author: Follett,. J.:

text:
    Julia A. Shaw, Respondent, v. Agnes Clare Bryant and Others, Appellants, Impleaded with The Farmers’ Loan and Trust Company of the City of New York.

      Comparison of handwriting with genuine handwriting of the alleged forger in evidence for another purpose — infants'living at a hotel with the father — hotel-beeper need not show the exact amount chargeable to each — hom'd of’a governess.

    Prior to the passage of chapter 36 of the Laws of 1880, it was the rule in the State of New York that comparisons might he instituted "between a disputed signature and other writings, which had been shown to bo genuine, and which had been admitted as evidence in the case upon the issues involved, and not solely for the purpose of comparison.

      In an action brought prior to the passage of chapter 555 of the Laws of 1888, which enlarged the scope of chapter 36 of the Laws of 1880, the plaintiff claimed that a release purporting to have been executed by the plaintiff’s agent, upon which a defense of accord and satisfaction was based, was a forgery. It appeared that an exhibit in the case, admitted to be in the genuine handwriting of the person whom the plaintiff charged with the forgery of the release, was received in evidence without objection, and not solely l'or the purpose of a comparison of handwriting.

      Held, that, after such admission, a comparison might be made between the exhibit and the disputed release and its signature, in order to enable the plaintiff to establish affirmatively that the release was in the handwriting of the person charged with having forged it.
    When two infants are living with their father, who describes himself as their general guardian, at a hotel conducted upon the European plan, the hotelkeeper is not bound to show as a condition of recovery against the estate of the infants, how much should be charged against each one for the ordinary expenses of living.
    Where a governess has been employed for such infants, and the father makes no proof as to whether or not he agreed to pay all or any part of the charges for the meals and room furnished to the governess, and it is impossible to determine the cost of the meals eaten by her, it is not erroneous to divide the expenses incurred upon her behalf equally between the father and his children.
    Appeal by the defendants, Agnes Clare Bryant and others, from . a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 9th .day of November, 1894, upon the report of a referee.

      George Norris and D. J. Goughian, for the appellants.

      EseTc Oowen, for the respondent.
   Follett,. J.:

This action was begun June 29,1885, to charge the funds belonging to Agnes C. Bryant and Amanda I. Bryant, infants, in the custody of the Farmers’ Loan and Trust Company, with the value of board and rooms furnished them and for money advanced and expended for necessaries ; also, to recover a judgment against Carolan O’Brien Bryant for board and rooms furnished and money advanced to him. The action was tried before a referee and a judgment recovered by the plaintiff, which was reversed. (65 Iiun, 57.) Afterwards the Special Term granted leave to serve an amended complaint, which order was affirmed. (20 N. Y. Supp. 785 ; S. C. sub. nom., Shaw v. Grant, 49 N. Y. St. Repr. 404.) The infants became of age before the trial which resulted in the judgment under review, their estate was transferred to them and the action was discontinued against the Farmers’ Loan and Trust Company.

Carolan O’Brien Bryant is the father of Agnes C. Bryant and Amanda I. Bryant, who, in 1882, were infants, Agnes C. then being about fourteen and Amanda I. about thirteen years of age. The mother of the infants died before 1882. In March, 1882, the infants became entitled to $180,000 ($90,000 each) from the estate of John Anderson, their maternal grandfather. From 1880 to 1890 the plaintiff was the proprietor of the Grand Union Hotel in the city of New York, and between July 17, 1882, and April 2, 1885, the defendants occupied rooms in and boarded at that hotel, and during a portion of that time the young ladies had a governess, who also roomed and boarded there, taking her meals with the family. The referee found that the value of the board and rooms furnished the three defendants and the governess, together with the moneys advanced for the necessary support and education of the infants, was, over and above all 'payments, $15,000, which was due April 2, 1885, no part of which has since been paid.

It was established by Exhibit C, introduced by the plaintiff, and by Exhibit No. 1, introduced by the defendants, that January 29, 1885, a settlement was had, and $15,270.43 was found due the plaintiff. The following is a copy of Exhibit C :

“ O. O’B. Bryant, Esq., Guardian,
“ To Grand Union Hotel, Dr.
1884.
“Dec. 31. To amount of ¶b as rendered............. $6,565 56
“ 1885.
“Jan. 7. “ Meals and room, 1 week....... $82 95
14. “ “ “ “ 75 25
21. “ “ “ “ 84 25
28. “ “ “ “ 79. 70
29. “ “ 1 day....... 10 14
- 332 29
$6,897 85
Jan. 29. To 29 days int. on aje
to Oct. 29,’84.. $8,168 75 $34 90
“ 26 days int. on
Nov. oja........ 407 40 1 47
$8,576 15 $36 37
Less 29 days’ int. on............ 2,729 16 11 99 $24 38
“1884. $6,922 23
“ Dec. 31. To amt. of cash °¡c rendered..... $8,216 34
. “ 1885.
“Jan. 29. “29 days’ int. on oje to
to Dec. 1, ’84.....$7,886 17 31 56
7. “ Cash............... 100 00
22 days’ int........ 30
- 100 30
-- 8,348 20
$15,270 43
“New York, Jam,. 29th, 1885.
“ I have examined the above bill and find it correct and approve the same. The charges therein were for supplies and maintenance of my two children, Agnes C. and Amanda I. Bryant, for whom I am the general guardian; and were furnished under and by my direction. The moneys therein advanced were for the same purposes.
“ CAROLAN O’B. BRYANT,
“ Guardian.”

Defendants’ Exhibit No. 1 is a duplicate of plaintiff’s Exhibit C, except that there was indorsed thereon the following:

“ Copy signed and approved by C. O’B. Bryant, Guardian.
“ J. E. SHAW.”

Mr. Bryant testified that this indorsement, including 'the signature, was written by J ames E. Shaw.

April 2, 1885, when the defendants left the plaintiff’s hotel, another settlement was had, as shown by defendants’ Exhibit No. 3, of which the following is a copy :

“ O. O’B. Bryant, Esq., Guardian,
“ To Grand Union Hotel, Dr.
“1885.
“Eeb. 17. To balance as rendered................. $15,327 66
“ Apl. 2, ’85, add 44 days at 5 %.................. 93 67
“ Apl. 2. Difference of int. of 1 % on int. paid at 6 % viz.: 150-j^-................................... 75 00
$15,196 33
“Eeb. 1. To meals & room as rendered..... $77 15
Less Jan. 29 included in previous bill............................ 10 11
$67 31
“ 11. Meals & Room, 1 week........... 75 00
“18. “ “ “ 76 10
“25. “ “ “ 76 15
Mcb. 1. “ “ “ 71 72
“11. “ “ “ . ...........' 7 00
“18. “ “ “ 7 00
“25. “ “ “ .. .......... 7 00
Apl. 1. “ “ “ ........... 7 00
“ 2. “ “ Id.............. 100
- 395 88
$15,892 21
“ New York, April 2nd, 1885.
“ Received from Carolan O’B. Bryant his check for eight hundred and ninety-two dollars on account of the above bill, leaving due on April 2, 1885, of fifteen thousand dollars... .$15,000.00.
“(Signed) JULIA A. SHAW, by
“ James E. Shaw, Atty.
“Or. (Adjusted and Deffrd) By amount deferred Interest acct. computed to Jan. 1, 1888........ $8,102 00
“ By tax lease settlements, loan and purchase com. acct. as rendered and adjusted, not to exceed... 6, 508 00
$15,000 00”

By whom and when, the sentences beginning with the abbreviation “ Cr.” and ending with “ $15,000.00 ” were written, was a disputed question. Oarolan O’Brien Bryant testified that they were written by one of the plaintiff’s clerks.

The sum represented by this statement — $15,000 — was the amount for which the referee rendered a judgment against the defendants.

An accord and satisfaction of this admitted amount was not pleaded as a defense in the original answers, but July 23, 1886, James E. Shaw, plaintiff’s husband and agent, died, and in the amended answers served February 25,1893, the defendants pleaded an accord and satisfaction entered into with him on or about April 2, 1885. To establish this defense the defendants put in evidence a statement of account marked Exhibit No. 2 of which the following is a copy:

“ O. O’B. Bryant, Esq., Guardian,
To Grand Union Hotel, Dr.
“1885.
“Jan. 29. To amount of a¡c as rendered........ $15,270 43
“ Feb. 17. Add 19 days’ Int. 5%............ $40 30
Difference of Int. of 1% on Int. paid at
Qf0 “ ........ $230 00
“ “ ........ 450 00
.... 1,044 17
i of $1,724 17 287 36
327 63
$15,598 09-
“ Feb. 17. • Or.
By check for..........
270 43
$15,327 63
“ Credits balanced and deferred.
“ O. O’B. Bryant in account with Julia A. Shaw.
“ 1885. Dr.
“ Jany. 29. To balance due Gr’d U. Hotel, cert, as.................. $15,270 43 15,000 09
'“ Feby. 17. By credits accrued and accruing deferred to final payment of mortgages June 1, 1888, as adjusted...............$15, 000 00
Difference cash.....'......... $270 43
Balance deferred as above $15,000 to
end of term......................... 15, 000 00
Balanced and closed without recourse to
new «¡c remainders:.................. 327 66
“Satisfaction herein acknowledged and duplicate exchanged in Release of all claims and accounts; difference in interest adjusted cash, signed and witnessed in each other’s presence. One dollar consideration received in hand.
“New York, Feb. 17, 1885. JAMES E. SHAW, AWyP

Mr. Bryant testified that this exhibit was in the handwriting of one -of plaintiff’s clerks down to and including the figures “ $15,327.66,” .and that from that point down to the figures “ 327.66,” the exhibit was in his handwriting. He testified that the paragraph beginning with the word “satisfaction” and ending with the figures “1885” was written by “ some of Mr. Shaw’s people,” but he did not know by whom. He also testified that the signature “ James E. Shaw, Att’y,” was written by Mr. Shaw, and that he (Bryant) saw him write it.

Whether the signature to the above receipt was genuine or forged, and whether the paragraph preceding the signature was written by Carolan O’Brien Bryant, were sharply contested issues -on the trial, and the referee found that the signature was a forgery. It is asserted that this finding is contrary to the weight of evidence. After examining the original document, reading the evidence and considering the circumstances, we are satisfied that the learned referee correctly determined this issue. In his opinion he said: “ The referee does not entertain the slightest doubt that the exhibit offered on behalf of the defendants, as to which such a warm controversy arose, and such voluminous expert evidence was introduced upon the trial, was not in fact signed by Mr. Shaw. Under these circumstances it is not necessary to proceed any further either to characterize the instrument as a forgery, or to attempt to declare who perpetrated such forgery. It is enough to find, as has been doné, that the receipt was not signed by Mr. Shaw, and was not the act or deed the plaintiff.” In this we concur.

As before stated, the issue, whether the signature of “ James E. Shaw, Att’y,” to defendants’ Exhibit No. 2 was genuine or forged, was sharply contested on the trial, and so was the issue whether the paragraph immediately preceding the signature was or was not written by Carolan O’Brien Bryant. The plaintiff undertook the burden of showing that the paragraph and signature were both written by him, and, to support her contention, experts in handwriting were called and comparisons instituted between signatures of James. E. Shaw, shown to be genuine, and the one in dispute, and comparisons were also instituted between a writing of Carolan O’Brien Bryant, admitted to be genuine, and the disputed satisfaction and signature thereto. The counsel for the defendants insists that the referee erred in permitting comparisons of the latter kind and in allowing one of the experts to testify to similarities between the challenged paragraph and the document written by Mr. Bryant and marked Exhibit TJ.

Chapter 36 of the Laws of 1880 provided:

“ Section 1. Comparison of a disputed writing, with any writing proved to the satisfaction of the court to be genuine, shall be permitted to be made by witnesses in all trials and proceedings, and such writings and the evidence of witnesses respecting the same may be submitted to the court and jury as evidence of the genuineness, or otherwise, of the writing in dispute.
“ § 2. This act shall take effect immediately.” •

In Peck v. Callaghan (95 N. Y. 73) it was held in 1884 that the statute did not authorize a comparison of an alleged forged signature with the writing of the alleged forger, which was followed in Bruyn v. Pussell (52 Hun, 17). For the purpose of obviating the effect of the first decision and enlarging the scope of the statute, chapter 555 of the Laws of 1888 was enacted, which provides:

“Section 1. Section two of chapter thirty-six of the Laws of eighteen hundred and eighty, entitled ‘ An act to amend the law of evidence and practice on civil and criminal trials,’ is hereby amended so as to read as follows :
“ § 2. Comparison of a disputed writing with any writing proved to the satisfaction of the court to be the genuine handwriting' of any person, claimed on the trial to have made or executed the disputed instrument or writing, shall be permitted and submitted to the court and jury in like manner. But nothing within contained shall affect or apply to any action or proceeding heretofore commenced or now pending.
§ 2. This act shall take effect immediately.”

It is asserted that the act of 1880 was superseded by the act of 1888, and that the saving clause of the latter act takes the case at bar, which was begun June 29, 1885, out of that act, and that the rules existing prior to 1880 in respect to the comparison of handwriting are applicable to this case. In determining whether the latter act supersedes the former one, it should be observed that section 2 of the act of 1880 simply provides “ This act shall take effect immediatelyand it is this section instead of section 1 which is amended by the act of 1888. (See, also, Mortimer v. Chambers, 27 Abb. N. C. 289.) But, admitting that the rules of evidence existing prior to 1880 are applicable to this action, the defendants’ contention cannot be sustained. Before the passage of the first statute it was the rule in this State that comparisons might be instituted between the disputed signature and other writings shown to be genuine and admitted as evidence in the case, upon the issues involved, and not solely for the purpose of comparison. Exhibit U, which the defendants admitted was written by Mr. Bryant, is not contained in the record. It is referred to at several places, but no statement of its contents is given. At page 690 it is referred to as follows: “Exhibit U. T. P. W., Referee. (The original exhibit shall be referred to and handed up on argument.)” It was not handed to the court on argument. The counsel for the defendants insists that Exhibit U ” was admitted in evidence as a specimen of Carolan O’Brien Bryant’s handwriting for the sole purpose of comparison, and refers to folios 1043 and 1045 to sustain the contention. Carolan O’Brien Bryant was under cross-examination, and the following occurred: “ Mr. Shoudy : I want to offer the paper marked Exhibit c TJ ’ for identification. I only offer so much as is in his handwriting. By Mr. Norris: Q. Are these pencil marks in your handwriting? Mr. Shoudy: I do not offer the pencil marks. A. That is my handwriting — I mean the pencil. Q. How is there, at the termination of the paper, ‘June, 1884;’ in whose handwriting is that? Turn over to the last page of the paper., A. There is a memorandum here of June, 1884.’ Q. Do you know whose handwriting it is? A. It is like Mr. Shaw’s. Q. It is certainly not yours? A. No, sir, it is not mine. Q. Are there any other marks on that paper not in your handwriting than you have already mentioned ? A. No, sir. Q. Look it over ? A. Here are marks on here and pencil interlineations that I had nothing to do with. The Referee : In so far as the paper exhibits the handwriting of the witness, it is received in evidence and marked Exhibit ‘IJ’.”

Turning again to the part of the.record where about 200 exhibits are printed we find that it. is stated that Exhibit Z and Exhibits Z, 1, 2 and 3 were introduced “for comparison of handwriting,” and are not printed. Again it is stated that Exhibits 23 and 26 were introduced by defendants “ to show handwriting ” and that defendants’ Exhibits Nos. 1 to 93 were introduced “ to show signatures only; ” but we find no such statement in respect to Exhibit H. This ease was made up by the appellants, and the burden of showing error is upon them, and we cannot presume from this record, and in the absence of the exhibit, that it was introduced in evidence solely for tlie purpose of comparing Carolan O’Brien Bryant’s handwriting with the last paragraph and signature of Exhibit No. 2.

In Miles v. Loomis (75 N. Y. 288), which arose before the statute of 1880, it was held that “ Where the instruments, the signatures to which are thus compared, were for aught that appears in the case, offered in evidence for other purposes than comparison, and were received without objection, it cannot be objected upon appeal that they were immaterial for any other purpose and so could not be used for comparison ; having been received without objection they must be regarded as properly in evidence for all the purposes of the case.” By referring to what occurred when Exhibit U was offered in evidence, it will be seen that the defendants’ counsel did not object to its admission. Under this state of facts and the authority last referred to, we must assume that Exhibit U was received in evidence without objection, and not solely for the purpose of instituting a comparison of handwritings. Exhibit IT having been properly received in evidence, it was competent to institute a comparison between it and the disputed release and signature thereto. The plaintiff undertook to establish affirmatively that the release which forms a part of defendants’ Exhibit No. 2 was in the handwriting of Carolan O’Brien Bryant. This was a distinct and relevant issue, which the plaintiff had the right to tender and try, and it was competent to show a similarity between the handwriting of the release and of Exhibit U. (Pontius v. The People, 82 N. Y. 339.)

In the case last cited the defendant was convicted on an indictment, charging him with having assaulted with intent to kill John G-. Hoster. Promissory notes purporting to be signed by Hoster were found in defendant’s possession which, it was alleged, were forged by him. These notes and some of defendant’s books of account were admitted in evidence without objection, and the jury, over defendant’s objection, were permitted to compare defendant’s handwriting in his books of account with the notes purporting to be signed by Hoster, which ruling was sustained by the Court of Appeals. If the ruling contended for by the appellants’ counsel in the case at bar were the correct one, as applied to cases not within the statute of 1888, it would have been competent only to have compared the genuine writing of John G. Hoster with the signa-, ture purporting to be his. Before the statute of 1880, documents written by a party to an action and admitted in evidence on the issues, or without objection, might be compared with any signature or writing which, it was alleged, such party wrote. Peeh, v. Callaghan (supra) is not an authority to the contrary. That case arose over the genuineness of the signature of a testator to a will. The contestant offered in evidence the genuine writings of a third person solely for the purpose of instituting a comparison between those writings and the signature alleged to have been the testator’s. The admission in evidence of those writings was objected to, and they were excluded, which ruling was sustained, but it was not held that if the writings had been introduced on the issues in the case, or without an objection, the comparison could not have been instituted.

The counsel for the appellants urges that it was error to permit witnesses to use ninety-two or ninety-three checks, signed by James E. Shaw, as standards of comparison. The’ genuineness of these checks was established by Mr. Bryant' on his cross-examination at pages 289 eb seq., and were marked for identification. The appellants’ counsel says in his brief that these checks were never offered in evidence in behalf of the plaintiff, but were used as standards for the comparison of handwriting. At page 697 of the case the following appears:

“ Defendants’ Exhibit No. 26, T. P. W., Referee. Introduced to show handwriting, and shall be produced and referred on argument.
“Exhibits checks Nos. 1-93 inclusive were introduced to show signatures only. They shall be produced on argument and may be referred to.”

Thus the case shows that these checks were introduced by the defendants for the very purpose for which they were used. No error prejudicial to the appellants was committed in admitting or rejecting evidence upon the issue whether the contested part of Exhibit No. 2 was in the handwriting of Carolan O’Brien Bryant.

The young ladies were not sworn on the trial, and neither they nor the father contested the correctness of the claim as presented, and the only defense sought to be established on the trial was payment. But it is urged that the referee erred in not ascertaining the amount for which each of the defendants was liable, upon legal principles. It is insisted that the referee-should have found liow much each defendant was indebted for rooms and how much each defendant was indebted for meals. It is also asserted that the young ladies should’ each pay one-half of the charges for the governess, and no part should be charged against the father. It appears that, during all of the time the defendants occupied rooms at the hotel, they lived together as a family, occupying, during much of the time, two bedrooms and a parlor, which were used in common by all. The hotel was kept on what is known as the European plan. The defendants usually took their meals together, making a single order for the three, and if guests were there, all were included in the order and the total amount of it was charged to the account. It is quite apparent, we think, that it is impossible to determine just how much, under the circumstances, each of the defendants should be charged for the rent of rooms and how much each should be charged for meals. There is no way of knowing wliat portion of the food ordered each of the defendants and the governess devoured, and to require such particularity of-proof as a condition of recovery will defeat the-entire claim, the justness of which is not disputed, the question of payment being out of the way. The referee found that the value of the rooms ocenpied during the period mentioned was $5,588.12, and that, considering the circumstances under which they were ocenpied, each defendant should be charged with one-third thereof. The father of the infants asserts that it was, error to charge him with any sum on account of the board and room furnished the governess. This is undoubtedly true, provided he did not assume any liability, nor order the room or meals for her. How many meals she ate and how much each meal was worth cannot now be ascertained, the items eaten by each person not being disclosed by the tickets sent to the cashier’s desk. The father did not testify, though examined at great length, whether or not he agreed to pay all or any part of the charges for the meals and room furnished for the governess. The plaintiff seems to have acted as banker and paymaster for these defendants, and when bills for clothing, education, carriages, and such bills as are usually incurred by such families, were brought to the hotel, they were paid by the plaintiff and charged to the account. Many of these bills disclosed that they were for some one of the defendants, and, in such cases, the referee has charged those bills to the separate'account of each. A judgment was ordered and entered against Amanda I. Bryant for $5,345.99; against Agnes C. Bryant for $5,534.10, and against Carolan O’Brien Bryant for $11,291.42, by which no injustice was done, so far as we can learn from the record, except in a few instances where, by oversight, a few items were charged to one defendant that should have been charged to another, as is conceded and pointed out by the learned counsel for the plaintiff in his brief. Neither of these items nor the apportionment is challenged on this appeal b}r the defendants. During the period that the defendants were at the plaintiff’s hotel the father represented that he was the general guardian of the infants, having the care of their persons and estates. He described himself as such in several documents, but, .in tsuth, lie never was their general guardian. This case has been twice tried at great length before different referees, and every opportunity has been given the defendants to challenge the items of the account and to show how the whole sum, admitted to be just, should be apportioned among them, but neither defendant has offered any testimony upon this issue, and we are of the opinion that the principle upon which the referee rendered liis judgment cannot now be successfully gainsaid. It has been held, and, we think rightly, that when two or more infants are member’s of the same family, the person who supports them is not bound to show precisely, as a condition of recovery against the estate, how much should be charged against each infant for the ordinary expenses of food, clothing, etc. (Shepard v. Stebbins, 48 Hun, 247; Hyland v. Baxter, 42 id. 9 ; Rolph's Estate, 9 N. Y. Supp. 293.) This rule, as applied to this case, is not in conflict with the judgment of this court when this case was first before it. (65 Hun, 57.) The referee on the first trial divided the claim into three parts, and entered judgment against each of the defendants for one-third. It was said in the opinion that the referee made an arbitrary decision. Such was not the determination of the referee on the present trial. The amount for which each defendant was held liable was founded on evidence which, we think, supports the decision.

The learned counsel for the respondent makes the following concessions in his points: There are some of the items which will plainly need correction by this court.

The following items should be deducted from the joint account of Agnes and Amanda Bryant and added to the chai’ge against Carolan O’B. Bryant, there being no proof that the expense was incurred for the use or benefit of the children :

Dec. 12, 1883, Toucher K74a, page 628.................. $200
Jan. 8, 1884. Charge for “appraisement,” no voucher.. 20
Jan. 9, 1884. Toucher K81, page 632................ 487
•Feb. 2,1884. Toucher K90, page 639................ 25
Feb. 29, 1884. Toucher IÍ104, page 647.............. 50
June 11, 1884. Toucher Ivl50, page 669.............. 28
July 31, 1884. Toucher IC163, page 675............... 150
Nov. 10, 1884. Toucher K169, page 679.............. 25

The following items should be deducted from the family account and charged to Carolan O’B. Bryant alone, to wit:

July 26, 1883. "Voucher K10, page 595, should be deducted from the hotel bill, the item, for “ wine and bar ”.......................... $9 00
July 30, 1883. Voucher Nil, page 596, “Barnum’s Hotel,” there being no proof that it was for the family............................. 150 00
June 3, 1883. Voucher K12, page 597, should be deducted for wines, etc....................... 2 20
Aug. 4,1883. Voucher K14, page 598, should be deducted, wines, $17. 40 ; cash, $25, making.... 42 40-
May 14, 1884. Voucher IC139, page 665, there being no proof that the books were for the family. 250 00

The following item should be deducted from the charge against Amanda Bryant and added to the charge against Agnes, it being clearly a clerical mistake:

Feb. 20,1884. Voucher K102. Page 645............. $112 90

These clerical errors are not pointed out and comjdained of by the counsel for the appellants.

The judgment entered in this action should be modified in accordance with the concessions above stated, and as modified affirmed, without .costs to either party.

O’Beien, J.; concurred; VAN Bbunt, P. J., concurred in result.

Judgment modified as directed in opinion and affirmed as modified, without costs to either party.


source: Caselaw Access Project

author: Follett, J.:

license: Public Domain

text:
    McCaslin Machine Company, Appellant, v. George W. McCaslin, Respondent.

      Contract — to assign future inventions — what is covered by — proof by experts that a prior drawing was essentially the same as a patented invention.

    An imperfect invention, resting in theory and not so far perfected as to he patentable, hut which is subsequently perfected by the inventor, is not embraced within a covenant by the terms of which the inventor has bound himself, during the term of his employment, to assign to a corporation any improvement upon or now method of makjpg any machine or machinery relating to or to be used in making a chain conveyor owned by the corporation.

      Upon the trial of an action brought to compel an assignment of patents issued to an inventor, and which a corporation claimed under the covenant above mentioned, it appeared that while the defendant was employed by the plaintiff he made a drawing representing certain proposed improvements in chain conveyors, and the plaintiff, after introducing the drawing, proposed to prove by an expert witness the points of similarity between the improvements described in the drawing and those shown in the claim upon which the patents were issued, but the evidence was excluded.

      Held, that the evidence was proper; that mechanical experts might be permitted, except in cases of a very simple character where such testimony was unnecessary, to describe the differences and similarities of inventions shown by different drawings, claims and models.
    Appeal by tlie plaintiff, the McCaslin Machine Company, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of New York on the 25th day of July, 1894, upon the decision of the court rendered after a trial at the New York Special Term dismissing the complaint upon the merits; also, from the decision of said Special Term denying the plaintiff’s motion made at the trial for leave to bring in additional parties; also, from an order entered in said clerk’s office on the 20th day of July, 1894, granting an extra allowance to the defendant, and also from an order made at the New York Special Term and entered in said clerk’s office on the 27th day of May, 1895, denying the plaintiff’s motion for a new trial on the ground of newly-discovered evidence.
    This action was begun February 16, 1893, to compel-the defendant to assign to the plaintiff two letters patent, No. 486,789 and No. 486,809, issued by the United States to the defendant February 22, 1892, for certain “improvements in conveyers,” to compel the defendant to account for the rents and profits received under said letters, perpetually to enjoin defendant from incumbering or assigning said letters and for the recovery of damages.
    October 20,1888, the plaintiff was.incorporated with a capital stock of 820,000 under the statutes of this State by Charles W. Hunt, John Allen, Charles C. King, George Martin Luther and George W. McCaslin for the purpose of manufacturing chain conveyers for conveying coal, grain and such articles. December 8, 1885, letters patent Fio. 331,961 were granted by the United States to William Griesser for a new and useful conveyer. August 7, 1888, letters patent No. 387,241 were granted to George W. McCaslin for an improved conveyer. August 20,1S89, letters patent No. 409,330 and No. 409,612 were granted to George W. McCaslin for improved conveyers, which four patents were assignecl to the plaintiff. October 27,1888, the persons who organized the corporation entered into a contract, of which the following is a copy:
    “For and in consideration of one dollar, each to the other of us in hand paid, and in consideration also of the sum of one dollar to each of us paid by the McCaslin Machine Company, we do hereby severally agree that if we, or either of us, shall (during the time we shall be interested as stockholders, trustees, officers or employees of the McCaslin Machine Company) invent or discover any improvement upon or new method of making any machine or machinery relating to or to be used in making the chain conveyer now owned and used by said company, or any other machinery manufactured or to be manufactured by said company, that we will at once assign the invention or discovery, and any ajiplication for patents, and any patents issued 'thereon, to said company.
    “ Dated October 27, 1888.”
    Upon the organization of the corporation the defendant became and remained a shareholder therein until January, 1891, and was employed as its general manager from the date of its organization until May 19, 1891, when he resigned. November 22, 1892, lettei-s patent No. 486,789 were issued by the United States to the defendant, upon his application, for “ certain improvements in conveyers,” and on the same day (November 22, 1892) letters patent No.. 486,809 were issued by the United States to the defendant, upon his application, for “ certain improvements in conveyers.”
    It is alleged in the complaint that the inventions secured by these letters patent were devised and made by the defendant while he was a stockholder and employee of the plaintiff, and that they and all the rights secured by the letters belonged to the plaintiff. The defendant denies this allegation in his answer, and alleges that the inventions secured by the letters were made after he ceased to be a shareholder in and an employee of the plaintiff. February 11, 1893, the defendant assigned said two letters patent to Bobert McCaslin, in consideration of $2,000, which assignment was recorded in the United States Patent Office May 19, 1893, and Bobert McCaslin in May, 1893, assigned said letters patent to the McCaslin- Conveyer and Transfer Company, of Cleveland, Ohio.

      Antonio Knauth, for the appellant.

      Thomas Ewing, Jr., for the respondent.
   Follett, J.:

The important issues of fact contested before the Special Term were: (1) 'Whether the inventions described in the letters patent were made by defendant while in plaintiff’s service; (2) whether the inventions were an improvement upon or new method of making any machine or machinery relating to or to be used in making the chain conveyer now owned and used by said company, or any other machinery manufactured, or to be manufactured, by said company,” and so within the terms of the contract. Both of these issues were found in favor of the defendant, and if they were well found, that is an end of the case, unless errors were committed in the reception or rejection of evidence.

■ To make a case against the defendant it was necessary to establish that while in the plaintiff’s service he so far developed the inventions subsequently patented that they were substantially perfected. While it was not necessary to show that all of the minute details had been worked out, it was necessary to show that the subsequent claims made by the defendant, and recognized as new and patentable by the Patent Office, could have been readily understood and applied. An imperfect invention resting in theory, a mere conception, and not so far perfected as to be paten table, which the defendant subsequently perfected, is not embraced within the contract. (Reed v. Cutter, 1 Story C. C. R. 590 : Christie v. Seybold, 6 U. S. C. C. App. 520.)

While the defendant was in the employment of the plaintiff he made a drawing representing certain proposed improvements in conveyers, which, on the trial of this action, was introduced in evidence by the plaintiff for the purpose of showing the identity of the improvements shown by the drawing with those patented under the letters patent. For the purpose of making it plain that the improvements described in the drawing and those subsequently patented were substantially the same in principle, the plaintiff called an expert and proposed to show by him wherein the improvements described in the drawing and in the claim upon which the patents were issued were alike. To this the defendant objected, and the objection was sustained and an exception taken. The court ruled that it would not permit an expert to testify as to wliat the sketch indicated. In this we think the court erred. It is competent to permit mechanical experts to describe the differences and similarities of inventions shown by different drawings, claims and models. This rale is so well settled that it does not require the citation of many authorities. (Bischoff v. Wethered, 9 Wall. 812; Spring Co. v. Edgar, 99 U. S. 645; Allen v. Blunt, 3 Story C. C. R. 742.)

Of course, cases may arise so simple in their character that the testimony of experts may not be required to make the similarities and differences between various patents, claims and drawings plain to the mind of a judge or jury ; but this, we think, was not such a case, and that the court erred in rejecting this class of evidence.

The judgment should be reversed, with costs to the plaintiff to abide the event. By the reversal of the judgment it 'becomes unnecessary to consider the appeal from the order denying a motion for a new trial on the ground of newly-discovered evidence, which falls with the reversal, and neither party has any further interest in it or the appeal therefrom, except the costs which might be awarded, and would not exceed twenty dollars and disbursements, and the order is set aside, without costs to either party.

Van BkuNt, P. J., and ParKEe, J., concurred.

Judgment and order reversed, new trial ordered, costs to plaintiff to abide event. Order denying motion for a new trial, on the ground of newly-discovered evidence, set aside, without costs.


author: Eollett, J.:

text:
    Stevens Voisin, Appellant, v. The Commercial Mutual Insurance Company, Respondent.

      Marine insurance — testimony as to the condition of a hull under water must be based on actual knowledge.

    Upon the trial of an action brought to recover damages alleged to have been sustained under a marine insurance policy, insuring the plaintiff upon merchandise laden on the bark L. B. Gann, “atand from Tecolutla, Mexico, to New York,” it appeared that the bark left Cardiff in the fall of 1881 and arrived in Vera Cruz in the latter part of November, 1881; remained there until about January 28, 1882; sailed for Tecolutla and arrived there about January 30, 1882, and left Tecolutla on March 30, 1882, and was abandoned off the coast of South Carolina April 27, 1882.
    Upon the trial, George W. Brown, an agent of the underwriters, testified that he never saw the vessel until she was lying at Norfolk, Va., on the 1st of June, 1882, and that he then found worm holes in the hull. The witness was allowed to testify that, from his knowledge of the presence of worms in tropical waters, from his experience in that regard at Vera Cruz and at Tecolutla, and from his examination of the bull at Norfolk, the vessel was not seaworthy as to her hull when she left Tecolutla, and that she was not seaworthy as to her hull on the 10th of March, 1882, that being the date upon which the policy in suit was issued. The captain of the bark testified that he had seen the bottom of the vessel only when she was on the ways at Cardiff, and that she was then slightly touched with worms. He was allowed to testify that, in his judgment, the vessel was not seaworthy as to her bottom when she left Tecolutla.
    Held, that the opinion of neither witness was competent, because neither had sufficient knowledge of the condition of the vessel’s bottom while at Tecolutla to justify the reception of the evidence.
    Appeal by the plaintiff, Stevens Yoisin, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of New York on the 29th day of December, 1894, upon the verdict of a jury rendered after a trial at the New York Circuit, and also from an order entered in said clerk’s office on the 4th day of January, 1895, denying the plaintiff’s motion for a new trial made upon the minutes.

      Frederic F. Ooudert and William Mitchell, for the appellant.

      Treadwell Cleveland and Henry W. Ilardon, for the respondent.
   Eollett, J.:

This action was begun August 23, 1882, to recover the sum of $3,500, with interest thereon, from July 21, 1882, damages alleged to have been sustained under a valued, voyage, marine insurance policy, issued by the defendant March 10, 1882, whereby it insured “Stevens Yoisin on account of whom it may concern,” on merchandise valued at $29,500, laden on board the bark L. E. Oann, “at and from Tecolutla, Mexico, to New York.” The bark left Tecolutla March 30, 1882, and was abandoned off the coast of South Carolina April 27, 1882, and the plaintiff’s goods were lost. The defendant interposed four defenses: (1) That the vessel was unseaworthy ; (2) that plaintiff had not merchandise of the value or of the description stated and represented on board, and that it was shipped with the intent that the vessel should never reach New Y ork; (3) that the voyage was not prosecuted in good faith and was not abandoned by reason of the perils insured against ; (4) deviation, in unnecessarily and unreasonably delaying the bark at Tecolutla. This case has been twice before this court (62 Hun, 4; 67 id. 365), and the trial under review is the third one.

On the first trial, as on the present, the issue was presented whether the bark was seaworthy when it sailed from Tecolutla. It was asserted then, as now, that the hull was in an unseaworthy condition, but no complaint was made of any other part. The defects alleged to exist in the hull were below the water line and caused by worms. On the first trial the plaintiff, to prove that the vessel was seaworthy, introduced the testimony taken de lene esse, of A. Randolph Tedford, the second mate of the vessel. He testified that he shipped as second mate at Cardiff, Wales, in September, 1881, made-the voyage from that port to Yera Cruz, and served in that capacity until April 27, 1882, when the vessel was abandoned. The witness, testified that at Yera Cruz he and the first mate went around the vessel in a host several times and examined the hull, finding two places that looked as though they might leak, one where two planks came together, and another by the side of a treenail; that they caulked and plugged these places, and did not discover any other defect in the boat. On the first trial this witness was asked : Q. What was-the condition of the ship with respect to the staunchness of her hull and manning and general equipment ? ” This was objected to by the defendant’s counsel on the ground, among others, that the witness did not examine below the water line, and never examined her inside and out; that his statement as to the condition of the vessel was hearsay, and that he had no personal knowledge that would •justify a conclusion. This objection was overruled and the testimony of the witness received. The further question was asked: “Q. Now, what was the condition of the L. E. Gann with respect to seaworthiness at the time you left Tecolutla ? ” This question was objected to upon the same grounds, and the answer of the witness taken. Upon a review of that trial it was held (62 Hun, 4) that the reception of this evidence was error, on the ground that the witness had not sufficient knowledge of the condition of the vessel to justify tlie reception of his opinion. It was held that the testimony of the witness disclosed that he was not sufficiently acquainted with the condition of the ship, where she was liable to. have been injured by the worms, to express his opinion or judgment. All that it was competent for him to do was to state what lie had seen in the course of the observations made by him.”

On the present trial George W. Brown, called by the plaintiff,, testified that he was an agent of the underwriters; that lie never saw the vessel until after the 1st of June, 1882, when she was lying at Norfolk, Ya. On liis direct examination he testified to the condition in which he found the vessel and its cargo. Upon his cross-examination by the defendant’s counsel the following occurred : “ Q. This vessel is stated to have left Cardiff in the fall of 1881, and to have arrived at Yera Cruz in the latter part of November, 1881, and to have laid there and at Tecolutla until the middle of March, 1882. Yon have stated that you found no copper or copper paint upon the vessel. State if in your judgment and from your observation of her at Norfolk, she was or was not seaworthy at the. time she left Tecolutla? Mr. Goodrich: I object to that on the same grounds as heretofore, and as incompetent, irrelevant and immaterial, and as calling for the opinion of the witness. Q. I don’t mean seaworthy as to her chronometer, nor provisions, nor spars, nor rigging, but as to her hull ? [Same objection.] Mr. Cleveland : I will ask the question as to Tecolutla. A. The water at Tecolutla is bad; worms are so thick; what makes the worms thick in Tecolutla is that it is at the confluence or mouth of the river in what we call brackish water. That is one of the worst conditions for worms; water mixed or brackish water. I have had experience in the action of worms on wood at or near Tecolutla. I observed that in logs that have broken away from rafts,, logs of mahogany and cedar, that have broken away from rafts,, they have been ■ wormed, and very bad after a short time, after-drifting upon the bank up on the beach. Q. This vessel lay at or near Tecolutla from, say the 30th of January until the middle of March, what effect would the worms have on her bottom? A. They most decidedly would have eaten it. Q. Judging now from your experience with worms in tropical waters generally, and at. Yera Cruz and Tecolutla, and judging from the facts that you saw at Norfolk, was this vessel and the examination you made of her hull then — was she, in your judgment, seaworthy or unseaworthy as to her hull when she left Tecolutla ? [Objectedi to as incompetent and calling for an opinion of the witness.] Q. Have you also had experience at Yera Cruz? A. Yes, sir. Q. This vessel is stated to have arrived at Yera Cruz in the latter part of November, 1881, to have there remained until about January 28th, 1882, when she sailed for Tecolutla ; she arrived at Tecolutla on or about January 30th, 1882, and left Tecolutla on or about the 21st day of March, 1882, judging from your experience generally — The Court: And assuming those facts to be true. Mr. Cleveland : Assuming those facts to be true, and judging from your experience generally of the action of worms on wood in tropical waters unprotected by copper or copper paint, wood such as you found the bottom of the Gann to be composed of, mainly spruce; and judging also from the facts which you observed from your examination of the hull of the vessel at Norfolk, and what you saw there concerning the condition of the hull, was or was not the vessel in your judgment seaworthy •as to her hull when she sailed from Tecolutla ? [Objected to as incompetent and calling for the opinion of the witness.] Mr. Goodrich : I make the same objection as before, and the further objection that the hypothesis of that question is not sustained by the evidence. I also object to that question that they must coniine their ■attention, so far as seaworthiness is concerned, tó the 10th of March, when that policy had its inception, and unless this witness is enabled to give his opinion, founded upon the condition of the vessel at that time, which he clearly cannot do, his testimony is incompetent, and we object to any evidence of her unseaworthiness, except at Tecolutla. Her condition when she sailed from Tecolutla doesn’t affect this case, except when it relates back. I read the answer that £ the vessel at the time of so leaving Tecolutla was not seaworthy nor ■duly manned or equipped.’ The Court :• I think I will allow that to be answered. [Exception.] A. I don’t think that she was. The Court: Assuming these facts to be true, and judging from your experience generally of the action of worms on wood in tropical waters unprotected by copper or copper paint, wood such as you found at the bottom of the Gann, to be ■composed of, mainly spruce, and judging also from the facts which, you observed from your examination of the hull of the vessel at Norfolk, and what you saw there concerning the condition of the hull, was or was not the vessel seaworthy as to her hull on the 10th of March, 1892 ? [Same objection. Objection overruled. Exception.] A. No, sir. Mr. Goodrich: ¥e have the same objection. The Court: Tes.”

The second mate and George AY. Brown were asked for an opinion based on the same undisputed facts, with a single exception about to be stated. In the case of the mate, who had personal knowledge of the facts, it was held that they were insufficient to justify an opinion as to the seaworthiness of the vessel at Tecolutla. In the case of Brown it was held that his opinion as to the condition of the hull of the vessel at Tecolutla was competent. The only additional fact relating to the condition of the hull testified to by the last witness was that he found worm holes in it at Norfolk in June, 1882. AYhether these holes were eaten before or after the vessel left that port the witness did not assume to know.

Undisputed facts, which are insufficient upon which to found an opinion, do not become sufficient by being incorporated into a hypothetical cpiestion.

The defendant called AYilliam AY. Brooks, the captain of the L. JS. Gann, who testified that he received $6,500 for wrecking her, and it was sought to counect the plaintiff and the consignors of his goods with a conspiracy to have her cast away. The captain testified without apparent shame to his own infamy, stating the details of the corrupt bargain, the sums paid to him and when and how paid. On the present trial he was asked: “ Q. In your judgment was she seaworthy when she left Tecolutla ? ” He had testified that he had made no examination of her at Tecolutla or at Yera Cruz. This question ivas objected to as incompetent, irrelevant and immaterial, and also that it appeared that he had not examined the vessel. These objections were overruled and the witness answered: “ I can only speak of the condition of her hull from what I suppose it would be from being down in the hot weather five months with no copper on her considering her wormy condition at Cardiff. She was slightly touched with worms at Cardiff. The Court: I think I will let this stand ; I will let the answer be read. [Exception.] A. As far as her bottom was concerned, no, sir.”

Thus this witness was allowed to give his opinion of the seaworthiness of the vessel in respect to its bottom, the only defect claimed, founded on less knowledge than the excluded opinion of the mate, except that he saw her bottom at Cardiff, after which he sailed for Yera Cruz, without, so far as it appears, making any repairs to the bottom or even painting it. He testified that when at Cardiff she was on the ways about eight hours ; that lie examined her bottom ; that it was bare of paint; that she had no metal, and along the edge of the seams and along the bottom it was touched with worms. So far as it appears this vessel had never been in southern waters before her voyage from Cardiff to Yera Cruz.' .The answer ■of this witness was not based upon a hypothetical question, and under the rule laid down in G2 Hun, which is the law of this case, his opinion was clearly founded on insufficient knowledge of the condition of the bottom of this vessel when she lay at Tecolutla. Following the decision of this court before cited, we are compelled ■to hold that the court erred in receiving the opinions of these witnesses as to the seaworthiness of the vessel at the port of Tecolutla.

In view of the conclusion to which we have already come on the •questions hereinbefore discussed, it is not necessary.to consider the other questions raised.

The judgment and order must be reversed and a new trial granted, with costs to the appellant to abide the event.

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

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


text:
    Francis Higgins, as Receiver of The North River Bank in the City of New York, Appellant, v. John J. Ridgway, Respondent.

      Bills and notes — accommodation maker, when not liable to the person accommodated — may testify that he received no benefit from the note.

    In an action brought by a bank to recover upon a promissory note, made by the defendant to his own order, the defense was interposed that the note was made for the accommodation of a bank and upon an agreement by its president that the defendant should not be held liable upon it. Upon the trial it appeared that the defendant was a clerk of a firm dealing with the bank, and that its senior partner was a director of the bank. The defendant testified that the president of the bank requested him to make the note for $15,000; that he objected to making it for that amount, upon the ground that the note would not be good, and that the president replied that the note was for the bank; that the defendant would get nothing for it and would not be held in the matter. It was shown that the note went to the credit of the firm which employed the maker.

      Held, that the defense was valid and that a verdict for the defendant would not be disturbed;
    That it was proper to allow the defendant to show that he was never credited by the bank with any sum of money, because of the note or of any renewal of the note, such evidence being competent to show that the defendant had received no benefit from the note.
    Appeal by the plaintiff, Francis Higgins, as receiver of the North River Bank in the city of New York, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the county of New York on the 17th day of May, 1895, upon the verdict of a jury rendered after atrial at the New York Circuit, and also from an order bearing date the 14th day of May, 1895, and entered in said clerk’s office, denying the plaintiff’s motion for a new trial macle upon the minutes.

      Denjamin Tates, for the appellant.

      Edward F. O'Dioyer, for the respondent.
   Follett, J.:

This action was begun February 23,1893, to recover on a promissory note made and indorsed by the defendant October 31, 1890, whereby, for value received, he promised to pay to his -own order $14,250, three months after date, at the North River Bank in this city. The defense interposed is that the note was made and indorsed for the accommodation of the bank, and upon the agreement of its president that the defendant should not be held liable thereon. At the time the note was made the defendant was a clerk of Paige, Carey & Co. Mr. Paige, the senior partner, was a director of the North River Bank and had extensive dealings therewith. The defendant testified that in 1889 Mr. Gedney, the president of the' bank, requested him to make a note for $15,000, but that he objected, saying that his note for that amount would not be good, and that he did not wish to do it. That Mr. Gedney replied: The note “ is for the bank; you will not be held on the note; you will get nothing for it.” The defendant made the note which was passed to the bank and went to the credit of the account of Paige, Carey & Co. This note was four times renewed, the last renewal being the one in suit. When or by whom the indebtedness to the bank was reduced from $15,000 to $11,250 does not appear. The defendant testified that when the note was last renewed he objected to signing it, and that Mr. Gedney replied, “You take no risk on it; you are not held on that note ; you assume no obligation on that note. The defendant received no benefit from the original note or any of its renewals. • The cashier of the bank testified that the avails of the first note, of which all others were renewals, were credited to the loan account of Paige, Carey & Co. It is conceded that the defendant’s indorsement was an accommodation one and that he received no benefit therefor, which fact was known to the president and cashier of the bank. The president of the bank was sworn as a witness and denied that he told the defendant that he would not be held on this note, but testified that the defendant objected to signing the original note and its renewals, and he told him that he did not think he would be called upon to pay it. The trial court submitted but a single question to the jury, which was, whether there was an agreement between the president of the bank and the defendant that he would not be held liable on the note. The jury were instructed that if such an agreement were not made they must find for the plaintiff, but if it were, they must find for the defendant. To this instruction the plaintiff excepted, which is the only exception taken by the counsel for either party to the charge.

The agreement testified to by the defendant, and found by the jury to have been made, was a defense to the note. (Garfield National Bank v. Colwell, 57 Hun, l69.) There is no distinction, in principle, between the case cited and the one at bar. This note was never delivered by the defendant nor received by the bank for the purpose of charging the defendant with liability thereon.

It is urged that the plaintiff’s exception to the following question was well taken : “ Q. "Was there ever credited to you with the North River Bank any sum of money, or any credit by reason of the note in suit or any of its predecessors ? ” The defendant answered, “No, sir.” It was entirely competent to show that the defendant received no benefit from tlie note. Tlie cashier of the bank so testified. Itcanuct be said that tlie verdict of the jury was contrary to the evidence. It was simply a question of credibility between the defendant and the president of the bank, and the circumstances under' which the note was made, the way the avails were used, and the-situation of the defendant, who was a mere clerk of Paige, Carey &' Co., to whose credit the avails were placed, strongly tended to render it highly probable that the defendant testified to the truth.

The judgment and order should be affirmed, with costs.

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

Judgment and order affirmed, with costs.


author: Parker, J.: Yan Brunt, P. J.:

text:
    The People of the State of New York ex rel. James O’Brien, Relator, v. Henry H. Porter and Others, Constituting the Board of Charities and Correction of the City of New York, Respondents.

      Waiter by a failure to claim a right — statutory privilege must be alleged and-proved.

    A. party may waive any right which lie may have, whether conferred by statute or otherwise, and a failure to call attention to such right at a time when it should be asserted will constitute a waiver.
    In proceedings by certiorari to review the action of the board of charities and correction in dismissing the relator from his position as a keeper in the city 1 prison on the ground of neglect of duty, it appeared that the relator was ordered to appear before the commissioners on a certain date, when, inquiry was made of him in regard to the charges against him, and after the hearing the commissioners passed a resolution dismissing the relator from the service of the department; that thereupon-he instituted proceedings to review the action of such board, contending that the commissioners had not the power to remove him from his position except for cause shown, after a hearing had, and alleging in his petition that he had served as fireman in the volunteer fire department in the city .of New York, and, therefore, came within the protection of chapter 577 of the Laws of 1892, which provided that “ no person holding a position by appointment in any city or county of this State, or who may hereafter be appointed, receiving a salary from such city and county * * * who shall have served the time required by law in the volunteer fire department of any city, town or village in this State, or who shall have been a member thereof at the time of the disbandment of said volunteer department, shall be removed from such position, except for cause shown after a hearing had.” The time of service required by law is five years.
    It did not appear that the relator, at the time of the hearing before the commissioners, called their attention to the fact that he was a volunteer fireman, and his petition failed to state that he had served five years in the volunteer fire department, or that he was a member thereof at the time of the disbandment of the department of which he was a member.

      Held, that the relator, having failed to assert on the hearing before the commissioners his right to the benefit of the statute, must be deemed to have waived any right thereunder;
    That even if the question of his right to the protection of the statute could be raised for the first time in proceedings by certiorari to review the action of the commissioners, the relator in his petition had failed to show facts entitling him to the protection of the statute.
    Certiorari issued out of the Supreme Court and attested on tlie lltli day of October, 1898, directed to ITenry IT. Porter, Edward C. Slieeliy and Charles E. Simmons, constituting the Board of Charities and Correction of tlie city of New York, commanding them to certify and return to the office of the clerk of the county of New York all their acts and proceedings in reference to the removal of the relator and tlie record thereof.

      James IF. McLaughlin, for tlie relator.

      Terence Farley, for the respondents.
   Parker, J.:

A prisoner having escaped from the city prison on the night of tlie lltli of May, 1893, the warden presented to the commissioners of public charities and correction a written communication preferring charges against the relator, a keeper therein, for neglect of duty. Thereupon the relator was ordered to appear before the commissioners on J une thirteenth, when inquiry was made of him relating to the manner in which he had discharged his duties as such keeper, and touching the facts surrounding the escape. After the hearing the commissioners passed a resolution dismissing relator, together with others, from the service of the department.

The relator, who alleges that he is a veteran volunteer fireman, contends that under chapter 119 of the Laws of 1888, as amended by chapter 577 of the Laws of 1892, the commissioners had not the power to remove liim from such position, except for cause shown after a hearing had. The respondents in their return take issue with the allegation in the petition, that the relator did not have notice of the charges, and assert that there was a hearing, and they further return that the relator did not assert upon the hearing that he was a veteran volunteer fireman, nor do the records disclose’that any such claim was ever made by him.

As a party may waive any l-ight which he may have, whether conferred .by statute or otherwise, the relator’s failure to call the attention of the commissioners, upon the hearing which took place, to his claim of right to the protection afforded by the statute, constituted a waiver of it. It was his duty to speak and not to keep silent until after the commissioners had taken such action- as they were authorized to take as against any person not within the shelter of the statute.

But if the question could be raised for the first time, in a proceeding by certiorari to review the action of the commissioners, the writ should be dismissed because of the insufficiency of the affidavit to bring relator within the terms of the statute. The statute provides :

“No person holding a position by appointment in any city or county of this State or who may hereafter be appointed, receiving a salary from such city and county (unless he has been appointed for a definite term), who is an honorably discharged soldier, sailor or marine, * * or who shall have served the time required by law in the volunteer fire department of .any city, town or village in this state, or who shall have been a member thereof at the time of the disbandment of said volunteer department, shall be removed from such position except for cause shown after a hearing had.”

The time required by law is five years. (Chap. 188, Laws of 1848.) The relator’s petition does not show that he served five years in the volunteer fire department or that he was a member thereof at the time of the disbandment of the department of which he was a member. All that it contains on the subject is, that the relator says “ I served as a fireman in the Volunteer Eire Department in the city of New York, and received my discharge therefrom on the 2nd day of June, 1862.” Whether it was an honorable discharge or not the petition does not disclose, and it cannot be inferred from the language employed that the relator served the time required by law, or that he continued to be a member until the disbandment of the volunteer department of which he says he was a member. It must he held, therefore, that the relator has failed to show in his petition that he was entitled to the protection of the statute which he invokes in this proceeding. The writ should he dismissed, with costs.

Follett, J., concurred.

Yan Brunt, P. J.:

I concur in result. I think, the relator was hound to show at the hearing before the commissioners his right to the benefit of the statute.

Writ dismissed, with costs.


author: Parker, J.:

text:
    Joseph J. Little, as Receiver of The Worthington Company, Appellant, v. David G. Garabrant and Others, Respondents, Impleaded with Another.

      Corporation —ultra vires — when illegal payments may be ratified by stockholders — rights of subsequent creditors.

    In an action brought by the receiver oí a corporation to have it adjudged that a policy of insurance upon the life of a director payable to his wife, who was also a director, belonged to the receiver, upon the ground that the premiums were paid out of the funds of the corporation, it appeared that the shareholders of the corporation practically formed a single family of which the two directors were members; that the corporation was conducted after the manner of a partnership; that all family expenses, rent, fire insurance, taxes and charitable contributions, were paid out of the moneys of the corporation, and that all such transactions took place openly, and, so far as appeared, with the assent of the real owners of all the shares of stock; that the corporation was solvent at the time the payments in question were made, and that no rights of creditors then intervened; that none of the indebtedness of the creditors of the corporation who were represented by the receiver arose prior to the payments in question.

      ITeld, that the corporation, if in existence, could not have maintained the action, and that its receiver stood in no better position to enforce the claim;
    That as no public rights intervened any misappropriations or diversions of the funds of the corporation were cured by the unanimous consent of the owners of the stock.

      Appeal by the plaintiff, Joseph J. Little, as receiver of The Worthington Company, from a judgment of the Supreme Court in favor of the defendants, David G. Garabrazit and othez’s,' entered in the office of the clezk of the county of New York on the 8th day of May, 1895, upon the decision of the court rendered after a trial at the New York Special Term dismissing the complaint upon the merits.

      James M. Fisk, for the appellant.

      Frederic A. Wcvrd, for the respondents.
   Parker, J.:

By this action the plaintiff seeks to have it adjudged that a policy of life insurance taken out by Richard Worthington upon his life, and made payable to Margaret Worthington, his wife, or to his legal representatives, and thereafter duly assigned for a valuable consideration to these defendants, belongs to him as receiver of the Worthington Company.

The ground upon which he bases his claim to the policy is, that fz-ozn the inception of the policy, in November, 1885, down to December, 1892, the premiums, amounting to about $400 a year, were paid out of the funds of the Worthington Company, a corporation organized under the laws of this State, and charged upon the books of the company either to the account of Margaret or Richard Worthington; that at the time of the several payments the Worthington Company was ziot indebted to either Margaret or Richard Worthington, and, therefore, the several payments constituted an illegal and fraudulent diversion of the funds of the corporation, constituting a gross breach of trust, which entitles the plaintiff as receiver, to follow the funds, and claim the policy and the sum due thereon.

The Woi’tliington Company was incorporated about July 1,1885, with a capital stock of $20,000, the number of shares being 200. Of these, 139 were issued to Margaret Worthington, wife of Richard Worthington, 50 shares to a Miss Sproule, who was the 'housekeeper of Mrs. Worthington, and a nominal shareholder, 10 shares to Richard Worthington, and 1 share to a nephew of Mr. Worthington. From the organization of the corporation until its dissolution, such persons continued to be the only stockholders in the company. Richard Worthington, Margaret Worthington and Miss Sproule were, from the beginning to the end. the directors and officers of the company. No dividends were ever declared, although it appears that at the annual meeting following the incorporation, the result of an examination of the affairs of the corporation by Mr. Galden showed a surplus of $42,590.26.

Instead of declaring dividends, the Worthingtons seem to have treated the assets of the corporation as something to be used in precisely the same manner as if the Worthington Company were a partnership..

From the beginning to the end all of the family expenses, rent, fire insurance, taxes, together with their contributions to charity and church and missionary societies, were paid out of the moneys of the Worthington Company by checks drawn against its account in the bank or from the proceeds of checks thus drawn.

It was in pursuance of such method and in precisely the same way that the premiums upon the policy of insurance in controversy were paid down to its assignment to these defendants. The first question which we shall consider is whether the Worthington Company, if still in existence and .solvent, could maintain this action.

In Kent v. Quicksilver Mining Co. (78 N. Y. 159) the court says, at page 185 : “ In the application of the doctrine of tdi/ra vires■ it is to be borne in mind that it has two phases : One where the public is concerned ; one where the question is between the corporate body and the stockholders in it, or between it and its stockholders and third parties dealing with it and through it with them. When the public is concerned to restrain a corporation within the limit of the power given to it by its charter, an assent by the stockholders to the use of unauthorized power by the corporate body will be of no avail. When it is a question of the right of a stockholder to restrain the corporate body within its express or incidental powers, the stockholder may in many cases be-denied on the ground of his express assent or his intelligent though tacit consent to the corporate action. If there be a departure from statutory direction, which is to be considered merely a breach of trust to be restrained by a stockholder, it is pertinent to consider what has been his conduct in regard thereto. A corporation may do acts wliicb affect the public to its harm, inasmuch as they are. per se illegal or are onabum proMbibwm. Then no assent of stockholders can validate them. It may do acts not thus illegal, though there is want of power to do them, which affect only the interest of the stockholders. They may be made good by the assent of the stockholders so that strangers to the stockholders dealing in good faith with the corporation will be protected in a reliance upon those acts.”

This language was repeated and approved in Skinner v. Smith (134 N. Y. 240).

The question that we are considering assumes that the rights of creditors and of third parties do not intervene. The payments in such a situation, although illegal, if made without the authority of, the stockholders, could be validated by the assent of all of the stockholders. And this rule proceeds upon the theory that the stockholders are the equitable owners of the corporate property, and if the officers or trustees do an unauthorized act, incur an indebtedness or make a loan of its money or credit outside of the ordinary course of its business, still, if all the stockholders unite, they may subsequently ratify the acts done and thus validate that which was originally unauthorized and illegal.

This rule is illustrated in Bissell v. Mich. So. & N. I. R. R. Co. (22 N. Y. 269), and cited with approval in Kent v. Quicksilver Mining Co. (supra):

A bank has no authority from the State to engage in benevolent enterprises; and a subscription, though formally made for a charitable object, would be out of its powers, but it would not be otherwise an illegal act; yet if every stockholder did expressly assent to such an application of the corporate funds, though it would still be in one sense ultra vires, no wrong would be done, no public interest harmed, and no stockholder could object or claim that there was an infringement of his rights and have redress or protection. Such an act, though beyend the power given by the charter, unless expressly prohibited, if confirmed by the stockholders, could not be avoided by any of them to the harm of third persons. This arises from the principle that the trust for stockholders is not of a public nature.” (Kent v. Quicksilver Mining Co., 18 N. Y. 159.)

As one of the results of this rule Mr. Morawetz, in his work on Corporations (§ G25), asserts that “ if the directors of a corporation apply the funds of the company to their own use, or misapply them in any -manner, the excess of authority, as between the directors and the corporation, may be cured by the unanimous consent or ratification of the stockholders.”

Other authorities upon this proposition are Martin v. The N. F. P. Mfg. Co. et al. (122 N. Y. 165); Barr et al. v. N. Y., L. P. & W. R. R. Co. et al. (125 id. 263).

Now, the learned judge at Special Term asserted, and we think •rightly, that not only was there no objection by the stockholders to this way of doing business, but that all the members of the corporation assented to it.

It appears that while Miss Snroule nominally held fifty shares of the stock, and Worthington’s nephew one share, Mr. and Mrs. Worthington were the real owners of every share.

That both of them assented to the payment of these premiums is demonstrated by the fact that both of them signed checks made payable to the order of the insurance company for such purpose, the checks drawn by Richard Worthington being signed by him as general manager, to which position he was chosen by the directors, and as such given full authority to manage the business and use the funds of the company. And the checks drawn by Mrs. Worthington were signed by her as president of the company, to which office •she was elected at the first meeting of the directors.

Thus it appears that the real holders of the stock consented to •such use of the funds in advance of the payment of the premiums. Aside from this positive evidence of assent and participation in the payment of these premiums by the two persons who were the real holders of the stock, there is other evidence in abundance in the record to support a finding of fact that each of them acquiesced in such disposition of the moneys. There was no concealment. All of the transactions appear openly upon the books of the company. Some of the expenses were charged to the account of Mrs. Worthington, and others to the account of Richard Worthington, but from one fund, and in the same way were paid all of the expenses of the family and of the Worthingtons individually, and towards that result each contributed by signing checks in their respective official capacities. Without further discussion of the evidence under this head, it is quite apparent that the learned judge at Special Terra was right in saying that all the members of the corporation assented to the use of the funds of the company for the purpose of paying these premiums. But it appears from the evidence, conclusively7, that the nominal stockholders- assented as well. Miss Sproule, who was the housekeeper and lived with the "Worthingtons, was a director of the corporation during all of -its existence, some of the time an officer of the conqiany7, and during a considerable period of time a clerk constantly in attendance at the store; she made entries in the books and attended the meetings of the trustees. As their method of paying the family7 expenses and other personal bills out of the funds of the company7, and charging them against the real owners of the stock began immediately7 upon the formation of the company and continued throughout its existence, it is evident, without further reference to the evidence, that the nominal stockholders assented fully to such use of the funds for the benefit of the real stockholders:

The conclusion necessarily7 follows that, if the corporation were in existence and solvent, it could not maintain this action. The receiver, it is true, represents not only the corporation but the creditors and stockholders as well, but, as trustee for the corporation and stockholders, he stands in no better position to enforce this claim than did they.

In their behalf, the rights of creditors not intervening, lie could not maintain an action which the corporation would be prevented from maintaining were it in existence.

In his capacity7 as trustee for the corporation he would not be precluded from a successful prosecution of the action, because of the-assent of all of the stockholders to the use of its funds for purposes outside of the business of the corporation, provided it were the fact that the corporation was insolvent at the time such payments were made. But, as was truly7 said at Special Term, there is no evidence that the corporation was insolvent at the time of the making of the several payments, nor does it appear that the indebtedness to any7 of the present creditors of the corporation arose prior to such payments.

So far as this record discloses, therefore, the receiver is in no better position to prosecute this action than the corporation would be were it in existence, solvent and making a like attempt.

It follows, if the views expressed be sound, that there is no occasion for a consideration of the other questions discussed by counsel. The judgment should be affirmed, with costs.

Yan Brunt, P. J., and O’Brien, <1., concurred.

Judgment affirmed, with costs.


author: Parker, J. :

text:
    Laura Cunningham, Plaintiff, v. John Scott, Defendant, Impleaded with Elihu H. Ropes.

      Bills and notes — a holder of, must prove himself to be abona fide holder thereof, where the inception of the paper is illegal — gross carelessness is evidence of lad faith-payment of value, how far conclusive — presumption that the-common law prevails in another State.

    Where it is shown that a promissory note had an illegal inception a holder thereof can no longer rest upon the presumptions which ordinarily attend his position, but must show the circumstances under which the note came into his possession and that he has acted in good faith.
    Gross carelessness will not, as a matter of law, defeat the title of a purchaser for value, but it constitutes evidence of bad faith.
    The payment of value for negotiable paper is a circumstance to be taken into account with other facts in determining the good faith of the purchaser, but it is not conclusive, and when it appears that a note was obtained under such circumstances as would prevent the original holder from maintaining an action upon it, it is only in the absence of all evidence tending to show notice to or bad faith on the part of the purchaser that the payment of value can be deemed conclusive.
    In the absence of proof to the contrary courts of the State of New York will assume that the common law prevails in another State as it does in the State of New York.
    Motion by the defendant, John Scott, for anew trial upon a case containing exceptions, ordered to be heard at the General Term in the first instance, upon the verdict of a jury in favor of the plaintiff rendered by direction of the court after a trial at the New York Circuit on the 26th day of April, 1895.

      Dallas Flannagan, for the plaintiff

      Sol. Kohn, for the defendant.
   Parker, J. :

Tlie note upon which recovery was had was made in the State of Texas, and, therefore, was governed by tlie law of that State. It does notapjiear, however, that the statutes of Texas affect in any manner the legal questions which grow out of this controversy, and, in the absence of proof to the contrary, the common law must be presumed to prevail in Texas as it does in New York.

In this State the law applicable to the facts of the case is that holders of negotiable paper are only entitled to tlie benefit of the rule of the commercial law which forbids its validity being questioned when they have purchased such paper in good faith, and in the usual course of business, before maturity, for full value and without notice of any facts affecting its validity. The holder may make out his title by presumption, but this may be impeached by evidence showing that the paper had an illegal inception, and then he can no longer rest upon presumption, but must show the circumstances under which it came into his possession, and that he has acted in good faith.

While gross carelessness will not, as matter of law, defeat title in a purchaser for value, it constitutes evidence of bad faith. The payment of value for negotiable paper is a circumstance to be taken into account, with other facts, in determining the good faith of the purchaser, but it is not conclusive when it appears that the paper was obtained under such circumstances as would have prevented the original holder from maintaining an action thereon, except in the absence of all evidence tending to show notice to, or bad faith on the part of, the purchaser. With these rules as our guide we shall briefly consider the evidence.

At the outset it may be observed that it is'undisputed that the note was obtained by the payee without consideration. It was made under the following circumstances : In November, 1890, John Scott, the maker, while in the State of Texas, negotiated for the purchase of some land of one E. II. Ropes, with whom he had been acquainted for some period of time. Ropes supposed that he was, or at least said that he was, the owner of a tract of land in the county of Nueces, and he agreed to sell the same, and to take defendant’s note therefor with vendor’s lien on the land to be conveyed..

The note was made and delivered to Ropes, and therein was acknowledged tlie vendor’s lien on tlie land, described as security for the payment of tlie note.

The deed had not been made out when the defendant left the State, and it was agreed that it should be made out, executed and forwarded to him.

It turned out that Hopes did not own the land; or at least he only had title to a part interest, the greater portion of it belonging to a corporation of which one Stayton was the secretary and also the attorney, and to whom reference will later be made. Hopes, therefore, did not forward to the defendant a deed, as he agreed, as lie neither had nor could obtain title. There was a total failure of consideration for the note, therefore, and Hopes had no right to put it in circulation. Hopes indorsed the note and turned it over to Stay-ton, as the latter alleges, in payment of a debt already due to him from Hopes for legal services rendered. Hopes testifies that it was a loan to Stayton, who reported to him that he would get into trouble unless he had some collateral to put up in addition to paper of his own. That Hopes, and not Stayton, gives the correct account of the transaction, is evidenced by a receipt signed by Stayton, which reads as follows: Received of E. TL Ropes, as a loan, one vendor’s lien note for $4,506, dated Corpus Christi, November 24th, 1890, and given by John Scott as part of tlie jiurchase money of block Number 814, on Port Aransas Cliffs.”

At least the jury would have been authorized to find from this, and the other evidence in the record, that it was a loan to Stayton, to be used temporarily as collateral, and then to be returned. They would have been further authorized to find from the evidence that Stayton well knew that there was no consideration for the note.

The note, and also the receipt, bore evidence that the consideration for the note was tlie purchase price of the land referred to in both note and receipt — land which was at the time owned by a corporation of which Stayton was the secretary and attorney, and it ■appears from the testimony of Hopes that Stayton, at his request, had made a search of the title to such land, which showed that the greater part of it, if not all, belonged to the corporation.

After Stayton had acquired possession of the note he turned it over to Messrs. Swearingen & Brooks for this plaintiff, to whom he was then indebted in the sum of $2,040, considerably less than half the face value of the Scott note. Swearingen and Stayton woidd have it believed that Stayton sold to Swearingen’s firm for the plaintiff this note for that sum in cash.

But the plaintiff testifies that Stayton owed her that sum of money with some interest, and that she had notice from Swearingen & Brooks of their getting the note. Under what circumstances they got it, and whether it was as collateral to the indebtedness due the plaintiff, or in payment of it, slie does not seem to know, or at least her testimony is silent upon that subject.

It is certainly quite remarkable that she should have no information in reference to it, and that she should not have felt called upon to inquire how it was that she should be given a vendor’s lien note for more than twice the amount of the indebtedness due to her from Stayton, if it was intended merely as a payment of such indebtedness.

There is still another bit of testimony which should not be lost sight of. As we have already observed, Stayton undoubtedly knew when he borrowed the note that it was without consideration, and that any attempted disposition of it by him would be fraudulent. And yet Ropes testified that he knew that, at the time of this transaction, Stayton was attorney for Mrs. Cunningham, this plaintiff. Although this testimony was weakened somewhat by a statement of how he acquired the information, still it was entitled to consideration. In the light of these facts, we think it was a question for the jury, whether she was a good faith purchaser for value, and not a question of law for the court.

The exceptions should be sustained and a new trial ordered, with costs to the defendant to abide the event.

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

Exceptions sustained, new trial ordered, costs to defendant to abide event.