to furnish all the information he could, then he has not complied with all the conditions of the policy. But if, on the other hand, he furnished all the information he-had, and made no concealment, then he has complied with the conditions of the policy, and so far as that point is concerned, is entitled to recover. I add that he-was bound to produce any invoices or other papers called for under his control, or that he could reasonably get; and also, say, as matter of law, he was not bound to send off to persons from whom he was in the habit of purchasing, and require new statements of the items, but if the facts of the case show he could reasonably procure anything, he was bound to do so.”
    To which the defendant excepted.
    The court further charged :
    “By the occasional and necessary absence of Candler from the store, or its being temporarily closed, as-testified to, the premises did not become vacant and unoccupied, in the sense contemplated by the conditions of the policy. That is the law. His leaving the store, as testified, temporarily, within the ten days or two weeks before the fire occurred, is only a fact that you can consider, to ascertain whether, on Thursday or Friday, he meant to leave permanently.”
    To which the defendant excepted.
    The court further charged :
    “If Candler acted in good faith, and endeavored to-comply with the conditions of the policy as to service of proofs of loss, and furnished such as he could, he did. all that the policy required.”
    To which defendant excepted.
    The jury rendered a verdict for plaintiff for the full amount claimed. Defendant thereupon moved for a new trial on the minutes, which was denied. Judgment was thereafter entered on the verdict. Defendant appealed from the judgment, and the order denying the motion for a new trial.

      The evidence is sufficiently adverted to in the opinion.

      Raymond & Courson, attorneys, and George W. Parsons, of counsel for appellant.

      Brown, Hall & Vanderpoel, attorneys, Wm. W. Badger & Livingston K. Miller, of counsel for respondent.
   By the Court.—Curtis, J.

That there had been & fire, and that the defendant made the insurance, was shown without dispute at the trial. The defendant claims that the court erred in submitting the question in respect to the proofs of loss to the jury as a question of fact instead of law. The defendant insisted that the plaintiff should have furnished certified copies of all bills and invoices relating to his loss. There was evidence that the papers were burned at the fire. The -court charged that if the jury believed from the evidence that Candler neglected or omitted to furnish, on the written requests of defendants or their agents, any vouchers, inventory or inventories, duplicate bills of purchases, copies of invoices of purchase, or any other statements touching his loss, which it was in his power to furnish, then the loss under the policy had never become payable, and plaintiff can not recover; and that if he had not done in this respect all that he could, and that was reasonable under the circumstances, he was not entitled to recover.

It was claimed by the defendant, that the evidence •showed that there had been an inventory made since the making of the one referred to in the preliminary proof of loss, and which the plaintiff did not furnish pursuant to the call made upon him for it. The court charged that if the plaintiff had made such an inventory, and did not furnish it, he was not entitled t'o recover, and that he was bound to furnish all the information he could. There was conflicting testimony as-to whether the plaintiff had furnished all those papers- and copies of papers, and information, that he could furnish. A question of fact arose upon the evidence, which was submitted to the jury, with proper instructions for their guidance, according as they should determine it.

There was also some conflict of testimony as to the-alleged false representation, and over-valuation in obtaining the policy, and also as to the amount and value of the property destroyed by the fire. All this evidence was submitted to the jury clearly and fairly by the court, and they were instructed that if Candler committed any fraud, if he over-estimated the goods, if he attempted to deceive the defendant in his preliminary proofs, if he presented false evidence in any way, if he swore falsely or procured false testimony, the plaintiff was not entitled to recover anything.

The requests of the defendant to the court to charge were complied with, or substantially complied with, except in one respect, to be presently considered.

Upon the questions of fact thus submitted, the jury appear to have found for the plaintiff. After a consideration of the evidence, conflicting as it is in many respects, it is impossible to concede, as the defendant claims, that it fails to support the verdict, and that there should be a new trial granted for that reason.

The evidence showed that a week or ten days before-the fire the store was kept closed mostly during the days, and no one slept there at night. It appeared Candler was absent with his clerk at another store, ancl that Tomlinson, who had quit the business but made Candler’s store his headquarters, and sold for him> when he and his clerk were absent, and who lived in his house, was at that time confined to his bed by illness. The defendant requested, the court to charge-that if the jury believed from the evidence that, in leaving the store-house closed during ordinary business-hours, and during the days or time after October 1, 1868, as shown in the evidence, being absent, and finally with his clerk engaged in business in another plane, eighty miles distant, the risk to the said store premises-of being burned by fire was increased, then their verdict, must be for defendant

The defendant also requested the court to charge that if the jury believe from the evidence that the risk insured was increased by any means whatever within the-control of Candler, and during the pendency of the policy, then their verdict must be for the defendant.

These are the requests the court refused to charge, and to which refusals the defendant excepted. There were no provisions in the policy requiring the "store to be kept continuously open, or that a person should sleep there at night, and no obligation was incurred to that effect by the plaintiff.

The court, however, charged that if the jury believed, from the evidence that Candler, after leaving his storehouse closed on the last occasion before the fire, did not intend to return to it again and carry on business-there in a regular and usual manner : then, within the meaning of the conditions of this insurance contract, the premises became unoccupied, and.their verdict must be for the defendant, but that the occasional and necessary absence of Candler from the store, or its being temporarily closed, as testified to, was not becoming- “ vacant and unoccupied ” in the sense contemplated by the conditions of the policy. That was the law, and that his leaving the store as testified, temporarily, within the ten days or two weeks before the fire occurred, is only a fact for the jury to consider, to ascertain whether, on Thursday or Friday, he meant to-leave permanently.

The court properly instructed the jury as far as the-absence of Candler related to the provision in the policy, as to the premises becoming vacant and unoccupied. There was no error in declining to charge those requests, especially as there was no evidence of an increase of risk, by reason of Candler’s absence, or by reason of not having a person sleep at night on the premises, or for any cause whatsoever. If the evidence did establish the existence of negligence, even very great in degree on the part of the insured, or those acting under him, and occasioning the loss, yet in the absence of fraud the loss is covered by the policy. Mr. Justice Stobt, in the Columbia Ins. Co. v. Lawrence, 11 Peters, R. 518, says, “ that a loss by fire occasioned by the mere fault and negligence of the insured, or his servants or agents, and without fraud or design, is a loss within the policy,” and states that this doctrine was discussed and adopted by the court in The Patapsco Ins. Co. v. Coulter, 3 Peters R. 222. In St. John v. The American M. F. and M. Ins. Co., 1 Duer, 381, this was considered the correct rule; and in Gates v. The Madison Ins. Co., 5 N. Y. R. 478, the reason why it should be so as one of the very objects of insurance, to protect the insured against his own negligence and that of others, is discussed ; and this decision ■is followed in Matthews v. The Howard Ins. Co., 11 N. Y. R. 14, and Judge Denio mentions in the opinion, that the supreme court had formerly held a contrary doctrine citing Grim v. The Phoenix Ins. Co., 13 John. 451.

The objection that the plaintiff did not produce the policy of insurance on the trial, is not of much force. The answer admits the making of the policy, and it appears in the case as one of the Exhibits on the defendant’s part. It was in the hands of Bryce & Company, who were the plaintiff’s agents in this city at the time of the insurance, and one of whom, James Bryce, was examined as a witness on the part of the defendant.

The defendant objects, that this action was prematurely brought, that it should date from February, 1869, when the attachment was served, instead of from its actual date in June, 1869, and that consequently if commenced in February, 1869, it was commenced before the expiration of the sixty days from the receipt of the proofs in conformity with the condition of the policy. The defendant errs in regarding this suit commenced by the sheriff in June, 1869, under the warrants of attachment, as a part of the same proceedings as those in which the attachments were issued in February, 1869. The claim of Candler against the defendant, whatever it may have been in February, 1869, was levied upon by the attachments, and this subsequent action was commenced by the sheriff to protect and enforce that claim against the defendant, and when the judgment and costs in the attachment suits are satisfied, the code (Sub. 4, § 273) requires the residue of the attached property, or the proceeds thereof, to be delivered over by the sheriff to the defendant in the original attachment suits. There is no adequate reason for sustaining the objection and holding that the commencement of the present action should have been antedated to the time when the attachment suits were commenced.

There are several exceptions during the progress of the trial to rulings of the court as to the admission of evidence, but none that seem to constitute a sufficient ground for granting a new trial.

The judgment and order appealed from should be affirmed, with costs.

Monell, J., concurred.