author: Jones, J.

text:
    JAMES BISHOP and others v. THE EMPIRE TRANSPORTATION COMPANY.
    I. Pleadings.— What constitutes an averment of the fact of a certain agreement having been made.

    1. An allegation that a certain written and printed contract, a copy of which is annexed to the complaint, contains the terms and conditions of the agreement between the parties, is an allegation of fact that the terms and conditions contained in the annexed paper were agreed on between the parties.
    H. Bill of lading.—Valid and invalid clauses.

    1. Valid clauses.

      а. One providing that each consignment of goods might be retained for all arrearages and charges due the carrier on other goods by the same consignee and owner, is not invalid either by reason of clogging the negotiability of the bill of lading, or by reason of interfering with any duty that may rest on the carrier, when the previous goods for the freight and charges on which the subsequent ones are sought to be retained, belonged to, and were delivered to the same person to whom the subsequent ones belonged at the time of the making of the contract contained in the bill of lading.
    б. A clause requiring the presentation to the carrier of bills of lading properly indorsed, as the evidence whereon delivery is to be made, is valid.
    1. A defense setting out the clause and averring that no bills of lading were ever presented, is good, and throws on the plaintiff the burden of, in some manner, avoiding it.
    2. Invalid clause.

      a. A clause requiring the bill of lading to be presented, properly indorsed, before the arrival of the goods at the place of des
      UnaUon, in order to render an assignment or transfer thereof binding on the defendants, or to establish a right to the delivery of the goods, is invalid.
    Before Monell, Jones and Freedman, JJ.

      Decided February 4, 1871.
    This action is brought to recover damages for not safely carrying and delivering certain goods entrusted to the defendant for its carriage as a common carrier.
    The complaint alleges “that in consideration that one A. J. Thompson delivered to defendant certain goods, the defendant delivered to said Thompson an instrument in writing, subscribed by its agent, by which they agreed to carry said goods and safely deliver the same at Communipaw, New Jersey, for certain freight, therein mentioned. That said Thompson delivered, indorsed and set over said bill of lading to the plaintiffs. That defendant did not safely carry and deliver the said goods pursuant to said agreement, although the plaintiff offered' to pay the freight and charges on the same, and duly demanded the same of defendant, but has always refused to deliver the same, and never have delivered the same to plaintiffs, to their damage of five hundred and sixty dollars.”
    The complaint contains four other similar causes of action; altogether amounting to three thousand two hundred and sixty dollars.”
    The answer first contains eight paragraphs, one° of which is prefaced with the word “First,” another with the word “ Second,” and another with the word “Third.” These eight paragraphs are devoted, in one shape or another, to a denial of the allegations in the complaint. The answer then proceeds with a ninth paragraph, prefaced with the word “Fourth.”
    ‘ ‘ Fourth. And for a further and separate defense to the causes of act "on, and each of them set out in the complaint, the defendants further allege, repeating the denials heretofore made, that all oil at any time delivered to defendants for transportation by A. J. Thompson, including the oil described in the complaint, was received by the defendants, and was to be carried by them under, and in accordance with, the terms of a certain written and printed contract, being a certain bill of lading, a copy of which is annexed to and forms a part of this answer, and which contains the terms and conditions of the agreement between the parties.
    “Defendants further allege that in and by the fifth article of the said bill of lading it is agreed and provided, and a portion of the contract between the parties that no assignment or transfer of the said bill of lading should bind or affect the defendants, or establish a right to the delivery of the oil, unless the said original bill of lading setting forth the same should be presented, properly indorsed, to the National Storage Company, the agents of the defendants at the city of New York, on or before the arrival of the oil at the place of destination—namely, at Communipaw, in the State of New Jersey.
    “That the defendants intended in and by said provisions to guard against rival and fraudulent claims to the same oil between the consignor and consignee of a bill of lading for the same.
    “ And defendants expressly deny that the plaintiffs or any other person at any time presented any of the bills of lading so issued to A. J. Thompson, with any indorsement whatever, to the National Storage Company, or to the defendants. And defendants deny that said bills, if indorsed at all, were indorsed at or before the arrival of the oil at the point of destination, and allege that if such bills of lading were presented at all, they were only so presented without any indorsement ' whatever, and without any proof that the person so presenting was entitled to the property,, and after the arrival of all the oil at the point of destination.”
    Then follows another paragraph, prefaced with the word “Fifth.”
    The answer then proceeds :

      “Sixth. And for a farther and separate answer to the causes of action, and each of them set out in the complaint, the defendants further allege, incorporating herewith and repeating all the allegations contained in paragraph four of the first separate defense herein, contained in folio five, and the denial hereinbefore contained, that in and by the sixth provision of the said bill of lading under which all said oil was carried, it was provided that each consignment of the same might be retained for all arrearages of freight and charges due these defendants on other goods by the same consignee or owner.
    “And defendants farther say, that at the time of the shipping and arrival of. any of the consignments of oil referred to in the complaint, there was due to the defendants in this action for freight and charges, an amount greater than the whole value of all the oil set out in the complaint upon other goods previously shipped by the same A. J. Thompson to the same Lyman D. Saxton (named as agent) as consignee, all of which oil and goods were delivered to the defendants, and carried in the same manner and under the same bill of lading as the oil in question, and with the same consignor and consignee, and that on or about the time of the arrival of the oil in question, or of the first consignment of the same, and at all times afterwards, the said Saxton was and has at all times remained largely in the defendants’ debt, upon other goods to him shipped as consignee, as was also the owner of said' oil, and that if any assignment or transfer of the bill or bills of lading for said oil, was at any time taken by the plaintiffs, the same was taken with notice of such provision, which, provision was also known to the plaintiffs by previous dealings with the defendants, as was also all and singular the provisions contained in the said bill of lading.”
    The printed papers do not show the folios of the answer ; but on reference to the original answer contained in the judgment roll and the copy thereof served on the plaintiff’s attorney,'it appears that folio 5 commences with the word “and,” immediately succeeding the word “ Fourth,” which prefaces the above extracted ninth paragraph of the answer, and ends with the word “parties,” where it first occurs in that paragraph.
    The plaintiffs demur to the above fourth and sixth defenses for insufficiency in not stating facts sufficient to constitute defenses.
    At special term the demurrer was overruled, and judgment ordered for the defendant thereon.
    Judgment was accordingly entered, and plaintiffs appeal therefrom.

      Edward L. Andrews, for the appellant, made the following points as to the effect of the pleadings.
    I. The defense demurred to (6th), avers, “ that in and by the sixth provision of the said bill of lading, under which all said oil was carried, it was provided that each consignment of the same might be retained for all arrearages of freight, &c.” It cannot certainly be urged that the above allegation states that the shipper contracted with the carrier that his goods could be retained, &c. It simply states that the bill of lading provides so and so ; the plaintiffs admit throughout the argument that the bill of lading did provide that the goods could be retained for arrearages of freight; and still the whole question in the case—whether such a provision in the bill of lading constituted a contract between the parties under the laws of Pennsylvania or of Hew York—remains to be settled.
    II. But it was urged by the court that the clause “the defendants further allege, incorporating herewith, and repeating all the allegations contained in paragraph 5, of the first separate- defense herein, contained in folio 5, and the denial hereinbefore contained,” included allegations which, if admitted for the purposes of the argument, would effectually preclude the plaintiffs from disputing the character of this clause in the bill of lading. After a close investigation of the pleadings, such a result does not appear. What is paragraph 4 of the first separate defense 1 It is a denial that the defendants know anything of the value of the oil— a matter which does not, of course, affect the question involved in this demurrer. And as to the denial hereinbefore contained—that the defendant has no information of any assignment of the bill of lading —this is the very point involved in the demurrer to the fourth defense, where it is shown, that in the absence oí any assignment of the bill of lading, naked possession for good consideration will sustain a party’s right to the property. And there is nothing to show that this denial was the one of several denials, referred to as the denial hereinbefore contained. "Hence there is nothing alleged in this defense, in any way, the admission of which affects the plaintiff’s case ; there is no allegation included in this defense that every clause in the bill of lading formed a contract, as the court was led to suppose, from a hasty reference to the pleadings. Here it is alleged that the bill of lading was a contract in all its parts. But it is scarcely necessary to urge, that in a bill of lading set forth in hcee verba, the calling of' the instrument thus set forth a contract does not conclude the court to consider it on demurrer as a contract, or consider it admitted by the other side to be a contract —the great conclusion of law to be settled in the case. When a pleading states that a party entered into a contract in, or by the words and figures following, those words must show upon their face that both parties are bound thereby as by a contract. If the pleader had to resort to extrinsic evidence to show it to be a contract, he has pleaded badly—he has pleaded in Ticrc verba, when he should have pleaded the legal effect, and he should not be allowed to take advantage of his bad pleading to defeat a demurrer. When a party demurs to a contract, pleaded in Jiaec verba, he is entitled to look at just those facts alone which appear on the face of the papers. By pleading in Ticec verba, a party imports that the instrument he sets forth contains all the language and acts binding on the parties. Instead of calling the documents set forth an agreement, he should have alleged that the plaintiffs accepted the document set forth, and assented to each and every clause thereof. Those facts, properly plead-able, were necessary to make the bill of lading, in any of its parts, more particularly in the objectionable clauses, well pleaded, as a contract between the parties. The defendant does not say that we agreed to so and so, but that we entered into a contract in the words and figures set forth. The question here is, did we, by those words and figures, enter into a contract % It is a well-established rule, that on a demurrer, facts well and sufficiently pleaded are. alone admitted. All such are here admitted, but not the allegation that an instrument is on its face a contract when it appears on its face not to be a contract; when no acts of the parties are stated to make it a contract; when calling it a contract is clearly a conclusion of law. The demurrer to the sixth defense does not, however, involve even this question, and no facts are in any way, even impliedly, admitted which can effect the force of that demurrer.
    With respect to the validity of a clause by reason of its clogging the negotiability of the bill of lading, he submitted the following points.—I. In England, and probably in this country, a deliberate executory contract—where the assent of both parties to such an extraordinary agreement was clear—for a general lien on the contractor’s property for his own debts and the debts of a third person would, perhaps," be sustained. But supposing this court found the elements of a contract for such a purpose in this bill of lading, the contract in that form would be against public policy. It would destroy the negotiability of bills of lading, whose negotiable character has always been anxiously guarded; it would be imposing ón the shipper and owners an oppressive condition, under circumstances' amounting to constructive duress; it would be enabling the common carrier to rid himself of his common law duty to collect the freight before delivering the goods, and yet to reap all the advantages of his right of lien in an other way. And this, too, by the abuse of an instrument nurtured by the law as the representative of property in transitu and intended to facilitate commercial operations by its negotiability (Wright v. Snell, 5 Barn. & A. 350).
    II. In England, after a long experience of the practice of validating notices in bills of lading, it has been found necessary to return, to some extent, to the common law system ; and this tendency is apparent in all countries where the English rulings have been followed.. In order that a carrier may now, in England, bind the shipper to any variation from his common law liability, or to any departure from the inherent requisites of a bill of lading, it is necessary that the. shipper’s' signature be given to a contract in writing, entered into before the shipment of the goods. It is, therefore, improper, in view of the tendency to revert to common law principles, that the court should give this extraordinary extention to the effect of notices (Railway and Canal Traffic Act, 1854, 17 and 18 Vict.).

      III. The rights of the plaintiffs have thus far been contended for as if they succeeded to no greater rights than the shipper possessed. But the carrier, by issuing an instrument negotiable in form, gave to an innocent holder thereof rights against himself even greater than were possessed by the original party to the contract. This has always been the law with regard to the receipt portion of a bill of lading ; and where an instrument is in its general form of a negotiable character, the rule protecting the rights of third parties is properly applicable. So that even if the shipper were bound by notices, of which he had no cognizance, actual or implied, it is questionable whether his assignee, without notice, is bound in these particulars (Lickborrow v. Mason, and Notes in Smith L. Cas.).

    IY. All the previous arguments upon the common law rights of the plaintiffs, are really rendered superogatory by the Pennsylvania statute, which is incorporated-in the complaint as a part of this cause of action, It distinctly provides that unless a bill of lading has the words “not negotiable” clearly stamped across the face of the instrument, the party advancing money upon the faith of such bill of lading, shall have the first lien upon the property represented thereby, after the payment of the freight and charges upon the goods represented by it. The defendant, therefore, had the proper means provided by this statute, for protecting its rights against any transferee of the bill of lading—namely, by stamping the words “not negotiable ” thereon, and thus giving notice to all innocent purchasers. The plaintiffs must, therefore, necessarily succeed upon this demurrer under the statute (Purd. Dig. Pa. Stat. 1862-9).
    With respect to the validity of a clause requiring the bill of lading to be presented, properly .indorsed, on or before the arrival of the goods at their destination, he urged: 1. It is now thoroughly settled in this State, that a delivery of a bill of lading for good consideration passes the property in the goods represented thereby, equally well as if it were indorsed to the transferee (Marine Bank of Chicago v. Wright, 46 Barb. 65; quoting Bank of Rochester v. Jones, 4 Comst. 497). 2. Hence it is no answer for the defendant to say, that the bill of lading was not indorsed to these plaintiffs by the shipper, a delivery thereof being as effective as an indorsement at common law. And as the- clause referred to is no part of the contract between the shipper and the carrier, the carrier has been guilty of conversion of the property of the plaintiffs, to whom the bill was transferred for good consideration. The same reason—absence of contract between parties—renders the provision in the same clause with regard to the time of presentation of the bill of lading equally nugatory. Finally, the plaintiffs, being the owners of these goods at law, and their assignor never having assented expressly or impliedly to any form of assignment, or any limited time for the presentation of claims against the defendant, they are fully subrogated to the shipper’s right, and are now entitled to recover in this action.

      Mr. Cadwallader, of counsel for defendant, urged,
    I. As the law is now settled in this State, a common carrier may, by contract or express stipula tion, limit his liability and agree upon terms on which the goods shall be carried, even so far as to wholly exempt himself from any liability whatever (Wells v. N. Y. Central R. R. Co., 24 N. Y. 196 ; Smith v. Same, Id: 222 ; Bissell v. Same, 25 Id. 442; Simmons v. Law, 3 Keyes, 217 ; French v. Buffalo, &c. R. R. Co., 4 Id. 108, and cases cited ; Prentice v. Decker, 49 Barb. 21 ; Boswell v. Hudson River R. R. Co., 5 Bosw. 699 ; Price v. Hartshorn, 44 Barb. 655 ; Redpath v. Vaughan, 52 Id. 489; Stedman v. Western Trans. Co. 48 Id. 97 ; Lee v. Marsh, 43 Id. 102). Not only the rule of law, but the theory of the law, in regard to carriers, has undergone a complete change. The rule was, that it was against the policy of the law to allow a carrier to limit his liability; the rule now is, that it is in furtherance of trade to allow parties, to make their own contracts and assume certain risks; and there is now in this State no limit to the right of a carrier to contract to carry, as he and his bailee may agree.
    II. The assignee of a bill of lading is on precisely the same footing as his assignor, and, besides, the plaintiffs knew all the provisions and stipulations in the contract.
    III. While we insist, that as the law now stands, the court cannot look into a contract to see if the conditions are advantageous to the public or against the policy of the law, still the provisions in question are reasonable, and would always have been sustained. 1. The provision as to the indorsement is to meet this very case. A shipper sends forward oil which is consigned to A. B. A third party, without title, except from his own statement, claims the oil. A negotiable bill of lading has been issued, and is held by some one. Can it be possible that the court would ever have held that a provision compelling the assignee of a bill of lading to produce it indorsed, would be unreasonable % Nevins v. Bay State Co., 4 Bosw. 225 ; Platt v. Wells, 2 Robt. 101 ; Blossom v. Champion, 37 Barb. 554. (a.) The law of Pennsylvania set out in the complaint has no application. We do not admit it, but deny it in the answer. And if it were in evidence, it seems to provide that the bill of lading must be indorsed, (b.) The question as to the presentment prior to the arrival of the oil is not material, as, in this case, no bill of lading ever was presented indorsed, and the court will only decide the case at bar. 2. The provision as to a general lien for freight, &c., is reasonable, (a.) This is a lien given by contract, and no rule of law requires the court to annul contracts made with carriers as to their lien, especially where this is known to the assignee, and goods are carried relying on it. (5.) We must distinguish between obligations by law, by custom and by contract. Certain English cases, as Wright v. Snell, 5 Barn. & A. 350; Luckhart v. Cooper, 3 Bing. N. C. 99, have held, that a general lien would not be given by usage or agreement in certain peculiar cases, where the lien was used to take the property of innocent third parties, to satisfy a debt. But here the lien is given by the party who owned the goods, and plaintiffs bought, if at all, subject to that claim. Lord Kenton says (9 Bing. 574): “An express contract is the strongest ground upon which the right to a lien can in any case be placed.” (c.) No case can be found where the contracting parties, as owner and carrier, have agreed that a certain lien should be given, that the court has interfered (Small v. Moates, 9 Bing. 574 ; Oppenheimer v. Russell, 3 B. & P. 42 ; Naylor v. Mangles, 1 Esp. 109 ; Gledstanes v. Allen, 12 C. B. 202 ; Spears v. Hartley, 3 Esp. 81 ; Kern Deslandes, 10 C. B. N. S. 205). In Fry n. Bank of India (1 C. P. [1855] 689), the court holds appropriate words will give a general lien. Even a contract for a lien on future acquired property is good (Seymour v. C. & N. R. R., 25 Barb. 284).
    Points were submitted on both sides on the question as to whether the shipper by the delivery to him, or by the delivery to, and retention -without demur by, him of a bill of lading, becomes bound by all the stipulations and conditions which the carrier chooses to insert therein; but as the court does not pass on the question, the points are omitted.
   Jones, J.

One of the questions designed to be raised by the demurrer is, whether a carrier can, by the insertion in the bill of lading of such clauses as are relied on in the defense demurred to, bind the shipper thereby,' without an express agreement made between the parties at or before the shipment, or an assent to the terms of the bill of lading, either express or implied by the shipper’s shipping his goods with full knowledge of the terms and conditions which the carrier has established as those on which he will undertake to carry; or, in other words, whether the mere delivery to, or retention by, the shipper, of a bill of lading, binds him by all the terms thereof, although at the time of its delivery his goods may be on their way to their destination, and he then first becomes aware of the contents of the bill.

The appeal papers, however, are not in proper form to present this question.

The defenses aver (the sixth defense by reference to the above cited paragraph in folio 5 of the answer which is prefaced by the word “Fourth”), that the oil in question was received by defendants, and was to be carried by them under and in accordance with the terms of a certain written and printed contract, a copy of which is annexed, which contains the terms and conditions of the agreement between the parties.

This is an allegation of fact that the parties made an agreement with each other as to the terms and conditions on which the oil should be carried, and that the terms and conditions so agreed on appear by and are contained in a paper writing, a copy of which is annexed to the answer.

The demurrer admits that said agreement was made. Consequently, the above point designed to be raised, does not arise; and, therefore, so far’ as this point is involved, the order below was right.

But as it may be that in point of fact no such agreement was made, unless the law adjudges the delivery to and retention by the shippers of the bill of lading the making of a contract between the parties, as to all provisions inserted therein by the carrier, the plaintiff should have leave to withdraw his demurrer so as to require the defendant to show on the trial on what he bases his averment of an agreement, and to enable him (the plaintiff), in case the averment is based on. the bare -facts of a delivery and retention of the bill of lading, to raise the question of law designed to be presented on this demurrer.

The bill of lading containing the clauses in question, gave notice thereof to the assignee or transferee. He cannot be considered a bona%de holder without notice (conceding that it would make any difference if he was), and, consequently, stands in no better position than the shippers.

These views would dispose of the appeal, were it not for the question of costs.

To dispose of that question, it is necessary to inquire whether, for any other reason, the demurrer was well taken.

Plaintiff’s counsel claims, as to the sixth defense, that even if the shippers and carriers had expressly agreed with each other to the effect therein set forth, still the agreement would be void as against public policy:

1. Because it would be a clog on the negotiability of a bill of lading.

3. Because it would absolve the carrier from his duty of collecting from the consignee his freight and charges on delivery.

As to the first ground: It is not perceived that there is any reason why the parties, if they see fit, may not clog negotiability of the bill of lading under which the one ships and the other carries.

As to the second ground: Without stopping to inquire what may be the duty of the carrier in this respect, suffice it to say that, conceding it to be as claimed, it is not perceived how the enforcement in this ease of the agreement in question, conflicts with this duty.

The previous - goods, the freight and charges on which are claimed to be a lien on the oil, belonged to said Thompson (to whom the present oil belonged), who consigned the same to his agent, one Saxton (to whom, also, he consigned the present oil). Those other goods were delivered to the said Thompson, himself, the delivery to his agent being delivery to himself. That Thompson obtained the delivery to himself of his own goods without prepaying the freight and charges, did not discharge him of his liability therefor, nor did such delivery conflict with any duty the defendant owed towards him.

There may be cases in which the clause in question would not be operative ; but the present is not one of them.

This ground of demurrer is not well taken.

With reference to the fourth defense, so much of the contract as requires the bill of lading to be presented, properly indorsed, before the arrival of the oil at its place of destination, in order to render an assignment or transfer thereof binding on the defendants, or to establish a right to the delivery of the oil, is unquestionably invalid in this State, as it contravenes the statutes made and provided for the institution and prosecution of actions. The carrier and shippers can, without doubt, agree as to the evidence upon which the carrier shall deliver. Bat they cannot go further and contract that such evidence must exist and be presented at any particular time. For the effect of this would be, that although the property in the goods was proved, to and belonged, to the assignee, yet he could only enforce a delivery by action in the name of the owner.

He could, were it not for the law of this State, so enforce a delivery, for if the carrier be not bound to recognize the assignment, he is bound to recognize the shipper; and the assignee, having all the beneficial rights of the shipper, would be authorized to demand a delivery in his name, and, in case of refusal, to bring an action in his name.

Our law, however, requires the action to be brought in the name of the real party in interest, and any contract, the effect of which is to require the beneficial owner to proceed in the name of the person from whom he derived title, must be deemed invalid.

The contract in question, however (as the demurrer as above held, admits for the purposes of the argument), required the presentation to the defendant of bills of lading properly indorsed, as the evidence whereon delivery was to be made. The fourth defense sets out this contract and alleges that none of the bills of lading mentioned in the complaint were ever at any time presented.

This, if true, constitutes a good defense ; and throws on the plaintiff the burden of, in some manner, avoiding it.

The special term was correct in overruling the demurrer ; but leave should have been given to plaintiffs to withdraw the demurrer, and go to trial on the issues framed by the complaint and answer, upon payment of the costs of demurrer.

The judgment entered on the order overruling the demurrer should be vacated, and the order itself modified so as to give the plaintiff leave to withdraw his demurrer, and go to trial on the issues formed by the complaint and answer, upon payment of the costs of the demurrer and of this appeal.

The demurrer to be withdrawn and costs paid within ten days after taxation of the costs.

In case of non-payment of said costs within that time, the order and judgment are affirmed, with costs of appeal.


source: Caselaw Access Project

author: By the Court.—Jones, J.

license: Public Domain

text:
    THOMAS A. HARTON, Plaintiff and Respondent, v. NATHANIEL BLOOM, Defendant and Appellant.
    I. Verdict, when not set aside and New Trial not granted for considerations arising out of the amount of the verdict solely, a. A verdict for a plaintiff will not be set aside on the defendant’s application, on the ground that the evidence bearing on the cause of action shows that the plaintiff, if entitled to recover at all, was entitled to recover more than the amount of the verdict, when a recoupment, counter-claim or set-off is pleaded, and evidence is given tending to support the plea, and the judge charges the jury (although erroneously), that there is sufficient evidence to support a verdict in favor of such plea, if rendered, and that if they found in favor of defendant on such plea, they should deduct the amount they should fine! defendant entitled to in respect thereof from the amount which the plaintiff would otherwise be entitled to.
    1. Semble. If, however, the amount of the verdict shows that the jury, in determining the case, either wholly disregarded the evidence, or misapprehended its effect, or overlooked some important fact, or must have necessarily found some fact which is wholly inconsistent with a verdict for any amount in favor of the plaintiff, the verdict will, for such cause, be set aside.
    Per Jones, J.
    Before Monell, Jones and Spencer, JJ.

      Decided February 4, 1871.
    The plaintiff entered into a contract with the defendant, whereby he agreed to serve the defendant as salesman for a period of time extending from January 1, 1868, to December 31, 1868, for the sum of two thous- and four hundred dollars per annum.
    The present action grew ont of this contract.
    Tne plaintiff in his complaint alleges that he performed his duties as salesman under the said contract, until about November 27, 1868, when the defendant discharged him. That he has been ready and willing to perform his duties as salesman for the balance of the term of employment. That he has received on account of his services, twelve hundred and eighty dollars, leaving due, on November 1,1868, a balance of seven hundred and twenty dollars. To recover this balance and compensation for the months of November and December, 1868, this action is brought.
    The defense interposed by the answer is, that the plaintiff, about November 3, 1868, voluntarily left the service of defendant without just cause, and ceased to perform his duties as salesman, and wholly neglected to perform the same; that by means of said neglect, the defendant suffered heavy losses. That plaintiff, when he left defendant’s service, kept the trunk of samples belonging to defendants, and failed to deliver the same until about November 28, 1868. That defendant’s damages, by reason of plaintiff’s said breach of contract and said retention of samples, amounted to two thousand five hundred dollars, which sum defendant demanded to counter-claim.
    The issues were tried before the court and a jury.
    On the trial the agreement between the parties was admitted to be as above stated. There was enough testimony to justify the jury in finding that plaintiff was taken sick on November 10; that by reason of such sickness he was incapacitated from performing his duties as a salesman ; that said incapacity, arising from this cause, continued for about two weeks; that on his recovery, he returned to New York and offered to work out his contract, but defendant refused to allow him.
    There was also evidence bearing on the question of damages sustained by the defendant in consequence of the cessation of work by the plaintiff. _
    The judge charged the jury, that unless the plaintiff had good cause for abandoning defendant’s service on November 10, arising out of sickness, then, that he could not recover, and they should render a general verdict for defendants ; but that, if on November 10, 1868, the plaintiff became unable, by reason of sickness, to perform his part of the contract,. and said inability continued during the time he kept himself absent from defendant’s service, he was entitled to recover the sum of seven hundred and eighty-six dollars and sixty-seven cents, with interest from November 10, 1868, subject, however, to a reduction by the amount of such damages sustained by the defendant in consequence of said inability, as were the direct result of plaintiff’s failure to perform, and as were sustained between November 10 and the day on which he refused to take the plaintiff; and if such damages exceeded the amount of plaintiff’s claim, a verdict for the excess should be rendered for defendant.
    To this charge no exception was taken. The jury rendered a verdict for plaintiff for five hundred and seventy-four dollars and twenty-three cents.
    Defendant moved for a new trial on the minutes, which motion was denied. '
    Thereafter judgment was entered in conformity with the verdict.
    Defendant now appeals from the order denying the motion for a new trial and from the judgment.

      Max Goepp, for defendant, appellant.
    I. The contract between plaintiff and defendant was for a certain time, and if the plaintiff left without cause before the expiration of the time, he cannot recover the services he rendered up to the time of his leaving (2 Pars, on Contracts, 36; and see the numerous cases cited in note g ; Cunningham v. Jones, 20 N. Y. 486 ; approving McMillan v. Vanderlip, 12 Johns. 165, &c. ; Wolf v. Howes, 20 N. Y. 197; Jennings v. Camp, 13 Johns. 94 ; Monell v. Burns, 4 Pen. 121).
    II. If the plaintiff was prevented by sickness from continuing to render service under the contract, after November 10, he was entitled to recover for his services, at the contract rate, up to that date (2 Pars. on Contracts, 38 ; Fahy v. Forth, 19 Barb. 341 ; Wolfe v. Howe, 20 N. Y. 197 ; Jones v. Judd, 4 Comst. 411 ; Hall v. Wright, E. B. & E. 749 [E. C. L. R. 96] ; Cackson v. Stone, 1 E. & E. 257 [E. C. L. R. 102] ; Brown’s Legal Maxims, p. 234 ; Astor v. Haven, 2 Esp. 530 ; Clarke v. Gilbert, 26 N. Y. 279). In this last case, Balcom, J. intimates that the employer should be allowed to deduct from the contract rate the damages sustained by him by reason of the servant’s involuntary failure to complete the contract ; but the majority of the court dissented from this view.
    If the jury found that the plaintiff was disabled by sickness from rendering services after November 10, 1868, it was their duty to give him the full amount of his salary up to that date, and nothing less. The law does not warrant their deducting any damages sustained by the defendant in consequence of plaintiff’s desertion, if such desertion was caused by sickness. Sickness is the act of God; and “actus Dei nemini facit injuriam.” It is clear that the defendant, Bloom, could not have maintained an action for - damages against the plaintiff, Hartón, for a breach of contract caused by sickness, or any other act of God. If Bloom could not have maintained an action, as plaintiff, he cannot as defendant counter-claim his damages against Hartón’s salary—always assuming Barton’s desertion to have been necessitated by sickness. The jury ought to have passed upon the question, whether Horton’s admitted non-fulfillment of his contract was excused by sickness, or was not; in other words, whether he was in fault or whether he was not in fault. If he was in fault he was entitled to receive nothing, and the verdict should have been for the defendant. If he was not in fault he was entitled to his salary up to November 10, 1868, without any deductions, and the verdict should have been for plaintiff— eight, hundred and fifty-three dollars and nineteen cents. The verdict rendered, five hundred and seventy-four dollars and twenty-three cents, shows that the jury did consider the plaintiff to have been in default, but, nevertheless, thought proper to allow him something. This they had no right to do, and the verdict is a verdict against evidence, and a motion for a new trial is defendant’s only remedy.
    III. The verdict rendered, being inconsistent with any correct disposition of the issues presented, is a verdict against evidence, and should be set aside. Adsit v. Wilson, 7 How. Pr. 64 ; Marx v. Wood, 19 Id. 405 ; Macy v. Wheeler, 30 N. Y. 231 ; Alger v. Duncan, 39 Id. 313. A motion for a new trial on the judge’s minutes is the proper remedy. See cases supra. The defendant is entitled to a decision by a jury whether the plaintiff was or was not in fault; and, if the jury find the plaintiff to have been in fault, the defendant is entitled to a verdict in his favor. Under the evidence, the plaintiff was entitled to his whole salary up to November 10, or to nothing. The jury have found that the plaintiff was to blame, to the amount of two hundred and fifty dollars, or thereabouts. This being so, their verdict should have been for defendant. The only way to remedy the error is to grant a new trial. It must be evident to the court that, upon the whole facts of the case, justice has not been done. To sustain this verdict is to render the law uncertain and to leave parties without a distinct knowledge of their rights and obligations under contracts such as this.
    IV. The circumstance that no exception was taken to that part of the charge which seems to hold that plaintiff might be liable to a recoupment for damages, even if not in default, is not an objection to granting a new trial. An objection to a recovery may. be a sufficient ground for granting a new trial, although not taken at the trial below, if the point is good in law and could not have been obviated by proof. Kowing v. Manly, 2 Abb. Pr. N. S. 377 ; People v. Holmes, 5 Wend. 193 ; Archer v. Hubbell, 4 Id. 514 ; Crow v. Recker, 33 How. Pr. 208. There was no express exception taken on the trial. The defendant, however, asked and obtained an instruction that the contract was . entire and that the plaintiff, if in default at all, could recover nothing. It was not incumbent on the defendant to except to that part of the charge which seems to indicate that plaintiff, if not in default, might nevertheless be liable to a deduction from his wages for damages sustained by defendant. That part of the charge can scarcely be said to have been unfavorable to the defendant. The motion for a new trial is not based on misdirection of the court, but on the ground that the verdict is utterly inconsistaht and incompatible with any conceivable logical and legal deductions and inferences from the testimony. It must be apparent to the court, on the whole facts, that Hartón was to blame, and that the whole jury meant so to find. His leaving the samples at Utica without sending them to defendant or notifying them where they could be found; his omission to send any word to the defendant from Utica, although he was well enough to travel to Toronto ; his-telegraphing to Gunn in December, without sending any message to the defendant; his total silence for three or four weeks, when it is not pretended that he was suddenly prostrated by disease, so "as to be unable to communicate with defendant; his admissions of delinquency to Gunn, and through him to defendant— all these circumstances clearly show that Hartón’s desertion and abandonment of his duties were not wholly involuntary and enforced upon him by “act of God,” but that he was guilty of a voluntary and negligent violation of his contract. The jury must have so found, but they hesitated to adopt the logical and legal consequence of such finding, and undertook to “split the difference ” by finding for plaintiff about two-thirds of that to which he would have been entitled if not in default. Such a verdict is'unjust to the defendant and prejudicial to the interests of the business community.

      QTiarles 8. Spencer, for plaintiff and respondent.— The services of plaintiff ceased, according to the proof, by the act of God. He was incapacitated by illness, and he reported as soon as he could. The plaintiff alone has cause to find fault with the charge and verdict. by which two hundred and fifty dollars was deducted from his actual past earnings.
   By the Court.—Jones, J.

In support of his claim for a reversal of the judgment, the appellant’s counsel lays down two propositions :

1. That if the plaintiff’s non-performance was excused by sickness, he was entitled to recover the full amount of seven hundred and eighty-six dollars and sixty-seven cents, without any reduction.

2. That if said non-performance was not so excused, then'he was not entitled to recover anything.

And as a result from these propositions, he claims that the verdict being for five hundred and seventy-four dollars and twenty-three cents only, is, in any aspect of the case, erroneous, and should not be permitted to stand.

Conceding, for the purposes of the argument, that the first proposition is correct, still the defendant cannot complain because the plaintiff did not recover against him as large a verdict as he was entitled to, unless the amount of the verdict shows that the jury, in determining the case, either wholly disregarded the evidence or misapprehended its effect, or overlooked some important fact, or must have necessarily found some fact in favor of defendant which is wholly inconsistent with a verdict for any amount in favor of plaintiff.

Appellant’s counsel claims, that the amount of the verdict in question shows that the jury found that the plaintiff was, in some degree, in fault, either in ceasing to render service or in delaying to return to it, and for that reason refused to return a verdict for the full amount; and on this, claims that such finding is inconsistent with a verdict for plaintiff.

Were it not for the judge’s charge, there might be some force in the agreement; but it is not necessary to stop to consider what force it might then have had, since the charge refutes the argument.

The judge charged the jury, that if the plaintiff became unable, by reason of his sickness, to perform his part of the contract, and such inability continued during the time he kept himself absent from defendant’s service, then he was entitled to compensation for the time during which he did serve, pro rata, according to the rate provided for by the contract; but he also charged that if, as a direct result of plaintiff’s failure to perform, defendant sustained damages, then the defendant was entitled to counter-claim those damages against the sum to which plaintiff was entitled as compensation for the services by him actually rendered; and this, although said failure to perform was the result of inability caused by sickness.

The defendant had given evidence tending to show that he had sustained damage by plaintiff’s failure to perform, and by his answer he had claimed to counterclaim those damages.

Under the charge, then, the jury, if they found that defendant had sustained said damages, were bound to deduct the amount thereof from the compensation which would be due the plaintiff in case they found that his failure to perform was caused by sickness ; and the charge clearly intimated to the jury that there was sufficient evidence upon which they might find that defendant had suffered damages which were deductable from plaintiff’s compensation.

The deduction made by the jury may well have been made, in conformity with a part of the charge, for damages sustained by the defendant, by reason of plaintiff’s failure to perform, which failure was the result of his sickness.

As the reduction may thus be ascribed, the court is not at liberty to say that it was on a ground which, according to other parts of the charge, would call for a verdict for defendant.

It is said, that so much of the charge as instructed the jury that, even if they found that the failure to perform was caused by sickness, yet that they should deduct from the compensation for services actually rendered, such damages, sustained by the defendant, as were the direct result of the failure to perform, was erroneous ; and as I understand it is claimed from this, that the deduction cannot be ascribed to action by the jury, under such erroneous direction.

Conceding-it to be error, still the result claimed does • not follow. The jury were bound to receive it as a correct exposition of the law, and were entitled, in their deliberations and verdict, to act upon it as such. We cannot say they did hot.

The error of law, if it be one, has in nowise prejudiced the defendant; he cannot, therefore, complain of it.

Defendant makes no claim that the jury did not allow all that he was justly entitled to for damages, and plaintiff does not complain that they allowed too much. The questions whether the charge that an allowance could be made, was correct, and if correct, whether the jury properly adjusted the amount of damages according to the evidence and charge, are not presented.

There appears to be no error in the verdict and judgment which has prejudiced the defendant. The judgment, therefore, should be affirmed, with costs.


author: By the Court.—Spencer, J.

text:
    JOHN T. HOWARD, Plaintiff and Respondent, v. ISAAC T. SMITH, Defendant and Appellant.
    Whenever it appears by the record of a judgment of a sister State, that the defendant appeared by attorney, it is prima facie evidence of the fact, but in such a case the defendant may rebut this presumption, by proof that the attorney named in the record was not his attorney in fact, and never had any authority to appear for him in the action. In other words, “notwithstanding the recital of the record, he may disprove the authority of the attorney to appear.”
    The question of authority to attorneys to appear in an action, becoming a material and contested question of fact, on a trial, should be submitted to the consideration and decision of the jury; and it was error on the part of the court to refuse to submit the same.
    Questions of fact, that are contested by the evidence to that degree that sensible men might conscientiously arrive at different conclusions, should be submitted to the decision of the jury.
    The rule for the guidance of the court in deciding questions of fact at issue on the trial, or submitting the same to the consideration and decision of the jury, should be founded upon the same basis as the rule that authorizes the court to direct a verdict where the facts are so clearly and conclusively established by the evidence on the trial, that if they were submitted to a jury and it found a verdict against them, the court would set it aside as clearly against the evidence. For instance, if a question of fact at issue on the»trial, is one so clearly established, that if submitted to the jury and it found a verdict against them, the court would set aside the verdict as against the evidence, then, and in such case, the court may and should decide that question of fact, and it is not error to refuse to submit the same to the jury.
    But on the contrary, if the question of fact is contested to that de gree, that if submitted to the jury and it found against them, the court would not set aside the verdict as against the evidence, in such case it is error for the court to refuse to submit the question to the jury.
    Before Barbour, C. J., and Jones and Spencer, JJ.

      Decided February 4, 1871.
    This-action was tried in December, 1869, before the court and a jury. The court directed a verdict for the plaintiff, and ordered the exceptions to be heard in the first instance at general term, and it now comes before the court upon a case and exceptions.
    The action was brought to recover the amount of a judgment rendered in the district court of California, August 22, 1851, in favor of Abijah T. Everett and others against the defendant Isaac T. Smith, for the sum of one thousand three hundred and twenty-six dollars and eighty-seven cents, and interest at the rate of ten per cent, per annum from the date of the judgment. The plaintiff claims to be the assignee and owner of said judgment.
    The defenses to the action are :
    1. That the attorneys who appeared in the action in California for defendant, had appeared without authority (no original process having been served upon defendant), and, consequently, - the judgment was a nullity.
    2. That no assignment of the judgment had been made to plaintiff.
    3. A plea of payment.
    The points and exceptions, and evidence considered by this court in the decision of the appeal, appeared in the opinion.

      Owen, Nash & Gray, attorneys for plaintiff and respondent.

      S. P. Nash, of counsel.

      John H. Platt, attorney.

      George C. Barrett and George Putnam Smith, of counsel for defendant and appellant.
   By the Court.—Spencer, J.

I think the court below erred in directing a verdict for the plaintiff.

First. The defendant’s counsel asked the court to submit the question to the jury as one of fact, whether there was or was not authority on the part of the California. attorneys (Messrs. Chetwood, Edwards, Rose & Turk), to appear for the defendant in the action (in California), resulting in the judgment now sued upon. The request was denied, and defendant’s counsel excepted.

The record of the judgment shows no original process issued against or served upon defendant; but from the record it appears, that the complaint and answer in the action were filed on the same day (May 6, 1851), and the answer purports to have been signed by “Chetwood, Edwards, Rose & Turk,” as attorneys for defendant. This is all that is established by the record in regard to the appearance of defendant in the action, and upon this the plaintiff rested his case. Subsequently, the defendant testified, in substance: “That he never saw either of the firm of Chetwood, Edwards, Rose & Turk, although he knew of them by name. That he never employed this firm to appear for him in this action, and never employed nor authorized any one to appear in this suit, nor to defend the same ; and that he did not know of the existence of the suit at the time of the judgment. He says, ‘I first heard . there "was such a suit, when this action was commenced, about a year ago : had never heard of the California suit before that.’ That the only agent he had in California, at the time, was one Edward Rogers, whom he sent out to California as his special agent, to attend to his business there. That he never heard of this judgment until he was sued here. That he was never asked to pay this judgment to Mr. Howard (plaintiff) or anyone,. before being sued.”

On the cross-examination, and afterwards, plaintiff introduced letters and and accounts, and other evidence that tended to establish that the firm of Chetwood, Edwards, Rose & Turk was employed by Beck & Palmer, shipping agents, with the consent of Edward Rogers, the agent of defendant, but no positive testimony established their employment with the consent or direction of said Edward Rogers. It appeared from the evidence, that at the time of the trial, Edward Rogers was dead. I am clearly of the opinion, that this question of authority to the attorneys who appeared for the defendant in the California action, was, or became á contested question of fact, upon which there was evidence upon both sides.

The testimony of the defendant was most positive and clear on the subject of authority, and, I think, fully established the fact that their attorneys were not retained or employed by him personally, in that case, nor by his agent (Rogers), with his {defendant's) knowledge or consent. The testimony opposed to this statement of defendant, raised the hypothesis, or tended to establish the fact, that the attorneys derived their authority to appear, from Beck & Palmer, who derived their authority to employ and retain them, from Edward Rogers ; but to say the most of this proof adduced by plaintiffs to contradict or rebut the testimony of defendant on" this point, it was vague and uncertain, and, in my view of the case, not of sufficient weight and certainty to justify the conclusion of the court below, that the authority of the attorneys, Chetwood, Edwards, Rose & Turk, to appear for the defendant, was so fully and conclusively established, that the question of such authority need not be submitted to the j ury as a question of fact. The decision of questions of fact in a case, by the court, when uncontested, or when clearly established by the weight' of testimony, narrows the issues and reduces the number of questions for the consideration of the jury, and thus lessens its labors in reaching a verdict, and in this view, are to be favored and sustained, to the full extent of the rules of law applicable to jury trials. The rulings of the court, however, in such cases, are often subject to a review and reversal by the appellate court, although a decision of the jury would have been final upon the same facts. I hold that all questions of fact that are contested to that degree by the evidence that sensible men might conscientiously arrive at different conclusions, upon the same evidence, should be submitted to the decision of a jury. The rule of law I hold to be the same as in the case of directing a verdict by court. The court has a right so to direct, when the facts are so clearly established on the trial, or the weight of evidence so strong, that if, on submission to a jury, it found a verdict against them, the court would set it aside as against the evidence. Applying this rule to this case, I do not think, if this question of authority had been submitted, and the jury had found that there was no authority, and, consequently, found for the defendant, that any court’would set aside their verdict as against evidence. I am of the opinion it was clearly a question that, under the evidence, should have been submitted to the consideration and decision of the jury, and it was error on the part of the court to refuse to do so. I also hold, as a conclusion of law, that whenever it appears by the record of a judgment of a sister State, that the defendant appeared by attorney, it is prima facie evidence of the fact; but in such a case, the defendant may rebut this presumption by proof' that the attorney named in the record never had any authority to appear for him; in other words, “notwithstanding the recital of the record, he may disprove the authority* of the attorney to appear.”

The cases cited by defendant’s counsel on the argument, are, in my opinion, conclusive as to the law in such cases (Shumway v. Stillman, 6 Wend. 447, 453; Starbuck v. Murray, 5 Id. 148 ; Long v. Levy, 1 Hill, 597).

The opinions and decisions of Chief Justices Savage and Brows in those cases, are not-weakened by the queries and dicta of other judges in' the cases cited by plaintiff’s counsel.

In the case of Bolton v. Jacks, in this court (6 Robt. 198, &c.), there is a very full review of cases touching this point.

My attention has been called to a late case decided in the court of appeals (Brown v. Nichols, 42 N. Y. 27). That case arose upon and relates to a judgment in this State, and the judges reviewing the same recognize a distinction, and that a different rule applies to judgments of another State. Although there is a diversity of opinion among the judges before whom the case at bar has been heard, as to the questions arising therein, we do not consider the same as affected by the decision in Brown v. Nichols. As for myself, I agree with the views of Judge Grover, as expressed in his dissenting opinion, so far as he discusses this question of the effect of appearance, and I believe those views should be and will be finally adopted as the rule in like cases. ,

In regard to the other principal exceptions in this case, a majority of the members of this court hold that there was no error in the rulings of the court below, and, therefore, their discussion has been avoided, and the present decision is based entirely upon the question of appearance in the California court.

The exception to the ruling of the court below upon this question should be sustained, and a new trial ordered, with costs to defendant, to abide the event.


author: Spencer, J.

text:
    CHARLES R. TOWNSEND and THEODORE E. TOWNSEND, Plaintiffs and Appellants, v. THE GLENNS FALLS INSURANCE COMPANY OF GLENNS FALLS, N. Y., Defendant and Respondent. THE SAME v. THE NARRAGANSETT FIRE AND MARINE INSURANCE COMPANY, Defendant and Respondent. THE SAME v. THE MERCHANTS’ INSURANCE COMPANY, Defendant and Respondent.
    After the hearing of a cause befora three referees, and after a consultation together, in which they, or any two of them, failed to agree upon any conclusion in the case or upon any findings of law or fact, but concluded they could not come to any satisfactory conclusion in the case, and so decided, it is irregular and erroneous, for any two of said referees afterwards to agree to conclusions of law and fact, and to make and sign a report in the case, without another meeting, conference or consultation of all the referees.
    Referees, after a meeting and a consultationdn the case, and after a separation without agreement to any findings of fact or law as a basis of a report, and without any two of them agreeing to any such findings or to any conclusion or report in the case, except that of a disagreement, must meet again before any report can be made.
    Two of such referees cannot afterwards make a report, without any meeting and agreement together, and without any further meeting of all the referees. -

      A report signed by two of the referees, separately, without meeting together, and without any further meeting of all the referees, is irregular and erroneous, and should be vacated and set aside.
    Can referees, even if a majority of them have substantially agreed upon a general decision of the case, make a formal report and decision therein by signing the same separately and without meeting for the purpose, and consulting and agreeing together formally, upon the conclusions and findings embodied in the written report. Quere ?

    After the submission of a controversy, a referee should not consult with, nor receive any suggestion or advice from any of the parties or their respective counsel, in regard to the subject matter of the reference, or to his findings, or report therein, except in the presence of the opposing party or his counsel. Referees, like judges, should avoid even the appearance or suspicion of unfairness or prejudice in the performance of their duties, and in all cases where they deem it necessary to hear the views of counsel, or obtain their assistance in regard to the case, or as to the form and substance of their report, they should exercise their undoubted power and privilege, by calling the respective counsel of both parties before them for that purpose, or request each of them to furnish a proposed formal report, that should be made upon the general conclusions they have reached in the cause.
    Before McCunn and Spencer, JJ.

      Decided February 4, 1871.
    Appeal from an order of the special term of this court, held on August 25,1870, in these several actions.
    These several actions were all referred in June, 1870, - ' to Hon. William Mitchell, Thomas Houston and Francis K. Thurber, and tried together before said referees, and submitted on July 5, 1870, and on July 6 the referees met and consulted and deliberated together, in regard to their decision and report in the case, and concluded that they could not agree upon a report, and separated, after authorizing referee Mitchell, one of their number, to inform the counsel of the respective parties, of their failure to agree, which he did on the same day. There was never any meeting of the referees thereafter, but soon thereafter one of the counsel for the defendants had an interview and conversation with the referees Houston and Thurber, in regard to the subject matter of the reference and relative to their agreement on a decision in the case and a report therein, holding said interview and conversation with said referees separately, and at a different time and place. That each of said referees (Houston and Thurber) told the defendants’ counsel that he would sign a report with the other in favor of the defendants, and said counsel afterwards prepared reports in the several cases, which were signed by said referees, Houston and Thurber, in the latter part of July, 1870 ; but there is no evidence that the referees Houston and Thurber ever met or consulted together as referees after July 6,1870, when all the referees were together, or that they (Houston and Thurber) were together, when they signed the several reports, beyond the fact of their signatures to the same ; and the referee Houston in his affidavit expressly states that he had no further con sultation with the referee Thurber, than that with him and referee William Mitchell, on July 6 or 7,1870 ; and the referee Thurber also states in his affidavit substanstantially, that he had no consultation with any one in regard to his judgment, and the matter of the reference after the said meeting of July 6, 1870.
    The motion in the court below was, for an order vacating and declaring null and void said reports, signed by the referees Houston and Thurber, and vacating the orders of reference ; and it was denied with leave to plaintiffs to appeal to the general term, and a stay of proceedings after the entry of judgments, pending such j appeal.

      J. R. Flanagan, attorney for plaintiffs and appellants.

      Osborne E. Bright, of counsel.

      Andrews & Ellis, attorneys for defendants and respondents.
   Spencer, J.

The report of the referees in these several actions should be set aside for error and irregularity in the manner of making the same.

It clearly appears to me, that no decision or conclusion in either of the cases, was ever reached or agreed to by the referees, at any time when they or any two of them were together. At the conclusion of the conference they had on June 6,1870, they separated without any decision or conclusion being reached or announced to each other, by any two of them. It appeared that they separated with the impression that a conclusion or report could not be made because of a diversity of opinion among them. It matters not how that impression was created. Its existence determines the fact, that at the time of their separation they had not, nor had any two of them, agreed upon any conclusion or decision, in either of the cases. Each had concluded that a decision could not be made, and'none was made.

They never afterwards met as referees ; never conferred together on the subject matter of the reference; never agreed as to ainy conclusion in the premises, when together, nor did any two of them, when together, agree to any conclusion or upon any report in the cases. The attorney or counsel for the several defendants drew up a formal report, which two of the referees signed, without any conference, or coming together, or agreeing together, at the same time and place, upon the conclusions of fact and law embodied in the report.' I hold this action to be irregular and improper, on the part of the referees, in the performance of their duties, and of sufficient importance, in the way of error on their part, as to authorize and justify this court in vacating and setting aside their report.

I fail to discover any breach of good faith in this matter on the part of the referees or the attorney for the defendant. I have no doubt they each meant to act legally and properly in the premises, and supposed they were so doing, in all respects ; but I think it very clearly appears from the testimony, that this report would not have been made by the two referees, unless they had been stimulated by the advice and energetic action of the defendant’s counsel, all of which appears to have reached and affected each of them separately, and in the absence of the other or others, and also in the absence of plaintiff’s counsel. The regular and proper course for the defendant’s counsel to have pursued in the premises, would have been to have obtained another meeting of all the referees, if practicable, and to have advised or claimed a report from a majority, in the presence of opposing counsel.

I hold that in all reference cases, there must be a conference of all the referees. That there must be a substantial conclusion agreed to between, at least, two' of the referees, upon the several questions of law and fact, necessary to be embodied in the report, at such conference, or when they are together, and I am much inclined to believe that the written report should be considered and signed by them at the same time and place, although this latter conclusion may be deemed extended and doubtful, under the decisions. I can find no special case that I consider authoritative and decisive as a precedent to guide the conclusion of the court in this case, although the principle that should govern the same clearly appears.

The Code and statute prescribe that all the referees shall hear all the proofs and allegations of the parties, and provides that any two of them may make a report in the case. The expressed opinions of the judges in the cases upon this subject, seem to hold, that the referees must all meet and. confer together and conclude upon their decision and findings in a case, upon those proofs and allegations, but they are silent upon the legal points involved in this case.

First. After the hearing of a cause before three referees, and after a consultation in which they, or any two of them, fail to agree upon a conclusion in the case, or decide upon any findings of law or fact whatsoever, can two of them, afterwards, without another meeting of all, agree to a conclusion and make a report, without a conference or consultation of all the referees? or,

Second. As in this case. After separating without agreeing to any conclusions of fact or law, as a basis of a report and without agreeing to report at all, except the fact of a disagreement, can two of these referees make a report by signing, separately, written conclusions of fact and law, without meeting together and agreeing to gether to make and sign the same, and without any further meeting of all the referees ?

i Third. Can referees, or two of them, make and sign a formal report and decision of the case separately and at different times and places? I am clearly of the opinion that the first and second queries should be answered in the negative, and that is. sufficient for this case. Eeferees should be held to a strict and impartial performance of their duties, and if this high standard should be extended to making and signing their report at the same time and place, I can see no wrong thereby to be done, and much to be avoided. I hold the ‘practice illustrated in this case to be irregular and erroneous, and contrary to the principles that should govern reference cases; and I hold this without suggesting a suspicion as to the good faith and intentions of the referees in the premises, and without reference to their subsequent agreement or present opinions as to the correctness of their conclusions in the case.

The approval of such a practice would open the door widely for the perpetration of great frauds, and for the practice of improper influence upon the action of referees.

I take this opportunity to say that I hold, as an opinion of the proper practice in like cases, that after the submission of a controversy, a referee should not consult with, nor receive any suggestion or advice from any of the parties or their respective counsel, in regard to the subject matter of the reference, or to his findings, or report therein, except in the presence of the opposing party or his counsel. Referees, like judges, should avoid even the appearance or suspicion of unfairness or prejudice in the performance of their duties, and in all cases where they deem it necessary to hear the views of counsel, or obtain their assistance in regard to the case, or as to the form and substance of » their report, they should exercise their undoubted power and privilege, by calling the respective counsel of both parties before them for that purpose, or request each of them to furnish a proposed formal report, that should be made upon the general conclusions they have reached in the cause.

This report must be set aside, the order of the special term reversed, the order of reference vacated and a new trial ordered, costs to abide the event of the same.

Judge McCüntí wrote a concurring opinion, which the reporters have been unable to obtain.


text:
    JAMES RYAN, by Catharine Ryan, Guardian, Plaintiff and Respondent, v. THE HUDSON RIVER RAILROAD COMPANY, Defendant and Appellant.
    Where the acts of a servant are willful, and beyond the scope and limit of his employment or agency, the principal is not liable for the same.
    In actions to recover for negligence, the burden of proving,—First. That the plaintiff was free from negligence on his part that contributed towards the injury; and, Second. That the defendant was guilty of negligence that produced the same,—rests upon the plaintiff; and on his failure to establish the same, the complaint should be dismissed by the court. There is, in such case, no question for the jury..

      Decided February 4, 1871.
    Appeal from a judgment.
    The cause was tried in April, 1870, before the court and a jury, and resulted in a verdict in favor of the plaintiff for the sum of fourteen hundred and fifty dollars. Upon the coming in of the verdict, the defendant moved upon the court minutes for a new trial, which motion was denied, and afterwards judgment was perfected upon said verdict for the plaintiff. Defendant appealed from the order denying the motion for a new 'trial, and from the judgment. The evidence that was considered in the review of the case on appeal appears in the opinion of the court. At the close of the evidence of the plaintiff, the defendant moved the court to dismiss the complaint on the grounds :

      First. That if the driver saw the child, and used his whip in the manner testified to by the plaintiff, that it was without the agency of the defendant, and the defendant is not responsible.

      Second. Assuming that the driver did not see the boy, that it necessarily followed that the whip was thrown back by him in the ordinary course of his business, to be used in the proper driving of his horses, and the catching of the whip about the boy, either by the loop formed by the lash and the whip being used in the driver’s hand, or by the lash winding about the child, was the merest accident, showing no act which the court could properly say was negligence on the part of the person who was, at the time, the agent of the defendant.
    The motion was denied, and the defendant excepted.
    At the close of the evidence in the case, the defendant renewed the motion to dismiss the complaint upon the grounds first stated, and upon the ground that it appeared that the negligence of the plaintiff caused or contributed to cause the injury.
    The motion was denied, and the defendant excepted. The defendant’s counsel then requested the court to charge the jury :
    1. That upon the evidence the plaintiff has no cause of action.
    Which the court declined to charge, and the defendant’s counsel excepted.

      2. That if the jury do not find that the driver was negligent in respect to the circumstances relating to the injury, the plaintiff has no cause of action.
    Which the court charged.
    3. If the jury are satisfied from the evidence that the plaintiff was negligent to any extent, and his negligence concurred in producing the injury, the plaintiff cannot recover.
    Which the court charged.
    4. That the act of the driver in using his whip, under the circumstances, as shown from the evidence, was without the scope of his employment, and for which the defendant is not responsible.
    To which the court said, “ I will charge that, with this qualification, that it is a question for the jury to determine and the counsel for the defendant excepted to the refusal of the court to charge as requested ; also, to the instruction as given.

      5. If the jury shall find that the act of the driver was willful, and without the limit of his agency, and with intent to drive the boy away, it was unauthorized by the defendant, and the plaintiff cannot recover.
    Which the court charged.
    The foregoing statement comprises the important exceptions in the case.

      Hirsch & Newcombe, attorneys for plaintiff and respondent.

      Frank Loomis, attorney for appellant.

      Theodore R. Strong, of counsel.
   By the Court.—Spencer, J.

The plaintiff in this case was a boy about twelve years of age when he testified on the trial, and was about ten years of age at the time of the accident. His testimony in regard to the circumstances was not very clearly given, and is materially contradicted by other witnesses. If the jury based there verdict upon his testimony as to the action of the driver (the alleged servant of defendant), in the premises, this judgment should most certainly be reversed, for he (the plaintiff), testified (substantially) that the driver saw him distinctly, and drew the whip upon and struck him. That the end of the lash was in his (driver’s) hand with the butt end of the whip, and when he struck plaintiff, he let the lash go and it wound around plaintiff’s neck, and he was thus caught and pulled along, and while he (plaintiff) was down on the track, the lash became loosened. That he (driver) jerked it (the whip) and threw him under the car. The defendants could not be held for the acts of the driver, . of this willful and wicked character. This question was raised by the defendant’s counsel on the trial, in the motion for a dismissal, and also in the requests to the court to charge; and the court charged the jury especially and clearly on this point, and it is proper to presume that they followed the direction of the court in the premises and disregarded the testimony of the plaintiff in regard to the facts attending the accident. I use the word accident, for, upon a review of ail the testimony, I conclude it was an accident,—an event happening without either negligence or design on the part of the defendant’s servant, and certainly without design on the part of the plaintiff. I cannot resist the impression that affects my mind from the testimony in the case, that plaintiff was guilty of negligence, in running alongside of the car and so near to the same that he could reach out and catch hold of it. The other boys were intent upon mounting the car, as appears from plaintiff’s testimony, and the facts in the case convince me that such was plaintiff’s intention. At any rate, I deem his action in the premises as very hazardous to, and negligent of, his own personal safety. I think the jury did not consider this point in the case. But - assuming that they disregarded the testimony of plaintiff as to the willful action of the driver, and Were correct in their conclusion that plaintiff was not guilty of any negligence that contributed to his injury, I cannot realize how they could reach the conclusion that the driver was guilty of negligence in the premises. I think his statement as to his action, and particularly as to the use of his whip, must be received as the true version of the facts attending this event, so far as he (the driver) in any way, participated therein ; for his testimony is not contradicted by any other witness, excepting the plaintiff, whose statement mnst have been ignored by the jury. How the driver’s testimony establishes that he used his whip with care, and in the ordinary way, without intending to hit the plaintiff or anyone else. That he did not see the plaintiff, nor know that he was .near, or that he was injured at the time. That he never let go the end of the lash, which he hek\with the butt end of his whip-stock, in his hand, striking out or back with the whip in that condition, when it was suddenly twitched or jerked from his hand; and he stopped the car as soon as possible, and after the accident he learned, for the first time, that the boy had been thrown down and injured. From his testimony, and from all of the witnesses, except the plaintiff, I cannot find any negligence established, that occasioned or contributed to the injury. The burden of proving or establishing such negligence on the part of the defendant, was upon the plaintiff, and I am of the opinion,, that he failed to furnish any evidence proving the same, and the motion to dismiss the complaint should have been granted.

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


author: McCunn, J. Monell, J. Spencer, J.

text:
    CHARLES C. RHODES, Plaintiff and Appellant v. WILLIAM DYMOCK, Defendant and Respondent.
    In the case of a'nonjoinder of defendants, and appearing on the face of the complaint, a demurrer is the proper remedy. If the defect does not thus appear, the defendant may set it up in the answer, but if no objections are taken by demurrer or answer, they shall be • deemed as waived (Code, §§ 144, 141,148).

      Objections to parties must be taken in this way, and cannot be made for the first time at the trial of the action.
    When a complete determination of the controversy cannot be had without the presence of other parties (additional to those of the record), the court must cause them to be brought in {Code, § 122).
    Such action of the court may be invoked by motion of any party, or may proceed by the direction of the court as of its own motion, based upon the facts and circumstances appearing in the case, but in such case the court should not nonsuit or dismiss the complaint because of this defect that thus appears for the first time, and which was not theretofore noticed or objected to by any party.
    The court should make such an order in the premises as will preserve the rights and equities of all parties interested in the subject matter of the action, whether of the record or otherwise, and ample time given to all parties to prepare for and meet the changed order or issue in the case.
    The rulings on section 122, of Code, appearing in the case of Sheldon 0. Wood, 2 Bosw. 267, and 24 N. T. 607, cited and approved.
    Before Monell, P. J., McCunn and Spencer, JJ.

      Decided February 4, 1871.
    Motion for a new trial on case and exceptions.
    The facts on the case appear in the opinion of Justice McCheie.

      James C. Cloyd, for plaintiff.

      John Hardy, for defendant.
   McCunn, J.

This action was brought to recover the amount of a promissory note for two thousand dollars, made by the defendant, to the order of one John Graham, dated September 1, 1866, at New York, payable six months after date, and held by the plaintiff.

The answer admits the making of the note, but alleges that it was made for the accommodation of said Graham, and loaned to him September 4, 1866, for the purpose of its being discounted by the First National Bank of Norfolk.

At the trial, the plaintiff testified, that James Graham came to his office, in Philadelphia, September 10, 1866, with defendant’s note, for two thousand dollars, which he said Mr. Cole, president of the First National Bank of Norfolk, had agreed to discount, and he was going to mail it to the bank and wanted to draw for the proceeds, and desired him to cash the drafts.

The plaintiff asked what the net amount would be ; Graham made a calculation at one thousand nine hundred and twenty dollars; that Graham then (sitting at plaintiff’s desk) drew his draft for one thousand nine hundred and twenty dollars on said bank, in favor of plaintiff, which plaintiff cashed. Graham then indorsed said note and mailed it (in letter which plaintiff saw him write) for discount, and .advised the bank he had on that day drawn on them for one thousand nine hundred and twenty dollars.

Plaintiff further testified, he advanced this money on the proceeds of said note, and defendant was represented to him to be rich, while Graham was not. That he never saw Graham afterwards. The draft was returned protested, and he subsequently received it from Graham and Aitken. He was told by Mrs. James Graham that William Graham had it. He, being notified by plaintiff that he advanced one thousand nine hundred and twenty dollars on the note, returned it to him, and that he has since had possession of it. On this state of facts plaintiff rested.

The learned justice below dismissed the complaint for want of proper parties being made defendants.

We think this should not have been done. If the complaint shows a nonjoinder of defendants, a demurrer is the appropriate remedy. If the defect does not appear on the face of the complaint, the defendants must set it up in their answer, and if no such objections be taken either by way of demurrer or answer then the objections to nonjoinder or to improper parties must be deemed waived. Sections 144 and 145 of the Code were intended to meet just such cases as this. This was the doctrine laid down in Zabriskie v. Smith, 13 N. Y. [3 Kern.], 322 ; Bixby v. Wood, 24 N. Y., 607; and a large number of other cases. Indeed, it is now a very familiar doctrine. It is also well settled, that an objection of parties cannot be taken for the first time on the trial. If the court finds that the controversy cannot be ended without other parties being brought in, either as plaintiffs or defendants, it is the bounden duty of the court and of its own motion to bring them in. It cannot nonsuit. It may, upon terms, grant time to eliable the parties if surprised to meet the emergency and prepare for the changed order of things; but this is all (Shaver v. Brainard, 29 Barb. 25). This rule has also been made familiar by the numerous cases in the books, in support of the principle.

In this case, however, we think there was not a defect of parties.

The testimony of Rhodes shows that he advanced one thousand nine hundred and twenty dollars on the note, the full value, less discount at eight per cent., which the bank was to charge. Had he advanced one thousand nine hundred and thirty dollars, the question involved here would not have arisen, as that amount with interest was equal to the face of the note. J ames Graham could have had no interest on the failure of the bank to discount the note; because the answer avers and the receipt shows the note was loaned to him without consideration ; that being the case, he had no actionable interest. The only person who could have any interest was the party who advanced money on the note in good faith.

The principle as to parties here does not differ from one where a note is put in circulation in fraud of the rights of the maker. A party buying such note can only recover what he has advanced, and the party who circulated it is not a necessary party to the action. James Graham was not an indispensable party, and therefore the court should have allowed the case to proceed in justice to plaintiff’s rights, because the same judgments could have been had against the defendant had Graham been a party. And there would have been a determination of the controversy without him. There was no demand of relief against him.

In Sheldon v. Wood (supra), it was.,held that where no objection has been made by the defendant to the non-joinder of a party, having a supposed interest in a suit, the court is not bound under section 122 to summon such party, unless the facts of the case show that his rights will be prejudiced by the determination of the cause in his absence. And new parties cannot be brought in against the will of the plaintiff, unless their presence is necessary to the determination of the action.

But apart from the question we have discussed above, we hold that the plaintiff was in law a tona fide purchaser and holder of the note; and therefore entitled to recover. He advanced one thousand nine hundred and twenty dollars on the note before maturity. From that moment plaintiff was entitled to the note, or its avails, whether the bank discounted it or not. The pledge of the proceeds by the draft transaction carried with it a pledge of the note. It was held in Curtis v. Deavitt (15 N. Y. 195), that a party who advances money on the credit of a pledge of a bond or note, is a tona fide purchaser for value (see pages 195 and 196, and cases there cited). It matters not whether there was an actual delivery of the note ; its proceeds constituted the only thing of value, and these were pledged.

As to the excess of ten dollars over seven per cent., no usury is set up in the answer, therefore that question is not before us.

The judgment should be reversed and a new trial ordered.

Monell, J.

I concur in reversing the judgment and granting a new trial.

Spencer, J.

I concur with my associates in the reversal of this judgment and the grant of a new trial in the case.

I do not think the evidence established that plaintiff was a tona fide purchaser of' the note in that degree that would prohibit or prevent any equitable defense of the defendant being interposed. The most that can be said of this transaction is, that there was an equitable assignment of the proceeds of the note or of the note itself. There was no indorsement, no delivery, and the evidence of an assignment of the same or its proceeds is very slight, yet I think it was sufficient to call upon the defendant for any defense that tie could interpose and prove, under his answer.