text:
    Francis H. Salt and Others, Respondents, v. Nathan D. Ensign, as Sheriff of Niagara County, N. Y., Appellant.

      ^Remedies of creditors of an insolvent eorpomtion — not defeated by an assignment of part of the assets.

    The assets of a corporation are a trust fund for the payment of its debts in the sense that creditors of the corporation have an equitable lien upon them as well against those who are not purchasers thereof in good faith as against the stockholders of the corporation.
    While a creditor of an insolvent corporation, having no other relation to it, may-have a remedy by action and final process to collect his debt, such corporation cannot, in view or in contemplation of its insolvency, by voluntary transfer of its property, lawfully give preference to any of its creditors, but the mere fact that a corporation is insolvent does not necessarily render ineffectual payments-out of its money or the transfer of its property in the usual course of its. business.

      Appeal by tbe defendant, Nathan D. Ensign, as sheriff of Niagara county, N. Y., from a judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the county of Niagara on the 21st day of September, 1893, upon the verdict of a jury rendered after a trial at the Niagara Circuit, and also from an order made at the Erie Special Term on the 30th day of August, 1893, and entered in the office of the clerk of Niagara county denying the defendant’s motion for a new trial made upon the minutes.

      Traoy O. BecTcer, for the appellant.

      E. M. & F. M. AsKley, for the respondents.
   Bradley, J.:

The plaintiffs charge that the defendant converted to his own use forty-eight bicycles belonging to them. The alleged defense is that the defendant, as sheriff of Niagara county, levied upon and sold the bicycles by virtue of executions issued upon judgments recovered against the Banker & Campbell Company, Limited; and that the alleged title of the plaintiffs was derived from such judgment debtor in fraud of its creditors, etc.

The Banker & Campbell Company, Limited, was incorporated March 1, 1890, under chapter 611, Laws of 1875, and its object was the purchase and sale of bicycles, tricycles, etc., and their appurtenances and the manufacture thereof.

Its place of business was the city of New York. In July, 1891, the company .had become indebted to one Henry Durke, who resided at Niagara Falls in the county of Niagara, in the sum of '$27,000, and in the further sum of $3,450. He in that month commenced an action to recover the $27,000, and recovered judgment therefor about the 12th day of August, 1891, and shortly thereafter execution issued upon the judgment was levied upon the stock and property of the company in the city of New York. While that •action was pending, and about the first of August, pursuant to an understanding of Durke with the company to the effect that he ■should dispose of some of its bicycles and it would turn over the proceeds to apply upon the $3,450 debt before mentioned, he procured the plaintiffs to take and they did order from the company .forty-eight bicycles, and their obligation to pay for them was turned over to him for such purpose. The plaintiffs had an understanding with him that they would pay him from the proceeds of the sale or as they could, and such was their arrangement with him prior to the time of the purchase.

The wheels were sent to the plaintiffs and received by them at Niagara Falls, where the levy of the executions before mentioned was made upon them. They were afterwards sold by virtue of those executions by the defendant. This constitutes the alleged conversion for which the plaintiffs recovered.

The questions presented are: (1) Was the sale of the wheels made with intent on the part of the company to defraud its creditors ? (2) Was it made in contravention of the statute which provides that: Whenever any incorporated company shall have refused the payment of any of its notes or other evidences of debt * * * it shall not be lawful for such company, or any of its officers, to assign or transfer any of the property or dioses in action of such company to any officer or stockholder of such company, directly or indirectly, for the payment of any debt; and it shall not be lawful to make any transfer or assignment in contemplation of the insolvency of such company to any person or persons whatever; and every such transfer and assignment to such officer, stockholder or other person, or in trust for them or their benefit, shall be utterly void.” (1 R. S. 603, § 4.)

At the time of this transaction of the plaintiffs through Durke with the Banker & Campbell Company, Limited, the company had been in existence less than a year and a half; its liabilities amounted to $90,000 and its assets to less than $40,000.

The executions pursuant to which the defendant sold the property were issued upon five judgments, four of them in favor of the John Wilkenson Company upon debts contracted by the Banker & Campbell Company, Limited, in June, 1891, and the other in favor of T. Henry Sweeting in September, 1891, upon debts contracted in April, May and July, 1891. In the action in which the latter j'udgment was recovered an attachment was issued and levied upon the property in question in August, 1891.

The question whether the sale of the property to the plaintiffs was f2’audulent against the C2-editoi-s of the company was upon the evidence one of fact faii’ly submitted to the j'ury, and their, conclu¡sion that it was not so was supported by evidence. A more serious •question arises upon the facts in view of the statute before mentioned. The assets of a corporation are a trust fund for the payment of its debts in such sense that its creditors have an equitable lien upon them as against those who are not purchasers iu good faith as well as against stockholders. (Cole v. M. I. Co., 133 N. Y. 164.)

While a creditor of an insolvent corporation having no other relation to it may have his remedy by action and final process to ■collect his debt, the corporation cannot, in view or in contemplation ■of its insolvency, by voluntary transfer of its property, lawfully .give preference to any of its creditors. (Robinson v. Bank of Attica, 21 N. Y. 406; Varnum v. Hart, 119 id. 101; Throop v. H. L. Co., 125 id. 530; Kingsley v. Bank, 31 Hun, 329; Nat. B. Bank v. W. M. Co., 59 id. 470; Keiley v. M. & T. Bank, 39 N. Y. St. Repr. 438.) The mere fact, however, that a corporation is insolvent does not necessarily render ineffectual the payment out of its money or the transfer of property in the usual course of business. (Dutcher v. Importers', etc., Bank, 59 N. Y. 5; Paulding v. Chrome Steel Co., 94 id. 334.)

In the former of those two cases an insolvent bank, of which the plaintiff afterwards became assignee in bankruptcy, paid the check ■of its depositor when the latter was ignorant of its financial condition. And in the Paulchimg case the corporation gave with the ■assent of the stockholders a chattel mortgage to secure the payment ■of moneys borrowed, but without filing written consent as required by statute applicable to corporations of that character. Five years later a new mortgage was given and the consent filed. The corporation was then insolvent. It was held that the transfer by the mortgage was not made in contravention of the statute.

In the present case the question whether the sale of the bicycles was made by the company in contemplation of insolvency was submitted to the jury with instructions that if they found the fact in the affirmative the defendant was entitled to a verdict. Although this was a question of fact the finding of the jury upon it was .■against the weight of the evidence.

The company was hopelessly insolvent in the sense that it had not within itself the strength to long survive its then financial condition. It bad in assets less than $40,000 witlx wbicli to meet its liabilities, amounting to $90,000, and at that time an action was pending against it to recover $27,000. It is true that the plaintiff in that action "was a friendly creditor, .and very likely would have consented to withhold the execution of his judgment if an arrangement could have been made with the other creditors to permit the company to proceed, provided it should be made satisfactory to him. An unsuccessful attempt was made by the company to arrange with them for the continuance of its business. The action of Durke had then resulted in a judgment and execution, which had been levied upon the property of the company. The sale afterwards had produced only a partial payment of the amount of the judgment.

The bicycles in question were sold to the plaintiffs pursuant to an understanding between the company and Durke, by which he was permitted to find a purchaser and have the benefit of the sale by way of application of the amount of the price upon his debt against the company. He had the debt of $3,450, besides that which was the subject of the pending action. Tie did make the arrangement with the plaintiffs that they purchase the wheels. Thereupon they sent the order for them, the bicycles came, and.they gave their notes for the amount to Durke. While this was a sale by the company to the plaintiffs, it was made through Durke and for his benefit, and when it was made the plaintiffs understood that he was to take their paper, or in some manner give them such time as was desirable for payment. It may be assumed upon the evidence that he still holds their paper pursuant to his arrangement with them.

In view of these facts and for the purposes of the question under consideration it is difficult to distinguish the transaction in its legal 'effect from a sale made directly from the company to Durke. He procured the sale and purchase to be made, and they were made that he as a creditor of the company should have the benefit of the sale. The whole amount of the purchase price is in the notes of the plaintiffs yet held by him. And, in view of the relation of Durke to the transaction, the making and delivery of the notes • to him did not constitute a payment by them of the purchase money in the sense requisite to render them purchasers in good faith. (Jewett v. Palmer, 7 Johns. Ch. 65; Macauley v. Smith, 132 N. Y. 524.)

But it is urged that the company did not make the sale in contemplation of insolvency because it did not entirely cease business until some time after the sale, and in the meantime it called its creditors together with a view to some arrangement with them which would enable it to go on. This may have been some evidence of hope on the part of the company of the continuance of its business life. But it seems that its financial condition was apparently so hopeless as to furnish no encouragement to the creditors that anything could be realized from the adoption of the plan suggested for reorganization of the company. This was the result of the conference notwithstanding a single creditor had the levy of an execution sufficiently large in amount upon the property of the company to cover its available value. The transfer of the property in question was made for the benefit and preference of that creditor. The ability of the company to proceed much longer was known to it to be dependent upon the indulgence of its creditors. It was quite reasonable to suppose that it would not to the requisite extent be obtained. And in view of the circumstances it is difficult to see that any inference can well arise in respect to the transfer of the property so made for the benefit of the creditor Durke, other than that it was made in contemplation of insolvency, and, therefore, in contravention of the statute.

The conclusion is that the verdict was so decidedly against the weight of the evidence as to require the direction of a new trial.

The judgment and order appealed from should be reversed and a new trial granted, costs to abide the event.

Dwight, P. J., Lewis and Haight, JJ., concurred.

Judgment and order appealed from reversed and new trial granted, costs to abide the event.


source: Caselaw Access Project

author: Hai&iit, J.:

license: Public Domain

text:
    Thomas J. Reynolds, Plaintiff, v. Ransom H. Miller, Defendant.

      Bequest for the direction of a verdict — when the right to go to the jury is waived thereby — action on a promissory note.
    Upon the trial of an action brought on a promissory note there was evidence tending to show a breach of contract and fraud and false representations on the part of the plaintiff; each party asked that-a verdict be ordered in his favor, and neither asked to go to the jury upon any question of fact.

      Held, that tire court was authorized to find the facts, and if there was any evidence to sustain its findings, they were conclusive upon the parties; that, by requesting the court to determine the case as one of law, the parties waived their right, if any, to go to the jury unless they subsequently so requested.
    MotioN by the plaintiff, Thomas J. Reynolds, for a new trial on a case containing exceptions, ordered to be heard at the General Term in the first instance, upon the verdict of a jury in favor of the defendant, directed by the court on the 29th day of November, 1893, after atrial at the Monroe Circuit.

      E. A. Eash, for the plaintiff.

      John Van Voorhis, for the defendant.
   Hai&iit, J.:

■ This action was brought to recover the amount of a promissory note executed by the defendant and delivered to the plaintiff. The answer admits the execution and delivery of the note, but alleges as a defense non-performance of the contract under which it was given, failure of consideration and fraud.

It appears that the Trotter Refrigerator Company was a corporation engaged in the manufacture of refrigerators and other articles of merchandise ; that on the 14th day of January, 1891, an agreement was entered into between Calvin P. II. Yary, Stephen Kiener, Charles ~W. Trotter and the Trotter Refrigerator Company, as parties of the first part, and Thomas J. Reynolds, as party of the second part, in and by which the individual owners of the capital stock of the corporation and the board of directors agreed to turn over to said Reynolds the management of the entire property and assets of the company and the entire control and management of the business of the company of every kind, etc. The agreement was not signed by Charles W. Trotter, who was one of the stockholders in the corporation.

Pursuant to this agreement, Reynolds assumed the management and control of the property of the corporation, and on the 11th day of June, 1891, in consideration of three promissory notes, of which the note in suit is one, executed and delivered to the defendant a bill, of sale of “ all the refrigerators manufactured and in process, described in the annexed schedule marked A, now stored in Newark, N. Y., at the company’s factory and storage houses, also, all the lumber, stock, wrought and unwrought, belonging to said company, now in the yard and factory at Newark, N. Y., including sash, doors, blinds, and glass, and other personal property, excepting the machinery and fixtures. The price at which said refrigerators shall be paid shall be 30 per cent of the list price, and said lumber shall be inven-, toried and figured at 80 per cent of such inventoried value. Any expenses incurred in finishing the refrigerators shall be deducted from said 30 per cent. The other property hereby conveyed to be paid for at a price to be fixed by an inventory made hereafter at 80 per cent of the cost price.” This instrument was signed “Trotter Refrigerator, by T. J. Reynolds, Manager.”

And upon the same day another instrument was executed and delivered to the defendant, which is as follows:

“ Rochester, N. Y., June 11, 1891.
“ Ransom H. Miller having this day purchased of. the Trotter Refrigerator Company the property described in a bill of sale bearing this date, now said Miller is hereby authorized to" collect all the unpaid book accounts due and to gi’ow due to said company and apply the proceeds thereof upon the indebtedness of said company to him. The rights hereby conveyed by said Reynolds as manager are the same rights acquired by him under an agreement made January 14, 1891, between him and said company and others.
“ T. J. REYNOLDS, Manager J

Thereupon, the defendant, on the morning of the next day, proceeded to Newark, where the company’s factory was located, and there met Yary and Kiener, two of the directors of the corporation, who were in charge of the company’s property, and demanded of them the possession of the property described in the bill of sale. This they refused to give until they could have advice of counsel, and it was then arranged that Director Yary should proceed to Rochester within a day or two and obtain such advice. Subsequently, he met the defendant Miller in the city of Rochester, and, together, they proceeded to the office of Hubbell & McGuire, the attorneys for the corporation, and were there advised that the agreement of January fourteenth, between a portjon of the stockholders and Reynolds, was invalid, and that Reynolds had no power to sell the property of the corporation to the defendant in the manner in which he had attempted to do, and they refused to then surrender the property to the defendant. Subsequently, the defendant demanded back the notes which he had delivered to Reynolds, and offered to return and restore to him the assignment and papers he had received from him. This Reynolds refused.

It further appears from the testimony of the defendant that, at the time the plaintiff offered the property to him, he stated and represented that he had legal power to sell and convey the same; that he had consulted with the members of the company and that they had agreed to the sale, and that it was all right; that the plaintiff further stated that if the defendant took the bill of sale he could have possession of the property, and that he should get peaceable possession, and that all of the members of the company were satisfied and would give him peaceable possession; that the defendant believed the representations so made and accepted the offer upon condition that they would give him peaceable possession.

It further appears that Reynolds had not consulted with the other members of the company in reference to the sale of the property to the defendant; that they knew nothing about it until the defendant presented his bill of sale and demanded possession, and that they were not satisfied therewith.

At the close of the evidence, the plaintiff’s counsel asked the court to direct a verdict in favor of the plaintiff for the amount of the note, with interest. This was refused and an exception was taken. The defendant’s counsel then moved for a direction of a verdict in favor of the defendant, which motion was granted, and an exception was taken thereto. No request was made that any question of fact should be submitted to the jury.

"Where, upon a trial, each party asks that a verdict be ordered in his favor, and neither asks to go to the jury upon any question of fact, the court is authorized to find upon the facts, and, if there is any evidence to sustain -its finding, it is conclusive upon the parties, for, by requesting the court to determine the case as one of law, a party waives his right, if any, to go to the jury unless he so requests. (Kirtz v. Peck, 113 N. Y. 222; Provost v. McEncroe, 102 id. 650; Dillon v. Cockcroft, 90 id. 649.)

Here, as we have seen, there was some evidence tending to show fraud on the part of the plaintiff; that he had falsely represented that he had authority to sell the property of the corporation ; that he had seen the members of the company and consulted with them, and that they had agreed that it would be best -for him to sell the property to the defendant. There is also sojne evidence tending to show that he had not performed the contract; that he agreed to deliver possession of the property to the defendant and had not done so.

It would, doubtless, have been the duty of the court to submit these questions to the jury had the plaintiff so requested, but, in the absence of such a request, we must now assume that the court has found the facts upon these questions in favor of the defendant. If so it follows that if there was fraud practiced on the part of the plaintiff it vitiates the contract. Or, if he failed to perform the contract on his part by neglecting to deliver possession of the goods, there was both a breach of contract and a failure of consideration. Or if, as is claimed, the property was to be inventoried, its quantity and condition then to be ascertained, and a price then agreed upon based upon the inventory, it was not a completed contract. Parsons on Contracts, at page 527, says: “Nor is the sale completed while anything remains to be done to determine its quantity if the price depends on this, unless this is to be done by the buyer alone, and, even if earnest or a part of the price be paid, the sale is not complete under these circumstances, and, if it finally fail, the money paid may be recovered back.”

In Tipton v. Feitner (20 N. Y. 423-425) Denio, J., says: “In'" contracts for the purchase of property, real or personal, where there is no stipulation for credit, or delay on either side, the delivery of the property (or its conveyance, where it is of a nature to pass by grant) and the payment of the price are each conditions of the other, and neither party can sue for a breach without having offered performance on his part.” (Dunham v. Mann, 8 N. Y. 508-512; Porter v. Rose, 12 Johns. 209; Parker v. Parmele, 20 id. 130.)

These views render it unnecessary to determine whether the plaintiff could sell the property under the power given to him by the contract of January fourteenth.

The plaintiff’s motion for a new trial should be denied, with costs, and judgment ordered for the defendant upon the verdict.

Dwight, P. J., Lewis and Bradley, JJ., concurred.

Plaintiff’s motion for a new trial denied, with costs, and judgment ordered for the defendant upon the verdict.


author: Haight, J.:

text:
    Edward A. Robbins, Plaintiff, v. Springfield Fire and Marine Insurance Company, Defendant.

      Action on a fire insurance policy — knowledge by the agent of cm existing violation of its conditions — request for the direction of a verdict — when upon a denial thereof the pa/i'ty requesting the same may go to the jury.

    Upon tlie trial of an action brought to recover the amount of a fire insurance policy issued by the defendant, where the answer alleged as a defense that, at the time the policy of insurance was issued, the property insured was incumbered by a chattel mortgage, it appeared that the defendant’s agent knew of the existence of the chattel mortgage at the time of the plaintiff’s application, to him for insurance, and that money had been deposited in the bank for its payment.

      Held, that there was a waiver of the provisions of the policy, making it void if the property was incumbered by a mortgage.
    Where the parties to an action unite in asking the court to direct a verdict each is deemed to have agreed that the facts may be determined by the court, and if there is any evidence to uphold the decision of the court it wiil be sustained. h. party, after asking for the direction of a verdict in his favor, upon being refused, has the right to request the court to submit specific questions of fact to the jury, but it must be done before the court finally disposes of the case by directing a verdict in favor of the other party to the action.
    Motion by the defendant, the Springfield Fire and Marine Insurance Company, for a new trial on a case containing exceptions, ordered to be heard at the General Term in the first instance, upon the verdiet of tlie jury in favor of the plaintiff, directed by the court after a trial at the Genesee Circuit on the 16th day of March, 1893.

      Walter H. Smith, for the plaintiff.

      William N. Cogswell, for the defendant.
   Haight, J.:

This' action was brought to recover upon an insurance policy the loss sustained by a fire. The policy was dated the 28th day of January, 1892, and was issued by one Falkner, the defendant’s agent, upon personal property situated in Le Roy, which was destroyed by fire on the 9th day of February thereafter.

The answer admitted the allegations of the complaint, but alleged as a defense that at the time the policy of insurance was issued the property insured was incumbered by a chattel mortgage given by the plaintiff to one McKay to secure $350.

Upon the trial the defendant assumed the affirmative, and gave evidence of the existence of the mortgage. The plaintiff then gave evidence tending to show that Falkner, the defendant’s agent, knew of the existence of the mortgage, and that plaintiff, on the day upon which the policy is dated, deposited in Latlirop’s Bank at Le Roy the money with which to pay the mortgage in full, and then notified Falkner that he had done so, and that the mortgage was held in Geneseo, and that the money would have to be sent to that place before the mortgage could be paid ; that Falkner then informed him that if he had deposited the money in the bank he would insure him from noon of that day. It also was made to appear that the-money was in fact deposited as stated by the plaintiff; that it was-received by one Doty, the agent of the mortgagee, on the third day of February thereafter, who on that day executed a satisfaction of the mortgage.

On behalf of the defendant, Falkner was sworn as a witness, and stated that plaintiff called upon him and made application for insurance a few days before the twenty-eighth, and that he told him that he could not insure the property if it were covered by a chattel mortgage; that the plaintiff then replied : “ I am all clear now, or at least I have the money in the bank to pay it, and it will be paid immediately j ” that he saw the plaintiff again in reference to the poli.cies before they were issued that he came to the office and wanted to know why they bad not been issued, and that the witness then told him he would issue them immediately. This conversation was about two days after the first.

At the close of the evidence the defendant’s counsel asked the court to direct a verdict for the defendant upon the ground that at the time the policy was issued the property was incumbered by a chattel mortgage. This motion was denied. Thereupon the plaintiff’s counsel asked the court to direct a verdict in his favor for the amount due under the policy, and this motion was granted. The defendant then took an exception to the direction of a verdict in favor of the plaintiff, and then asked to be allowed to go to the jury upon the question whether or not at the time the policy was issued the agent knew of the existence of the chattel mortgage. This was refused, and an exception was taken.

The parties having united in asking the court to direct a verdict, each is deemed to have agreed that the facts might be determined by the court, and if there is any evidence to uphold the decision it will be sustained. (Dillon v. Cockcroft, 90 N. Y. 649; Mayer v. Dean, 115 id. 556; Baylies Tr. Pr. 230.)

The finding of the trial court was in accordance with the testimony of the plaintiff, and it is, therefore, supported by evidence. It is true that the defendant, after asking for a direction of a verdict, upon being refused had the right to request the court to submit specific questions of fact to the jury, but this should have been done before the court finally disposed of the case by directing a verdict in favor of the plaintiff. But, assuming that the request was made in time, we are inclined to the view that there is not such a variance between the testimony of the plaintiff and Falkner as to require a new trial. It appears from the testimony of Falkner that he knew of the existence of the mortgage; that money had been deposited in the bank for its payment. This he knew on the occasion of the jdaintiff’s application to him for insurance. He states that nothing was said in reference to the mortgage on the day on which he issued the policy. He, therefore, issued the policy without knowing or inquiring as to whether the mortgage had actually been paid or discharged. ¥e discover nothing in his testimony that is in conflict with the testimony of the plaintiff, who states a little more in detail that the money had been deposited in the bank ; that it had to be sent to Geneseo in order to make the payment, and that the payment would be made as soon as possible, and, according to the plaintiff’s recollection, this was satisfactory to Falkner, who stated that he would make the insurance from noon of that day. Upon these facts we think there can be no doubt but that there was a waiver of the provisions of the policy making it void if the property was incumbered by mortgage. (Berry v. Am. Cent. Ins. Co., 132 N. Y. 49; Cross v. The Nat. Fire Ins. Co., 132 id. 133; Woodruff v. The Imp. Fire Ins. Co., 83 id. 134; Von Schoick v. Niagara Fire Ins. Co., 68 id. 434; Forward v. The Cont. Ins. Co., 49 N. Y. St. Repr. 867; 66 Hun, 546.)

The defendant’s motion for a new trial should be denied, with costs, and judgment ordered for the plaintiff upon the verdict.

Dwight, P. J., Lewis and Bradley, JJ., concurred.

Motion for a new trial denied, with costs, and judgment ordered for the plaintiff upon the verdict.


author: Lewis, J.:

text:
    Elizabeth G. Hughes, Plaintiff, v. The County of Monroe, Defendant.

      Quasi corporations — responsibilities of — duty of a county to care for its insane— not liable for personal injuries sustained, through its negligence, by an employee in an asylum maintained by it.

      Quasi corporations created by the Legislature for purposes of public policy are not responsible for the neglect of duties enjoined on them, unless a right of action therefor is given by statute, and where a county of the State is engaged in the performance of a duty imposed upon it by statute, to wit, the support and care of its insane, which is a duty imposed upon every county of the State, it can discharge such duty, either by employing the State to care for its insane, or by caring for them itself in an asylum within its own borders. In either case, such county is discharging a duty imposed upon it by law, and is not liable in damages for the personal injuries sustained by a person employed in such asylum, by reason of the failure of the persons in charge thereof to properly instruct such employee in regard to her duties in respect to certain machinery therein, through the operation of which she sustained such injuries.
    Motion by the defendant, The County of Monroe, for a new trial on a case containing exceptions, ordered to be heard at the General Term in the first instance, upon the verdict of a jury in favor of the plaintiff, rendered after a trial at the Monroe Circuit.

      Fiogene Ycm Yoorhis, for the plaintiff.

      F. F. Drake, for the defendant.
   Lewis, J.:

This action was commenced on the 31st of August, 1892, against the board of supervisors of Monroe county, to recover damages for ' personal injuries sustained by the plaintiff while she was employed at the Monroe County Insane Asylum, caused by the alleged negligence of the defendant, on the 11th of February, 1891.

After the commencement of the action, by virtue of an order, the summons and complaint were amended by striking out the “ Board of Supervisors of Monroe County ” as defendant, and inserting as defendant The County of Monroe.”

The plaintiff was engaged, at the time of receiving her injuries, in removing wax from the main cylinder of a steam ironing machine belonging to the defendant, and being used in said asylum, and which was at the time in motion. Her hands and arms were drawn in between the rollers of the machine and were quite seriously injured.

The plaintiff’s contention is that the negligence of the defendant -consisted in the fact that those in charge of the asylum did not give her proper instructions as to the management of the machine. It is a question of considerable doubt whether the plaintiff succeeded in showing herself free from negligence contributing to her injuries.

The position of the rollers of the machine, and their manner of operation when in motion, were plainly visible to the plaintiff, and the danger of her hands being caught between the rollers when they were in motion must have been apparent to her; she testified that she saw the position of the rollers, their distance from each other; that if she had stopped to think she would have known that if anything got into the machine that was thicker than the space between the ■ rollers it would get pinched. She was, at the time, twenty-four or twenty-five years of age, and had lived nearly all her life in the country upon a farm, and must be assumed to have had the common intelligence and experience that girls possess who are brought up among the ordinary affairs of farming life.

But,- from the view we have taken of this case, it will not be necessary to consider the question of the plaintiff’s contributory negligence, for we are of the opinion that the defendant was not liable to the plaintiff for the negligence of those in charge of the asylum.

It is provided by chapter 82 of the Laws of 1863 that the insane asylum of the county of Monroe shall, after the passage of the act, be a separate and distinct institution from that of the Monroe county poorhouse; the board of supervisors was authorized to elect a warden and such other subordinate officers as the board deemed expedient, and appoint three persons who should constitute the board of trustees of the asylum; the warden was to be the chief officer of the asylum and to have the general management thereof under the supervision of the trustees.

The board of supervisors was required to cause to be levied and collected upon the taxable property of the county a sufficient sum annually to defray the expenses of the asylum ; the money raised was required to be paid to the county treasurer to be used for the support of the insane of the county, and for no other purpose whatever.

The warden was given power to enter into contracts with any town or city in the county for the support of any insane person at. the asylum, and to demand and receive from the State lunatic asylum any insane person who was then, or thereafter should become, chargeable to the county of Monroe, or to any town in said county, or any ward in the city of Rochester. The managers of the State lunatic asylum, upon such demand, were required to surrender to the board of supervisors any and every person who, at the time of making such demand, is in anywise chargeable to such city or town. By chapter 633 of the Laws of 1870, it was made the duty of the trustees of the said asylum, and they were empowered thereby, to hear and determine all questions and inquiries in relation to indigent lunatics and pauper insane who may be committed to said asylum, as to whether the maintenance of such lunatic and pauper insane is properly a charge on a specified town of Monroe county or upon the city of Rochester, or upon the county of Monroe, and certify tbeir decision to tbe board of supervisors, and tbe said board was required to cause the expenses of such maintenance to be levied against tbe said town, city or county and collected as tbe said board of trustees shall certify.

The board of trustees was given power to charge tbe estate of any lunatic who was not indigent or a pauper, or tbe person legally responsible for bis maintenance, and collect tbe same and apply it to. tbe maintenance of such lunatic.

It was conceded upon tbe trial that tbe asylum charged to tbe county, tbe city of Rochester and tbe several towns of tbe county, respectively, the year preceding tbe time of tbe accident, various sums for tbe board of patients, and that there was due from tbe State for that year moneys for tbe care of insane' persons cared for by tbe institution who were chargeable to tbe State, and that there was due to tbe county moneys for tbe care of other insane persons,, and that it received during said year for tbe price of articles produced upon tbe farm belonging to tbe asylum and sold, about $800.. Tbe defendant is one of tbe divisions of tbe State.

Tbe obligation of caring for its insane was imposed upon it by law. It could have its insane cared for at tbe State asylum, or at an institution of its own, but under all circumstances it was required to bear tbe expense of caring for them. Tbe expense thereof was paid by taxation. If any revenue wTas derived from tbe product of' tbe farm, or from tbe patients who, in whole or in part, contributed to tbeir own support, the amount collected by taxation was accordingly lessened by tbe amount of tire sums thus received, but in no event was it contemplated that tbe county would derive any revenue from tbe asylum.

"Wliat it did in caring for its insane was for the benefit of its; citizens as well as for all tbe other citizens of tbe State. Tbe control and restraint of tbe insane and criminal classes are equally necessary for tbe welfare and safety of tbe community.

Restraining tbe insane of tbeir liberty can only be justified as an exercise of police power. Tbe laws authorizing such interference are classified among tbe laws concerning tbe internal police of tbe State. (R. S. part 1, chap. 20, tit. 3.)

Dillon on Municipal Corporations (4th ed., § 963) states tbe raleas to liability of counties for torts to be: According to tbe prevailing rule, counties are under no liability in respect of torts, except as imposed (expressly or by necessary implication) by statute.

“ They are political divisions of the State, created for convenience.”

A county was accordingly held not liable for an injury suffered by the plaintiff, ~who, when in attendance at court as a witness, was precipitated into the cellar of the court house in consequence of the negligent omission of an agent, or officers of the county, to guard or light a dangerous opening leading into the cellar.

Addison on Torts (Banks & Bros.’ ed., p. 1298, § 1526) states the rule as follows: A plainly marked distinction is made and should be observed between municipal corporations proper, as incorporated villages, towns and cities, and those other organizations, such as town•sliips, counties, school districts and the like, which are established without any express charter or act of incorporation, and clothed with but limited powers.

These latter political divisions are called quasi corporations, and the general rule of law is now well settled that no action can be maintained against corporations of this class by a private person for their neglect of public duty, unless such right of action is expressly given by statute.”

Ensign v. Board of Supervisors of Livingston Co. (25 Hun, 20) was an action brought to recover damages sustained by injuries received in crossing a defective bridge over a river crossed by a public highway. The bridge was erected under an act of the Legislature, which declared that it should, when constructed, become a public bridge and be maintained at the expense of the county of Livingston.

It was held that the county was not liable, and the court stated the rule as follows: “ There is a distinction in this respect between municipal corporations created by charter and vested by the government with a portion of its sovereign power for their peculiar benefit, and counties and towns which, like assembly and senatorial districts, are mere political divisions organized for the convenient exercise of portions of the political power of the State.”

Allamango v. Board of Supervisors of Albany Co. (25 Hun, 551) was an action brought by the plaintiff, an inmate of the Albany County Penitentiary, to recover damages for an injury received to 0his hand while working with a circular saw. It was held that the defendant, in building and managing tlie penitentiary, was engaged in a public duty wbiclr concerned tlie administration of criminal justice and was a mere instrumentality selected by the State, and that tlie rule was not different even if tlie county derived some profit incidentally from work performed at tlie institution.

The same rule is stated in Hollenbeck v. The County of Winnebago (95 Ill. 148).

It was held in Summers v. Board of Commissioners of Davies County (103 Ind. 262) that where the duties delegated to officers elected by public corporations are political or governmental, the relation of principal and agent does not exist; that the maxim of respondeat superior does not govern; that counties are mere instrumentalities of government and are not liable for an injury caused by the negligence of its commissioners in the selection of an unskilled or incompetent physician for the care of the poor.

Judge Elliot in his opinion says: “¥e have many cases holding that counties, townships and cities are instrumentalities of government, and it must, therefore, be true that where they act simply as the local government they act for the State. As the State is not liable for the acts of its officers, neither can the public corporations be held liable for the acts of its officers in the exercise of political powers. * *

There is no more reason for holding counties liable for the negligence of the commissioners in the exercise of the governmental functions delegated to them, than there is for holding cities liable for the acts of their firemen or police officers, or for holding counties and towmships responsible for the torts of sheriffs and constables. In providing for the care of the poor, a police power which resides primarily in the sovereignty is exercised, and neither the sovereign nor the local governing body to whom such a power is delegated is responsible for the misfeasance of its officers.”

He refers with approval to the case of Ogg v. City of Lansing (35 Iowa, 495), which held that a city was not liable for the negligence of persons placed in charge of a small-pox hospital which the city had established.

In Maxmilian v. Mayor (62 N. Y. 164) Judge Folger points out the distinction between municipalities organized as a political division .pf the State for the purpose of discharging duties for the benefit of .all its citizens, and. municipalities created to discharge duties for their own private interests.

In the former the agents are servants of the corporations and act for the public at large, and the corporation is not responsible for their acts or omissions, or the actions or omissions of the subordinates by them appointed, lie refers, as authority for the rule, to Eastman v. Meredith (36 N. H. 284); Fisher v. Boston (104 Mass. 87); Hafford v. New Bedford (16 Gray, 297).

Howard v. City of Worcester (153 Mass. 426) was an action to recover damages for injuries received by the plaintiff through the alleged negligence of the city. The city was engaged in the construction of a school house. It had let the contract for removing a ledge of rocks, and the plaintiff was injured by the blasting of rock by the contractor.

Judge Allen says that the service in which the city was engaged was purely for the benefit of the public, and that the case falls within the general rule which exonerates it from responsibility for the consequences of its servants’ negligence, and refers to Neft v. Wellesley (148 Mass. 487); Kern v. City of Boston (151 id. 505), and Bates v. Westboro (Id. 174).

The same rule is stated in the cases of Buttrick v. City of Lowell (1 Allen, 172); Wheeler v. City of Cincinnati (19 Ohio St. 19); Brinkmeyer v. City of Evansville (29 Ind. 187); Toomey v. City of Albany (38 N. Y. St. Repr. 91); Smith v. Rochester (76 N. Y. 506); McKay v. City of Buffalo (9 Hun, 401).

In Benton v. Trustees of the City Hospital of Boston (140 Mass. 13) the action was against the trustees of the city hospital for injuries received through the negligence of its superintendent.

Judge Field, in stating the reason why the plaintiff was not entitled to recover, says: “ But we think, that this is a hospital maintained by the city with such aid as may be derived from donations and the sums received from paying patients, and that the trustees are, in a sense, managing agents only in maintaining the hospital, subject to the laws and to the ordinances of the city. * * * The sums received from paying patients are by the ordinance to be credited to the account of the hospital and are, as stated in the exceptions, used in the support of the hospital.

K The trustees are a body created for the performance of a duty which, under the authority of the statute, the city of Boston has assumed for the benefit of the public, and from the performance of which no profit nor advantage is derived either by the trustees or the city.” (Hill v. City of Boston, 122 Mass. 344; Ulrich v. City of St. Louis, 112 Mo. 139; Sherbourne v. Yuba Co., 21 Cal. 113; Kincaid v. Hardin Co., 53 Iowa, 430.)

There are many other authorities sustaining the same doctrine, but it is not necessary to refer to more of them.

Plaintiff’s counsel concedes the correctness of the general rule as above stated, but he seeks to distinguish this case from the cases cited; he claims that the defendant was managing this asylum for its own benefit and advantage, and calls our attention to the case of Hannon v. The County of St. Louis (62 Mo. 313) as an authority sustaining his contention. In that case the city of St. Louis had contracted with one Lukan to lay a water pipe along certain streets through the grounds of the county insane asylum, in order to supply the same with water; and the plaintiff was injured by the negligence of the defendant while in the employ of the contractor.

In discussing the case the court affirmed the doctrine that quasi corporations, created by the Legislature foi’ the purpose of public policy, are not responsible for the ‘neglect of duties enjoined on them unless the action is given by statute, but held that it had no application to a case where a special duty is imposed upon the quasi corporation with its consent, express or implied, and stated that, In the case at bar the county of St. Louis was not engaged in the discharge of duties imposed alike by general law on all counties; duties whose performance, if neglected, might have been enforced by appropriate procedure for that purpose, but in the discharge of a self-imposed duty not enjoined by any law. And the test of the mattei is this: that the county could not have been compelled to enter on the work for whose performance it. contracted.”

That case, we think, can be distinguished from this. Here the defendant was engaged in the performance of a duty imposed upon it by statute, to wit, the support and care of its insane, a dirty imposed upon every county in the State. It could discharge that ■duty either by employing the State to care for its insane, or care for them in an asylum within its own borders.

In either case it was' discharging a duty imposed upon it by law. ¥e are of tlie opinion tliat tlie plaintiff failed to make a case entitling ber to a verdict; the defendant’s motion for a new trial should be granted, with costs to abide tlie event.

Dwight, P. J., Haight and Beadley, JJ., concurred.

Defendant’s motion for a new trial granted, with costs to abide the event.


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    In the Matter of the Probate of the Will of Sarah R. Torkington, Deceased.

      Evidence inadmissible under section 839 of the Oode of Civil Procedure — decree admitting a will to probate — when not reversed for error in the rejection of evidence.

    The evidence of an heir at law of a testatrix in a contested proceeding relating to the probate of her alleged will, to the effect that the witness was present at the time of the execution of the will, and saw the person who was in attendance upon the testatrix administer to her an opiate, is inadmissible under section 839 of the Oode of Civil Procedure, where no valid release of the interest of such witness in the estate is shown to have been made.
    Upon the contested probate of a will an interested witness, whose testimony was excluded as inadmissible under section 839 of the Code of Civil Procedure, produced an instrument of which the following is a copy :
    “ To the Hon. Joseph A. Adlington, Surrogate of Monroe County : I, George W. Rumble, one of the legatees, heirs at law and next of kin of Sarah R. Torkington, deceased, do hereby renounce and release all my interest of whatsoever name and nature in and to the estate of said deceased as legatee or otherwise. Witness my hand and seal this 37th day of December, 1893. George W. Rumble (seal).”
    The witness testified that he executed such instrument, but there was no proof that it had ever been delivered to any one.

      EM, that the instrument did not qualify the witness to give his testimony where the incapacity of the testatrix to make a will was the ground of contest.
    Under the provisions of section 3545 of the Code qf Civil Procedure, a decree of a surrogate admitting a will to probate will not be reversed for an error in the admission or rejection of evidence, unless it appears to the appellate court that the appellant was necessarily prejudiced thereby.
    Appeal by Emma J. Chapman, one of the legatees named in the last will of Sarah R. Torkington, deceased, from a decree of the Surrogate’s Court of the county of Monroe, entered in the office of tbe clerk of tbe Monroe County Surrogate’s Court on tbe 2‘'Tth day of December, 1892, admitting to probate tbe will of the said Sarah R. Torkington, deceased, as a valid will of real and personal property.

      John It. Farming, for tbe contestant, Emma J. Chapman, appellant.

      George A. Garnahcm, for tbe executrix, Laura M. Wackerman, respondent.
   Lewis, J.:

Tbe will of Mrs. Torkington was offered for probate by tbe executrix, Laura M. 'Wackerman. Emma J. Chapman, a daughter of tbe testatrix, contested the probate of tbe will upon tbe grounds that tbe testatrix was, at the time of executing tbe will, of unsound mind, memory and understanding, and was not competent to make tbe will; that it was not her free, unconstrained, voluntary act, and that it was not executed in conformity with the requirements of tbe statute. The proof in favor of probating tbe will was so clear and satisfactory as to leave scarcely a doubt as to its being the will of the testatrix, and that tbe formalities of tbe statute were fully complied with in its execution.

The contestant called her brother, George "W. Rumble, as a witness. He was a son and heir at law of tbe testatrix. Tbe contestant offered to show by tbe witness that be was present on tbe morning of tbe day tbe will was executed, and saw the person who was in attendance upon tbe testatrix administer to her an opiate called upon tbe trial a suppository. The testimony was objected to by tbe proponent; upon tbe ground that tbe witness was not competent to testify to tbe transaction under section 829 of tbe Code of Civil Procedure. Tbe objection was sustained. The contestant duly excepted. Her counsel thereupon produced an instrument in tbe words and figures following:

“ To the Hon. Joseph A. AdliNgtoN, Surrogate of Monroe Cownty :
“I, George "W. Rumble, one of tbe legatees, heirs at law and next of kin of Sarah R. Torkington, deceased, do hereby renounce and release all my interest of whatsoever name and nature in and to the estate of said deceased as legatee or otherwise. Witness my band and seal this 27th day of December, 1892.
“ GEORGE W. RUMBLE, [seal.] ”

Rumble testified that he executed this instrument. No releasee is named in the instrument, and there was no proof that it had ever been delivered to any one.

The surrogate held that the instrument did not qualify the witness to give the testimony. The contest being made upon the ground of the incapacity of the testatrix to make a will, and there being, as we think, no valid release proven, the testimony was properly rejected. (Eighmie v. Taylor, 68 Hun, 573.)

But if it should be held that the evidence was competent, and that its exclusion was error, it was, we think, under the circumstances of the case, a harmless error, for an examination of the evidence satisfies us that had it been admitted the result of the contest would ha,ve been the same, for the due execution of the instrument having been so clearly and satisfactorily proven, this evidence, had it been admitted, would not probably have affected the result. The appellant was not, therefore, prejudiced by the exclusion of the evidence offered.

It is provided by section 2545 of the Code of Civil Procedure that a decree of a surrogate admitting a will to probate shall not be reversed for an error in admitting or rejecting evidence, unless it appears to the appellate court that the exceptant was necessarily prejudiced thereby.

The decree appealed from should be affirmed, with costs of this appeal to be paid by the contestant personally.

Dwight, P. L, Haight and Beadley, JJ., concurred.

Decree of the Surrogate’s Court of Monroe county appealed from affirmed, with costs to the respondent, to be paid by the appellant personally. 1


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    William Miller and Others, Respondents, v. Elijah Boyer, Appellant.

      Action on a Bohemian seed ¡/rain promissory note — plaintiff must show that he is a bona fide purchaser for value before maturity — veracity of testimony a question for the jury.

    In an action brought upon a promissory note known generally as a Bohemian seed grain note, by the assignee thereof, the burden of proof is upon the plaintiff to show that he is a bona fide purchaser of the note for value before maturity. When upon the trial of an action a party thereto testifies as a witness, the veracity of such testimony is to be determined by the jury, and such testimony should be submitted to the jury for its determination, unless the testimony of such party is corroborated as to its material facts by testimony coming from a disinterested source.
    Appeal by the defendant, Elijah Boyer, from a judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the county of Monroe on the 21st day of June, 1893, upon the verdict of a jury directed by the court after a trial at the Monroe Circuit, and also from an order made at the Steuben Special Term and entered in the office of the clerk of Monroe county on the 9th day of January, 1894, denying the defendant’s motion fora new trial made upon a case containing exceptions.

      Qiáncij Q. T. Pm'lcer, for the appellant.

      JElbridge L. Adams, for the respondents.
   Lewis, J.:

This action was brought upon a promissory note for $100, given by the defendant, payable to ~W. J. Curtis or bearer for seed grain. It is what is generally known as a Bohemian seed grain note. The defendant concededly made the note, but claims it was obtained from him by fraudulent means, and that the plaintiffs are not bona fide holders thereof for value before maturity.

The note was obtained from the defendant by an agent of a Pennsylvania seed company. It is not necessary to rehearse the means resorted to to obtain the note. They were substantially the same as have been stated so many times in these Bohemian note cases decided by this court.

Tbe defendant unquestionably consented to make the note, with a full and complete understanding of the scheme stated to him by the agent of the company. The agent stated to him just how it was proposed to be operated. The defendant expected to realize a profit of $100 out of the enterprise if the seed company performed its part of the agreement. The plan did not involve the expenditure of any money or labor by him. lie was disappointed for the reason that the company failed to sell his crop of oats the following year as agreed.

This court held in Watson v. Blossom (18 N. Y. St. Repr. 727), upon a similar state of facts, that the burden of proof was upon the plaintiff to show that he was a Iona fide purchaser of the note for value before maturity.

The trial court so held in this case, and the plaintiffs, to show that they were such bona fide holders, called as a witness the plaintiff Ettenheimer.

TIis testimony tended to show that the plaintiffs purchased the note in suit before maturity of a Mr. Parsons, and that at the same time they purchased of Parsons two other small notes ; that they paid for the notes in jewelry.

Some of the facts testified to by Mr. Ettenheimer should have had a tendency, perhaps, to raise a suspicion in the minds of the plaintiffs that it was a Bohemian note, and required them, in order to be considered bona fide holders, to have made a more careful and particular examination than they did into the facts attending the making; of the note; but assuming that the facts testified to by Ettenheimer, if true, established that the plaintiffs were bona fide holders of the note for value before maturity, he being one of the plaintiffs, his veracity was a question for'the jury (Canajoharie Nat. Bank v. Diefendorf, 123 N. Y. 191; Bookheim v. Alexander, 64 Hun, 458; Goldsmith v. Coverly, 27 N. Y. Supp. 716), and it should have been submitted to them for their determination unless his testimony was, as to its material facts, corroborated by testimony coming from a disinterested source. The only other witness called by the plaintiffs was Charles Beemer.

Ettenheimer had testified that the note was delivered to him by Parsons before they purchased it with the view of enabling the plaintiffs to investigate and satisfy themselves as to its genuineness; that lie bad purchased other seed grain notes of the father of Mr. Parsons, and that he understood that a Mr. Kurz had purchased such notes, and, therefore, he called u]ion him and made inquiry as to the notes; that he was informed by Kurz that he had purchased many of them, and that they had always been paid; that when he went to make the inquiry of Kurz he found Mr. Beerner and a man by the name of Pote in Kurz’s store; that Kurz had since died and Pote had left the State.

Beerner testified: I reside in Rochester. Have an office approximate to Kurz’s tailor establishment; I was present in 1889 whqn Mr. Ettenheimer, who has just been on the stand, came to Kurz; I heard Mr. Ettenheimer ask Kurz if he considered those notes good; showed him the notes, and Kurz told him that he did; that he had been dealing in the notes and they were always paid; that he had taken them ; I just heard a little of the conversation. I was standing four or five feet away and I wasn’t listening exactly to the conversation until Mr. Ettenheimer spoke in a little louder voice, and I heard him say something about those notes. These two or three sentences is all I heard. I wasn’t present at Ettenheimer’s when any of this talk was had.”

It may well be doubted whether this evidence of Beemer’s in any material respect corroborated the testimony of Ettenheimer. Beerner did not identify the notes. He left it entirely uncertain whether the note in suit was one of the notes concerning which the inquiry was made. ' -

His evidence fails to corroborate Ettenheimer’s evidence as to what was paid for the note, or whether there was anything paid for it, or as to the time that the plaintiffs actually purchased the note. His evidence simply shows the quite unimportant circumstance that Mr. Ettenheimer was inquiring of Kurz about some notes.

The only other piece of corroborating evidence is the letter from the postmaster at Alden in reply to an inquiry from Mr. Ettenheimer to the effect that he knew the maker of the note and considered him honorable and upright and good for the amount of the note. It does not seem to us that the testimony of Mr. Ettenheimer was so far corroborated upon the material facts incumbent upon the plaintiffs to establish, as to justify the trial court in taking the case from the jury.

The judgment and order appealed from should be reversed and a new trial granted, with costs to abide the event.

Dwight, P. J., Haight and Bradley, JJ., concurred.

Judgment and order appealed from reversed and new trial granted, costs to abide the event.