author: By the Court.—Freedmah, J.—In

text:
    THEODORE SCHROFF and CHARLES SNEIDER, Plaintiffs and Respondents, v. WILLIAM BAUER, Defendant and Appellant.
    I. Trial. Court. Direction of, to jury to find verdict when questions of fact are involved; when not cause for reversal although the evidence may not be entirely clear or uncontradicted.
    1. When no specific request is made for the submission of the questions of fact to the jury, and only a general exception is taken to the direction.
    It. Waiver of a condition.

    What is sufficient evidence of, to sustain a verdict finding a waiver.
    Before Monell, McCunn and Freedman, JJ.

      Decided April, 1871.
    Appeal from a judgment and order denying defendant’s motion for a new trial made on the judge’s minutes.
    The action was for the recovery of a commission, fixed by agreement of the parties at one hundred and forty dollars, and claimed to have been earned by the

      plaintiffs, as brokers, in effecting a sale of defendant’s house to one Kaesinger.
    The defendant admitted the employment and the agreement to pay the said sum of one hundred and forty dollars, but averred that said agreement was on the express condition that the purchase should be first completed, the title passed and the purchase price paid, which had not been performed.
    On the trial, the defendant claimed and was decided to hold the affirmative of the issue.
    Upon being placed upon the stand the defendant testified substantially to the condition alleged in the answer, and also, among other things, that through the intervention of the plaintiffs, a contract, under seal, was entered into between defendant and Kaesinger, whereby said Kaesinger agreed to purchase defendant’s house for nineteen thousand six hundred dollars ; that five hundred dollars thereof were paid down, but that Kaesinger subsequently backed ont.
    On cross-examination he admitted that upon receipt of the five hundred dollars plaintiffs demanded their commission, which they wanted to deduct from the sum so received, and that he, the defendant, told them that it was no matter, that they should have their commission in a few days, whether Kaesinger took the property or not.
    It further appeared from defendant’s testimony, that about seven days after the execution, and about twenty-three days before the maturity of the contract, the purchaser, in a conversation had with the defendont, informed the latter that he did not want the house; that no deed was ever prepared or tendered to the purchaser, and that no action was ever commenced against him.
    After defendant had rested, plaintiff proved the interest on the amount claimed, and the court thereupon (directed the jury to find a verdict for the plaintiffs, which was done, and to which direction defendant excepted.
    A motion for a new trial, on the judge’s minutes, was denied.

      Otto Meyer, attorney for plaintiff.

      Stallknecht & Hall, attorneys for defendant.
   By the Court.—Freedmah, J.—In

looking over the evidence, and considering it in the light most favorable to the defendant, it seems clear that the learned judge who tried the case found that the defendant had waived the condition originally annexed to his promise." Whether or not such waiver had taken place was a question of fact to be deduced from the whole evidence, which was uncontradicted. The defendant might have insisted upon its submission to the jury, and if such request had been made in terms, it would probably have been error to refuse it. But the defendant did not see fit to do so. Having assented to the substitution of the judge in the place of the jury on that question, and there being some evidence to sustain the conclusion, at which the court arrived, the matter of fact involved therein is not reviewable, on appeal from the judgment, under a general exception (Dows v. Rush, 28 Barb. 157 ; Marine Bank of New York v. Clement, 31 N. Y. 43, and Wilklow v. Lane, 37 Barb. 244).

The authorities are quite numerous that where no specific request is made to the judge to leave any particular question of "fact to the jury, and he gives to the jury a direction to find a verdict either in favor of the one party or the other, although the evidence may not be entirely clear or uncontradicted, to which ruling only a general exception is taken, the point that such question should have been submitted to the jury can not be raised, under the exception aforesaid, in the appellate court for the first time. The request must be made on the trial, and should be so distinct and specific that the court can pass directly upon it. This proposition has been laid down and reaffirmed so often, that it must be deemed settled beyond further controversy (Barnes v. Perine, 2 Kern. 22 ; Plumb v. Cattaraugus Ins. Co., 18 N. Y. 392 ; Winchell v. Hicks, Id. 558 ; Graser v. Stellwagen, 25 Id. 315 ; Seymour v. Cowing, 1 Keyes, 532 ; Bidwell v. Lament, 17 How. Pr. 357 ; Stedman v. Western T. Co., 48 Barb. 97 ; Hoagland v. Trask, 6 Robt. 540 ; Luckey v. Gannon, 1 Sweeny, 12).

It is claimed, however, that because á motion has been made, upon the judge’s minutes, for a new trial, and an appeal taken from the order denying the motion, the appellate court may, notwithstanding the omission of defendant’s counsel on the trial, reverse the judgment and grant a new trial, if, upon an inspection of the case, it should be of the opinion, that the merits of the case have not been fully and fairly tried, and that injustice has been done. Without affirming the principle laid down in the opinion, reported as the opinion of the court, in Lennox v. Hoppock, 1 Sweeny, 466, as that case may be distinguished from this by the fact that in that case the motion for a new trial was made at special term, upon a case regularly made and settled, and not upon the judge’s minutes, a distinction which becomes quite material whenever the question of the extent of the power of the court to grant a new trial for objections not taken at the proper time is sought to be determined, it is sufficient to say that the case at bar is not one which calls for the exercise of any such power. The plaintiffs, according to defendant’ s own showing, had done all in their power to earn their commission, and the defendant should not be permitted to deprive them of it by refusing to enforce the contract against the purchaser, and contenting himself with pocketing a profit of five hundred dollars resulting from the transaction.

I have also looked at the tWo exceptions taken by defendant to the exclusion of evidence, and am satisfied that they are untenable.

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


source: Caselaw Access Project

author: By the Court.—Monell, J.

license: Public Domain

text:
    JOSEPH R. STUYVESANT, Plaintiff and Respondent, v. JOSEPH E. BROWNING, — MOORE, — GEISSLER, — FAUSSEL and OTHERS, Defendants, GEISSLER and FAUSSEL, Appellants.
    I. Mechanics’ Lien Law.
    1. Mortgage on lease, by lessee to lessor, to secure advances made by lessor, under an agreement between him and lessee, tobe applied to the improvement of the premises, the advances having been made before the execution of the mortgage, and mechanics' lien against lessee for work performed and materials furnished before the execution of the mortgage.—Priorities of.

    A. If the mortgage is recorded before the notice of lien is filed, the mortgage has the priority.
    B. If the notice of lien is filed before the mortgage is recorded, the lien has the priority.
    1. A covenant in the lease that the improvements should belong to the lessor at the end of the term, does not affect the question of priority.
    II. Foreclosure. Answer. Pule 71. Proceedings under.
    1. Motion for judgment cannot be made under rule 71 when the answer raises an issue against the plaintiff’, although the issue so raised may not be a sufficient one, and although the answer may not deny any material fact in the complaint.

      B. The plaintiff must either demur to such an answer, or move to strike it out as irrelevant, or move for judgment on it as frivolous, or bring the cause to trial.
    C. Semble. The intention of rule 71 was to prevent defendants delaying a plaintiff by interposing controversies between themselves.
    3. Judgment in. Provisions in as to leases and rent.
    A. When a mortgage is on a lease, the judgment should not contain directions for the payment of taxes, assessments or rents in arrear out of the purchase money.
    B. In such case, taxes, assessments and rent in arrear, are not payable out of the purchase money.
    Before Barbour, Ch. J., Monell, Jones, Spencer, and Freedman, JJ.

      Decided April 1, 1871.
    Appeal from a judgment.
    This action was to foreclose a mortgage made by the defendants, Browning and Moore, dated August 4, 1868, to secure to the plaintiffs the payment of twenty thousand dollars.
    The complaint alleged, amongst other things, that Geissler and Faussel, two of the defendants, had, • or claimed to have, some interest in or lien upon the mortgaged premises, but which had accrued subsequently to the lien of the mortgage.
    The defendants Geissler and Faussel, only, appeared and answered the complaint.
    They alleged in their answer that prior to the date of the mortgage, the plaintiff was the owner of four lots, describing them, part of the mortgaged premises, which, by indenture, he leased to the defendants Browning and Moore, for a term of -ten years, in which lease it was agreed that all repairs, alterations, improvements and additions to the buildings upon the premises, should, at the expiration of the term, be surrendered to the plaintiff. That afterwards, Browning and Moore acquired a leasehold interest in the residue of the mortgaged premises, for a term of seven years. That subsequently, the plaintiff and Browning and Moore agreed with each other, to improve the property, by the erection of valuable buildings thereon; and the plaintiff agreed to advance to Browning and Moore, certain moneys to be expended thereon. That thereupon Browning and Moore, with the knowledge and consent of the plaintiff, made a contract with the defendants Geissler and Faussel, to do certain work, and furnish materials in the construction of such buildings, for the sum of twenty-nine thousand dollars. That they immediately commenced such work, and furnished such materials, and completed the same pursuant to such contract; and that a large portion of the work had been done, and materials furnished, prior to the execution and delivery of the mortgage. They further alleged, that they were not paid for such work and materials, and that on February 23, 1869, there remaining unpaid the sum of nine thousand six hundred and sixty-six dollars, they filed- a notice of lien, pursuant to the statute. That the improvements upon the part of said premises which was acquired subsequently to the lease to Browning and Moore, and upon which, in fact, such improvements were put, form a part of one continuous building, extending over the residue of the premises.
    Under these facts the defendants claimed, that they should be declared to have a lien, for the payment of their demand, prior to the lien of the plaintiff’s mortgage.
    In answer to the allegation in the complaint, that there was due to the plaintiff upon the mortgage the sum of twenty thousand seven hundred dollars, &c., the defendants answered that they “have no knowledge or information sufficient to form a belief, whether the gum of twenty thousand dollars, or any pfcher sum, was lent by the plaintiff to said Browning and Moore ; or whether that sum, or any other sum, is due, or has been secured by said bond and mortgage.”
    The plaintiff moved, at special term, upon notice to the defendants, and upon the complaint and answer, for judgment of foreclosure and sale. The motion was granted, and judgment was thereupon entered, and a reference had to compute the amount due.
    The defendants appealed.
    Upon the argument of the appeal it was stated by counsel that the proceedings on the judgment not having been stayed by the appeal, the same had been so far executed, that the mortgaged premises had been sold and purchased by the appellants, at a sum sufficient to pay the amount directed to be paid, and also to nearly pay their claim.
    The court was thereupon requested not to set aside the whole of the judgment, as that would affect the sale and the appellants’ title under the judgment, but to merely modify the j udgment, by asserting the priority of the defendants’ lien, if the court should decide they had a priority of lien, or to set aside so much of the judgment as directed the payment of the amount due to the plaintiff, if the court should decide it should be set aside.

      Mr. John J. Townsend, for appellants.

      Mr. Malcom Campbell, for respondent.
   By the Court.—Monell, J.

The judgment in this case was obtained upon a motion made at special term, pursuant to notice for judgment upon the complaint and answer; upon which motion it was adjudged that the answer presented no defense to the action. There had been no demurrer to the answer, nor had there been a motion for judgment upon it as a frivolous answer, nor a motion to strike out the defense as irrelevant. But merely on a motion for judgment, the court, at special term, overruled the defense or matter set up in the answer, and directed judgment in favor of the plaintiff. No findings of fact or conclusions of law were made; nor was there any opportunity afforded to the appellants to object to the manner of proceeding, or to except to the decision of the court.

The practice adopted in this case, was probably supposed to be in accordance to Rule 71. But, I am of opinion, that it was not intended by that rule, to authorize a summary trial, where the answer of any defendant presented, what might be claimed to be a defense to the plaintiff’s case, or to any part of it.

The rule provides for this summary trial, only, where no answer has been put in, “ or any answer denying any material fact” in the complaint.’

Doubtless, the court has the power, in any stage of the action, to overrule a defense ; but it can ordinarily be done only upon a demurrer, or upon one of the motions to which reference has been made. Where there is a defense, or what is claimed to be a defense, the usual, and I think, the correct practice is, if no demurrer is served or motion made to strike out the defense as irrelevant, or for judgment upon it as a frivolous pleading, to put the cause upon the calendar, and upon the trial pronounce judgment upon the defense (Boyce v. Brown, 7 Barb. 81; Van Valen v. Lapham, 13 How. Pr. 243). In that way the defendant can fairly raise the questions presented by his answer, and afterwards review any decision which may be rendered against him.

The intention and object of Rule 71 was, to prevent defendants from arresting or delaying a plaintiff, by interposing in the action controversies between themselves ; and hence, where it is sought to settle equities between defendants, and none of them deny the allegations in the complaint, a summary trial may be had, under the rule. But where the answer raises an issue against the plaintiff\ whether sufficient or not is not important, it was not, I think, the design of the rule, that such issue should be determined, otherwise than in the ordinary way of trying issues of fact, although the answer may not deny any material fact in the complaint.

Overlooking the irregularity in the trial, however, if there was any irregularity, and treating it as a demurrer ore tenus, let us see if the appellants have any de fense.

Their claim to priority arises, as I understand it, from the fact, that they had contributed largely to the value of the mortgaged premises : which value, under the peculiar arrangement between the plaintiff and Browning and Moore, subsequently accrued or would accrue to the plaintiff’s benefit.

The premises had been leased by the plaintiff to Browning and Moore for a term of years, with a. covenant in the lease, that the improvements should be surrendered to the lessor, at the end of the term. Subsequently, the lessees agreed to improve the premises, the plaintiff agreeing to advance the money therefor, and to take a mortgage to secure the advances.

The appellants furnished work and material for the improvements, with the knowledge of the plaintiff, and before the mortgage was given, to the extent of about ten thousand dollars ; and to that extent, enhanced the value of the premises, when the mortgage came to be given.

But the plaintiff had, at the same time, advanced upon his agreement with the lessees a sum of money much greater than the value of the work and materials furnished by the appellants; and a part of which money, doubtless, ought to have gone to them. But I cannot see why a mechanic, who furnishes labor and materials towards the construction of a building, should have a priority of lien over a capitalist who advances money for the same purpose, unless he gets such priority legally and under some of the modes provided for the purpose.

The plaintiff had no lien for the money he had advanced, until the execution and delivery of the mortgage, and the appellants had no lien for the work and materials furnished until the filing of their mechanics’ lien under the statute ; and as that was after the plaintiff’s lien had attached, it must be susidiary to it.

It was contended by the appellant’s counsel that a mechanic occupies a stronger position in respect to his labor and materials furnished, than any other person; and that he should, at all events, and as against all others, be protected ; and it was, therefore, claimed that the lien laws, which have been enacted for his security, give him a priority of lien for his labor and materials furnished in the construction of a building, over all others.

I should be very reluctant to put any such construction upon the statute ; and shall not do so, unless compelled by the plain letter and intent of the statute.

It is claimed that the act of 1863 (Laws qf 1863, ch. 500, § 1), which gives the lien to a person, who as laborer, in pursuance of any contract with or employment by the “owner,” shall perform any labor, &c., shall have a lien, &c.

The difficulty in making that section of the law available to the appellants is, that in no sense whatever, did the plaintiff stand in the character of “owner” in respect to the buildings. Although he was the owner of the fee and the lessor, and by the terms of the lease was to have all improvements at the end of the term; and although he advanced money towards the construction of the buildings, nevertheless he was not owner in the sense contemplated by the statute.

Besides, there was no contract with, or employment by the plaintiff, who stood in relation to the buildings, precisely as any stranger would have stood, who had made a building loan.

And the same construction must be put upon the act of 1866. Under both statutes, the term “ owner ” must be deemed to mean the person for whom the building is erected or improved. So, that, if a tenant erects a building upon Ms landlord’s property; or alters or improves one already there, the tenant, within the meaning of the lien laws, is “owner” and not the landlord, although the latter, by the terms of the lease, or by operation of law, will become the owner of the building or improvement, at the end of the term.

These views are strictly in accordance with Ombony v. Jones (19 N. Y. 232), and Loonie v. Hogan (9 Id. 435). The latter case is quatuor pedibus with the one now before us.

It is clear, therefore, that the lien of the appellants was subseqent to the lien of the plaintiff. The only lien wnich they acquired, was under the notice filed under the lien laws of the State, and that lien attached only from the time of filing, and to such interest in. the premises as the lessees then had.

It follows, from all this, that the matter set up in the appellant’s answer, constituted no defense. It was properly overruled, and the judgment directing payment of the mortgage debt, was correct.

• It is not usual to insert in a judgment a direction to pay any taxes or assessments which may, at the time of the sale, be a lien upon mortgaged premises. That is usually done by the referee or officer who makes .the sale. Yet, in an ordinary case of a mortgage upon real property, it would not be < deemed an essential error. But in this case, which is a mortgage upon leasehold property, taxes and assessments should not be paid out of the purchase money. If the lessees have agreed to pay such liens, it is at most a mere personal covenant, and not included in their mortgage.

For a stronger reason, the direction to pay arrears of rent, is improperly in the judgment.

The judgment must, therefore, be modified, by striking out the directions to pay out of the purchase money, taxes, assessments or rent.


author: By the Court.—Freedman, J.

text:
    BERNARD SAMUELS, Plaintiff, v. JOHN McDONALD and others, Defendants.
    I. Emigration, commissioners of. Liability of..
    1. Not liable for loss of baggage belonging to immigrants.
    II. Bailee without hire. Carrier. Liability of.
    1. Not liable for loss of baggage except upon proof showing such a delivery to, and acceptance by him of the property as imposes on him the legal obligation to answer for its safety.
    2. Evidence which establishes merely that according to certain rules and regulations the property should have come into his possession, is not sufficient for this purpose.
    III. Complaint. -What will not support a verdict founded on evidence of loss by carrier.

      1. Semble. A complaint for conversion will not.
    2. Semble. There is á substantial difference between an action founded on a loss by a bailee, and one founded on a conversion, which the plaintiff is bound to observe in stating the cause of action in the complaint.
    Before Monell, McCunn, and Freedman, JJ.

      Decided April 1, 1871.

      Exceptions ordered to be heard at general term.

    The complaint of the plaintiff against John McDonaid, Robert Murray, Cornelius Van Ness and Nicholas Muller, named as defendants therein, alleged as follows :
    That on May 24, 1867, the plaintiff arrived at the port of New York, from Liverpool, in the steamer Manhattan, having in his possession several trunks and other personal effects, the property of the plaintiff.
    That upon such arrival, and before the said steamer had come to any wharf in said port, the above-named defendants, by their servants and employees, boarded said steamer by means of a small steamboat, and then and there the defendants, claiming to act under some contract, license or permission from the commissioners of emigration, a corporate body established by and under the laws of the State of New York, did without obtaining the consent of the plaintiff, but claiming the exclusive right to carry and convey the baggage and personal effects of passengers from said steamship to the city of New York, take into their possession the said trunks and personal effects of the plaintiff, and undertook to carry and convey the same safely to the city of New York, and there safely keep the same in the premises occupied by the defendants at Castle Garden, in said city, charging as compensation therefor the sum of ten cents for each package not taken away by the owner within forty-eight hours.
    That among the said trunks and chests of the plaintiff taken possession of by the defendants, as aforesaid, was one chest containing a large quantity of clothing and other articles of the value of about thirteen hundred dollars.
    That the plaintiff has repeatedly demanded the said trunk last mentioned from the employees of the defendants at the usual place of delivery of such articles, and has offered to pay the sum charged by the defendants for the care and custody thereof, but the defendants neglected and refused to deliver the same to the plaintiff, and admitted their inability to deliver the same, whereby the same has become wholly lost to the plaintiff.
    Wherefore the plaintiff demands judgment against the defendants for his damages to the amount of fifteen hundred dollars.
    The defendant McDonald alone was served with process, and his answer constituted, in effect, a general denial.
    By stipulation in writing between the plaintiff and the defendant McDonald, the summons and complaint were amended by the striking out of the name of Robert Murray, as one of the defendants, and inserting the name of John Daly as defendant in lieu of said Murray.
    The action was tried at the trial term, before a justice of this court and a jury.
    At the close of plaintiff’s case, defendants’ counsel moved for a dismissal of the complaint, for the reasons:
    I. Because by the statutes the defendants were the mere servants of the commissioners of emigration, and could not be made liable for any baggage delivered into Castle Garden until it was checked by the railroads represented by the agency.
    II. Because the complaint alleged a delivery to defendants on board of the vessel, which had not been proved, and such allegation could not be sustained by proof of delivery in the Garden.
    III. That, if these defendants were liable at all, it was a joint liability which could not be severed, and all must be sued and served, or the action could not be maintained.
    IY. That, by statute, these defendants could not be made liable for any city baggage not intended for inland transportation, this baggage being under the sole control of .the commissioners of emigration.

      The court denied the motion, to which defendants’ counsel duly excepted.
    The evidence thereupon introduced showed that at the time alleged, to wit, May 34, 1867, the defendants, McDonald, Van Hess and Daly, were jointly engaged in a kind of business in the interior of Castle Carden, which appears to have been as follows :
    McDonald represented the Pennsylvania Railroad, Van Hess the Erie, and Daly the Hew York Central. For the benefit of those roads in soliciting travel, and their convenience in booking passengers and receiving and checking their baggage, these parties,, known as the railroad agency, were admitted into Gfastle Carden for that'purpose, to the exclusion of all other parties. These railroad agents (the defendants), derived a profit by way of a commission or allowance upon the tickets sold by them. It appeared that the commissioners of emigration allotted to these agents a portion of their premises, in which to transact then- business, and imposed upon them as a condition of the privileges accorded to them, the duty of receiving, taking charge of and delivering_the baggage and 'effects of the immigrants who intendecTtcTremhiri'ih the city, as well as of those who purchased tickets- Tor-rthose railroads; and the commissioners "aBowed the defendants to charge ten cents for each package.-which remained in their custody over forty-eight hours, according to one witness, or twenty-four hours according to the defendants’ testimony. The money thus received went to the individual benefit of the defendants, and made part of a general fund, which, - after paying the expenses of labor, &c., was divided among them. If the expenses had exceeded the profits, the defendants would have had to pay them.
    It also appeared that under another regulation made by the commissioners of emigration, it was the duty of one Captain Hall to convey the baggage of the immigrants from the steamer to Castle Garden, and that the employees of Captain Hall checked the baggage before it was taken from the steamer.
    After the close of the evidence on both sides plaintiff’s counsel moved to strike out the name of Nicholas Muller in the complaint as he had put it in on the information that he was one of the railroad agents at the time the baggage was lost, and it appeared from the testimony in the case that he was not an agent at that time.
    The court granted the motion, to which defendants’ counsel duly excepted.
    The defendants’ counsel then requested the court to dismiss the complaint and to direct a verdict for the defendants, for the reasons urged by him on the motion for the nonsuit, and for the additional reason :
    V. That it appeared from the evidence that defendants were the mere agents in all cases of either the railroad companies they represented, or the commissioners of emigration, and could not be personally charged in this case.
    The court refused so to do, to which defendants’ counsel duly excepted.
    The court, on motion of the counsel for plaintiff, directed the jury to find a verdict for plaintiff against the defendants John McDonald, Cornelius Van Ness and John Daly; and the jury, thereupon, under the direction of the court, rendered a verdict for the plaintiff, and assessed the damages at eight hundred and seventy-nine dollars.'
    The court then ordered that the exceptions taken by the defendants be heard at the general term of this court in the first instance, and that judgment in the mean time be suspended.

      Malcolm Campbell, attorney for plaintiff.

      Charles C. Bigelow, attorney for defendants.
   By the Court.—Freedman, J.

Under the statutes in force at the time of the commencement of this action, the commissioners of emigration were public officers of the State government, whose powers and duties were strictly defined by law. Aq such officers, they had no power to make any contract for tBe acceptancépiáfe-keeping or return of the baggage of any person. The rules and regulations prescribed by them, pursuant to the authority conferred upon them by statute, for the landing of immigrants and their baggage, must be deemed to have been established for the general good and better protection of immigrants arriving at the port of New York ; but if such rules and regulations have failed to protect the plaintiff, it is a misfortune; for which he has no remedy against the State or against the commissioners in their official character, for the assumption by the government of control over such matters cannot be held to operate as a contract of general indemnity (Murphy v. The Commissioners, &c., 28 N. Y. 134.

To enumerate the instances in which the commissioners, or any of them, might become individually liable, would, in the present case, be a work of supererogation. Nor is it necessary to discuss how far and under what circumstances the doctrine of respondeat superior should be applied to the several railroad companies who are represented at Castle Garden by the defendants; the only question to be determined in this case being whether the verdict directed against the defendants named can be permitted to stand.

Passing over the questions arising from the change and substitution of parties, and the non-service of process upon two of the defendants, who were brought into court in a summary way, I shall at once proceed to examine, whether, upon the proofs adduced in support of the allegations of the complaint, a personal liability has been established on the part of the defendants ; and for the purposes of such examination I will assume, without further inquiry, that in consequence of the manner in which they transacted their business at Castle Garden as the so-called railroad agency, they were personally responsible, to some extent at least, for the safety of baggage coming into their possession and belonging to immigrants who intended to remain in the city of New York.

By the complaint, defendants stand charged as carriers, who, against plaintiff’s consent, had taken possession of his baggage and assumed the duty of safely carrying and keeping the same. Proof of a compulsory taking of the baggage from plaintiff’s possession by the defendants, and a refusal on their part to restore it, would consequently have been sufficient, without any proof of its subsequent fate, to enable plaintiff to recover. But plainiiff’s evidence ■ wholly failed in this respect, for it showed, that if there was any compulsory taking at all, it was done by Captain Hall* whose duty it was to convey the baggage to Castle Garden, and who, in the performance of such duty, acted under the regulations established by the commissioners, and not under any authority, express or implied, from defendants. If there was no compulsory taking, the action, being in "the form of trover for a conversion, and not for a mere negligent loss, will not lie against a carrier or even a bailee, except upon proof of an absolute appropriation of the property by the carrier or bailee to his own use, or, what is equivalent, parting with it to others without authority from the owner (Devereux v. Barclay, 2 Barn. & Ald. 702 ; Stephenson v. Hart, 4 Bing. 476 ; Youl v. Harbottle, Peake’s Cas. 49 ; Sublock v. Inglis, 1 Stark. 154). For mere negligent loss the only forms of remedy formerly were either a special action on the case for a breach of the public duty of carrying and delivering safely, or of assumpsit for a breach of the undertaking so to carry and deliver (Ross v. Johnson, 5 Burr. 2825 ; Anon., 2 Salk. 665). In Tolano v. The National Steam Navigation Co. (5 Robt. 326), this was held by this court to constitute a substantial difference in the cause of action, which a plaintiff is bound to observe in the statement of facts constituting the complaint (Code, § 142, subd. 2), if he seek to recover for mere non-delivery or loss.

If this doctrine is sound law under our present practice, there was, at the time plaintiff rested his case, a total failure of proof as regards the cause of action alleged in the complaint, and the motion for a nonsuit should have been granted, especially as no motion was made by plaintiff for leave to amend. •

But aside from this objection, which may be open-to the criticism of being of a technical nature, the evidence appears to be altogether insufficient to fasten any liability upon the defendants. If, in consequence of the ' manner in which, and the circumstances under wliich, they transacted their business at Castle Garden, they are to be -considered as bailees without hire of the city baggage of immigrants, they can be held liable only upon proof of want of ordinary care in keeping it, or of an actual subsequent appropriation of it to their own use. But in either case it is absolutely neceá\ / sary to establish, as the foundation of the liability, J and by competent proof in the first instance, that the . baggage_came into their possession for.the purpose of 5 being kept by them subject to the call of the owner. ■Upon this point the evidence shows, that plaintiff saw .the missing box checkecTby sorifiTperson unknown to f him on boardTofUrhFvessET^S^vKich he arrived, and that he received a check therefor. But he was unable to state whether or not the check Jhus received was a duplicate of the strap check, which he saw attached to the box. There was also some evidence which had a tendency to show that a mistake occurred in the checking of this box. Plaintiff testified that he saw all his pieces landed by a lighter (commanded by Captain Hall) upon a wharf inside of Castle Harden, over which it appeared, the commissioners of emigration had control, and to which all their employees, who were quite numerous, as well as the defendants, had free access ; but that he did not count his pieces after they had been discharged from the lighter, although he was positive that all the large boxes and trunks (which included the box in question) went into Castle Harden. Edward Murphy, called as a witness on the part of plaintiff, testified that he was employed by the railroad agency as baggage master, and as such, had charge of the whole baggage, which included railroad as well as city baggage; that he presumed he was on the wharf when the baggage came in from th'e vessel, on which plaintiff had arrived, but that he ngmc_saw plaintiff’s missing box. It also appeared that plaintiff did not discover his loss for ten or twelve days. All these facts, taken and weighed together and considered in connection with the Castle Harden regulations, so far as they were made to appear, fall very much short of establishing that there was, in point of fact, such a delivery by Captain_Hall_to the defendants, andrina acceptance on their part of the box in question, as is necessary for the creation of a legal liability founded thereon.

Defendants’ exceptions to the refusal of the court to dismiss the complaint, and to the directions of the verdict, should be sustained, and a new. trial ordered, with costs to the defendants to abide the event.


author: Jones, J.

text:
    ANSON WILLIS, Plaintiff and Respondent, v. NATHAN TIBBALS, Defendant and Appellant.
    I. Contract between authors and publishers.

    1. CONSTRUCTION OF.

      Held, that under a contract whereby the publisher agrees to publish the work, and pay the author for the copyright seven and a half cents for every copy of the book published, the publisher does not obtain the sole and exclusive right to publish the work.

      Held, that no usage was established which either gave to the words used such a meaning as would embrace such sole and exclusive right, or would make the passing of such a right a part of the contract.
    3. Pubmsheb. Right of,-under such a contract.
    It merely gives him the privilege of publishing as many copies of the book as he may see fit, on condition of paying the stipulated sum for each copy.
    3. Author. Right of, under such a contract.
    To allow as many other publishers .to publish the work as he pleases, and at such prices as he pleases; but he cannot give an exclusive right.

      4. Breach.

      Held, that the making of a subsequent agreement by the author, whereby he gave another publisher the right and privilege to publish the work, did not constitute a breach of such contract.

      Held, that the admission or rejection of evidence designed to excuse or justify the making of the subsequent agreement, and of evidence designed to bear on the question of damages arising from the making of the subsequent agreement, constituted no ground for reversal, as such admission or rejection could not possibly affect the result.
    II. Trial. Evidence. Admission and rejection of. Immateriality.

      1. The court will not reverse for the admission or rejection of evidence which could not possibly affect the result.
    III. Usage. How proved.
    1. By evidence of facts.
    3. Not by speculative opinion.

      Between authors and publishers,

    1. A certain claimed usage, held, not established.

      Before Monell, McCunn, and Jones, JJ.

      Decided March 4, 1871.
    This action is brought by plaintiff, who is the author of a work entitled “ Our Eulers and Our Eights; or, Outlines of the United States Government,” against the defendant, who published the work under a contract with the plaintiff, to recover the sum of five per cent, on -the retail price of eight thousand copies of said book, which number of copies he alleges the defendant published, and which sum of five per cent, he alleges was to be paid to him under the contract.
    The defendant, by his answer, claimed that the contract was: that after the sale of fifteen hundred volumes, the payment of twenty-five dollars for revising the manuscript, and six dollars and twenty-five cents for stereotyping, plaintiff should receive seven and one-half cents upon every volume sold in excess of the fifteen hundred volumes.
    That after this contract it was agreed between plaintiff and defendant, that Parmelee & Co. should be "allowed to purchase of defendant at the lowest possible price, and plaintiff should allow defendant at the rate of fifty dollars on the first six thousand books sold to Parmelee & Co. ; and defendant claims against plaintiff a pro rata on four thousand one hundred and forty-nine books sold to Parmelee & Co., amounting to thirty-four dollars and fifty-four cents.
    The answer then sets forth, that, by the agreement with the plaintiff, he, the defendant, was to be the sole publisher; that plaintiff afterwards, without defendant’s knowledge, entered into a contract with Parmelee & Co. to publish the book, under which contract Par-melee & Co. are publishing and selling, to defendant’s damage of four thousand dollars. The answer also claims an overpayment to plaintiff of sixty-nine dollars and sixteen cents.

      The plaintiff replied, denying the over-payment; denying that he agreed to allow fifty dollars on every six thousand books which should be sold to Parmelee & Co. ; denying that by the agreement between him and defendant, defendant was to be sole publisher, and denying that by the publication by Parmelee & Co. defendant has been damaged to the amount of four thousand dollars, or to any amount.
    The cause was tried before a referee, who, upon conflicting evidence, found as facts: ‘ ‘ That in or about January, 1868, the plaintiff made and entered into a contract with the defendant to publish the book in question.
    “That by the said contract the defendant agreed to publish said book, and to pay the plaintiff for his copyright of said book seven and a half cents for each copy of said book published.
    “ That before the publication of said book the defendant caused the same to be revised and corrected, so as to fit the same for publication, and informed the plaintiff thereof, who assented thereto, and that the defendant paid for such revision the sum of twenty-five dollars.
    “That in or about the month of July, 1868, the defendant, under and in pursuance of said contract, published an edition of said book for five hundred copies.
    “That after the publication of said edition the plaintiff, at the request of the defendant, revised the said book and enlarged the same, and that afterwards the defendant published seven thousand five hundred copies thereof so revised and enlarged, and that such revision and enlargement was reasonably worth two and a half cents for each copy, making ten cents for each of the last-mentioned seven thousand five hundred copies.
    “ That it was not agreed between the parties that the defendant should pay to the plaintiff a percentage upon the price for which the said book, when published, should be sold.
    “That after the publication of the said book, it was agreed between the said parties that the plaintiff should allow to the said defendant, on account of sales of books at a certain rate to other parties, to wit, Parmelee & Co., fifty dollars ; and that the plaintiff should allow to the defendant for certain additional stereotyping, two dollars.
    “ That the defendant paid to plaintiff in cash and in books the sum of two hundred and eighty dollars.
    “That by said agreement between the parties, defendant did not undertake to publish the said book within any certain time or in any particular style.”
    He further found as matters of fact:
    ‘ ‘ That defendant sought and failed to prove that there is an usage of trade in the city of Hew York, whereby a publisher who has agreed with an author to publish the works of the latter, which he has copyrighted, and pay him a certain price for each copy, becomes thereby entitled to the exclusive right to publish such work. And that plaintiff had no knowledge of any such custom.”
    Upon these facts he found as matters of law :
    ‘ ‘ That, by the agreement between the parties, the defendant did not become entitled to the exclusive right to publish the book ; that plaintiff was entitled to receive seven and a half cents for each of the first five hundred books published before the revision, and ten cents for. each of the seven thousand five hundred books published after the revision, making seven hundred and eighty-seven dollars and fifty cents; and defendant was entitled to offset the above-mentioned sums of twenty-five dollars, fifty dollars, two dollars, and two hundred and eighty dollars, making altogether thre'e hundred and fifty-seven dollars ; and that plaintiff was entitled to judgment against defendant for the balance, to wit, four hundred and thirty dollars and fifty cents.”
    It is necessary to advert to some of the testimony with a view of showing the questions arising in the case.
    About August 20, 1868, defendant entered into an agreement with Parmelee & Co., whereby he agreed that Parmelee & Co. should have the sole and exclusive right of sale of the work in the United States of America, and that he would furnish the books at cer-' tain stipulated prices from time to time, as ordered; and whereby Parmelee & Co. agreed to pay the stipulated prices, and guaranteed a sale of ten thousand copies of the work.
    There is evidence that piaintiff knew that the defendant intended to make a contract with Parmelee & Co., for the sale by them of the work, and agreed to make a deduction from the sum otherwise receivable by him on the books to be sold by Parmelee & Co. at the rate of fifty dollars on the first six thousand copies; but there is no evidence tending to show that plaintiff ever knew or was advised of the contents of the contract or its terms, or sanctioned them.
    Defendant, under his agreement with Parmelee & Co. furnished them with five thousand four hundred and seventy-one copies.
    Sometime in December, 1869, plaintiff made a contract with Parmelee & Co. to publish this book, being then aware that defendant had employed them for the sale of the book.
    After Parmelee & Co. made this contract with plaintiff they ordered but a few copies from defendant, and finally ceased entirely in January, 1869.
    There was proof on the part of plaintiff tending to show that defendant was guilty of gross delay in getting out' the book; that the book was poorly printed and bound; that there was great delay in furnishing Parmelee & Co. with the copies they ordered, and finally a .positive refusal to furnish them with certain descriptions thereof at the contract price, and that defendant had put a higher retail price on the book than had been agreed on between him and plaintiff.
    All of which matters were relied on by plaintiff as a justification for his making the contract with Parmelee & Co.
    The defendant introduced evidence in contradiction of these several matters.
    The referee has not found on them.
    The defendant, for the purpose of proving damages to him, offered to show how much the paper, printing,' and binding cost per volume; how much the stereotype plates cost; what the average sale of the book was down to December, 1868.
    The evidence was objected to by plaintiff ; the objection was sustained, and defendant excepted.
    The plaintiff offered in evidence the contract between Parmelee & Co. and defendant. The defendant objected ; the objection was overruled, and defendant excepted.
    The defendant had, previous to this, offered the same agreement in evidence, and it had been rejected on plaintiff’s objection, to which rejection defendant excepted.
    The plaintiff introduced evidence to show that it was the fault of defendant that Parmelee & Co. had not sold the ten thousand copies, with the view of showing that defendant, by his acts, had damaged and was damaging plaintiff by impeding the sale of his book. The evidence was objected to and the objection overruled, and defendant excepted.
    Evidence was introduced by the defendant, designed to establish that there is an usage whereby the publisher, under such a contract as this, obtains the sole right to publish the work. hTo evidence on this point was adduced in plaintiff’s behalf.
    After this evidence had been introduced the plaintiff was recalled and asked if he had ever heard of such a custom. This question the defendant objected to ; the objection was overruled, and an exception was taken.
    This comprises all the objections raised on the trial, except objections to two questions put by defendant, designed to prove matters which the plaintiff had proved on his examination, and in relation to which there was no contradictory evidence.
    From the judgment intered on the report of the referee this appeal is taken.

      George N. Lord, for defendant and appellant.

      Niles & Bayley, for plaintiff and respondent.
   Jones, J.

The basis of the referee’s decision is, that under the words of the contract defendant did not obtain the sole and exclusive right to publish the work, and that there was no usage which either gives to the words used such a meaning as would embrace such sole and exclusive right, or make the passing of such a right a part of the contract.

If this basis is correct, it follows that notwithstanding the contract with defendant, the plaintiff had a right to give a license to as many other publishers as he saw fit, to publish this work.

In this view, the objections taken on the trial are immaterial ; the evidence received and that rejected could not possibly have affected the result.

Is this basis correct %

The proper construction of the words of this contract is that defendant should have the privilege of publishing as many copies of the book as he saw fit, on condition of paying therefor seven and one-half cents each copy.

The argument against this construction and in favor of defendant’s view, to wit, that the contract amounted to an assignment of the copyright of the work, and gave the defendant the exclusive right to publish it, are, 1st, that the right to publish would be comparatively valueless unless it was exclusive, and, 2nd, that a publisher could not afford to undertake the expense of publication unless he had the exclusive right.

It is, however, evident, that a right to publish, although it is not an exclusive one, is not wholly valueless. Whether it is of sufficient value to justify the making of a particular contract, is a question for the publisher to determine, before entering into the contract. It may even be that a publisher would prefer paying to the author a small sum on each copy published for a non-exclusive right ‘ to publish as many copies as Ije pleased, to paying a larger sum for the exclusive right, depending on his ability to produce the work at the sum paid the author, in a style superior and at prices less than any other publisher can.

The price agreed to be paid the author wa s not so enormous as to preclude the idea that the publisher preferred making a contract at that price, whereby he did not get the exclusive right, to making one at a higher rate which should give such a right.

The construction contended for by the defendant, would be far more unreasonable than the one claimed by plaintiff.

Under the defendant’s construction, we would have an author parting with all right to the control of his copyright for a sum to be paid on each book when published, without any means to compel the publication of a single copy, or to claim damages for pon-publication.

So far as reasonableness goes, the weight of the argument is strongly in plaintiff’s favor.

In truth, in such a contract as this each party relies on the interest of the other.

The publisher assumes that if he, in good faith, publishes with proper efforts to assure circulation, and the work finds favor with the public, and becomes a success, the author will not give a license to another publisher, except at an increased rate, proportioned to the success of the work, in which case he, the first publisher, can readily command the market by underr selling the second one; whereas, if with proper diligence and energy in getting out the work, advertising it, and otherwise bringing it before the public, it fails to be a success, then that no other publisher would care to publish it at any price.

The author, oh the other hand, assumes that the publisher makes the contract expecting to profit thereby, and that he will use every effort to makue the work successful; and if successful, that he, for his own profit, will publish as largely as the demand call’s for.

Thus each regards his rights and interests sufficiently protected by a contract bearing the construction the plaintiff assigns to the one in qustion.

This leads to the inquiry 'as to whether the evidence established the usage sought to be proved.

I think it was wholly insufficient to establish the claimed usage.

1. A usage must be proved by evidence of facts, and not by mere speculative opinion (Greenl. on Ev. § 251 ; Stark, on Ev. vol. 2, p. 361).

The witnesses relied on to establish the usage in this case, are all publishers. They give, it is true, their opinion that such a usage exists. This opinion, 'however, is purely speculative. Hone of the witnesses pretend to have had any actual practical experience of 'it. They all say (with the exception of Mr. Clark), that the point never came up in their business ; that they had never known it discussed between publishers, or between publishers and authors, or between authors, and had never heard it spoken of except by the defendant.

Mr. Clark differs from the others only in saying that it came up for discussion between himself and partners some years ago; but he says that it never came up as a practical question in his business, or the business of any other publisher, to his knowledge. He further says, he generally provides for the exclusive right by written contracts, and relies on the contracts, and in some verbal contracts he relies on the honor of the author (fols. 104-105).

There cannot well be a weaker case made in support of a usage, or one resting more on speculative opinion than this, unless it is one where the witnesses brought to prove the custom have never had any connection with, or any dealings, in any shape or form, in the business, in relation to which the custom is sought to be proved.

2nd. A Usage must be established, known, certain and uniform.

Most of the witnesses testify that when they have a written contract they insert a clause giving an exclusive right.

It is certainly singular to insert a clause to secure that which a well-established, known and certain custom already fully secures to them. If, under an oral contract, without any special stipulation, the exclusive right is obtained by force of usage, so it is under a written contract without a written clause ; and e con-verso, if a special clause is requisite in a written contract so is an express stipulation in an oral one.

But one of the witnesses shows that the custom is not established and certain ; for he says that in some oral contracts he relies on the honor of the author (fol. 105). If the custom is good for anything it applies to all contracts (unless there is a stipulation excluding its operation), and consequently there would be no necessity for relying solely on the author’s honor in any contract. Another witness shows that the usage claimed is not certain and uniform, for he says it gives the exclusive right, for a certain term, or the whole term of the copyright—that is to say, it may be for a term of years, never less than five years (fol. 107).

What is the usage, according to this witness ? Is it to pass the exclusive right for five, seven, eight years, or the whole term ?

If he means that the usage passes the right for only five years, or the whole term, if it is less than five years, leaving it to the agreement of the parties if it is to pass, for a longer term, then, he is at variance with the other witnesses, who place no such limitation on the effect of the usage.

3rd. The usage is unreasonable.

The views above expressed as to the construction the defendant claims for the words of the contract are equally applicable here.

From an examination of the evidence, it appears that the witnesses have formed their opinions from a process of reasoning, and not from the existence of facts.

The propositions on which the reasoning is formed, are : that they have never known a case where an author, after making a contract like this with a publisher, has given a license to publish to another publisher; that such custom .is necessary to protect publishers, otherwise they would be at the mercy of. authors. From these propositions they draw the conclusion that the custom does exist (fol. 99).

The propositions are not, even as matter of reasoning, sufficient to support the conclusion.

It does not appear that the witnesses ever knew or heard of a single instance in which a contract like this was entered into. Nor of how many such instances, if any. But, assuming that they had heard of several such instances, the fact that the authors in those cases (being well satisfied with the first publisher), did not deem it to their profit or advantage to license other publishers, certainly does not warrant the presumption that there existed a usage which prohibited them from so doing, if occasion required; and as to publishers being under such a contract as this, at the mercy of the author, if such a custom does not prevail, they are no more so than authors would be at the mercy of the publishers if it did prevail. Both can protect themselves by proper stipulations, made either orally or in writing.

Judgment affirmed, with costs.


text:
    GEORGE K. DEMING, Plaintiff and Respondent, v. JOHN H. PULESTON, Defendant and Appellant.
    One stockholder in a corporation created under the general manufacturing act of this State, cannot, at law, enforce the liability of another stockholder of the same corporation, under any of the provisions of the act (Bailey ®. Bancker, 3 Bill, 188; Richardson ®. Abendroth, 43 Barb. 163; Beers ®. Waterbury, 8 Bosw. 396). Such liability can be reached only by an action in equity against all the stockholders, for contribution.
    Section 3 of this act provides for the annual election of the trustees and section 4 has a further provision that declares if an election be not made, all acts of trustees shall be valid and binding as against the company until their successors shall be elected.

      Beld, that section 4 continues trustees in their office after the expiration of their terms, and until their successors are elected, so far at least as to make their acts binding upon the company, and may, therefore, be regarded as a continuance in office, so as to render the incumbent liable as a trustee, if, after thq expiration of the term for which he was elected, he continues to act; but if, at the expiration of his term, the trustee retires from the company, and after-wards performs no official act, and assumes no official authority, he cannot be held liable as trustee under the provisions of the act.
    If he acts, however, as trustee after the term of his office has expired, he will be held to a faithful discharge of all the duties of the office of trustee, and responsible for any failure to perform them.
    A person whose term as trustee had expired, was afterwards present at a meeting of the trustees of the company, but it did not appear that he had done any official act before that time, or that he acted as trustee at that meeting. Held, that the fact of his mere presence at the meeting was insufficient to charge him as trustee. It did not establish or prove any official act, and upon this evidence the defendant had a right to have the jury instructed “ that if there was no evidence that the defendant was acting as trustee, the defendant could not recover.”
    In case of a liability of the trustees for certain debts of the company, it is immaterial whether said debts exist in simple contract, or that the contract has been merged in a note or judgment. It is, nevertheless, an existing debt in either form.
    Before Monell, Jones and Freedman, JJ.

      Decided April 1, 1871.
    Appeal from a judgment.
    The plaintiff alleged, that he was employed to superintend the operations of the “Hocking Valley Oil and Coal Company,” a corporation organized under the general manufacturing act of this State, at a salary of one hundred and twenty-five dollars for the first month, and one hundred and fifty dollars per month afterwards. That he continued in their employment for one year and eight days, when there was found to be due to him the sum of one thousand and four dollars and twenty-eight cents, for which the company gave to the plaintiff their promissory notes. The notes not being paid at maturity, the plaintiff obtained judgment against the company for the amount.
    The defendant was a trustee and stoelcholder of the company, and the plaintiff sought to charge the defendant for the debt of the company, on three several grounds, namely:—First, as a stockholder, that no certificate that the capital stock had been paid in, had been filed; and, Second, that the indebtedness of the company was for services. Third, as trustee, that the company had never filed an annual report.
    It appeared on the trial that the company was incorporated November 21, 1864. In the certificate of formation, it was provided that the number of trustees who should manage the concerns of the company, for the first year,” should be five, and the defendant is named as one of the five.
    The plaintiff continued in the employment of the company until May 8, 1866. One of the company’s notes given to the plaintiff, bears date April 1, 1866, and was payable in thirty days. The other bore date June 28, 1866, and was payable one day after date.
    No certificate of the paying in of the capital stock of the company, had ever been filed; nor had the company, at any time, filed any annual report; nor was there any proof that there had or had not been, at any time after the formation of the company, any election of trustees.
    It was proved that the plaintiff was also a stockholder of the company.
    There was some evidence which it was claimed tended to show that the defendant had acted as trustee down to the time the notes were given.
    That evidence was, that the defendant was present when the settlement was made with, and the notes given to, the plaintiff, and took part in the meeting. The only evidence in respect to the nature of the services, was as follows:—
    The plaintiff, who was examined on his own behalf, was asked if he had been employed by the company, and he answered:

      I was. I was employed by Mr. Puleston the defendant and Dr. King, in the Spring of 1865, the first of May. Mr. Puleston did not tell me he was secretary of the company at that time. I was there to oversee the work and to develop their property in forcing wells. That was my business there, to endeavor to obtain oil.
    Q. Did you bore wells ? A. Yes, sir. I was one of a gang that undertook to bore.
    Q. State what you did ?
    A. I was one that helped to put down wells. I sharpened the tools, and did any kind of work that was done, a portion of it.
    Q. When did you commence to work for the company ?
    A. I commenced the first day of May, 1865.
    Q. What was said to you in respect to working before you went there, at the time you were employed ?
    A. There was considerable said.
    Q. State what was said by Mr. Puleston ?
    A. Mr. Puleston gave me a history of the work and the way it had been conducted.
    Defendant’s counsel moved to dismiss the complaint on the grounds:

      First. This action being brought against the defendant as a stockholder, the plaintiff cannot recover, it being in evidence that he is himself a stockholder in the company.

      Second. The plaintiff cannot recover against the defendant as trustee, because he has not proved that at the time of the creation of the debt the defendant was a trustee.

      Third. This action cannot be maintained to charge the defendant upon his individual liability as stockholder upon the ground of service rendered to the corporation, because the services of a superintendent are not such services as are contemplated by the statute.

      Fourth. The plaintiff having recovered against the company a judgment which, upon its face, shows simply a debt of the company upon promissory notes, cannot, upon the evidence furnished by such judgment, maintain an action against the defendant to charge him upon his individual liability as stockholder for services rendered to the company.
    The motion was denied, and the defendant excepted.
    The defendant asked the court to charge the jury, that if they found, that after the making of the note, and at the time of its maturity, there was no evidence to show that the defendant was acting as trustee, the plaintiff could not recover.
    The request was refused, and the defendant excepted.
    The court directed a verdict for the amount claimed.
    The defendant appealed.

      Mr. H. S. Bennett, for appellant, defendant.

      Mr. W. B. Putney, for respondent, plaintiff.
   By the Court.—Monell, J.

It appears to be quite well settled, that one stockholder in a corporation, created under the general incorporating act of this State, cannot, at law, enforce the liability of another stockholder of the same corporation, under any of the provisions of the act (Bailey v. Bancker, 3 Hill, 188 ; Richardson v. Abendroth, 43 Barb. 162 ; Beers v. Waterbury, 8 Bosw. 396). It seems, that such liability can be reached only in equity, by an action against all the stockholders for contribution.

The first objection taken upon the motion to dismiss tne complaint is, therefore, fatal to a recovery against the defendant as a stockholder. But he is also sought to be made liable as a trustee, by reason of the default of the company to file an annual report pursuant to section 12 of the act (Laws of 1848, p. 54) which provides that for such omission, the trustees shall be jointly and severally liable, for all the debts of the company then existing, and such as shall be contracted before such report shall be made.

The company never, at any time, made or filed a report, and if the defendant was a trustee at any time when the company made default, he became liable for the debts of the company existing at the time of such default, and for such as were afterwards contracted.

The incorporating act provides (§ 3) that, except for the first year, the trustees shall be annually elected, at such time as shall be directed by the by-laws of the company; and there is a further provision (§ 4) that if an election be not made, “all acts of trustees shall be valid and binding as against the company, until their successors shall be elected.”

The defendant was named as a trustee for the first year, which expired November 21, 1865, It does not appear that there was either an election or a failure to elect after that. The by-laws, if there were any, are not before us.

It was the duty of the company, I think, to make and file a report, as required by section 12 of the act, within the first twenty days of January, 1865. The language of that section is, that the company shall annually, within twenty days from the first day of January, make a report. The meaning of which is, that every company shall, in each year, within the first twenty days of every January, after the company is formed, make a report; and the prescribed period has no reference to the time the company comes into existence.

For the omission of the company to make its report in January, 1865, the defendant, as a trustee, at that time in office, became liable for the debts of the company then existing, and such as might thereafter be contracted so long he remained a trustee.

The plaintiff’s debt was not contracted until May, 1865, and, I think, for any part of it which fell due previous to November 21, of that year, if it was unpaid, the defendant would be liable. It was, to that extent, a debt contracted after the company’s default, and while the defendant was a trustee.

No report of the company was filed in January, 1866. For that default the defendant would be liable, if he continued a trustee, as well for the existing as the afterwards contracted debts.

The official term of a trustee, of a manufacturing or mining corporation, is one year, and, except for the provision in section 4 of the act, he became functus officio, after that time. There is no common law right of holding over (People v. Tieman, 8 Abb. Pr. 359). That section impliedly continues trustees in office after the expiration of their terms and until their successors are elected, so far, at least, as to render their acts valid and binding, as against the company. And it may, therefore, be regarded as a continuance in office so as to render the incumbent liable as trustee, if, after the expiration of his term, Tie continues to act.

I am not prepared to go to the extent, that, upon >a failure to elect a successor, a trustee, who merely has the right to hold over, but who does not act, can be charged as a trustee, for any default of the cbmpany. Being elected for a year, if at the éxpiration of that time, he retires from the company, performs thereafter no official act, and assumes no official authority, I do not think he can be held under any of the provisions of the incorporating act. If, however, he continues to act in his official capacity, after his term of office has expired, the law will regard him as a trustee for all purposes of liability under the act. Having the right to act., if he assumes and continues to act, he will be held to a faithful discharge of all the duties of his office, and will be responsible for any failure to perform them.

There was evidence that the defendant was present and took part at the meeting when the notes -were given. It does not appear what he did, or whether he was acting as a trustee. There was no proof that at any previous time he had done any official act.

This evidence does not seem to me sufficient to charge the defendant as trustee. It does not prove any official act, and it would not have been error if, on that ground, the motion for a nonsuit had prevailed.

But the defendant had a right to have the jury instructed as he requested, that if there was no evidence that the defendant was acting as trustee, the plaintiff could not recover. That was equivalent to asking to have the question of the sufficiency of the proof, passed upon by the jury, and the request should have been granted.

The liability of a trustee under the statute, is in the nature of a penalty (Bird v. Hayden, 1 Robt. 383), to the extent of the existing debts of the company. Whenever, therefore, the trustees become liable, by reason of the failure of the' company to comply with the statute, it is for such debts of the company as then exist. And it is immaterial whether such debts exist in simple contract, or that»the contract has been merged in a judgment. It is, nevertheless, an existing debt for which the trustees are liable.

The view taken in this case renders it unnecessary to examine any of the other questions presented by the defendant’s exceptions.

The burden in this case rests on the plaintiff. Proof of once a trustee is not- sufficient. Any default of the company happening after the expiration of the term of office of a trustee, cannot be charged upon him, except by proof of Ms continuance in office by Ms afterwards assuming to act and acting as a trustee.

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


text:
    WILLIAM H. BAILEY v. JOHN O’MAHONY and OTHERS.
    I. Beceiver, when and of what appointed.

    1. Of moneys deposited with a defendant, by one who had received them from, plaintiff and others under a subscription to carry out a proposed project, and remaining in his hands after the project had been abandoned and an election by plaintiff to withdraw his subscription.
    2. Several receivers. May be appointed. Bights of.

    A. The fact that a receiver has already been appointed in a previous action does not necessarily interfere with the appointment of another in a subsequent one.
    B. But in such case the functions of the second receiver are subordinate to those of the previous one.
    G. When the first becomes functus officio the second one takes the fund, or so much as remains of it.
    II. Neutrality laws.

    The furnishing of money to be used on behalf of the people of another country in a struggle for independence, provided it is not to be used in organizing and fitting out with" arms and ammunitions of war expeditions into and against any foreign country or its commerce, is not in contravention of the neutrality laws.
    HI. Bescission. Unlawful contracts or purposes. Becovering hack money or property.

    A. Money advanced or contributed to be used for an unlawful purpose, can be recovered back by the lender, depositary or contributor, at any time before it has been actually used or expended.

      Before Monell, Jones and Spencer, JJ.

      Decided February 4, 1871.
    Appeal from an order appointing a receiver.
    This action was brought by William H. Bailey against John O’Mahony, Thomas J. Barr, August Belmont and Ernest B. Lucke.
    The complaint in the action alleged that John O’Mahony, one of the defendants, had received from a large number of persons large sums of money, and had given in return therefor certificates of ten dollars, signed by said O’Mahony, payable to bearer, of which the plaintiff was the holder and owner of the aggregate of one hundred dollars.
    Such certificate was as follows:

      “No. 1,665. No. 836, E.

      “10. ' 10.
    “It is hereby certified, that the Irish Republic is
    indebted unto--, or bearer, in the sum of
    ten dollars, redeemable six months after the acknowledgment of the independence of the Irish nation, with interest from the date hereof inclusive, at six per cent, per annum, payable on the presentation of this bond at the treasury of the Irish Republic.
    “March 17, 1866.
    “[Signed] JOHN O’MAHONY,
    “ Agent for the Irish Republic “ Office of the Secretary of the Treasury, [l. s.] ”
    The complaint further alleged that no such nation or government existed or was known as the Irish Republic, but that the money so received by O’Mahony was obtained upon his representation that the same was to be used by him on behalf of the Irish Republic in the struggle of the Irish people for independence as a nation, and that upon such representation O’Mahony had obtained many thousands of dollars, a portion of which he had deposited with the defendants, Belmont and Lucke.
    The action was in behalf of the plaintiff, and all other holders of similar certificates, and sought payment of the certificates out of the moneys in the hands of Belmont and'Lucke.
    It appears that a receiver of the same moneys had been appointed in an action in this court, instituted by O’Mahony against Belmont and Lucke to recover the same money ; and it was alleged, as a foundation for the motion, that a portion of “ the funds so deposited with Belmont and Lucke had been placed in the hands of the chamberlain of the city of New York,” in a certain action pending in the supreme court, in which said O’Mahony is a party, claiming to be entitled to receive said funds.
    Upon these facts, a motion was made to appoint a receiver in the action, and to take possession of said funds now in the hands of the city chamberlain, and for other relief.
    The motion was granted, and an order was thereupon entered, appointing Thomas J. Barr receiver of all the moneys and funds placed in the hands of August Belmont & Co. by John O’Mahony, and derived from the sale of Fenian bonds, and also of all the funds and moneys deposited in the hands of Peter B. Sweeny, the city chamberlain of New York city, in a certain action pending in the supreme court, in which said O’Mahony was a party, claiming to be entitled to receive said funds, and also of all the funds and moneys wheresoever situated, and in whosesoever hands the same might be, which were derived and accumulated ..by the said O’Mahony by the sale of Fenian bonds, mentioned and described in the complaint. Under this order the receiver took possession of over forty-seven thousand dollars.
    The defendants Belmont and Lucke appealed.

      W. W. Macfarland, for appellants.

      R. S. Guernsey, for respondent.
   By the Court.—Monell, J.

If this action can be sustained by the plaintiff, I can see no reason why he should not have a receiver to protect his interest in it. Of course, such receiver must necessarily be subordinated to any receiver already appointed, or to any other authority under which the money in controversy, or any part of it, is now held. But it is obviously proper that the plaintiff in this action should not be prejudiced by the action of the plaintiffs in any of the several other actions which it appears are now pending, and which relate to the same fund, or to some part of it, that is involved in this action.

The order appealed from is probably too general in its terms, and confers, perhaps, more power upon the receiver than is proper, *or was designed, audit must, therefore, be modified so as to subordinate his functions to those of any previously appointed receiver, as well as to those of the city chamberlain, in respect to the portion of the moneys alleged to have been deposited with him in the action pending in the supreme court.

The effect of such a modification of the order will be to leave the receiver to come in after the prior receiver becomes functus officio, and to take from him the fund, or any remaining portion of it; and in that way the plaintiff ’ s interest in this action will be protected.

If the authority under which it is alleged a portion of these moneys has been deposited with the city chamberlain is not sufficient, the receiver can ascertain it, and his receivership will give him a right to make the inquiry ; and, if he shall be so advised, to apply to the supreme court in the action there pending, to be placed in possession of these funds. But this court cannot make any order in respect to that action, nor in respect to the subject of it, which will or may conflict with the jurisdiction which that court has already obtained. Nevertheless, the receiver appointed in this action will be in a poistion to take the money deposited with the city official, or such of it as may remain, on the determination of that action.

It may be true, as was urged on the argument, as a reason for reversing this order, that the plaintiff could have applied'in the O’Mahony suits pending in the supreme court, and also in this court, to be made a party to those suits, for the purpose of protecting his rights to a portion of the fund which is in controversy there. But even if he could do so, I do not think he was bound to do so, and as the receivership created by the present order is, as has already been said, necessarily subordinated to all previous receiverships of the same fund, it cannot injure other parties, and is a needed and proper protection to the plaintiff in this action. ,

But this order cannot be sustained for any purpose, if, as was urged by the appellant, the plaintiff has no cause of action which it is proper for a court of justice to entertain. I pass over the doubt, which might reasonably arise, whether a recovery can be had upon the certificate of which the plaintiff alleges himself to be the owner and holder, without also alleging that he obtained them as a contributor to the funds, and not as a purchaser in the market, and take up the objection, that the purpose for which these moneys were obtained was unlawful, and being unlawful, the courts should not be open to parties engaged in such illegal acts.

It is probably true, and it is so substantially alleged in the complaint, that the money contributed to the “ Fenian fund,” as it was called, was designed to be’ used in subverting the established government, which then and now exercises dominion over the Irish people, and in erecting upon it a republic, or such other form of civil government as would secure the independence of that nation.

A purpose of that nature, had it been attempted to carry it into execution in opposition to the principles of neutrality which have so long governed the United States, in respect to the internal strife of foreign nations, would have been unlawful. But it by no ■means follows, that because money is contributed to assist a revolutionary struggle, it may not lawfully be done, without violating any laws of neutrality, and such would be the case when money, although contributed here, was to be used only in the country where the struggle for independence was going on.

Óur laws of neutrality prohibit the organizing and fitting out, with arms and ammunitions of war, expeditions into any foreign country with which we are at peace, and our government always has, and I believe always will rigidly enforce the neutrality of her citizens within the letter and spirit of the law, and prevent any attempted interference with the government of other nations.

But to the extent only that has been stated, does this government see fit to interfere? The money of her citizens may be contributed to aid struggles for liberty in any part of the world. It was done, and nobly done, when Greece, and Poland, and Hungary were, at different periods, struggling to be free from monarchical bondage, and establish the independence of those nations ; and it will continue to be done, whenever any nation shall attempt to overthrow existing monarchies or despotisms and establish free governments in their stead.

It does not appear in this case that the fund in-question was designed to be used in any manner that would violate the neutrality laws of this country. There is no allegation that the projectors were engaged in organizing or fitting out armed expeditions into British territory, or that the money, or any part of it, has been or was to be used for such a purpose ; but the allegation is simply that it was to be used on behalf of the Irish republic, in the struggle of the Irish people for independence.”

The purpose, ' therefore,' so far as the complaint shows, for which the money was contributed, was lawful and proper, and in none of its aspects is it against public policy to open the courts to a contributor who desires to rescind his subscription after the project has been abandoned and given up, and get back his money.

But, even if the transaction could be regarded as unlawful, either as opposed to some statute, or as being against public policy, or otherwise, I yet can see no reason why this action may not be maintained.

Had the money been used or expended for any unlawful purpose, it could not be rescinded except where a recovery may be bad under the provisions of some peculiar statute. But where the purpose for which the money was advanced or contributed, has been neither accomplished nor attempted, and the money remains unemployed, a depositary or contributor may rescind the contract and prevent the thing being done, and recover back his money. Thus, money lent to be used for betting at a gaming table, cannot, after it is lost, be recovered back. But before it is lost, the lender may rescind and recover. In this case the transaction is still executory, and it is not too late to render the rescission operative. So, in this case, the purpose for which the money was contributed not having been accomplished, or even attempted to be accomplished, and now having been wholly abandoned, the plaintiff has a right to rescind, and his rescission will become operative upon the fund in question.

I refer, in support of these propositions, to 2 Pars. on Cont. 253 ; White v. Franklin Bk. (22 Pick. 181) ; Cotton v. Thurland (5 Term R. 405) ; Smith v. Bickmore (4 Taunt. 474).

The order must be modified, by inserting therein that the authority of the receiver thereby appointed shall in nowise interfere with the authority of any other and previously and lawfully appointed receiver or custodian of the same fund, or any part of it, except by action brought with the permission of the court or tribunal which has appointed such other receiver or custodian.

Spencer and Jones, JJ., concurred, the latter on the ground that the complaint did not show any file gality in the transaction.