author: Corlett, J.:

text:
    WILLIAM SAVAGE and Others, Respondents, v. CITY OF BUFFALO, Appellant.

      .Eminent domain— the power given to the common council of a city to determine what lands are benefited by am, improvement cannot be delegated — chap. 519, Lams of 1870.
    'Tlie charter of the city of Buffalo treating of the duty of its common council in raising the money requisite to pay for property taken, and the method of so doing, provides as follows: “The amount which is to be raised by local assessment it (the common council) shall cause to be assessed upon the real estate benefited; ” and, further, that “the assessors shall constitute a board of valuation and assessment;” and, further, that “they (the assessors) shall assess the whole amount upon the parcels of land benefited by the work, act or improvement in proportion to such benefit.” * * *
    'The city of Buffalo took lands for a market, and thereafter the common council, by resolution, determined that one-half of the expense should be raised by general tax and one-half by local assessment; and by said resolution it further directed the board of assessors to impose the local assessment upon the real estate benefited by the improvement. The common council did not at any time determine what particular lands would be benefited.
    In an action to vacate an assessment subsequently made by the assessors upon lands selected by them therefor a demurrer was interposed to the complaint.

      Held, that no power to determine the lands benefited by the improvement was given to the assessors.
    'That such a power could not be delegated by the common council to the assessors;
    That the proportion of benefit to the property assessed was to be determined by the common council, and not by the assessors.

      Semble, that an assessment to pay for the site of a city market, from which certain property was omitted because it might be thereafter assessed for another market, was improper and illegal.
    Appeal by tbe defendant, tbe City of Buffalo, from au interlocutory judgment, entered in tbe clerk’s office of Erie county on tbe 5th day of September, 1890, upon a decision made at Special Term in said county upon a trial of issues of law, which judgment overruled tbe demurrer interposed by said defendant to tbe complaint.

      Philip A. Zaing, for the appellant.

      Stephen Zoehwood, for tbe respondents.
   Corlett, J.:

Section 1 of title 3 of tbe charter of tbe city of Buffalo, chapter 519, Laws of 1870, provides that “tbe city of Buffalo shall bold its corporate meetings, for the exercise of its corporate powers, the performance of its corporate duties, and the management of its property and affairs, by means of a common council, composed of the aldermen of the several wards of the city, a majority of whom .shall constitute a quorum.” The legislative power of the city is vested in the common council.

Section lé of title 8 is as follows:

“ Upon the confirmation of the report of the commissioners, the common council shall ascertain the amount of money required to pay the compensation awarded and t)ie costs of the proceedings; and .shall, when it is not provided in this act that the expenses of the improvement for which such lands were taken shall be assessed upon a certain district, or upon the parcels of land benefited by the improvements, determine whether the whole of such amount, or any part of it, shall be raised by general tax or by local assessment. The amount which is to be raised by general tax shall be included in and raised in the general tax next thereafter to be levied. The amount which is to be raised by local assessment it shall cause to be .assessed upon the real estate l>enefitedP

Section 11, title 9, confers power upon the city to construe^ maintain and repair a city hall, markets, public buildings, etc.

Section 39, title 2, provides that “the assessors shall constitute a board of valuation and assessment, and a majority of them shall ■constitute a quorum.”

Section 1 of title 8 confers power upon the city to take lands for public or corporate purposes.

On the 1st day of October, 1888, the common council passed a resolution, of which the following is a copy :

“ That the common council of the city of Buffalo intends to take the land and property necessary for public market purposes described as follows: All that certain piece or parcel of land situate in the city of Buffalo, county of Erie and State of New York, bounded and described as follows: Beginning at a point in the easterly line of Michigan street, at its intersection with the southerly line of Eulton street, running thence southerly along the easterly line of Michigan street 302 feet, more or less, to the north line of Elk street; thence easterly, at right angles along the northerly line of Elk street 127 feet, more or less, to the westerly line of "West Market street; thence northerly, and at right angles along the westerly line of West Market street 302 feet, more or less, to the southerly line of Fulton street; thence westerly, and at right angles along the southerly line of Fulton street, 127 feet to the easterly line of Michigan street, the place of beginning; and that the city clerk be, and he is hereby, directed to cause this notice of such intention to he duly published.”

On the 20th day of May, 1889, the common council passed the following resolutions:

“Resolved, That the common council has ascertained and hereby determines the amount of money required to pay the compensation awarded in and the costs and expenses of said proceedings to be the sum of $169,097.50; and

“Resolved, That it be, and it is hereby determined that one-half of said sum, to wit, $84,548.75, be raised by general tax; and that one-half of said sum, to wit, $84,548.75, be raised by local assessment ; and

“Resolved, That the board of assessors be and they are hereby directed to assess the said sum of $84,548.75 upon the real estate benefited by such improvement, to wit: The improvement of acquiring the block of land bounded by Fulton street on the north, West Market street on the east, Elk street on the south, and Michigan street on the west, for public market purposes, to be known'as the extension of the Elk street market, in proportion to such benefit.”

The common council did not adjudge or determine what particular land would .be benefited by the improvement. The board of assessors assumed to exercise that power, and so made their assessment.

The assessors, in determining what property was benefited by the improvement, excluded the eleventh and twelfth wards of the city upon the sole ground that the lands included in those wards would be liable at some future time to be assessed for a public market to be located in one or the other of said wards. This action was brought to vacate and set aside that assessment. The complaint alleges the above facts. The defendant demurred to the complaint upon the ground that it failed to state facts constituting a cause of action.

The demurrer was heard at a Special Term of this court, held in July, 1890. The demurrer was overruled, and the interlocutory judgment appealed from was entered.

The learned counsel for the appellant insists that the complaint is defective in not clearly stating the grounds upon which the assessment was void. It is well settled that, on demurrer, all reasonable intendments will be indulged in in support of the pleading demurred; to. (Lorillard v. Clyde, 86 N. Y., 384 ; Marie et al. v. Garrison, 83 id., 14.) The allegations in the complaint were sufficient.

Property assessed for local improvements may be sold if the assessments are not paid, and the owner’s title divested. Strict compliance with the law is, therefore, required. (Stebbins et al. v. Kay et al., 123 N. Y., 31; Merrit et al. v. Village of Portchester, 71 id., 309 ; Angel v. Town of Hume, 17 Hun, 374.)

Where the board or officers materially depart from the authority delegated, they act without jurisdiction. (Cagwin v. Town of Hancock, 84 N. Y., 532.) And a right of action is vested in the persons injured. (Hassen v. City of Rochester, 65 N. Y., 516.) A ratification of the assessors’ report by the common council did not render it valid. (Danks v. Quackenbush, 3 Denio, 594.)

The only express poryer conferred upon assessors is to value and assess property. There is nothing in the charter which confers-authority upon them to determine what particular property will be-benefited by the improvement. The existence of such power might involve serious consequences. The city of Buffalo, through its counsel, should determine and specify the property benefited. The board of assessors could then value that property and make the assessment. The mischief of such authority is illustrated in this case, for, in addition to omitting wards and parts of wards proximate to the market, the board refused to assess any of the property of the eleventh or twelfth wards for the reason that those wards might be liable thereafter to be assessed for another public market. In taking property the common council should not be allowed to relieve itself from responsibility by imposing its duties upon the assessors.

The learned counsel for the city argues with great earnestness that the board of assessors had power, not only to value the property and make the assessment, but also to determine the lands which would be benefited by the improvement, including the proportions, and cites title 6, sections 1 to 3, inclusive, in support of this contention.

Section 3 is: “ They shall assess the whole amount upon the parcels of land benefited by the work, act or improvement in proportion to such benefit, except in those cases in which, by this act, the assessment is to be made upon a different principle, and in those cases they shall make the assessment upon the principle prescribed for each ease, pursuant to this act.”

It will be observed that this section does not, in express words, confer power upon the board of assessors to determine the particular property that would be benefited. The section is entirely consistent with the assumption that this power is exclusively vested in the city through its council. The section directs that the assessment shall "be made in proportion to the benefits conferred. But it does not state whether the council or board of assessors shall determine what those portions are. In terms it only requires that the assessment shall be made in the manner therein directed; but it fails to prescribe what body shall determine and designate the property. The other two sections have no application.

The resolution of the council was to the effect that the assessors should levy the sum of $84,548.75 upon the real estate benefited by the improvement. It then states the nature of that improvement, hut omits to show what property is benefited, or the proportions.

While the section last quoted requires the assessment to be made on the parcels of land benefited, it omits to specify those particular parts. It requires no argument to prove, for it is self evident that in nearly every case the proportion of benefit will be unequal. One block, or part of a block, may be benefited five per cent; another ten, then twenty, and so until par is reached, the adjudication showing the proportion of benefit conferred upon particular parcels of the property. Section 3 does not enact or state what body or tribunal shall decide the proportion of benefit which will result from the improvement. If the body authorized to decide that question shall adjudge that different portions were benefited a certain percentage in unequal degrees, then the propriety of section 3 would at once appear.

The meaning of the provision “they shall assess the whole .amount (ordered to be assessed) upon the parcels of land benefited by the work, act or improvement, in proportion to such benefit,” is mot obscure. Abundant caution induced the legislature to compel the assessors to adjudge valuations and impose assessments upon such adjudications; that is, a certain percentage would be imposed upon one piece of property, and so through the list. The assessors, ■therefore, are commanded to make their assessment upon that basis. If the city is required to make the determination, then its attorney would represent it in protecting the municipality, including its property owners and the citizens affected. Appropriate ordinances would be adopted defining the mode of procedure, and the persons affected would have full opportunity to be heárd through counsel ■or otherwise. Then when an adjudication was made showing the parcels to be benefited, and the proportions, the result would be put .upon record, 'and parties deeming themselves aggrieved could resort to legal methods of redress. If errors were committed to the prejudice of the city or of the citizens, relief might be obtained. If, on the other hand, the power rests in the assessors, they have practically arbitrary authority. The dignity of real estate, and the caution which must be exercised in transferring title from the owner to another has its root, in the very nature of things, in the origin of the law and the rights of man, and extends back beyond the time whereof the memory of man runneth not to the contrary.”

Assessors are not elected on account of their judicial ability or aptness in the construction of statutes. They are chosen on account of their supposed general knowledge of the value of property. When a tax is general, embracing all the property in the corporation, their duties are very simple. They determine the value and assess on that basis. If injustice is then inflicted or errors are committed, provisions are made for redress. But if those officers can determine the proportions of benefit without any prescribed methods of procedure'or relief, the power vested in them would be absolute and extreme to the last degree. They, would have more authority than any tribunal in the State or Union.

It was never the intent of the legislature to confer any such power. It has not been conferred in express terms and cannot be implied. If it has been exercised and acquiesced in, the safety of citizens requires that the question of power should be determined. A rule should be adopted which will alike protect the city and prevent confiscation. In case of omission to pay assessments the ■property can be sold and title vested in a stranger.

Where lands are needed for railway or city purposes the court appoints commissioners. The city is heard through its attorney and the landowners have full opportunity to employ counsel and be ■ heard, and after full consideration the court is applied to, to confirm the report of the commissioners, and the various parties in interest have their day in court, including the right to appeal. But in the ease of assessors, if thej power claimed exists, all these safeguards are eliminated.

It is no answer to say that great labor would be imposed upon the city. When the rights of property are in question no duty should be omitted on account of the labor involved. Aside from this it is entirely clear that it would be quite as easy for the city to perform this duty as the assessors.

As matter of logical necessity, without regard to previous practices or acquiescence, it must be adjudged that the assessors had no power or authority to determine the relative benefits which will be conferred by the act or improvement. Ellwood v. City of Rochester (122 N. Y., 229, reported in Supreme Court, 43 Hun, 102),(sustains the above reasoning.

Section 170 of chapter 14 of the Session Laws of 1880, containing the revised charter of the city of Rochester, is as follows:

“ Whenever, by order of the common council, any new street or alley shall be laid out, opened or worked in said city, or any other public improvement is to be made, it shall be the duty of the common council to determine what portion, if any, of the expense thereof ought to be paid from the public treasury, and what portion, if any, ought to be paid by a local assessment, and to direct that the whole expense to be paid by a local assessment be assessed upon all the lots and parcels of lands to be benefited thereby in proportion to the benefit which each will derive therefrom. The common council may maintain, improve, embellish and protect any public park, square or area in said city, and grade, sewer and pave the streets and alleys, and make, grade and improve sidewalks about the same, or any part thereof. And they may cause the whole expense thereof to be assessed upon all the lots and parcels of land where the parks, squares or areas are situated, in proportion to the benefit which each lot or parcel will derive therefrom.”

Section 172 provides: “ Before the common council shall determine to make any suck public improvement, they shall cause an estimate thereof to be made, and shall, by an entry in their minutes, describe the portion and part of the city which they deem proper to be. assessed for the expense of such improvement.”

It was there held, among other 'things, that the commissioners of assessment were bound by the portions designated by the common council, and had no power to make new subdivisions for assessment purposes. It will be observed that the clause in section IVO is similar to section 3 of the charter of' the city of Buffalo, above quoted. And the language of the ordinance of the common council in this case was a direction to the commissioners of assessment to make it upon all the lands and parcels of land and houses therein determined by the ordinance to be benefited in proportion, as nearly as may be, to the advantage which each shall be deemed to acquire by the making of said improvement.”

The commissioners divided the designated territory into two districts, one of which they decided would receive more benefit than the other. The court held that the assessors had no such power, which proves that section 3 of the charter of Buffalo fails in' terms to confer power upon the assessors to determine the portions benefited. It is true that the charter of the city of Rochester differs from that of the city of Buffalo in expressly conferring power upon the council to make the determination. But in the absence of an express provision, whether the assessors or the city through its council shall determine, it is. plain that the power is vested in the city.

The argument of the learned counsel for the appellant in the case at bar is, that the language of section 3 confers power. The case cited proves the reverse. Even if the language of the charter of the city of Buffalo was equally consistent with the exercise of that power by the council or the assessors, still it is obvious that it must be vested in one or the other, and no construction should be adopted which would relieve the city from making the determination, in the absence of a statute expressly conferring the power upon the assessors.

But, if the assessors had the power, they failed to exercise it either according to the sections of the charter above referred to, or ihe resolution of the common council. The eleventh and twelfth wards were'excluded, not because they would not be benefited; it was obvious they would be, and the assessors so assumed. But they were left out for the simple reason that they might be assessed for a future market. Neither the charter or resolution of the common council conferred any power except to assess the lands benefited in proportion to the benefit conferred. If, therefore, the power was-properly delegated to the assessors, they failed to exercise it in the manner prescribed. The power as given excluded by necessary implication any authority to make it in any other manner. The Ellwood Case, above discussed, is decisive ujion this proposition.

The interlocutory judgment must be affirmed.

Dwight, P. J., and Maoombeb, J., concurred. •

Interlocutory judgment appealed from affirmed, with costs, with leave to the defendant to withdraw the demurrer on payment of costs, and to answer within twenty days after service of copy of order entered on this decision.


source: Caselaw Access Project

author: Hardin, Pi J.:

license: Public Domain

text:
    CHARLES M. TITUS, Respondent, v. CHARLES F. POOLE and Others, as Executors of EDWARD V. POOLE, Deceased, Appellants.

      Éxeautors and administrators —rejected claim, — right within one year to bring a second action thereon, after a nonsuit — the six months’ limitation does not apply in-such a case— Code of Civil Procedure, secs. 1822, 405.
    A claim against a decedent’s estate was presented to his executors and was rejected. The claimants then brought an action thereon in the Supreme Court alleging fraud, but were nonsuited. They subsequently presented a second claim, and upon its rejection began, after the expiration of six months from the presentation of the claim, and within one year from the granting of said nonsuit, a second action .upon such claim, based on contract.

      Meld, that the six months’ limitation, prescribed by section 1822 of the Code of Civil Procedure, within which an action must be brought upon a rejected claim, ■ did not apply to the second action.
    That such action came within the scope of section 405 of the Code of Civil Procedure, providing that if an “ action is terminated in any other manner than by a voluntary discontinuance, a dismissal of the complaint for neglect to prosecute the action, or a final judgment upon the merits,” the plaintiff may bring a new action within one year after the termination of the former action.
    Appeal by the defendants, Charles F. Poole, Susan Poole and Thomas B. Campbell, as executors of the last will and testament of Edward Y. Poole, deceased, from a judgment, entered in the office of the clerk of the county of Tompkins on the 11th day of March, 1890, after a trial at the Tompkins Circuit before the court and a jury, at which a verdict was rendered in favor of the plaintiff for $6,922.67; and also from an order, entered in said clerk’s office on the 15th day of December, 1890, denying defendants’ motion for a new trial.
    Edward Y. Poole died on the 1st day of October, 1887, and on the 12th of October, 1887, his will was admitted to probate by the surrogate of Tioga county, and the defendants were appointed executors. In the complaint in this action, which was commenced December 26, 1888, it is alleged that on the 9th day of February, 1883, the plaintiff sold and conveyed to defendants’ testator certain real estate situated in the city of Ithaca at the agreed price of $9,000, “and accepted and received an assignment of what purported to be fifty shares of one hundred dollars each of the stock of an alleged bank called £ The Home Savings Bank of South Waverly,’ alleged to have been organized under an act of the legislature of the State of Pennsylvania, as full payment of five thousand dollars balance due plaintiff on such purchase-price, and that plaintiff received, and agreed to receive, said alleged stock by reason of and relying on the warranty, express and implied, and on the statements and representations hereinafter set forth.” The com- ■ plaint sets out a copy of the certificate ; indorsed on which was a power of attorney to transfer the fifty shares of the capital stock of the Home Savings Bank of South Waverly, standing in the name of the testator on the books of the said company, which was executed by the testator on the 9th day of February, 1883. It is alleged that the stock certificate “ was printed and engraved in the common form and on paper usually used in script representing bank stock,” .and further that the testator “ by express words and by implication warranted and represented that said script or alleged certifi-cate of stock so transferred was, in all respects, what it purported to be on its face, and that all the statements and representations printed and written on it were true; and said testator further .stated, represented and warranted that it was a regular dividend-paying stock; that it was a State bank regularly organized under the laws of the State of Pennsylvania; that it was all right in every particular. * * * Whereas, in truth and fact, said script or alleged certificate of stock was not, in any respect, what it purported -on its face to be. It was not regular bank stock. It was not organized under an act of the legislature of the State of Pennsylvania, and was not a State bank regularly organized under laws of Pennsylvania.. * * * None of the statements and representations written -or printed upon said script were true, and it was utterly worthless for any purpose whatever. It was not in any respect what plaintiff agreed to receive as payment of said $5,000, and the transfer to him of the above-described piece of paper did not operate, in whole or in part, as a payment of the said balance, which has never been paid by defendants or their testator,, and the same is still due and owing this plaintiff, together with interest from the 10th day of February, 1883.” It is also alleged in the complaint “ That said demand and ■claim was in writing and was presented on or about the 29th day of November, 1888, and contained substantially the facts set forth in this complaint.” It is alleged that the executors refused to pay, and that the plaintiff offered to refer, and that the defendants neglected and refused to refer the claim.
    In the answer the defendants allege that the claim was presented on the 7th of May, 1888, and was by them rejected; and they allege •“that the claim so presented May 7, 1888, arose out of, and was founded upon, the ■ same transaction substantially set forth in the complaint in this action. That these defendants, on or about June 12, 1888, disputed and rejected the aforesaid claim which the plaintiff presented to the defendants May 7, 1888.” They then set up that the action was not brought within six months after the •claim was so rejected, and that it was barred by the short statute of six months, according to the language of section 1822 of the Code of Civil Procedure. The answer of the defendants further alleged that on the 28th of June, 1888, an action was brought in this court claiming to recover $5,000, balance of the purchase-money for the real ■estate, by reason of alleged infirmities in the stock transferred in payment therefor; that the complaint in that action alleged that the testator, at the time of the transfer, intended to “ deceive and defraud the plaintiff in the transaction in question; ” that the issues in that action were brought to trial at a Circuit Court on the 31st of October, 1888, and that the plaintiff was nonsuited, as there was a failure to prove that the testator “ knew the representations made by him were false; ” that thereafter a fresh claim was presented to the executors and rejected; and on the 26th day of December, 1888, this action was commenced on contract only for the unpaid balance of purchase-money, containing no allegations of fraudulent representation or intent.
    While the plaintiff held the stock he received a dividend thereon of $150. The verdict of the jury was for $6,922.67, being for $5,000 and the interest thereon from the 9th day of February, 1883, less the $150 which had been received by the plaintiff on the 10th day of February, 1884, with interest thereon from that date.

      JDa/oid JMJ. Bean, for the appellants.

      Frank F. Tibbitts and 8. JD. Hallida/y, for the respondent.
   Hardin, Pi J.:

Appellants insist that the short statute of limitations, found in section 1822 of the Code, applies and bars the right of action, because this suit was not commenced within six months from the rejection of the first claim presented. In Hoyt v. Bonnett (50 N. Y., 538), it was held that the short statute of limitations (2 E. S., 89, § 38) was penal in its character and should be strictly construed. Despondent maintains that as the first action was terminated by a nonsuit he was entitled to commence a new action for the same cause, after the expiration of the time so limited,” by the provisions of section 1822 of the Code, provided the new action be brought “ within one year after such reversal or termination ” by the nonsuit mentioned. 405.) Apparently the first action was brought by reason of the supposed misrepresentations, statements and assertions alleged to have been made by the testator. In the complaint in that action it was asserted that the testator knew that the representations made by him were false. In the present complaint no such allegation is contained. The gravamen of the first action was a failure of the plaintiff to receive and realize satisfaction for his real estate from and out of the balance of the stock transferred to him; and the gist of the second action seems to be the same, or, in the language of section 405, it may be said the plaintiff has brought “ a new action for the same cause,” and as it was brought within one year from the nonsuit, it seems to be saved by section 405 of the Code of Civil Procedure. Our attention has been called to Hill v. Board of Supervisors of Rensselaer County (119 N. Y., 344); that was an action against the county under a statute creating liability for the acts of a mob, provided the action was brought within three months, and it was held that as the action was under a special law it was only maintainable by its authority; that the limitation was so incorporated with the remedy given as to make it an integral part of it, and was a condition precedent to the maintenance of the action at all, and, therefore, section 405 of the Code did not apply. Ve think the case does not aid the appellants. It may be observed, in passing, that if it could be successfully maintained that the claim first presented, and upon which the first appeal was brought, was essentially different from the second claim presented and rejected, it might be said with force that this action was brought within the six months next following the rejection of the second claim, and it was not barred by the provisions of section 1822 of the Code of Civil Procedure. However, we prefer to uphold the plaintiff’s right to escape the force of section 1822 by resting the same upon the provisions of section 405 of the Code of Civil Procedure.

After a careful perusal of the evidence found in the appeal-book we are of the opinion that the testator acted in good faith and without any intent to defraud the plaintiff when he transferred to him the shares represented by the certificate which he held, and which are mentioned in the complaint. Such seems to be the opinion and ruling of the trial judge. Near the close of the case he observed: Now, as I understand it, in this action there is no claim here that Mr. Poole made these representations in bad faith, or that that question is here at all.” Again, he observed: “ I have no doubt but that Mr. Poole acted in good faith.” The defendants’ counsel took the position that, under the evidence in the case, “ the question as to whether there is a warranty is a' question of law in this case.” Thereupon the court ruled, viz.: “ I rule and hold it is a question of fact for the jury upon the whole of the evidence.” To that ruling the defendants took an exception. The case seems to have been submitted to the jury upon the theory that it was for them to find whether there was a warranty, and if so, whether there was a breach, and if so, to ascertain the damages sustained by reason of the breach; and the defendants’ counsel took an exception to that portion of the charge “ which, in substance, submits to the jury to say whether the stock had any value at all, or represented anything at all; ” and thereafter he took the position by way of a request, as we understand the appeal-book : “ That the rule of damages in this case is the difference in the value between the stock as warranted and its actual value in the market at the time of the trade,” and the court so charged, adding this-expression: “ That is what I charge if it had any value at all; ’~ thereupon the defendants’ counsel observed, viz.: “Well, we except to that portion that leaves to them again whether it has any value at all;” thereupon the court observed: “I have left it for the jury to say whether it had any value;” thereupon the. defendants’' counsel asked the court to charge': “ That the measure of damages is the market-price of the stock about the time, or soon after the purchase,” to which the court responded : “ That is so, if they find it had any market-value; ” thereupon the defendants’ counsel observed : “And that the market-price at the time, or soon after the purchase, is strong evidence of its value ; ” to this request the court responded : “ That is so, I charge that, with this qualification, that if the price, was based upon the fact that the persons who were dealing in it believed that it was a corporation, that fact would affect it, but if they were ignorant of the fact it was a corporation that would be a different thing; ” thereupon the defendants’ counsel excepted to the qualification. The defendants’ counsel then observed : “ That such market-price will control unless the real pecuniary condition of the bank is shown; ” to which the court responded : “ That would be so within the rules I have laid down; ” thereupon the defendants’’ counsel requested the court to charge : “ That the burden of proving-the real pecuniary condition of the bank is upon the plaintiff; ”’ to which the court responded: “ In that form I decline to charge it; it is true the burden of proof is on the plaintiff to show that this stock was of less value than its face, or of no value at all — that is probably what you mean ; ” thereupon the defendants’ counsel took an exception to the refusal to charge as requested. From the quotations already made, as well as from other expressions found in the charge, it may be assumed that the trial judge intended to instruct the jury that the rule of damages applicable was the difference in the value of the stock as represented and the actual value of it at the time the sale was made in February, 1883. Witnesses were called in belialf of the defendant, who testified that sales were made subsequent to the transfer to the plaintiff at par. Dr. Cady testified that he knew of its being bought and sold in August, 1886, at par, and from the time the bank was organized down to the time of the sale made by him that the value of the stock was par, and that the market-value of it from 1873 to 1887 was par; and the witness Brooks testified that he knew the bank from the time it was organized, in 1873, until it closed, and that during that time the stock had a market-value; and in answer to the question as to what was it worth, he says one hundred cents on a dollar; I bought some of it, and sold some of it, and investigated as to its value. The witness Clark testified that he knew the Home Savings Bank from 1873 up to the time it closed its doors, and in speaking of the stock he added: “I should say its market-value on the 1st of February, 1883, was from eighty-five cents to a dollar on a dollar.” Besides the evidence given by the opinion of witnesses as to the value of the stock, it appeared in evidence that the bank was in operation from 1873 to 1887, and during that time it was a bank of deposit and discount; and a witness was called who testified as to the assets possessed by the bank in 1883. Considerable evidence was delivered, also indirectly bearing upon the question of the actual condition of the bank, as to the assets which it possessed in 1883, and the statement of February 3, 1883, showing the assets to be $226,174.88. "William Kirby, who was the bookkeeper in the bank from March, 1881, until the time it closed in 1887, testified that he was familiar with the books and its assets in February, 1883; and he says that the value of the assets at the close of the business on the 9th of February, 1883, “was $171,000, and something over. * * * It would make the assets about equal to the liabilities, including the capital slock.” If the stock, at the time of the transfer in February, 1883, was worth par, or if the share in the assets represented by the certificate was worth $5,000, it is difficult to see how the plaintiff sustained damages in the sum of $5,000 by reason of a breach of any warranty shown to have been given by the testator to the plaintiff. It was incumbent on the plaintiff to show the value of the stock, if as represented, and its actual value as it was. The plaintiff furnished no satisfactory evidence to indicate that the difference between the value of the stock as it was, if as represented, and the value of the stock as it actually was, was equal to one hundred cents on the dollar; we are, therefore, inclined to think the verdict is not in accordance with the evidence, and that the jury did not follow the rule laid down by the trial judge upon that subject. Undoubtedly the plaintiff, when he took the certificate for the shares, became in equity the owner of a proportionate share of tlie assets of the institution. If, when he thus - acquired an ownership in the institution, capitalized at $100,000, his one-twentieth share thereof was worth $5,000 at the time he received the certificate, it is difficult to see how he sustained $5,000 damage by reason oí the breach of any representations shown to have been made by the testator. It does not follow that the plaintiff’s damages are $5,000 from the fact that the institution failed in 1887, four years after he acquired an ownership therein. It seems he used the certificate, and by means of it he borrowed $1,500 from the institution, pledging the certificate as security for the loan to that amount made to him by the institution. We think the verdict is not in accordance with the evidence, nor the charge of the learned trial judge, as we understand it.

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

Martin and Merwin, JJ., concurred.

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


author: Hardin, P. J.:

text:
    CHRISTIAN COOK, Appellant, v. MINOR G. BENNETT AND JOHN HAMM, Jr., Respondents.

      Chattel mortgage — an agreement that the mortgagee may deal with the mortgaged propei'ty as his own, provided he makes a certain annual payment, is fra/adulent as to his creditors.

    Upon a sale of chattels theyendee executed to the vendor a mortgage by which he agreed to pay a certain part of the principal during each year of the term; at the same time the parties agreed that the vendee should execute a new mortgage each year for the balance unpaid; that he should have the right to sell the mortgaged'chattels for cash or upon credit, and use in his business the proceeds not required for the said annual payment, replacing what chattels were sold with new goods in order to preserve the value of the security, and that such new purchases should be subjected to the lien of said mortgage, and that of any subsequent mortgages executed by the vendee to the said vendor.

      Held, that such an agreement tended to hinder, delay and defraud the creditors of the vendee, and was void as to them.
    Appeal by the plaintiff Christian Cook from a judgment, entered in the office of the clerk of Onondaga county on the 26th day of September, 1889, in favor of defendants, after a trial by the court at the Onondaga Circuit.
    The plaintiff, in this action of replevin, sought to recover the possession of a quantity of furniture; two bay horses, a set of double harness, one double sleigh and one double wagon, which were mortgaged by one Mathias Theisin, by a mortgage dated May 1, 1884. On May 1, 1882, and several year’s prior thereto, the plaintiff was engaged in the furniture business at No. 71 South Salina street, Syracuse. May 1, 1882, he negotiated a sale thereof for $8,000 to Theisin, receiving in part payment $3,000 in cash and an agreement that the balance was to be secured by a chattel mortgage upon the property sold. Pursuant to the arrangement then made the plaintiff took a chattel mortgage for $5,000 covering the property sold, providing, in express terms, that $500 should be paid each year; and in the negotiation it was agreed that a new mortgage should be executed at the end of each year, and at least $500 paid. A new mortgage was executed in May, 1883, to secure the payment of $4,500; and in May, 1884, another mortgage was executed covering the goods then on hand to secure the payment of $4,000. This latter mortgage contained the usual “ danger clause.” A fire took place and a portion ■of the goods were burned, and the plaintiff received a portion of the insurance money, to wit, $800, which he applied toward the payment of his mortgage. On April 27, 1885, various creditors of Theisin procured judgments against him, and executions were issued thereon to the sheriff and levies were made upon the stock of goods in Theism’s store, including all the mortgaged property in controversy in this action. After the levy was made, and on April 28, 1885, this action was commenced, and in virtue of the proceedings in this action the coroner took possession of the property, and no undertaking having been given within the time prescribed by the statute, possession of the property was delivered to the plaintiff.

      The Circuit Court, before which the action was tried, found “ That at the time of said sale of May 1,1882, and the giving of the mortgage? it was understood between the parties thereto that the said Theisin might go on and sell the stock in the ordinary way for cash or on credit and use the proceeds generally in his business, paying $500 of principal and the interest each year, and keeping by new purchases the stock in substantially as good condition as at the time of the sale,, and at the end of each year give a new mortgage for the balance of the debt upon the property then in the store. That this understanding was carried out and continued in operation till the failure-of Theisin in April, 1885 ; that during this time sales were made for cash and on credit, and the business conducted in the usual manner, all to the knowledge and consent of the plaintiff, and the stock kept up by new purchases, and the said mortgages of May 5, 1883, and May 2, 1884, were given in pursuance of said understanding, each covering the goods that were, at the time of the giving of such mortgage, in the store; that after the giving of said mortgage of May 2, 1884, and up to the time of his failure, said Theisin sold goods from said store to the' amount of six or seven thousand dollars, and no part thereof was applied on said mortgage.” * * *
    And the court further found, “ as matter of fact, as a conclusion, from the foregoing findings, that said mortgage of May 2, 3 884, was given and received by the mortgagor and mortgagee with intent to. hinder, delay and defraud creditors of said Theisin.”
    The court also found, as matter of law : (1.) “ That the mortgage-of May 2,1884, was and is fraudulent and void as to creditors of the mortgagor and as to these defendants. (2.) That the defendants are-entitled to recover of the plaintiff the possession of the property in controversy, or, in case possession is not delivered to the defendants, then the value found as aforesaid.”
    Before this action was commenced the plaintiff caused a demand for the possession of the goods to be made, and there was a refusal to deliver them up. One of the debts represented by the defense accrued on the 29th of November, 1878, one February 2, 1885, and one March 9, 1885.

      .Louis Marshall, for the appellant.

      Q harries E. Ide, for the respondents.
   Hardin, P. J.:

If we were to assume that the plaintiffs mortgage was valid, we might properly hold that this action could be maintained. (Huggans v. Fryer, 1 Lans., 276; Merchants and Traders' Bank v. Farmers and Mechanics' Bank, 60 N. Y., 47.) The proofs disclose sufficient occasion for the plaintiff to deem himself insecure ahd to warrant him in exercising the privilege conferred by the danger clause ” found in the chattel mortgage. "Whether the chattel mortgage in question was fraudulent or not was passed upon as a question of fact by the trial judge; it was proper that such conclusion should be stated among the findings of fact (Wallace v. Nodine, 32 N. Y. St. Rep., 657, and cases there cited), and the burden of proof on that subject rested with the plaintiff. (Wallace v. Nodine, supra, at page 663.) We think the findings of fact made by the trial judge are supported by the evidence. Theisin testifies, viz.: The mortgage was to be given on the stock of goods and payable $500 a year; I was to sell the goods and do whatever I had a mind to with the proceeds, I suppose, as long as he got his $500 a year and interest; he told me that I could make anywhere from three thousand to four thousand a year, and I could save so much; as far as the mortgage, all he asked was $500 a year, and I told him if I could pay more I would; there ivas nothing said between myself and Cook, either at the store or in Hopkin’s presence, that the proceeds of the sale of these goods was to be given to Cook entirely, either in money or goods; I say there was no such thing said; there was no arrangement between myself and Cook by which the entire proceeds of the sale were to be turned over to him.” There was. .some evidence given tending to show that the arrangement between the mortgagor and mortgagee was to the effect that the mortgagor should go on and sell the goods for cash or on credit and use the proceeds generally in his business, being required to pay at least $500 of the principal at the end of each year, and to execute a new mortgage for the balance remaining unpaid at the end of each successive year. This seems to have been carried out. Theisin made sales for cash and made sales on credit and conducted the business-in the usual manner prevailing in such establishments, and this seems to have been done with the knowledge and consent of Cook, the mortgagee, who, having an office in the store, a portion of the time assisted in the sales, making some sales, as the agent or clerk of Theisin, for cash and some on credit; the store was rented of Cook, the plaintiff, by the mortgagor for an annual rental of $1,000, and the rent and expenses of operating the store were paid from the proceeds of the business carried on; the sales were apparently six or seven thousand dollars a year. In speaking upon this subject the plaintiff, as a witness, testifies: “ It is a fact that Matt (Theisin) was to go on and do business there; he was to pay his expenses, pay his rent, and make just as much profit as he could on the sale of his goods, and buy new goods and sell those that he had; if he sold the goods in one year he would pay me the whole of it; * * * I gave him ten years in which to pay it in the ordinary course of business, and give him a lease for five years; it was agreed that he should replace all old goods sold with new ones; when he sold the old goods he was to replace them with new ones, and I gave him authority to sell the old ones.” A somewhat similar transaction was under investigation in Griswold v. Sheldon (4 Comst.,582), and it was there held: “ The mortgage, besides permitting by its terms the mortgagor to retain possession of the goods, on its face conferred on him the power to sell and dispose of them as his own, and was5 therefore, fraudulent and void .in law as to creditors; and in an action brought by the mortgagee against a creditor who had levied on the goods the court should have nonsuited the plaintiff on the trial.”

In Edgell v. Hart (5 Selden, 216) an arrangement very like the one now before us was under consideration and was condemned, and Judge Denio, in delivering the opinion in that case, observed: “ The true question, then, is whether a person engaged in traffic and indebted, can make a valid contract or conveyance in favor of one ■creditor, by which he shall possess a lien upon all the chattels which the debtor shall from time to time have on hand, allowing the latter to sell and purchase like an unqualified owner, the lien ■attaching only to what may be on hand at the time it is sought to be enforced. The proposition requires only to be stated to be refuted. The branch of it which professes to subject after-pur■chased property is void upon the most common principles. * * * But I am of opinion that the right to sell, if it stood alone, would vitiate the mortgage. In Griswold v. Sheldon (4 Comst., 581-594) five judges of this court concurred in holding that such a provision woitld render the instrument void, and four were of opinion that where the mortgagor was allowed by the mortgagee to sell the mortgaged chattels, though not in pursuance of a provision in the instrument, the mortgage would be invalid in law, whatever a jury might think of it. The invalidity of such a transaction had been affirmed in the Supreme Court in Wood v. Lowry (17 Wend., 492), and no case or dictum has been found to uphold it. * * * My own opinion is that the existence of such a provision out of the mortgage or in it would invalidate it as matter of law, and that where the facts are undisputed this court should so declare. The manifest tendency of such arrangements, to defraud creditors by giving to the mortgagor a false credit, and their incongruity with the just and legal idea of a mortgage are, in my mind, sufficient to condemn them.” * * *

In Ford v. Williams (24 N. Y., 359) it was held: “ An agreement, upon the mortgage of chattels, that the mortgagor shall keep possession and retail the goods for cash only, paying over the money to the mortgagee, is not fraudulent in law, but presents a question of good faith for the jury.” In delivering the opinion in that case, Dbnio, J. (at page 363), stated : But if the debtor was permitted not only to retain the possession of the property mortgaged, but to sell it out by retail on his own account, as he had been doing before the mortgage, we think, with the judge who tried the case, that the arrangement would be fraudulent and the security void.” In passing, it may be observed that the case before us contains no such limitation that the sales should be for cash only, and that all the proceeds of the sale should be turned over to the mortgagee, the mortgagor acting as agent in making such sales. The case in hand, therefore, differs from Ford v. Williams (supra).

In Conkling v. Shelley (28 N. Y., 362) it was held that an agreement between the mortgagor and mortgagee to the effect that the mortgagor should remain in possession and sell the goods from time to time and pay over the proceeds to the latter, is not unlawful or fraudulent per se.” In delivering the opinion in that ease Emott, J., said: “ Where a mortgage contains a clause permitting the mortgagor not only to remain in possession, but to dispose of the mortgaged property at his discretion and apply the proceeds to his own benefit, it will be void as a fraud upon creditors. (Edgell v. Hart, 5 Seld., 213.) Where such agreement is made between the parties outside of the mortgage, but at the time of its execution, I should be inclined to agree with the idea expressed by Judge Denio in Edgell v. Hart, and in Gardner v. McEwen, that it would invalidate the instrument in the same manner as if it were written in its provisions. At all events, it would be irresistible evidence of a fraudulent purpose.”

A transaction somewhat like the one now before us was under consideration in City Bank of Rochester v. Westbury (16 Hun, 458), and in delivering the opinion in that case Smith, J., said: “ By the agreement in this case, as we gather it from the testimony, the mortgagor was not restricted to sales for cash, but he was at liberty to sell on credit at his unlimited discretion.” The court reached the conclusion in that case that the mortgage was fraudulent as to creditors and void.

In Smith v. Cooper (27 Hun, 565) an arrangement somewhat similar to the one now before us was condemned. There it appeared, “ at the time of giving the mortgage, it was orally agreed that the mortgagor, who was to remain in possession of the property until default, should be permitted to sell and dispose of the property either for money or in trade for other stock, the money received to be applied to the purchase of further stock, which was to be subjected to the lien of the mortgage, and that the grain should be used in feeding the stock,” and it was held that the agreement was fraudulentyer se and rendered the mortgage void.

In Southard v. Benner (72 N. Y., 424) it was held that “ where, at the time of the execution of a chattel mortgage upon a stock of merchandise, it is understood and agreed between the parties that the mortgagor may go on and sell the stock and use the proceeds generally in his business, and the agreement is carried out by permitted sales, the transaction is fraudulent in law as against the creditors of the mortgagor.” Also held : “ Such an agreement outside of the mortgage and proved by parol is equally fatal to the instrument as if it had been made a part thereof; and it may be inferred from the fact that the mortgagee has permitted sales to be made as alleged.” In the course of the opinion delivered in that case Judge Allen said: “ The difference in the modes of proving the agreement cannot take the sting out of the fact and render it harmless. If it is satisfactorily established, the result upon the security must be the same. It is the fact that such an agreement has been made and acted upon that, in law, condemns the security, and not the fact that it is proved by the instrument of suretyship, instead of by parol, or in some other way.”

In Potts v. Hart (99 N. Y., 168) it was held, viz.: “A chattel mortgage is fraudulent and void as to creditors, where it was given with a tacit or express understanding and arrangement that the mortgagee may sell and dispose of the mortgaged property, and apply the avails to his own use.” It was further held in that case: “ Such an agreement may be inferred from the fact that the mortgagor does, with the knowledge and assent of the mortgagee, so sell and dispose of the property and apply the avails.” We think the various doctrines of the cases to which we have already referred are against the plaintiff, and support the conclusion reached by the trial judge.

The learned counsel for the appellant upon the argument of this appeal, in his usually vigorous mode, contended that Brackett v. Haney (91 N. Y., 214) was an authority which would sustain the mortgage in this case. We think otherwise. In that case it was held that a chattel mortgage is not rendered void, as to creditors of the mortgagor, by a provision authorizing him to sell the mortgaged property and apply the proceeds of sales toward the payment of the mortgage debt.”

“ Nor does an authority to the mortgagor to sell on credit, taking good business paper’, which the mortgagee agrees to accept and apply on the debt, affect the validity of the mortgage.”

“ So, also, permission to use a portion of the proceeds of sales to purchase other property does not vitiate the mortgage, where it is coupled with a condition that the' property so purchased shall be brought in and subjected to the mortgage lien by a renewal of the mortgage.” It was, however, held in that case that “ an agreement, although outside of the mortgage, and oral simply, that the mortgagor may use a portion of the proceeds of sales for his own benefit, avoids the mortgage.” The learned judge who delivered the opinion in that case conceded that if the finding that was made, to wit: “ It was understood and expected by all of the parties thereto, that the avails of the sales made in said business were to be used in the transaction of said business, in paying the personal expenses of the said Frank E. Darrow and of the members of said firm, including their own and their families’ support and maintenance,” was sustained by the evidence that the same would necessarily be fatal; and he added, “ for such an agreement opens the door to fraud and permits the mortgagor to use the property for his own benefit, utilizing the mortgage as a shield against other creditors.” He then proceeds to examine the evidence and reaches the conclusion that the finding of fact was not supported by evidence in that case. "We see nothing-in the features of that case that warrant us in yielding our consent to the contention of the learned counsel for the appellant in the case in hand.

Nor does the case of Robinson v. Elliott (22 Wallace, 513) aid the contention of the appellant. In that case the mortgage contained a stipulation that the mortgagors might remain in possession of the goods, “ sell the same as heretofore and supply their places with other goods, and the goods substituted by purchase for those sold shall, upon being put into said store, or any other store in said city where the same may be put for sale by said parties of the first part, be subjected to the lien of this mortgage.” And it was held that the mortgage was void, and in the course of the opinion the court said, viz.: “ But there are features engrafted on this mortgage which are not only to the prejudice of creditors, but which show that other considerations than the security of the mortgagees, or their accommodation even, entered into the contract. Both the possession and right of disposition remain with the mortgagors. They are to deal with the property as their own, sell it at retail and use the money thus obtained to replenish their stock. There is no covenant to account with the mortgagees, nor any recognition that the property is sold for their benefit. Instead of the mortgage being directed solely to the bona fide security of the debts then existing, and their payment at maturity, it is based on the idea that they may be indefinitely prolonged. * * * Manifestly, it was executed to enable the mortgagors to continue their business and appear to the world as the absolute owners of the goods, and enjoy all the advantages resulting therefrom. * * * Whatever may have been the motive which actuated the parties to this instrument, it is manifest that the necessary result of what they did do was to allow the mortgagors, under cover of the mortgage, to sell the goods as their own and appropriate the proceeds to their own purposes ; and this, too, for an indefinite length of time. A mortgage which, in its very terms, contemplates such results, besides being no security to the mortgagees, operates, in the most effectual manner, to ward off other creditors; and where the instrument on its face shows that the legal effect of it is to delay creditors, the law imputes to it a fraudulent purpose.”

In Yates v. Olmsted (65 Barbour, 43) a chattel mortgage made under circumstances somewhat like those presented in the case now before us was condemned as fraudulent, and it. was held in that case,, viz.: “ Although no express agreement in words, between the parties, that the mortgagor shall continue to sell the goods mortgaged, and the business proceed as before the giving of the mortgage, is found by the referee, such an agreement or understanding may be implied.” The decision made at the General Term was reversed by the Court of Appeals in Yates v. Olmsted (56 N. Y., 632), upon an opinion to the effect that the clause in the mortgage did not, as a matter of law, render it fraudulent; and it appearing, also, that there was no authority reserved in the mortgagor to sell or deal with the stock while in his possession, and that no such arrangement was made and that the mortgagee had no actual knowledge of any such sales.

In Russell v. Winne (37 N. Y., 591) it appeared the mortgagor was a dealer in stone and kept a small store, and, although there was nothing in the mortgage authorizing a sale, the mortgagor continued after the mortgage to sell goods just as he had done before that time, applying the proceeds to his own use; and there was some evidence that it was done with the knowledge and assent of the mortgagee, and it was held that upon such evidence, if there was a finding by the jury that there was an agreement to allow such sale, then the mortgage would be void. (See, also, Divver v. McLaughlin, 2 Wend., 596; Wood v. Lowry, 17 id., 492.)

In Ball v. Slafter (26 Hun, 353) it was held that a chattel mortgage “containing a provision allowing the mortgagor to sell the property covered by it at retail for his own benefit is fraudulent as to his creditors,” and that aS the agreement in the case “ did not require the sales should be for cash, and, as matter of fact, they were on credit, and it did not necessarily require the proceeds to be paid on the notes when the sales were made,” that the mortgage was void.

In Sperry v. Baldwin (46 Hun, 124) it was said that “ a tacit understanding and agreement between the parties to the mortgage, •entered into at the time of its execution, that the mortgagor might •continue the business and sell the property and apply the proceeds to his own use ” would render the transaction “ void and illegal.” The same doctrine seems to be held in Greenebaum v. Wheeler (90 Ill., 296) and in Blakeslee v. Rossman (43 Wis., 116).

In Marston v. Vultee (12 Abb., 144) it appeared that Marston was a gunsmith and kept a store; he mortgaged his stock in trade to the plaintiff, his mother; she left the property, after the mortgage to her, in his possession, with directions to go on and sell and trade the property as he had done before the mortgage. Woodruff, J., in delivering the opinion of the court condemning the transaction, said: “Where the arrangement is made between the mortgagee and the mortgagor that the latter may do so and apply the proceeds to his own use, whether that arrangement is ■shown by the face of the instrument or is proved otherwise to be a part of the terms or conditions on which the mortgage -was given, such arrangement makes the arrangement necessarily fraudulent, because it operates, of necessity, to hinder, delay and defraud creditors — it secures to the debtor the use and benefit of his property •and its proceeds, while it protects it from levy and sale for the payment of his debts.”

In Mittnacht v. Kelly (3 Keyes, 407) a mortgage was condemned as fraudulent, as it was held that the intent “ was not to create an absolute lien, but a fluctuating one, and the mortgage was, therefore, void; ” and it was further said in that case that although the horse, wagon and harness in question did not constitute a part of the stock in trade, yet, “ as to the stock in trade, the mortgage was fraudulent •as against creditors ; that fraud infected the whole mortgage and it is wholly void.” (Goodrich v. Downs, 6 Hill, 438; Mackie v. Cairns, 5 Cowen, 547-580; Grover v. Wakeman, 11 Wend., 187-225; see, also, Thomas on Chattel Mortgages, § 263.)

In the case in hand evidently the mortgagor and the mortgagee supposed at the time the instrument of 1882 was executed, and the subsequent instruments, that it was competent for them to have an arrangement by which the mortgagor should sell in the usual way of retail stores, pay the rent, clerk hire and living expenses out of tiie proceeds of the business, and carry forward the business in the manner in which it had been carried forward years before by the mortgagee, and that if at the end of each year the $500 was paid by the mortgagor to the mortgagee that the instrument would be and remain valid. We think such an arrangement tends to mislead, delay and hinder the creditors of the mortgagor, and that the views expressed in the opinion of the learned trial judge are correct.

We think the conclusions of fact and the conclusions of law stated by the learned trial judge should be sustained and the judgment should be affirmed, with costs.

Martin, J., concurred; Merwin, J., not sitting.

Judgment affirmed, with costs.


author: Martin, J.:

text:
    JAMES POWERS, as Administrator of EDWARD POWERS, Deceased, Appellant, v. THE NEW YORK CENTRAL AND HUDSON RIVER RAILROAD COMPANY, Respondent.

      Negligence — a mere scintilla of proof indicating negligence does not require the submission of the ease to the jury — duty of the master to furnish proper implements.

    In. an action against a railroad corporation, arising out of its alleged negligence occasioning tlie death of a fireman, it appeared that the deceased was standing upon a lap-board between the engine and tender when the pin, coupling them, broke, the engine and tender separated, and the deceased was thrown under the .tender and killed. The pin had been furnished to the railroad company at the same time with the engine by a reputable firm, and had been inspected by a competent person eight days before the accident, and, beyond the fact of its being slightly worn, outward examination showed no defect. A hidden flaw existed in the pin, and experts, in view of its condition after the accident, testified that the iron of which it was composed was not of the best quality.

      Neld, that no case was made for the jury.
    'That the doctrine that if there is a scintilla of evidence, indicating negligence upon the part of the party defending an action, the case must be submitted to the jury has no existence in the State of New York.

      That the duty of the master to furnish for the use of the servant suitable and proper tools and machinery, and to keep the same in repair, is not an absolute one, but is satisfied by the exercise of reasonable care and prudence upon the part of the master.
    Appeal by the plaintiff James Powers, as administrator of the goods, chattels and credits of Edward Powers, deceased, from a judgment, entered, on the llth day of March, 1890, in the clerk’s office of Onondaga county, dismissing the complaint in this action, with costs, at the close of the evidence, after a trial at the Onondaga. Circuit before the court and a jury.

      Louis Marshall, for the appellant.

      M. M. Waters, for the respondent.
   Martin, J.:

The plaintiff’s intestate was killed on the 6th day of December, 1886, about one mile east of defendant’s yard in East Syracuse-This action, to recover damages for his death, was based on the theory that it was caused by the defendant’s negligence.

The decedent, at the time of his death, was in the defendant’s employ as a fireman on one of its engines, known as No. 112. At-the time of the accident the engine was moving a freight train, which consisted of about thirty loaded cars. It was a very large engine, used only for moving heavy freight trains. When the accident occurred the engineer was at his post and the decedent was-upon the tender, or upon the bridge or lap-board between the engine and tender, shoveling coal into the fire-box of the engine.

While the tram was passing along the track, without any apparent cause or previous unusual movement of the engine or train, the engine separated from the tender and the decedent fell to the track, was struck by the tender and instantly killed. The night was very cold and the ground was covered with snow. The engine was. coupled to the tender and held in place by a pin or king-bolt about, two and one-eighth inches in diameter, which was the usual size used for that purpose. The accident was caused by the breaking-of the pin or king-bolt. The pin was slightly worn, but not sufficiently to render its use unsafe or improper. After it was broken flaws could be discovered at the point where the break occurred. They were, however, beneath the surface and could not have been seen before tbe accident. There were also stay or guard chains connecting the engine and tender., The hook of one and the link of the other were broken.

The locomotive and tender were manufactured by the Dixon Locomotive Works, and purchased in July, 1884. They were then new. The Dixon Locomotive Works is a reputable manufacturer of that kind of mach inery. Eight days before the accident the engine and tender were in the defendant’s shops, and the pin and chains were carefully inspected by a competent inspector in the defendant’s employ, who discovered no flaw or defect in the pin, except that it was slightly worn.

It is contended by the appellant: 1. That the pin was made of an inferior quality of iron, which might have been discovered before the accident if it had been properly inspected by a competent inspector. 2. That the hook to which the stay-chain was attached was of inferior iron, the broken link defectively welded and the chains too long, and that a person properly inspecting them would have discovered these defects.

The undisputed proof was that the hook was of the usual size, and that there was nothing about it which would challenge any competent man’s attention as showing any flaw or weakness. The evidence was also to the effect that the chains were of the usual size and the link which was broken was of tough iron, and that for aught that appeared before it was broken it was a good weld. It was also shown that these chains were of the usual length used upon that class of engines. While there was proof that shorter chains were used upon passenger engines, we find no evidence that upon this kind of engines any shorter chains were used. Indeed, the evidence tends to show that chains of the length used were required upon engines of that size and build.

That the purpose of these stay chains was to maintain the connection between the engine and tender, when a pin of at least five times their strength was broken, can hardly be supposed without impeaching the mechanical ability or integrity of every reputable manufacturer of gueh engines in this country or elsewhere. That there may have been instances where, under certain circumstances, such pins have broken and the stay-chains have prevented a separation of the engine from the tender, does not tend to show that such was their purpose, nor that it was the defendant’s duty to provide chains of sufficient strength to prevent a separation of the engine, from the tender in case the pin should break.

We can find nothing in the evidence which would have justified the court in submitting the question of the defendant’s negligence, by reason of the insufficiency of the hook and chains or of the insufficient inspection thereof, to the jury, or that would have justified the jury in finding any negligence in that respect which was the proximate cause of the injury complained of.

This leaves for consideration the question whether the evidence was sufficient to require the submission to the jury of the question whether the defendant was negligent in not providing a proper pin or in not properly inspecting it. There was no evidence that the defendant was negligent in purchasing this engine and tender, nor that it was not so far perfect when purchased that no defect in the pin could have been discovered by the most careful inspection. Nor was there any evidence that the defendant had any knowledge of the alleged defect in the pin..

As we have already seen, the evidence discloses that but eight days before the accident an employe of the defendant, who was a competent machinist, carefully examined this pin and discovered no flaw or defect in it. The only proof that tends in any way to show that this inspection was not complete and proper was the evidence of experts called by the plaintiff who testified that the iron of which the pin was constructed was not of the best quality. This was the condition as discovered by an examination of the pin at the point where the break occurred after it was broken. But when asked whether an intelligent inspector from an inspection of the pin would have discovered the condition mentioned, the reply was: “ The only thing I could discover would be the small spot below the crack and the laminated appearance of the pin above.” The same witness testified that he could not say the crack came to the surface of the pin so that it was observable before the pin was worn by use. Indeed, an examination of the evidence upon this subject discloses nothing which tends to show that any crack, or other indication oi weakness or insufficiency of the pin, existed before the accident, that could have been discovered by the most minute and critical inspection that could have been made even by a scientific expert, except the speculations and theories of experts who expressed the opinion that some defect might have been discovered. The pin was produced upon the argument. An examination of it shows that if there was any defect in it which was discernible before it was broken, it must have been very minute, and would have required an extremely close and unusual examination to have discovered it. Here we have, at most, the opinion of experts, based on an examination of the pin after it was broken, that some slight flaws or defects might have been discovered before the accident, against the evidence that the pin was thoroughly and carefully inspected by a competent machinist a short time before and no defects discovered. That the defects complained of could not have been discovered by the usual and ordinary inspection given to an engine is testified to by the plaintiff’s own witness.

While it must be admitted that negligence is generally a question for the jury, still it is only when the facts would authorize a jury to find it that it should be submitted to them. (Sutton v. N. Y. C. and H. R. R. R. Co., 66 N. Y., 243, 249.)

We think the evidence failed to establish the omission of any duty by the defendant, which it owed to the plaintiff’s intestate, which caused the injury complained of. We do not think the evidence was such as would have justified the jury in finding that the defendant had omitted to exercise reasonable care and prudence in furnishing appliances for the intestate’s use or in keeping them in proper repair. That there was a mere theory from which a jury might have surmised that the defendant had omitted some duty it should have performed was not enough. If the proof of a fact is so preponderating that a verdict against it would be set aside by the court as contrary to the evidence, then it is the duty of the court to direct a verdict. It was said in Baulec v. New York and Harlem, Railroad Company (59 N. Y., 356, 366), by Judge Allen, that ‘ it is not enough to authorize the submission of a question as one of fact to the jury that there is some evidence. A scintilla of evidence or a mere surmise that there may have been negligence on the part of the defendants would not justify the judge in leaving the case to the jury,’ quoting from Williams, J., in Toomey v. Railway Company (3 C. B. [N. S.], 146). In Hyatt v. Johnston (91 Penn. St., 200) Justice Sterrett says: ‘ Since the scintilla doctrine has been exploded, both in England and in this country, the preliminary question of law for the court is, not whether there is literally no evidence or a mere scintilla, but whether there is any that ought reasonably to satisfy the jury that the fact sought to be proved is established.’ (Citing Ryder v. Wombwell, L. R., 4 Exch., 39). The rule held by the Supreme Court of the United States is expressed by Mr. Justice Clifford in Improvement Company v. Munson (14 Wall., 442), as follows: ‘Nor are judges any longer required to submit a question to a jury merely because some evidence has been introduced by the party having the burden of proof, unless the evidence be of such a character that it would warrant the jury in finding a verdict in favor of that party. Formerly it was held that if there was what was called a scintilla of evidence in support of a case, the judge was bound to leave it to the jury; but reeent decisions of high authority have established a more reasonable rule that in every case before the evidence is left to the jury there is a preliminary question for the judge, not whether there is literally no evidence, but whether there is any upon which a jury can properly proceed to find a verdict for the party producing it, upon whom the onus of proof rests.’ ” This is the language of Ruger, Oh. J., in Dwight v. Germania Life Insurance Company (103 N. Y., 358).

The duty of a master to furnish safe, suitable and proper tools, machinery and implements for the use of his servant in the performance of his work, and to keep them in proper care, is not an absolute one. Ris satisfied by the exercise of reasonable care and prudence •on the part of the master. (Probst v. Delamater, 100 N. Y., 266; Burke v. Witherbee, 98 id., 562; Stringham v. Milton, 111 id., 188.)

Therefore, to entitle the plaintiff to recover in this action, he was bound to prove that the defendant had omitted to exercise reasonable •care in furnishing the decedent with safe and proper tools and .appliances, to be used by him in the performance of his work, or that it was negligent in not keeping them in a proper state of repair. If the defendant was negligent, the burden of establishing that fact was upon the plaintiff. Negligence must be proved. It is not to be presumed. Where a servant enters upon an employment, from its nature necessarily hazardous, he assumes the usual risks and perils of the service, and also those that are known to him or which are apparent to ordinary observation. (Williams v. D., L. and W. R. R. Co., 39 Hun, 432, and cases cited in opinion.) An employee in the service of a railroad corporation assumes the risks and dangers incident to the business in which he is engaged, and while the company is bound to exercise reasonable care to furnish suitable and safe machinery and appliances for his use, having done so, it is not liable for an injury resulting from their breaking or failure, unless it is shown that the corporation has been guilty of negligence in regard thereto. (De Graff v. N. Y. C. and H. R R. R. Co., 76 N. Y., 125.) In the language of Allen, J., in Wright v. New York Central Railroad Company (25 N. Y., 562), “If the injury ■arises from a defect or insufficiency in the machinery or implements furnished to the servant by the master, knowledge of the defect or insufficiency must be brought home to the master, or proof given -that he was ignorant of the same through his own negligence and want of proper care.” The same doctrine is held in Chapman v. Erie Railway Company (55 N. Y., 579); Baulec v. New York and Harlem Railroad Company (59 id., 356); Edwards v. New York and Harlem Railroad Company (98 id., 245); Kelly v. New York and Sea Beach Railroad Company (109 id., 44).

A master’s liability to Ins servant for injuries received in-the •course of his employment is based upon the personal negligence of the employer, and the evidence must establish personal fault on his part, or wliat is equivalent thereto, to justify a verdict, and he is entitled to the benefit of the presumption that he has performed his duty until the contrary appears. (Cahill v. Hilton, 106 N. Y., 512, 517.) The submission of an action for negligence to a jury is not authorized where a plaintiff’s evidence is equally consistent with the absence as with the existence of negligence, as in such a case the evidence fails to establish negligence. (Baulec v. N. Y. and Harlem R. R. Co., supra; Hayes v. Forty-second St, etc., R. R. Co., 97 N. Y., 259.)

We think the principles of the authorities cited fully sustain our conclusion that the evidence in this case was insufficient to justify the submission to the jury of the question of the defendant’s negligence, and that the court properly nonsuited the plaintiff.'

The judgment should be affirmed, with costs.

Hardin, P. J., and Merwin, J., concurred.

Judgment affirmed, with costs.


author: Merwin, J.:

text:
    ANNA B. HAULENBEEK and Others, as Executors of JAMES H. WHITE, Appellants, v. DANIEL McGIBBON, Respondent.

      Attorney and client — when a communication is privileged— Code of Giml, Procedure, sec. 885.
    Upon the trial of an action upon a note, in which a defense of forgery of the indorsement thereof was interposed, a witness for the plaintiff stated that he was a lawyer and had attempted to settle the claim in suit as a mutual friend of the-parties; that his expenses thus incurred had been paid in part by each; that he had not been retained as counsel by, and that he had declined to act as attorney for either party.

      Held, that a communication made to him by the defendant, the indorser of the note, relative to the indorsement, was not privileged under section 835 of the Code of Civil Procedure.
    Appeal by tbe plaintiffs, Anna B. Haulenbeek and George E. Dinsmore, as executors of James H. White, deceased, from an order of the Broome County Special Term, entered in the clerk’s office of Delaware county on the 10th day of September, 1890, denying their motion for a new trial of the action, made upon a case and exceptions after a trial before the court and a jury at the Delaware Circuit, at which a verdict was rendered in favor of the defendant.
    The action was brought upon a note, dated September 8,1884, for $2,000, made by Nathan C. Wood, and indorsed, as it is alleged, by the defendant, and made payable at the Delaware County Bank one year after date. The answer denied the indorsement and alleged that it was a forgery. The note was delivered to Mrs. C. F. White and was by her transferred to James H. White, in whose name the action was originally brought. The case was tried at the Delaware Circuit, February, 188'i, and a verdict rendered for the defendant. Since the trial the original plaintiff died and his executors have been substituted in his place.

      John B. Gleason, for the appellants.

      Edwin D. Wagner, for the respondent.
   Merwin, J.:

Upon the trial of this action Samuel II. Fancher was called as a witness for the plaintiff and testified that he was a lawyer, and was at the date of the note acting as attorney for Mrs. O. F. White, in reference to a claim she had against Wood, the maker; that after some negotiation the note, bearing, as was supposed, the genuine indorsement of the defendant, was taken in settlement of the claim and delivered to Mrs. White; that about the time the note became due it was sent to the Walton Bank for collection, and, as the witness thinks, delivered by him to Mr. Mead, an officer of the bank ; that the witness had the note in his possession, and' McGibbon, the defendant, saw it there. The witness was then asked the question : “While the note was in your possession did you have a conversation with Mr. McGibbon in relation to the note ? ” The witness then stated that in any conversation he had with McGibbon he was, in his judgment, acting in a double capacity, and that the relations, to-a certain extent, of counsel and client existed ; that in his further acting in the matter he was endeavoring to procure a settlement between the parties; that he went to New York to see Mr. and Mrs. White upon three occasions afterwards, and two of the times the plaintiff paid his expenses and at one time the defendant paid a part of his expenses ; that he rendered an account to Mr. White for all the services that were rendered, by which he received a sum of not much more than enough to cover his expenses ; that he was not retained by McGibbon as his counsel in any way; was not retained by either side, declined to have anything to do with either side ; that so far as anything he did, he did it with the full knowledge of both parties and refused to have anything to do as attorney upon either side of the case ; that McGibbon asked to have the note sent up to the office and he (McGibbon) looked upon him (the witness) as a sort of mutual friend in the matter, and he came there and talked freely upon the matter; that, to a certain extent, he considered he was acting in the same capacity as he would if he was drawing a contract for two persons ; that McGibbon did not ask him to act as his attorney, but he paid a portion of his expenses-going to New York afterwards to see about a settlement. It does not appear that he went at defendant’s request. The witness then stated that he had a conversation with Mr. McGibbon in reference to his indorsement upon the back of the note, and was asked to state-such conversation. To this the defendant objected that it was a. conversation with the witness as his counsel and was privileged. The objection was sustained and plaintiff excepted.

By section 835 of Code of Civil Procedure it is provided that “ an attorney or counselor-at-law shall not be allowed to disclose a communication made by his client to him, or his advice given thereon, in the course of his professional employment.” Before this section can apply in any case a contract relation of attorney and client must exist, based upon an employment by the client. (Earl, J., in Renihan v. Dennin, 103 N. Y., 579.) It is not enough that the communication be confidential; the fact of professional employment must also exist. (The Rochester City Bank v. Suydam, 5 How. Pr. Rep., 258.) The privilege does not apply to cases where the party applied to, though an attorney, refuses to act as such and is, therefore, only applied to as a friend. (1 Gr. Ev., § 244; Greenough v. Gaskell, 1 My. & K., 104; Beeson v. Beeson, 9 Penn. St., 301.)

In the present case' it distinctly appears that the relation of attorney and client did not exist between the witness and the defendant; the witness was not retained by either side; expressly declined to have anything to do with either. At most, so far as the defendant was concerned, he was in the position of a friend. We think that a case for the application of the rule of privilege was not made out, and the evidence was improperly rejected. It is very ■clear that it was material. It follows that there must be a new trial.

Hardin, P. J., concurred

Order reversed and new trial granted, with costs to abide the ■event.