author: VaN JBRüNt, P. J.:

text:
    The Mutual Life Insurance Company of New York, Appellant, v. The Forty-second Street and Grand Street Ferry Railroad Company, Respondent.

      Fraudulent issue of a certificate of stock — when a corporation is hound hy it — hona fide holder — forged certificate — when a principal is responsible for the acts of cm agent — authority of the officers of a corporation presumed — right of subrogation— the right does not depend on actual contract.

    The signing of a certificate of its stock hy the transfer agent of a corporation, and the affixing of the corporate seal thereto hy the person having the same in charge, is an affirmation by the authorized agent of the corporation, upon which the public has a right to rely that everything previously done in the issuing of such certificate has heen rightly done
    Although the secretary and transfer agent of a corporation has no authority to issue-certificates of its stock, except upon the surrender and cancellation of previously existing valid certificates thereof, and after obtaining the signatures of the president and treasurer thereof to the certificates to he issued, yet the issuance of certificates in due form hy him is a representation that such conditions have heen complied with, and that the facts existed upon which his right to act depended, and if such certificates of stock he fraudulently issued hy such transfer agent, the corporation is under an implied obligation to make indemnity to a person for the loss he may have sustained hy the negligent or wrongful exercise hy its officers of the general powers conferred upon them.
    When, certificates of stock contain apparently all the essentials of genuineness a hona fide holder thereof has a claim to recognition as a stockholder, if such stock can legally he issued, or to indemnity if this cannot he done. The fact of forgery does not extinguish this right when it has heen perpetrated hy or at the instance of an officer placed in authority, hy the corporation, and intrusted with the custody of its stock hooks, and held out hy the company as the source of information upon the subject.
    A principal is responsible for the acts of his agent when acting within the scope of the general authority conferred upon him, It is not necessary that the agent should do the precise thing which the principal has authorized him to do, hut when, so far as the world knows or can know with reasonable diligence, he has done so, the principal is liable for his acts.
    The officers of corporations are presumed to have the authority to perform the duties which such officers ordinarily perform in corporations of like character.
    One Hof ele applied to the American Exchange Bank for a loan of §30,000 upon his note, and tendered certain certificates of stock in a corporation as collateral security. The hank before making such loan made inquiry at the office of the corporation as to the genuineness of the certificates, and was informed by its secretary and transfer agent that they were genuine. Thereupon it made the loan of $30,000 upon Hofele’s note, taking such certificates as collateral security.
    Thereafter one Grant, acting in his own name, but really representing Hofele, applied to The Mutual Life Insurance Company for a loan of $32,000, and offered i.o give as collateral security the certificates of stock held by the American Exchange Bank as collateral security for the payment of Hofele’s note. Thereupon the insurance company inquired of the bank what it knew about, the certificate and was told of the information received at defendant’s office; it then paid Ilofele’s note held by the American Exchange Bank, took Grant’s note for $32,000, received the collateral held by the American Exchange Bank and paid Grant the difference in amount between his note and that given by Hofele

      Held, that The Mutual Life Insurance Company was entitled to be subrogated to whatever rights the American Exchange Bank had acquired by reason of its inquiry at such corporation’s office prior to the making of its loan to Hofele, to the extent to which the American Exchange Bank had acted upon such information
    A volunteer cannot acquire an equitable lien or the right to subrogation, but a person who, at the request of another, advances money to redeem or pay off a security in which that other has an interest, is not of that character, and in the absence of an express agreement one will be implied, if it is necessary that it should exist for his use, and will be enforced.
    The doctrine of substitution may be applied although there is no contract expressed or implied ; it rests on the basis of mere equity and benevolence.
    Appeal by the plaintiff, The Mutual Life Insurance Company of New York, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the city and county of New York on the 23d day of June, 1893, upon the report of a referee.

      C. E. Miller, for the appellant.

      F. H. Smith, for the respondent.
   VaN JBRüNt, P. J.:

There seems to be no serious dispute in regard to the material • facts out of which arises the controversy sought to be settled in this action. • •

For some time prior to and on the 3d of February, 1883, John Green was president, Charles Curtiss was treasurer, and Eben S. Allen was secretary and transfer agent of the defendant. Prior to this time Green signed, as president, certain blank certificates of stock of the defendant, one of which is the subject-matter of this action, and handed the same to Curtiss, the treasurer, who shortly after delivered the same to Allen, who thereafter kept them in his private drawer. In January, 1886, Allen took one of said blank certificates, signed by Green as president, and filled out the same, dating it February 3, 1883, numbering it 976, and stating the number of shares which it represented to be 229, and that the same belonged to F. W. TIofele, and writing the name of Charles Curtiss opposite the printed word “ treasurer ” upon said certificate, without the knowledge or authority of said Curtiss, and below writing his name, “ Eben S. Allen,” opposite to the words “ transfer agent.” This certificate Allen delivered to said F. "W. Hofele.

Green had ceased to be president of the defendant, and Curtiss had ceased to be the treasurer in .April, 1883. "When the said certificate was filled out in January, 1886, as above stated, Charles Curtiss was president, and Allen was treasurer, secretary and transfer agent of the defendant.

The certificate as filled out by Allen read as follows:

“ Capital stock, $750,000.
“ Shares $100 each.
“The Forty-Second Street and Grand Street Ferry Railroad Company.
“No. 976. City of New York.
“ 229 shares.'
“ This is to certify that F. ~W. Hofele is entitled to two hundred and twenty-nine shares of one hundred dollars each in the capital stock of the Forty-second Street and Grand Street Ferry Railroad Company, transferable only on the books of the company, by him or his attorney upon surrender of this certificate, to be canceled, indorsed with the name of the party to whom a new certificate is to be issued for said stock or any part thereof, and accompanied with a declaration of sale or transfer, setting forth the number of shares transferred, and the person to whom, and the time when the same are so transferred. No certificate shall bind this company, unless the same be signed by their president, and countersigned by their treasurer and transfer agent.
“ In witness whereof, the said company have caused this certificate to be signed by their president, and to be coun[seal.] tersigned by their treasurer and transfer agent, and sealed with their corporate seal, this third day of February, one thousand eight hundred and eighty-three.
“CHAS. CURTISS,
Treasurer.
“JOHN GREEN,
President.
“EBEN S. ALLEN,
Transfer Agent.”

The issuance of this certificate was never authorized by the defendant, but the same was fraudulently and feloniously issued by Allen,, and neither the defendant nor any of its officers, except Allen, had any knowledge or information of such issuance until August, 1889, when the plaintiff demanded the transfer of the stock purporting to be represented by such certificate. After the receipt by Hofele of such certificate, he applied to the American Exchange Bank for a loan of $30,000 upon his note, and tendered this certificate as collateral security. The bank thereupon, and before making the loan, made inquiry at the defendant’s office as to the genuineness of the certificate, and was informed by Allen, who was treasurer, secretary and transfer agent, and had charge of the issuance of stock, that it was genuine. Upon receiving this information the bank made the loan of $30,000 upon Hofele’s note, taking said certificate as collateral. Subsequently, while the loan made by the American Exchange Bank remained unpaid, one Grant, acting in his own name, but really representing Hofele, applied to the plaintiff for a loan of' $32,000, and offered to give as collateral security 229 shares of defendant’s stock, which the plaintiff: agreed to take. Afterwards, Grant, accompanied by a messenger from the American Exchange Bank, who brought the certificate of stock held by the bank as collateral to the loan of Hofele, came to plaintiff’s place of business, and Grant having made his note for $32,000, the same, with the certificate in question, was delivered to the plaintiff, and it issued its check for the amount of the loan, which Grant then and there indorsed to the American Exchange Bank, and delivered to the messenger, and subsequently received back Hofele’s note and a certificate to ilofele’s order for the difference between Ilofele’s note and the amount received from the plaintiff, less $320 paid in money.

Before making this loan to Grant, the plaintiff inquired of the American Exchange Bank what it knew as to the certificate, and the information previously received by the bank from the office of the defendant was communicated. The loan by plaintiff was renewed from time to time, no part thereof having been paid. Subsequently the plaintiff demanded a transfer of the stock, but such transfer was refused, and thereupon this action was brought to recover the damages sustained. The cause having been tried before a referee, and he having reported for a dismissal of the complaint, from the judgment entered upon such report this appeal is taken.

Two questions seem to he presented which it is necessary to consider.

The first is whether the defendant is hound by the representa-' tions contained in the certificate itself, issued by its duly authorized agent, and, secondly, whether the plaintiff in. this action is entitled to any benefit from the representations made to the American Exchange Bank at the office of the company as to the genuineness of this certificate prior to the making of the loan to Ilofele.

As to the first of these propositions we are referred by both parties to the decision in the case of the Fifth Avenue Bank against these defendants (131 N. Y. 231) as an authority establishing both the affirmative and the negative thereof. But we think, upon an examination of the facts in that cáse and the opinion of the court, that it will he seen that it is clearly intended to be decided that Allen, being the agent of the defendant, and being clothed with the authority to perform the final acts required in the issue of a certificate of stock, when he performed those acts, and delivered the certificate with the intent that it might be negotiated, so long as it remained outstanding, such certificate was a continuing affirmation, by the defendant, that it had been lawfully issued, and that all the conditions precedent upon which the right to issue depended had been duly observed.

In the Fifth Avemte Ba/nh case, above cited, at the time of the date of the certificate Allen was treasurer, secretary and transfer agent, and he forged the name of the president to the certificate of stock, and countersigned tlie same as treasurer and transfer agent, the difference between that case and the one at bar being that in this case he forged the name of the person who was treasurer at the time of the date of the certificate, instead of, as in the Fifth Avenue Banle case, forging the name of the president. And the sole question presented is whether this fact creates a difference in respect to the acts of Allen.

It is urged upon the part of the respondent that that difference is material, and makes the decision in the Fifth Avenue Banle case support the defendant’s claim that no recovery can be had. This claim is based upon the fact that upon the face of the certificate it appears that it was not only not signed and countersigned by, but it does not even bear the names of, the officers of the company charged with the duty of signing aijd countersigning it when issued. It does, however, bear the names of the persons who were such officers at the time of thé date of the certificate, but the name of the treasurer was forged by Allen, while the signature of the president was genuine.

It is further claimed that upon the face of the certificate it was provided that no certificate shall bind this company unless the same is signed by the president and countersigned by the treasurer and transfer agent; and that the certificate in question not having been countersigned by the treasurer, there was no continuing representation as held in the Fifth Avenue Banle case. But an examination of the opinion in the Fifth Avenue Banle Case shows that the question as to the countersignature of the treasurer had no influence whatever with the court in its determination. The point there determined was that the transfer agent was the party who had the custody of these certificates, and issued them in proper cases by and with the assent of the corporation; that he was the officer of the corporation who was invested with that duty, and that the final acts attending their issuance were to be performed by him. This certificate in question was signed by him, and the corporate seal affixed — such corporate seal being in his charge- — -and when he did these things, it was an affirmation upon the part of the authorized agent of the company that everything previously done had been rightly done, and the public had a right to rely upon such affirmation.

In the Fifth Avenue Banle case the signature of the president was forged while the face of the certificate gave notice that no certificate should be binding upon the company unless it was signed by the president. And if the affirmation of the transfer agent who signed the certificate made a forged signature of the president binding upon the company, we can see no reason why the affirmation of this same officer in regard to the signature of another officer should not be equally potent. It was not because it was a countersigning that it had this effect. It would have been precisely the same as though the provisions of the certificate were that it should be signed by the ■ transfer agent, instead of countersigned. The affirmation arises from the fact that the transfer agent was the authority duly appointed by the corporation to affix its seal and sign the certificate as the last acts to be done, and issue it to the public. The language of the court is: “ When, therefore, the defendant’s secretary and transfer agent countersigned and sealed this certificate and put it in circulation, he declared in the most formal manner that it had been properly executed by the defendant, and that every essential requirement of law and of the by-laws had been performed to make it 9, binding act of the company.” Nothing is said in regard to the countersignature of the treasurer, to the effect that that signature must be genuine in order that the representation should be perfect.

In the opinion attention is called to the familiar rule of agency as laid down in Story, that the principal is to be held liable to third persons in civil suits for the frauds, deceptions, concealments, misrepresentations, torts, negligences and other malfeasances or misfeasances and omissions of duty of his agent in the course of his employment, although the principal did not authorize or justify, or participate in, or, indeed, kno.v of such misconduct, or even if he forbade the acts or disapproved of them. “In all such causes the rule applies respondeat superior, and is founded upon public policy and convenience, for in no otuer way could there be any safety to third persons in their dealings, either directly with the principal, or indirectly with him through the instrumentality of agents. In every such case the principal holds out his agent as competent and fit to be trusted, and thereby in effect he warrants his fidelity and good conduct in all matters within the scope of the agency.” Then the court go on and say : “ It is true that the secretary and transfer agent had no authority to issue a certificate of stock, except upon the surrendex* and cancellation of a previously existing, valid certificate, and the signature of the president and treasurer first obtained to the certificate to be issued. But these were facts necessarily and peculiarly within the knowledge of the secretary, and the issue of the certificate in due form was a representation by the secretary and brans-' fer agent that these conditions had been complied with, and that the facts existed upon which his right to act depended. It was a certificate apparently made in the course of his employment as the agent of the company, and within the scope of the general authority conferred upon him ; and the defendant is under an implied obligation to make indemnity to the plaintiff for the loss sustained by the negligent or wrongful exercise by its officers of the general powers conferred upon them.”

If the opinion had stopped here we think there would have been no ground whatever for the contention that the fact that the secretary and transfer agent in the case at bar had forged the signature of the treasurer was of any greater consequence than the fact that he had forged the signature of the president in the case cited.

It will be seen from what has already been said in reference to the case cited, that the theory of the decision is that Allen was the secretary and transfer agent of this company, and that it was within the scope of his authority to issue these certificates after he had procured the signatures of the president and treasurer, and that when he affixed the seal and signed it as transfer agent, certifying that these previous acts had been done, and issued the certificate to the public, the public had a .right to rely upon the representations of Allen in respect to the regularity of the certificate. Attention is, however, called to the succeeding paragraph in the opinion, and this» is the only foundation for the claim that, because the certificate in question was not countersigned by the treasurer, but his signature was forged, the public were not entitled to tlie protection of the representations of the agent of the defendant.

The court say : “ The learned counsel for the defendant seeks to distinguish this case from the authorities cited, because the signature of the president to the certificate was not genuine. But we cannot see how the forgery of the name of the president can relieve the defendant from liability for the fraudulent acts of its secretary, treasurer and transfer agent. They were officers to whom it had intrusted the authority to make the final declaration as to the validity of the shares of stock it might issue, and where their acts, in the apparent exercise of this power, are accompanied with all the indicia of genuineness, it is essential to the public welfare that the principal should be responsible to all persons who receive the certificates in good faith and for a valuable consideration, and in the ordinary course of business, whether the i/ndioia are true or not.” And after citing authorities the court continue: The rule is, we think, correctly stated in Beach on Private Corporations (YoL 2, § 488, p. 791). When certificates of stock contain apparently all the essentials of genuineness, a bona fide holder thereof has a claim to recognition as a stockholder if such stock can legally be issued, or to indemnity if this cannot be done. The fact of forgery does not extinguish his right when it has been perpetrated by or at the instance of an officer placed in authority by the corporation, and intrusted with the custody of its stock books and held out by the company as the source of information upon the subject; ” this latter quotation it is claimed denies that which has gone before, that where a corporation clothes an officer with the authority to finally act, and holds him out as the source of information upon the subject of the regularity of its certificate, it is bound by Ms acts.

Now, the language to which attention has been called, where the court speaks of the secretary, treasurer and transfer agent, has no particular significance. The whole scope and reasoning and foundation of the opinion was that Allen had been intrusted by the corporation with the stock books of the company, and held out as the source of information upon the subject of the' regularity of its certificates; and the force of the reasoning, which pervades the whole opinion, cannot be broken by the language used in a casual sentence ; and the conclusion arrived at is in accord with the principle enunciated by Story in the citation above cited, viz., that the principal is responsible for the acts of his agent when acting wdthin the scope of the general authority conferred upon him. This does not mean that he does the precise thing which the principal has authorized him to do, but when, so far as the world knows or can know with reasonable diligence he has so done, the principal is required to respond. Any other rule would place every person at the mercy of a principal where dealings had been through an agent, and in respect to corporations it would be absolutely impossible that business could be conducted, because the only other way to ascertain whether any of its officers have authority to act would be to call a meeting of the board of directors and get a resolution passed certifying to their powers in respect to each individual transaction. Corporations have become so general that the courts have been compelled to recognize the fact that the officers are to be presumed to have the authority to perform the duties which such officers ordinarily perform in corporations of like character.

In view of the conclusion at which we have arrived in respect to the effect of the certificate in question, it may not be necessary to touch upon or discuss the second proposition.

It seems to us very clear that, under all the principles governing the right of subrogation, the plaintiff was entitled to be subrogated to whatever rights the American Exchange Rank had acquired by reason of its inquiry at the defendant’s office prior to the making of it's loan, to the extent to which the American Exchange Bank had acted upon such information.

■ It is claimed upon the part of the respondent that the representar tions made to the American Exchange Bank afford no aid to any claim which might be advanced by the plaintiff ; that if they constituted an estoppel at all it was only in favor of the bank ; the representations were not made to the plaintiff, nor were they made to be communicated to the plaintiff or to influence its conduct; and that any estoppel they might have created cannot extend beyond the parties to the transaction in relation to which they were made. It is then asserted that this is settled beyond all controversy, citing numerous authorities. The authorities, however, do not sustain the proposition for which the respondent contends. Each of them is as distinct in its facts as it is possible to be from the case at bar, except perhaps that one might, upon a cursory reading, be held to be in point, and that one is the case of Mayenborg v. Haynes (50 N. Y. 675). But on examination it will be seen that even this case has no application. The action was upon a promissory note made by the defendant. The defense was that it was an accommodation note and was received by the plaintiff after maturity. The note was made for the accommodation of one Ilopke, who transferred it to Kugeler as security for an antecedent debt. The latter transferred it to plaintiff after maturity. Kugeler testified that when the note became due he presented it to defendant for payment, who replied in substance that he would see about it in two or three days. This conversation was reiterated to plaintiff when he purchased the note; and the latter testified that he supposed he would not have taken the note if this had not been stated to him. The court below charged that if defendant promised to pay the note, and that fact was communicated to plaintiff, and he took the note upon the strength of the communication, believing it to be true, it would constitute an estoppel. This the court held to be error, stating that the declaration of the defendant Kugeler constituted no estoppel. All that this case decides is that a representation made to one who does not act upon it cannot protect another, to whom it was not intended to be communicated, who does act upon it. If Kugeler had made the inquiry before he took the note, and the representation had then been made in regard to the validity of the note, and he had transferred it to the plaintiff, a different question might have arisen.

In the case at bar the facts established show that the American Exchange Bank made the inquiries and acted thereon, loaning their §30,000. Within the decision of the court in the Fifth Avenue .Bank case they were protected by such representations, and it is not necessary to discuss that question here. When the plaintiff in this action made its loan to Grant, acting as the agent of TIofele, it paid Hofele’s loan to the American Exchange Bank by its own check and received the collateral which Hofele had deposited as security for that loan, viz., this certificate of stock. The plaintiff’s money paid the debt of Hofele to the American Exchange Bank at his request and it took up the security. It seems to be clear that upon the principles of equity and under all adjudications in regard to subrogation the plaintiff is subrogated to the rights of the American Exchange Bank to the extent at least of the loan which the latter made. It is undoubtedly true that a volunteer cannot acquire an equitable lien or the right to subrogation, but it is equally true that he who, at the request of another, advances his money to redeem or even to pay off a security in which the other has an interest is not of that character, and in the absence of an express agreement one would be implied if necessary that it should exist for his use and be enforced. But the doctrine of substitution may be applied, although there is no contract, express or implied. It is said to rest on the basis of mere equity and benevolence. In Gans v. Thieme (93 N. Y. 225) this doctrine of subrogation was applied certainly to as great an extent as should be done in the case at bar. It appeared in that case that one Herman Thieme, deceased, was at the time of his death the owner of certain land described as lots A and B, subject to a mortgage of $2,000 to the German Savings Bank. He left surviving a widow and several children, and by hie will appointed Margaretha Thieme and one Petry as executors. They conveyed lot B to one Oexle. The bank released it from the mortgage and loaned to Oexle $3,000 upon a mortgage executed by him on the same lot. He then conveyed lot B to Mrs. Thieme. She afterwards intermarried -with one Bethon, and by subsequent conveyances the title to lot B, subject to the $3,000 mortgage, was vested in them as husband and wife. The two mortgages bore interest at the rate of seven per cent. In December, 1875, they were due and nothing had occurred to relieve the estate of the deceased from its liability to pay off the mortgage of $2,000 as one of its debts. Between December 1, 1875, and January 1, 1876, the executors applied to the plaintiffs to advance and loan upon the securities then held by the savings bank the sums of $2,000 and $3,000 for five years at six per cent instead of seven, at the same time agreeing to cause the mortgages to be assigned to them. They, relying on this assurance, advanced their money to the estate of Thieme, and the executors paid it over to the bank, but permitted the mortgages to be discharged of record, and sirbsequently delivered to the plaintiffs a bond executed by Charles Bethon and Margaretha Bethon, execu-. tqrs, etc., for the sum of $3,000, with a mortgage as collateral thereto executed in like manner upon lot A, and a bond executed by Margaretha Bethon and Charles Bethon for $2,000 with a mortgage collateral thereto upon lot B ; and these bonds and mortgages were delivered to the plaintiffs in place of the bonds and mortgages held by the savings bank, without the knowledge or consent of tüe plaintiffs, who were ignorant of the true character of the papers so delivered to them until shortly before the commencement of the action. And the court held that by the understanding between the executors and the plaintiffs the latter had a right to stand in the place of the bank and take the full benefit of this security, the principle invoked being that where one, at the instance of another, advances his money to redeem or even pay off a security in which that other lias an interest, if necessary equity will imply an agreement that the security shall subsist for bis use and it will be enforced.

Applying tills rule to the case at bar, when Hofele requested the plaintiff to pay his debt to tbe American Exchange Bank and receive from the bank the security, the plaintiff was entitled to be subrogated to all tbe security as far as it advanced its money to pay Ilofele’s debt to the American Exchange Bank which such bank held. Part of that security was the representation made to it in respect to the certificate held by it.

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

Eollett and Parker, JJ., concurred.

Judgment reversed and a new trial ordered, with costs to appellant to abide event.


source: Caselaw Access Project

author: Eollett, J.:

license: Public Domain

text:
    William E. Demarest, Appellant, v. The Mayor, Aldermen and Commonalty of the City of New York, Respondent.

      Municipal office —payment of the salary to a defacto incumbent — Weio Toi'Jc city — aldermen — the eity reorganization acts of 1870 ancl 1873.
    In case a person legally elected to a public office is prevented by another, under color of legal right, from enjoying it, and the intruder discharges its duties and is paid the salary of the office, the person so elected cannot recover from the municipality by which it. is payable
    In an action brought against the city of New York, to recover salaries demanded by persons who claimed to have been elected aldermen for the year 1877, under chapter 137 of the Laws of 1870, it appeared that the plaintiff’s assignors had not performed the duties of aldermen, but that other persons, elected under chapter 335 of the Laws of 1873, as amended in 1873 and 1874, which expressly declared chapter 137 of 1870 to be repealed, had discharged the duties of the office and had been paid by tbe city the salaries attached thereto The plaintiff contended that the repeal of the provisions of the act of 1870 in reference to the election of aldermen, by tbe act of 1873, was ineffectual by reason of the unconstitutionality of certain provisions of the act of 1873.

      Held, without considering the question of constitutionality, that the action for salaries was not maintainable, for the reason that the payment thereof to the de faeto aldermen afforded a complete defense to the city.
    Appeal by tbe plaintiff, William E. Demarest, from a judgment of the Supreme Court in favor of tbe defendant, entered in tbe office of the clerk of tbe city and county of New York on the 29th day of May, 1893, upon an order granted at tbe New York Circuit dismissing tbe complaint on the pleadings and opening of counsel.
    The action was brought to recover from tbe city of New York tbe salary for tbe year 1877 attached to tbe office of alderman, to which office tbe plaintiff claimed that be and bis assignors bad been elected.

      Seaman Miller, for the appellant.

      W. A. Sweetser, for the respondent.
   Eollett, J.:

Section 3 of article 2 of chapter 137 of the Laws of 1870 provided : § 3. The board of aldermen sliall consist of fifteen members to be elected upon a general ticket from tlie city at large.” The 6th section of the act provided that, subsequently to 1870, the aldermen should be elected at the general election held in November of every year thereafter.

Pursuant to this section the plaintiff and fourteen others became candidates for the office of aldermen at the general election held November 7, 1876, and received a majority of all the votes cast for' candidates for such offices created by chapter 137 of the Laws of 1870. They took and filed an official oath, and on the first Monday of January following met and assumed to organize as a board of aldermen and expressed their willingness to discharge the duties of the office. It does not appear that any certificate of their election was made or filed by the board of canvassers. It is asserted that they were tbe legally elected aldermen of the city, and were entitled to hold the office from the first Monday in January, 1877, to tbe first Monday of January, 1879, and were entitled to the salary provided by law, for the recovery of which salary for the first year this action was brought.

By section 119 of chapter 335 of the Laws of 1873, chapter 137 of tlie Laws of 1870 was expressly repealed, and the number of aider-men increased from fifteen to twenty-one, and a new mode for their election prescribed. This act was amended by chapter 757 of the Laws of 1873, and again by chapter 515 of the Laws of 1874, by which it was provided :

“ § 4. The board of aldermen now in office shall hold office until the first Monday in January, in the year eighteen hundred and seventy-five, the same being the term for which they were elected. There shall be twenty-two aldermen elected at the general State election which shall occur in the year eighteen hundred and seventy-four, three of whom shall be elected in each Senate district, except the eighth Senate district, and shall be residents of the district in which they are elected, but no voter shall vote for more than two of said aldermen. In the territory comprised within the eighth Senate district, and the twenty-third and twenty-fourth wards, there shall be elected four aldermen, and the aldermen to be elected in said district may reside either in said eighth Senate district or in the twenty-third and twenty-fourth wards, but no voter shall vote for more than three of said aldermen. There shall also be elected six aldermen at large, to be voted for on a separate ballot, but no voter shall vote for more than four of the said aldermen at large, and the voters of the twenty-third and twenty-fourth wards of said city are hereby authorized and empowered to vote for aldermen at large. The members of the board of aldermen shall hold office for the space of one year, and shall take office ■ on the first Monday in January next succeeding their election, at noon. Annually thereafter, at the general State election, there shall be elected a full board of aldermen as hereinbefore provided.”

At the general election held in November, 1876 and 1877, aider-men were elected under the section quoted, who discharged the duties of the offi.ce and received the salaries provided by law.

It is asserted that chapter 335 of the Laws of 1873, and the two amendatory acts, violated section 1 of article 2 of the Constitution, which provides: 1£ Every male citizen * * * shall be entitled to vote * * * .for all officers that now are, or hereafter may be, elective by the People.”

The view which, we take of the case renders it unnecessary to consider the constitutional question, and, assuming that section 4 above quoted is unconstitutional, it is unnecessary to consider the effect of the repealing clause contained in section 119 of chapter 335, Laws of 1873. The last question would not seem to be quite the same as the one considered in People v. Tiphaine (3 Park. 241); Devoy v. Mayor (35 Barb. 264) and in Harbeck v. Mayor (10 Bosw. 366), which arose under unconstitutional statutes repealing all acts inconsistent with them. Chapter 335 of the Laws of 1873 contained many provisions, most of which are confessedly unconstitutional, and by it the act of 1870 was repealed, not by implication nor by general terms, but expressly.

Conceding that chapter 119 of the Laws of 1873, and the two amendatory acts are unconstitutional, and that the repealing clause therein is not effective, the plaintiff is not entitled to recover the salaries provided for persons holding the office of aldermen. The plaintiff and his assignors, though ready and willing to discharge the duties of the office, did not actually perform those duties, which were discharged by others, under color of legal right, who have been paid by the defendant the salaries attached to the office. During the entire term of the offices to which the plaintiff and his assignors claim to have been elected, they took no steps to establish their title to them, but permitted others to perform the functions of the offices and receive the salary which they now seek to recover from the city. This they cannot do. In case a person legally elected to a public office is prevented by another, under color of legal right,- from enjoying it, and the intruder discharges its duties and is paid the compensation provided for the service, the person so elected and excluded cannot recover the salary attached to the office from the municipality by which it is payable.

In Dolan v. Mayor (68 N. Y. 274) it was held that payment of a de facto officer of the salary of the office, made while he is in possession, is a good defense to an action by the de jure officer to recover the same salary brought after he had acquired possession. The same rule was held in the later case of Mc Veany v. Mayor (80 N. Y. 185) and in the earlier case of Smith v. Mayor (37 id. 518).

The case of Devoy v. Mayor (36 N. Y. 449) is in harmony rvith the other cases cited. In that case the plaintiff was the actual incumbent of the office and discharged its duties during the time for which he recovered the salary against the city. (See, also, Tbroop on Pub. Officers, § 13; Dill. Mini. Corp. [4th ed.] § 235, note; Beach Pub. Corp. § 199.)

Without considering the other questions discussed, we think that the judgment should be affirmed, with costs.

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

Judgment affirmed, with costs.


author: Van Brunt, P. J.:

text:
    Edward Wright, Appellant, v. Robert W. Chapin, Respondent.

      Direction for judgment in a decision tr report — from what an appeal should ha •tajeen■ — complaint on a foreign, judgment.

    A decision of the court, or the report of a referee, upon the trial of a demurrer must direct the final or interlocutory judgment to he entered thereon.
    Upon the trial of an issue of fact the decision of the court, or the report of a referee, must, state separately the facts found and the conclusions of law, and it must direct judgment to ho entered thereon.
    Upon an appeal from an interlocutory judgment, the decision filed pursuant to section 1021 of the Code of Civil Procedure may he reviewed, and it may also he reviewed upon an appeal from a final judgment where notice of an intention to review the interlocutory judgment is given in the notice *f appeal, precisely the same as upon an appeal from a final judgment a decision filed under section 1022 of the Code of Civil Procedure may he reviewed, although no notice is given of an intention to review it.
    The decision of the court upon the argument of a demurrer is not an order, and there can he no appeal therefrom as such; the only way in which it can he reviewed is hy an appeal from the interlocutory or final judgment!
    Section 1316 of the Code of Civil Procedure does not extend the right of appeal; it simply authorizes a party aggrieved hy an order which is appealable under section 1317 of the. Code of Civil Procedure, and which has not already been reviewed upon a separate appeal, to review the samé upon an appeal from the final j udgment.
    A j udgment was recovered in the courts of Canada directing that a sum of money he paid hy the defendant into court. Thereafter an action was commenced in the State of New York hy the same plaintiff against the same defendant upon such judgment to recover the amount thereof. It was alleged in the complaint that the plaintiff was entitled, under the Canadian laws, and the rules' and practice of the courts, to enforce such judgment against the defendant with the same force and effect with which he could enforce a personal judgment against him for the same amount, and that the plaintiff was the proper person to receive payment for the purpose of enforcing tlie same. The defendant demurred to the plaintiff’s complaint, on the ground, among others, that it did not state facts sufficient to constitute a cause of action.

      Held, that the complaint showed a personal right in the plaintiff to maintain the action, and that the demurrer thereto could not he sustained.
    Appeal by the plaintiff, Edward Wright, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the city aud county of New York on the 27th day of June, 1893, sustaining the defendant’s demurrer to the complaint, with notice of an intention to bring up for review on such appeal the interlocutory judgment, entered in said clerk’s office on the 18th day of May, 1893, upon a decision of the New York Special Term.

      A. C. Rounds, for the appellant.

      H. B. Closson, for the respondent.
   Van Brunt, P. J.:

In this action a demurrer was interposed to the complaint, and after a trial of the issue of law a decision was made, by the court, pursuant to section 1021 of the Code, sustaining the demurrer upon the ground that the amended complaint did not state facts sufficient to constitute a cause of action and that there was a defect of parties apparent upon the face of the complaint, in that George Goodwin was not made a party plaintiff or defendant, and directing that an interlocutory judgment be entered sustaining the demurrer, with leave to the plaintiff to amend, and further directing that in case the plaintiff should fail to amend, final judgment should be entered sustaining said demurrer, with costs. The interlocutory judgment was thereupon entered, and the plaintiff not having amended, the final judgment was entered, and from such final judgment this appeal was taken, and notice was given that, upon the appeal, the interlocutory judgment would be brought up for review.

It is now urged that, inasmuch as the appeal is taken from the final and interlocutory judgments, and no notice is given of any intention to review the order directing their entiy, the appeal brings up only the question whether the judgment conforms to this order, and certain decisions of the Superior Court are cited to sustain this proposition, and also tlie case of Cambridge Valley Bank v. Lynch (76 N. Y. 514). The head-note of this last case is presented upon the brief, but an examination of the opinion will show that the conclusions of the head-note, which are relied upon by the respondent, by no means follow therefrom.

It will be seen that the provisions of section 1021 in reference to the decision of the court upon the trial of issues of law raised by demurrer, are similar to those of section 1022 in reference to what is to bo done by the court or referee upon the trial of the whole issue of fact. In the one case the decision of the court, or the report of the referee upon the trial of a demurrer, must direct the final or interlocutory judgment to be entered thereupon. Hpon the trial of the whole issue of fact, the decision of the court.or the report of the referee must state separately the facts found and the conclusions of law, and it must direct the judgment to be entered thereupon.

We have never heard it advanced but once, that in the case of an appeal from a judgment entered upon a referee’s report or the decision of the court, in order to bring up for review the proceedings upon the trial, it was necessary to mention that the decision, in which was stated the facts found and the conclusions of law, and which directed judgment to bo entered thereupon, would be brought up for review. The theory upon which this fallacy rests in the case of a demurrer, is that the decision mentioned in section 1021 is an order. It is no more an order than the decision mentioned in section 1022. In the case of Cambridge Valley Bank v. Lynch it is held that there is no appeal from such a decision, although it may be an order, because there is no provision in section 1347 for such an appeal. But the court hold that the only way in which such a decision may be reviewed is upon an appeal from the interlocutory or the final judgment. It by no means holds, however, that by the provisions of section 1316 the right of review is extended to every order upon appeal from a final judgment whether mentioned in section 1347 as an appealable order or not. There is no intention of extending the right of appeal by section 1316. All that is intended to be done is to permit the party who feels himself aggrieved by an order which, under the provisions of section 1347, is appealable, and lias not already been reviewed upon a separate appeal therefrom, to review such order upon the appeal from the final judgment. This is plainly stated by section 1316, which does not seem to admit of the construction claimed.

We think, therefore, that upon an appeal from an interlocutory judgment the decision filed pursuant to section 1021 may be reviewed, and also that upon an appeal from a final judgment in which notice of an intention to review the interlocutory judgment is given, precisely the same as, upon appeal from a final judgment, a decision filed under section 1022 may be reviewed, although no notice is given of an intention to review such an order. It seems to us clear that the appellant is correct in his practice.

The complaint in this action alleged that in October, 1889, the plaintiff purchased certain Canadian lands of one Goodwin, and gave him a purchase-money mortgage of $60,000. Subsequently, the defendant being about to purchase these lauds of the plaintiff, he and Goodwin made an agreement by which Goodwin agreed to .accept, in satisfaction of the unpaid $60,000 of purchase money and of the mortgage given by the plaintiff, the sum of $52,500; and the defendant promised to pay Goodwin this reduced sum. Shortly afterwards the defendant purchased these lands of the plaintiff, and by the deed agreed to pay Goodwin the $52,500 and to relieve the plaintiff of and from and to indemnify him against all liability whatever to Goodwin. The defendant also, by the deed, agreed to relieve the lands from the lien of the mortgage, but no time in which the defendant was to perform is alleged. The defendant thereafter paid Goodwin some $30,000 of the $52,500.

The plaintiff subsequently repurchased the land, but avers that by the deed of purchase the obligations of the defendant in the premises were unaffected. Subsequently Goodwin brought an action in the Canadian courts against the defendant and others, to which the plaintiff was not a party, and obtained a judgment decreeing a foreclosure of the lien of Goodwin upon said lands, and directing a sale thereof for the satisfaction of said lien. Subsequently the plaintiff commenced an action against the defendant in the Canadian courts to enforce the liability of said defendant to said plaintiff arising from the facts above set forth, in which action the defendant duly appeared, and such proceedings were thereupon had that in May, 1892, the plaintiff duly recovered a final judgment directing that said defendant pay into court the amount due said Goodwin in respect to his said claim, the amount thereof to be settled, etc., which amount was subsequently settled at $22,429.28, and the costs were thereafter taxed and allowed at the sum of $318.60.

The complaint then alleges: That under and pursuant to the laws of the Province of Ontario and the .Dominion of Canada, and under and pursuant to the practice and rules of the said court, the judgment above mentioned was given, and has all the force and effect of ■ a personal judgment for the said sum of $22,429.28, and for the said sum of $318.60, as and for costs and disbursements, making a total of $22,747.88 in favor of the said plaintiff against the said defendant, and plaintiff was and is, under and pursuant to the said laws, rules and practice, entitled to enforce the said judgment against the said defendant in all ways, and with the same force and effect, in or with which he could enforce a personal judgment against the said defendant for the said amount, and that, under and by virtue of the said laws, rules and practice the plaintiff is the person to receive payment for the purpose of enforcing the same.

The complaint further alleges that payment has been demanded, and no part thereof has been paid, and that the whole of said sum is due and owing, for which judgment is demanded. ,

A demurrer to this complaint was interposed to the effect that another action was pending between the same parties for the same cause ; that there was a defect of parties in that Goodwin was not joined as a party; and that it did not state facts sufficient to constitute a cause of action: The court decided that the amended complaint does not state facts sufficient to constitute a cause of action, and that there is a defect of parties. An interlocutory judgment was entered as above mentioned, and subsequently a final judgment, and from these judgments this appeal is taken.

It is urged that the complaint does not state facts sufficient to constitute a cause of action, because by the prayer for judgment the plaintiff seeks to recover for himself the' money directed to be paid into the Canadian court by the Canadian judgment. It is urged that that judgment determined that it is into the Canadian court, and not to the plaintiff, that the defendant must make payment, and that when the plaintiff comes into this court in a suit on that judgment, and in the face of it, asks that the money be paid to him, it would seem that the rule to which 'lie appeals requires that he be thrown out of court; and the case of Greene v. Republic Fire Ins. Co. (84 N. Y. 572), which was an action on a Mississippi judgment, is cited in support of this proposition. All that that case decides is that, it appearing upon the face of the declaration 'that the action was brought for the use and benefit of the plaintiff, in view of the rule •of the common law which prevailed in that State, that dioses in action were not assignable, it was held that the judgment roll furnished presumptive evidence that the plaintiff was the owner of the judgment, and that the plaintiff in the Mississippi action was merely ¡a nominal party having no interest in or right to control it, and that .he was not a trustee in any legal sense under the Code, and that the plaintiff alone could sue upon the judgment.

In view of the allegation in the complaint that, pursuant to the practice and rules of the Canadian court, a judgment entered in the manner in which this judgment was, entitled the plaintiff to enforce the judgment against the defendant in all ways and with the same force and effect with which he could enforce a personal judgment ¡against the defendant for the same amount, it seems to us that he ¡shows a personal right to maintain his action and collect the .money.

But it is urged that the appellant’s allegation in respect to the laws, rules and practice of Canada and Canadian courts is not sufficient to justify any proof of the law and practice of Canada, and the case of Rothschild v. Rio Grande Western Railway Co. (59 Hun, 455) is cited, which case undoubtedly sustains the contention of the respondent so far as relates to' proof of foreign laws. But this case is, we think, overruled by the case of Schluter v. Bowery Savings Bank (117 N. Y. 125, 131), in which an allegation that a surrogate of New Jersey had jurisdiction and was duly authorized and empowered by the laws of New Jersey to issue letters of administration, was held to be sufficient to authorize proof of the laws of New Jersey and the jurisdiction of the surrogate in issuing letters.

The allegation in question, in the case at bar, being admitted by ■the demurrer, there seems to be no reason why the action upon the part of the plaintiff, as the party entitled to collect the money, cannot be maintained.

Tlie judgment should, therefore, be reversed, with leave to the defendant to answer upon payment of the costs of the appeal and of the demurrer in the court below.

O’Brien and Parker, JJ., concurred.

Judgment reversed, with leave to the defendant to answer upon payment of the costs of the appeal and of the demurrer in the court below.


author: Yan Brunt, P. J.:

text:
    The Exchange Fire Insurance Company of the City, of New York, Respondent, v. John G. Norris and Others, Defendants; Albert I. Sire and Another, Appellants.

      When an answer is not fricolous — tender of money' — unnecessary, in oo'der to extinguish, a mortgage lien, to pay it into court.

    If tlie question as to whether an answer sets up a defense or not requires argument, the pleading is not frivolous.
    It is not necessary, in order to make a tender, which is sufficient to extinguish the lien of a mortgagee, to keep it good and to pay the money into court.
    Where a tender has only the effect of extinguishing the.lien, and not of discharging the debt, it is not necessary to bring the money into court.
    Appeal by the defendants, Albert I. Sire and Meyer L. Sire, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the city and county of New York on tlie 25th day of September, 1898, upon the report of a referee adjudging the foreclosure and sale of certain mortgaged premises, and also from an order made at the New York Special Term, and entered in said clerk’s office on the 22d day of September, 1893, directing the entry of a judgment upon the answer of the defendants, and appointing a reféi’ee, etc.

      A. J. Sire, for the appellants.

      F. F. Brown, for the respondent.
   Yan Brunt, P. J.:

The complaint in this action is the ordinary pleading upon the part of the plaintiff for the foreclosure of a mortgage upon failure to pay interest when due. The answer alleged an agreement extending the time of payment, and also a tender to the plaintiff before suit brought of the whole amount of interest due, and a refusal upon the part of the plaintiff to accept.

It seems to be apparent that the learned judge who heard the motion in the' court below did not think the answer was frivolous, because he thought it necessary to write quite a lengthy opinion for the purpose of showing that no defense was set up by the defendants.

It is also equally true that the learned counsel for the respondent does not think that the answer is frivolous, as he has submitted lengthy points upon the question as to whether any defense is set up in the answer or not.

It has been too often determined to require demonstration here that if the question as to whether an answer sets up a defense or not requires argument, the pleading is not frivolous.

The ground upon which the respondent claims that the tender was a nullity was because it was not kept good and the money paid into court. That this is not necessary in order to make a tender extinguish the lien of a mortgage was held so far back as the case of Kortright v. Cady (21 N. Y. 343). And it may very well be argued that by the tender of the interest, which was due at the time of the tender, and which was all that was due (as there was no evidence of any election at that time upon the part of the plaintiff), the lien of the mortgage, to that extent, may have been extinguished. In such cases it is not necessary in order to defeat the lien that the tender should be kept good. It was held in Cass v. Higenbotam (100 N. Y. 248-253) that where a tender has only the effect of extinguishing the lien and not of discharging the debt, bringing the money into court is not required. The defendant undoubtedly set up a defense of greater gravity than he imagined at the time he pleaded it.

It seems to us that the pleading is clearly not frivolous and that the order should be reversed, with ten dollars costs and disbursements,

O’Brien and Parker, JJ., concurred.

Order reversed, with ten dollars "costs and disbursements.


text:
    Myer Hellman and Joseph F. Blaut, Partners under the Firm Name of Hellman & Blaut, Plaintiffs, v. The Forty-second Street and Grand Street Ferry Railroad Company, Defendant.

      Principal and agent — liability of a corpoi'ation upon a spurious stoclc certificate ' issued by its officer.

    ■ The rule which imposes a liability upon the principal for the unauthorized acts of his agent applies to a spurious, but apparently genuine, certificate of stock of a street railroad company, wrongfully issued by a person who was at the time secretary, treasurer and transfer agent of the company and invested with authority to sign, countersign and seal valid certificates of stock, and who, when he issued the certificate in question, was acting within the scope of his apparent authority.
    Motion by the defendant, The Forty-second Street and Grand Street Ferry Railroad Company, for a new trial, made upon exceptions ordered to be heard at the General Term in the first instance, upon the direction of a verdict for the plaintiffs at the New York Circuit on the 13th day of April, 1893.
    This action was brought by the co-partnership firm of Hellman <fe Blaut to recover from the defendant $60,341.50, with interest from November 21, 1890, as indemnity for a forged stock certificate, of which the following is a copy :
    “ Capital Stock, $750,000. Shares, $100 Each.
    “No. 976. (Yignette).
    “ The Forty-second St. and Grand St. Ferry Railroad Company.
    “ City of New York. 229 Shares.
    “ This is to certify that F. ~W. Hofele is entitled to two hundred and twenty-nine shares of one hundred dollars each in the capital stock of the Forty-second Street and Grand Street Ferry Railroad Company, transferable only on the books of the company, by him or his attorney upon the surrender of this certificate, to be canceled, indorsed with the name of the party to whom a new certificate is to’ be issued for said stock, or any part thereof, and accompanied with a declaration of sale or transfer, setting forth the number of shares transferred, and the person to whom and the time when the same are so transferred. No certificate shall bind, this company unless the same be signed by their president, and countersigned by their treasurer and transfer agent
    “ In witness whereof, the said company have caused this certificate to be .signed by their president, and to be copnter-
    [seal.] signed by their treasurer and transfer agent, and sealed with their corporate seal, this third day of February, one thousand eight hundred and eighty-three.”
    “JOHN GREEN, CHAS. CURTISS,
    “ President. Treasurer.
    “ EBEN S. ALLEN,
    “ Trcmsfer Agent.”

    Written across the face in red ink :
    “No good. C. P. Emmons, Transfer Agent.
    “R. J. Jacobs, Treas.”
    It is alleged in the complaint and admitted by the answer that the defendant has for many years issued its .stock upon engraved certificates taken from its stock certificate book in a form approved by it, and with a blank form of transfer and power of attorney indorsed thereon, also approved by it.
    It appeared upon the trial that the certificate in suit was one of twelve of those certificates signed in blank by John Green, a former president of the defendant company, sometime between 1876 and 1880, when he ivas to be absent from the city. The certificates so signed by him were left in the charge of Charles Curtiss, then treasurer of the company, for the purpose of making transfers during Mr. Green’s absence, and were subsequently delivered to Eben S. Allen, thenjsecretary and transfer agent of the company, who placed them in a private drawer in the safe to which no one but himself had access. "
    Mr. Green ceased to be president of the company in April, 1883, and died in 1887. Mr. Curtiss became president in 1883, when Mr. Green retired, and at the same time Allen became treasurer in addition to the other offices then held by him. In April, 1888, Allen became president of the company, Ralph J. Jacobs became treasurer, and Charles P. Emmons became secretary and transfer agent. Mr. Curtiss died in August, 1888,

      In March, 1888, Allen, then secretary, treasurer and transfer agent of the defendant, took the certificate here in question, filled it up in the name of F. W. Hofele for 229 shares, forged the name of Charles Curtiss as treasurer, signed his own name as transfer agent, dated it February 3, 1883, affixed the corporate seal, and delivered it to Hofele without, consideration, for the purpose of procuring a loan for the benefit of Allen & Co., a co-partnership firm composed of Allen and himself.
    On the 14th day olfMarch, 1888, Hofele applied to the Columbia Bank in the city of New York, of which bank the plaintiff Blaut was then a director, for a loan of $13,000, offering as collateral security the above certificate. Before loaning Hofele any money, the bank, with the knowledge of the plaintiff Blaut, had one of its clerks take the supposed certificate to the office of the defendant and inquire whether it was genuine. At the defendant’s office this clerk saw a person who claimed to be the secretary or treasurer of the defendant company, and was informed by him that the certificate was genuine'. Upon the return of the clerk to the bank and his report to the cashier, the bank, with the knowledge of the plaintiff Blaut, loaned Hofele $13,000, for which Hofele gave his note and the forged certificate as collateral. This loan was subsequently increased upon the same collateral to $25,000, which was paid off on the 24th day of April, 1889, when the certificate was surrendered by the bank.
    On the same day, the 24th of April, 1889, Hofele procured another loan upon his promissory note, with the forged certificate as collateral, from the First National Bank of Brooklyn, the amount upon this occasion being $30,000. On August 1, 1889, Hofele sbld the certificate to the plaintiffs for $45,800, and paid off this loan. On August 5, 1889, the plaintiffs sold the certificate to George II. Prentiss & Oo. for $41,650. The certificate was then presented at the office of the company for transfer by Prentiss & Co., and transfer refused upon the ground that it was forged and spurious. On or about August 26,1889, Prentiss & Co. brought an action against the plaintiffs, alleging that the certificate was worthless and false in fact, and demanding a return of the- money they had paid for it, and in consequence of this action the plaintiffs repurchased it from Prentiss & Co., paying the same price they had received for it.
    On November 21, 1890, the plaintiffs in turn presented the certificate at the office of the defendant, and, offering to surrender the same, demanded the issue to them of a new certificate for the same number'of shares, which was refused upon the ground that the certificate presented was forged and spurious. Thereupon the plaintiffs caused this action to be instituted to recover the market value of 229 shares of defendant’s stock, on the 21st day of November, 1890, with interest from that day.

      George Hoadley, for the plaintiffs.

      F. H. Smith, for the defendant.
   Van Brunt, P. J.:

This action was brought to recover damages for refusal of the defendant to transfer certain stock. The certificate which the plaintiffs offered to surrender upon such transfer was similar to the one involved in the action of The Mutual Life Ins. Co. against this same defendant, in which case it was held that the defendant was liable under jhe rule which imposes a liability upon the principal for the unauthorized acts of his agent; that Allen, who issued the certificate, was at the time secretary, treasurer and transfer agent of the defendant, and invested with authority to sign, countersign and seal valid certificates of stock, and when he issued the certificate in question was acting within the scope of his apparent authority, and that the issuance of the certificates in due form was a representation by him tlxat all the conditions had been complied with, and the facts existed upon which his right tó act depended.

It follows, therefore, that the exceptions should be overi’uled and judgment ordered upon the vei’dict for the plaintiffs, with costs.

Follett and Parker, JJ., concurred.

Exceptions overi’uled and judgment ordered upon the verdict for the plaintiffs, with costs.


author: Van Brunt, P. J. : Follett, J.,

text:
    Joseph Bacharach, Appellant, v. Charles Von Eiff, Respondent.

      Deed — covenant against incumbrances — affected by notice of the existence of a release of easements to an elevated railroad.

    Easements which have been extinguished cannot be appurtenant to an estate or follow a conveyance thereof.
    A purchaser of real estate, under a deed containing a covenant that the premises are free from incumbrances, given under a contract calling for a general warranty deed, cannot be heard to complain, in an action brought by him against the grantor to recover damages for an alleged breach of the covenant against incumbrances, that he did not get the easements that he expected to, because of the existence, in front of the premises, of an elevated railroad, to which the grantor had executed a release of easements, where the plaintiff knew, at the time of mailing his contract and taking his deed, that the easement was in the actual use and occupation of the railroad company, and thus had notice that the railroad company had some claim of right to the easement and that it was partially extinguished.
    Appeal by the plaintiff, Joseph Bacharach, from a judgment of the Supreme Court in favor of the defendant, entered in the office of the clerk of the city and county of New York on the 3d day of November, 1893, upon an order made at the New York Special Term on the 1st day of November, 1893, overruling the plaintiff’s demurrer to new matter in the answer and directing judgment absolute for the defendant.
    The action was brought to recover damages for an alleged breach of the covenant against incumbrances contained in a deed of conveyance given by the defendant to the plaintiff.

      B. Lewinson, for the appellant.

      Henry Meyer, for the respondent.
   Van Brunt, P. J. :

The complaint in this action alleges a contract between one Beran and the defendant-for the purchase of premises No. 341 Greenwich street; that by this contract a general warranty deed was to be delivered ; that Beran assigned the contract to plaintiff; that plaintiff paid the consideration named in the contract to the defendant, and on or about December 1,1891, the defendant conveyed the premises to the plaintiff; that in and by the deed of conveyance the defendant covenanted “tliat tlie said premises are free from incumbrances” (except a mortgage and lease therein referred to); that defendant violated his said contract and said covenant in his deed to plaintiff, in that said premises were not free and clear from all incumbrances, in that there existed immediately in front of said premises an elevated railway, which railway interferes with the beneficial use and enjoyment of the premises, and that the defendant has executed an instrument under seal releasing all claims against said railway which he might have as owner of the premises conveyed.

The answer admits the contract, the deed and the covenant in the deed, denies violation of the covenant, and alleges as and for an additional defense that the Manhattan Railway Conrpany was in lawful possession of the elevated iron structure, and lawfully operated the steam railway mentioned in the complaint past and in front of said premises at the time of the making of said contract and the assignment thereof, and the execution of the deed, and that such possession and operation of said railroad was actual, open, visible and notorious and well known to the plaintiff and Beran.

To this additional defense the plaintiff demurred upon the ground that it was insufficient in law upon the face thereof.

Upon the trial of this demurrer the defendant attacked the plaintiff’s complaint, and the court having held the complaint bad, gave judgment absolute for the defendant; and from the judgment thereupon entered this appeal is taken.

It seems to us that much learning has been wasted and much confusion produced in the consideration of the questions arising upon this demurrer, from the failure to notice the paucity of allegation in the complaint, and the fact that easements which do not exist cannot be appurtenant to an estate.

The complaint nowhere intimates that any part of the demised premises are subject to any incumbrance, but simply alleges that immediately in front of said premises, whether in the public street or upon other land the complaint does not inform us, a railway is erected and operated, which railway interferes with the beneficial enjoyment of the premises of the plaintiffs, and that the defendant has executed an instrument under seal, a copy of which is annexed to the complaint, upon reference to which instrument it is found to be a release and conveyance of all such easements, etc., as might be necessary for the elevated railway structure and the operation of the railway. There is, however, no allegation that there were any easements appurtenant to this land which was conveyed, and we cannot assume that there were. But even if it had been alleged in this complaint that this lot fronted on Greenwich street, and that appurtenant to such lots there is usually an easement of light, air and access from the street, which passes upon the conveyance of the premises, in view of the allegations in the answer, would the situation have been changed? We think not. Undoubtedly all easements appurtenant to premises follow a conveyance thereof. But when an easement has been extinguished there is nothing to follow the conveyance of the premises.

The allegation in the answer is that the plaintiff knew at the time of making his contract and taking his deed that this easement was in the actual use and occupation of the railway company. This was notice to him that the railway had some claim of right to this easement, and that it was partially extinguished; and if he took his conveyance with this notice he cannot now be heard to complain that he did not get as much easement as he expected to do. He got all there was, and that is all that the defendant covenanted to give him. One piece of property may have more easements appurtenant to it than another piece; and if no easement is appurtenant none can follow a conveyance, as has already been said. There is no covenant in the deed as to what the appurtenances are ; but all that existed at the time of the conveyance were conveyed and no more.

The judgment appealed from should be affirmed, with costs.

If the plaintiff desires to amend his complaint he should be allowed to do so upon payment of the costs of appeal and costs of the court below.

Follett, J.,

concurred.

Judgment affirmed, with costs; if the plaintiff desires to amend his complaint he should be allowed to do so upon payment of the costs of appeal and costs of the court below.


author: Per Curiam :

text:
    Joseph P. Carson, Plaintiff, v. The New York Terminal Express Company, Appellant; Daniel D. Mangam and Others, Respondents.

      Insolvent foreign corporation — receiver — actions against the corporation enjoined

    In an action against an insolvent New Jersey corporation, doing business in New York, in wkick a receiver had been appointed ancillary to an appointment in New Jersey, an injunction was granted restraining all persons from prosecuting any suit against the defendant corporation or in any manner interfering with its assets, until the further order of the court, A creditor of the corporation obtained a modification of this injunction, allowing him to perfect Ilia judgment in a pending action against the corporation and to take such action thereunder as might be allowed by law

      Held, that this modification of the injunction was improvidently granted — there being nothing in the papers to show either any propriety in allowing the creditor in question to perfect his judgment in preference to other creditors, or that any proceeding under such judgment could be taken by the creditor which would be of any avail to him after the appointment of the receiver.
    Appeal by the defendant, The New York Terminal Express Company, from an order of the Supreme Court, made at the New York Special Term and entered in the office of the clerk of the city and county of New York on the 13th day of October, 1893, modifying an injunction order theretofore graifted, so as to allow Daniel D. Mangam and others, composing the firm of D. D. Mangam & Co., to perfect their judgment in an action pending against the defendant, The New York Terminal Express Company, and to take such action thereunder as they may be allowed by law to do.
    The defendant, The New York Terminal Express Company, is a corporation created under the laws of the State of New Jersey, and having a business agency in the city of New York.

      C. B. Alexander, for the appellant.

      F. D. Arthur, for the respondents.
   Per Curiam :

In this action a receiver was appointed of the defendant ancillary to appointment in the State of New Jersey. An order was granted by the Special Term that all persons be enjoined and restrained from bringing or prosecuting any suit against the defendant, or in any manner interfering with its assets until the further order of the court. A condition was made, of granting this .order, that the defendant should not remove from this State any of its property. A motion was made by the respondents, I). D. Mangam & Co., creditors of the defendant, for the vacation of this injunction so far as it affected them, which motion was granted without any reason therefor appearing in the affidavits upon which the respondents moved, except the statement that the defendant was insolvent at the time it bought the goods and merchandise of the respondents, and that the directors of the defendant company knew at the time that it was insolvent.

It is claimed upon the part of the respondents that the questions on this appeal resolve themselves into, first, whether the creditors (the Mangams) have any right to perfect their judgment, and, second, whether any further proceedings under the judgment are necessary.

There was nothing in the papers upon which this order was gj anted to show any propriety in allowing these respondents to perfect their judgment in preference to other creditors, and there was nothing whatever in the papers to show that any proceedings under the judgment could be taken by the respondents which would be of any avail to them after the appointment of receivers.

~We think, therefore, that the order was improvidently granted and should be reversed, with ten dollars costs and disbursements, and the motion denied, with ten dollars costs.

Present— Van Brunt, P. J., O’Brien and Parker, JJ.

Order reversed, with ten dollars costs and disbursements, and the motion denied, with ten dollars costs.


text:
    John P. Holt and Another, as Assignees, etc., Respondents, v. James P. Streeter, Appellant.

      Ch’der pf arrest —non-joinder of defendants —plea in abatement — several tortfeasors.

    A complaint which, alleges that the defendant, as agent of the plaintiffs, was intrusted by them with the sale of certain goods, with authority to coüect and receive the proceeds and to pay over the same to the plaintiffs; that the defendant acted for the plaintiffs in a fiduciary capacity and, while so acting, soid the goods, collected the moneys, and neglected and refused to pay over the same, for which judgment is demanded, constitutes an action in tort, warranting the issuance of an order of arrest
    A plea in abatement on the ground of the non-joinder of necessary parties defendant is bad When it fails to allege that the parties not joined are within the jurisdiction of the court.
    Where more than one, as, e. g.. the members of a firm, have wrongfully converted the plaintiff’s property, he may proceed against any of the tort feasors, without joining the others.
    Appeal by the defendant, James P. Streeter, from an order of the Supreme Court, made at tlie New York Special Term and entered in the office of the clerk of the city and county of New-York on the 4th day of October, 1893, denying the defendant’s motion to vacate an order of arrest theretofore granted to the plaintiffs.
    The complaint demanded judgment for the sum of $2,368.37 and interest, being the balance of the proceeds of goods alleged to have been sold by the defendant as the plaintiffs’ agent, over and above the defendant’s commissions, which balance he retained and refused to pay over.

      John A. Grow, for the appellant.

      Chas. E. Rushmore, for the respondents.
   Per Curiam :

The complaint alleges that the defendant, as the agent of the plaintiffs, was intrusted by them with the sale of certain goods, with authority to collect and receive the proceeds of such sales and to remit and pay over the same to the plaintiffs when collected, and that he acted for the plaintiffs in a fiduciary capacity. It further alleges that, while so acting, he sold the goods, collected the moneys,, and neglected and refused to pay over the proceeds. The grounds upon which the order of arrest was sought to be vacated were, firstT that the action itself was one eai contractu ; and, second, that the defendant was a member of the firm of James P. Streeter & Co., the other members being one Richardson and the defendant’s wife, and that the failure to join them shows a non-joinder of necessary parties defendant, which is urged as a plea in abatement.

With respect to the first, it is clear from the substance of the complaint given that the action is one in tort, by which it is sought to recover from the defendant the property of the plaintiffs which he has wrongfully converted, as alleged, to his own use. To the plea, in abatement there are two answers: First, that the plea itself is-bad, in that it fails to allege that the other parties are within the jurisdiction of the court, and, second, that because, if there was more than one who had wrongfully converted the property of the plaintiffs,, they would be at liberty to proceed against any of the tort feasors.. Apart, however, from the last consideration we think it clearly appears that the transactions were with the defendant personally, but whether this view is finally established or not, the preponderance of proof is not at present in favor of the defendant upon this question.

Our conclusion is that the order was right and should be affirmed,, witli ten dollars costs and disbursements.

Present — Van Brunt, P. J., O’Brien and Follett, JJ.

Order affirmed, with ten dollars costs and disbursements.


author: Per Curiam:

text:
    John D. Cheever, Respondent, v. The Pittsburgh, Shenango and Lake Erie Railroad Company, Appellant.

      Costs — fees and mileage of witnesses from another State — officers of a corporation.
    An objection to taxing, in favor of a railroad corporation defendant, the witness-fees and mileage of officers of the corporation, who came to the trial from another State, upon the grounds that such officers were not called as witnesses, and that the affidavit in support of the taxation does not state that they attended only as witnesses and not as officers, or that they were deemed absolutely material and necessary, nor any fact which the defendant expected to prove by them, is not tenable when such affidavit alleges chat the persons attended for the purpose of being witnesses, and states the number o£ miles traveled by them within the State of New York, and it appeals that they were not called as -witnesses because the action was disposed of at the close of the plaintiffs case.
    The object of the law allowing a prevailing party witness fees and mileage is reimbursement and not profit.
    When it appears, upon an application to tax costs in favor of a corporation, that the witnesses for whom fees and mileage are charged are officers of the corporation, the affidavit upon which the taxation is claimed should distinctly show, not only that the witnesses have attended, but that the fees have been or will be paid to them.
    Appeal by tbe defendant, Tbe Pittsburgh, Sbenango and Lake Erie Railroad Company, from an order of the Supreme Court, made at the New York Special Term and entered in tbe office of tbe clerk of tbe city and county of New York on the 2d day of November, 1893, denying tlie defendant’s motion for a new taxation of its costs and for tbe allowance of certain items disallowed by the clerk.

      F. S. Smith, for tbe appellant,

      A. G. Fox, for the respondent.
   Per Curiam:

The claim made is that the clerk erred in refusing to tax mileage and witness fees of certain officers of tbe defendant corporation who came from another State for tbe purpose of attending as witnesses upon tbe trial of this action.

The ground upon which it is sought to sustain tbe order o* the court below is that, tbe defendant could not tax tbe mileage of its officers who came to New York to attend the trial as witnesses upon its behalf. And it is urged that as they were not called, as witnesses, and as there is no statement in the affidavit that they attended only as witnesses and not as officers, and because there is no statement that they were deemed absolutely material and necessary, nor ■any statement of any fact which the defendant expected to prove by them, witness fees and mileage cannot be taxed.

The affidavit of the defendant- alleges that each of the persons attended for the purpose of being a witness upon the trial of the case upon various occasions, and also states the number of miles traveled within the State by the witnesses in question. There is no contradiction of this allegation.

It is true that they were not called as witnesses for the defendant because the defendant admitted the cause of action upon which the verdict was directed, and as to the two other causes of action which were litigated, the complaint was dismissed at the close of the plaintiff’s case.

None of the grounds urged upon the plaintiff’s points seem to be well taken. But it is manifest that the court below was correct in denying the motion for retaxation for the reason that it is the duty of the taxing officer to see that the prevailing party recovers no more for the expenses of witnesses than he has himself actually and in good faith incurred. The object of the law is reimbursement and not profit. (Haines v. Mosher, 15 How. 216.)

It is true that the affidavit of the managing clerk in the office of the attorney for the defendant states that the disbursements set forth in schedule A, annexed to and made a part of said affidavit, had been made or incurred at and for the February and April terms of this court. But there is no pretense that any witness fees were paid to any of the witnesses named who are officers of the corporation ; nor does it appear that there is any expectation upon the part of the attorney that such witness fees and mileage are to be paid to the various witnesses named in the affidavit.

We think that where it appears that the witnesses for whom the fees and mileage are charged, are officers of the corporation, the affidavit upon which the taxation is claimed should distinctly show not only that the witnesses have attended, but that the fees have been or will be paid.

It is to be noticed upon a reference to section 3256 of the Code, that the object of the law, as has been already stated, is reimbursement and not profit.

The order should be affirmed, with ten dollars costs and disbursements.

Present — Yan Brunt, P. J., O’Brien and Parker, JJ.

Order affirmed, with ten dollars costs and disbursements.