Volume 16 — Abbott's New Cases

Samuel Tolies, a judgment creditor of W. Stannard Wood, brought this action against said Wood individually and as a trustee with and Edward Wood his co-defendant, and William Jay added as co-trustee by supplemental summons and complaint, under the will of Silas Wood.

Philip Lore, in Ms life-time, being indebted, assigned a lease he held, and which constituted his only property, to Catherine Dierkes, one of the present defendants in this action, the transfer… Held: and which constituted his only property, to Catherine Dierkes, one of the present defendants in this action, the transfer being expressed to be subject to the payment of the debts above mentioned without interest, and in installments to commence after his, the debtor’s death..

Appeal in summary proceedings to dispossess. Ellen O’Donnell took proceedings in the municipal court of Rochester to disposess Robert McIntyre from premises in that city, as being one who had intruded into or squatted upon them. The facts appear in the opinion. The case now came before the county court, on appeal from a final order of the municipal court, awarding possession of premises to the plaintiff.

On the 7th of June, 1876, the bankrupts, SLowells, made an assignment to Samuel W. Perry, pursuant to the statutes of Hew York, for the benefit of their creditors. The assignee duly qualified and entered upon the duties of his trust. On the 22d of August, 1883, Perry died. The petitioners are his executors.

Alfred P. Wright applied to the supreme court, at the Erie special term, for a peremptory writ of mandamus to be directed to the common… Held: and appointments to office can not be made, and the government of the city of Buffalo can not actually be carried on ; that of the other items included by the mayor and the comptroller, in the estimate for the mayor’s department, the items for the salary of mayor or mayor’s clerk, for the rent of the telephone, and for services of…

William J. Chin and another applied for the issue of a writ of mandamus to Richard H. Poillon and others, fire commissioners, to enforce the claim made by the relators, by reason of being honorably discharged from military service, to appointment under the Civil Service Act, in preference to other persons examined.

Appeal by John Carpenter from judgment of the court of general sessions, on conviction of murder in the first degree. The material facts appear in the opinion.

Trial by bhe court. Henry A. Weeks, individually and as administrator, &c., of Nathaniel G. Weeks, and as executor, «fee., of Mary Weeks, sued George W. Weeks, as executor, &c., of Jacob Weeks, and Jacob W. Cornwell and. Charles H. Ostrander, as executors, &c., of Catharine Weeks, to recover a bond and mortgage for $15,000, executed by said Nathaniel T. and Mary Weeks in favor of said Jacob Weeks.

<p>Eminent domain ; petition stating inability to buy.—Amendment OF' PETITION TO CONDEMN LANDS TO PUBLIC USE.Affidavits beceivable as pboofs undeb genebal allegation.—L. 1875, c. 606, § 18. *</p> <p>Under the provision of the rapid transit act, L. 1875, p. 740, c. 606, § 18,—allowing proceedings to take necessary property where the petition shows that the company has not been able to acquire title thereto, and the reason of such inability,”—it is not enough to state as the reason, that the owner refused to sell for any reasonable compensation, and that the petitioner has not been able to agree with the owner for the sale of the same. The petition must state facts as to the compensation offered or demanded, so that the court may judge of its reasonableness.</p> <p>But the petition may be amended upon the hearing, where the defect is supplied by supplementary affidavits, notice thereof being given to the other side. Where such a general allegation is put in issue by the opposing affidavits, the court may receive from the petitioner affidavits of the facts in support of the allegation, as proofs under this issue.*</p> <p>The case of the Prospect Park & Coney I. R. R. Co., 67 N. Y. 377, applied ; and The N. Y. & Boston R. R. Co. v. Godwin, 12 Abb. Pr. N. S. 21, and Matter of Marsh, 71 N. Y. 315, distinguished.</p> <p>■ * See also U. S. v. Oregon Ry. & Nav. Co., 16 Fed. Rep. 524; Burt v. Brigham, 117 Mass. 307; Matter of Metrop. Ry. Co., 14 Weekly Big. 520; Matter of N.Y. Central, &c., 15 Id. 201; Matter of N.Y., West Shore, &c. Ry. Co., 64 How. IV.210; Matter of N.Y., Lackawanna & W. Ry. Co., 26 Hun, 194; Johnson v. F. & M. R. Co., Ill. Nov., 1884, 20 Gent. I. J. 157; De Buol v. The same, Id. ,213.</p> <p>For recent cases in proceedings in Eminent domain, see—</p> <p>As to time for exercising powers. Tiverton & North Devon Ry. Co. v. Loosemore, 32 Weekly R. 929 (Ho. of L. July, 1883, Mar. 1884).</p> <p>. Jurisdiction of subject fully acquired by the petition; notice only necessary to give jurisdiction of person. Rheiner v. Union Depot St. Ry. & Tr. Co., 31 Minn. 289.</p> <p>Necessity to be alleged and proved. Tracy v. Elizabethtown, &c. R. R. Co., 80 Ky. 259; and see Winklemans v. Des Moines, &c. Ry. Co., 62 Ia. 11; Chicago, &c. R. R. Co. v. Hillsheimer, 15 Chic. Leg. News, 265.</p> <p>Absolute necessity not always required to be shown. Wilkinson v. Hull, &c. Ry. &c. Co., 30 Weekly Rep. 617; People ex rel. Green v. Dutchess, &c. R. R. Co., 58 N. Y. 152.</p> <p>Necessity, not relevant for purpose of enhancing value or damages. Union Depot St. By. & Tr. Co. v. Brunswick, 31 Minn. 297.</p> <p>Limit as to premises injured. Restricting number of witnesses. Sheldon v. Minneapolis, &c. Ry., 29 Minn. 318.</p> <p>Necessity of allegation of damages. North Pac. R. R. Co. v. Reynolds, 50 Cal. 90.</p> <p>Right of removal to United States court. Northern Pac. Terminal Co. v. Lowenberg, 18 Fed. Rep. 339.</p> <p>Action for proceeding without compensation. Blanchard 0. City of Kansas, 16 Fed. Rep. 444.</p>

<p>The rule that the Niagara River is both a navigable stream and a boundary stream, within the principle that a deed in which the premises conveyed are described as bounded by such a stream does not convey to the center of the bed,—reiterated.</p> <p>Cases on this subject, collected and analyzed by counsel.</p> <p>The interruption of navigation in the vicinity of the Falls, does not, in legal contemplation, take away the navigable character of the stream there, within the meaning of the rule. For a river, navigable in its general character, does not change its legal characteristics in that respect by a disturbance which, at a given point, breaks the continuity of the actual navigation.</p> <p>The grants by the State of Goat Island, and other islands in the rapids above the Falls, describing them as islands, did not, therefore, convey title to the bed of the river, but only to the boundary of the islands.</p> <p>Whatever rights, short of prescriptive rights, may be claimed by the owners of the islands in the use of the waters, are subject to the right of the State as the owner of the bed of the river.</p> <p>The currents flowing between the islands, and between any of them and the shore, however narrow, do not form exceptions to this rule, but the whole stream is to be considered in its entirety as one navigable and boundary stream.</p> <p>The possibility that, by modes yet to be devised, the water power might be utilized within the boundaries of an island is conjectural, and not a basis for an allowance of compensation on taking the island for public use.</p> <p>But the value of water power, the use of which has actually been long enjoyed, may be allowed for.</p> <p>The proper principle of compensation for residence property in the immediate vicinity of the Falls,—Held, to be the difference between the full value of each lot as existing under the full control of its owner, and the value of the residue of such lots after the proposed part should be taken for the purposes of the State reservation fora park, without making deduction for supposed benefits.*</p> <p>In estimating the value of “ Goat Island ” and “Prospect Park,” the absolutely unique character of the scene enjoyed is not ground for enhancing the amount by sentimental considerations.</p> <p>Prices for which interests or shares on the property have been Sold, or the property capitalized, are entitled to some weight, but are not controlling. Opinions of witnesses are valuable only in connection with the facts in evidence.</p> <p>Income received from the property is to be considered. Making due allowance for the fact that it depends in part on the ability of management and the expenses.</p> <p>* Section 6 of the act authorizing the appropriation of the lands (L. 1883, c. 336), expressly provided that the commissioners should make no deduction on account of any real or supposed benefits the parties interested might derive from the reservation.</p> <p>After the taking of evidence had been completed, and the merits of the questions presented argued by counsel, the following final decision, signed by all the commissioners, was delivered.</p> <p>By the Commission.—Hale, Commissioner.—The commissioners of appraisement have entered upon the duty of ascertaining the values of various pieces of property proposed to be taken for the State reservation with a deep sense of responsibility. They have recognized the fact that where property is compulsorily taken, as in this case, the “just and proper” compensation contemplated by the statute is a liberal compensation. They have intended therefore to award the full value of each piece of property considered. The difficulty they have found is to do this and at the same time deal fairly by the State, and exclude from consideration fictitious, conjectural and imaginative values. Opinions of witnesses are admitted in evidence to aid the judgment of the commissioners ; but the commissioners are not bound by any such opinions. If they were, where opinions vary so widely, it would be impossible to decide between them. Such opinions must be tested by the facts in evidence, and the commissioners must rely upon their own judgment, aided by the evidence both of facts and opinions, so far as aid can be thence derived. It is not proposed to state here the reasons which have governed them in the valuation of each parcel, but to mention some of the considerations which they have deemed important.</p> <p>1. As to the water power. The commissioners have not thought it necessary to decide the question which was so very thoroughly and ably argued before them, as to whether a prescriptive right to the use of the waters of the Niagara River can be obtained as against the State.* Differing somewhat in their views as to the strict legal question, they have concurred in the belief that it was just and proper to make allowance for such water power where it is now in use, and has been for the period prescribed by statute. They have, therefore, practically decided this question in favor of the claimants, and have allowed what in their judgment is the full value of the water power which has been used for the prescriptive period. In one case, that of Messrs. Hill and Murray, they have made such allowance even where a non-user for a number of years would seem to have been strictly fatal to the claim of prescription, j The value of the water power has been estimated at the rate which the great mass of testimony shows to prevail at Niagara Palls.</p> <p>* See briefs of counsel on this point reported at the end of this-case.</p> <p>2. As to the residence property, so called. In regard to the lots extending from Buffalo to River streets, of which a small portion of the River street end is proposed to be taken, we have been unable to concur with the opinions of the witnesses for the owners as to the extent of damages that the residue of the property would sustain in consequence of the taking. It has not seemed to us that such damage would be by any means as serious as apprehended by them. We cannot believe that the commissioners in charge of the State reservation or park, for the purpose of preserving the scenery, will so manage it that it will be a nuisance or an injury to the adjacent owners. It has seemed to us also that in most cases the owners of the property have not heretofore attached that extreme value to the river front of these premises and the views therefrom, which they now seem to attribute to them. This is shown by the fact that in many cases they have, by planting or maintaining trees, effectually deprived themselves of such views, and that in some instances they have built their barns and stables upon the part, of the lot commanding the finest views, while they have fronted their residences on Buffalo street. At the same time, the fact that they lose the legal control of this part of their lots, somewhat to the detriment of the residue, has been taken into consideration in making our estimates. We have intended to award in each case, (1) the full value of the land and buildings proposed to be taken, and (2) such compensation, varying with the different conditions and circumstances of each lot, as would in our judgment cover any damage reasonably likely to fall upon the residue of the property by reason of such taking. In other words, it has been our intention, to award as compensation the difference between the full value of each lot as now existing under the full control of its owner, and the value of the residue of such lot after the proposed part shall be taken for the purposes of the State reservation without making any deduction or allowance for supposed benefits.</p> <p>3. Gloat Island and Prospect Park. The appraisal of these two parcels has been attended with peculiar difficulty. They are both what may be termed unique parcels. There is no other property like them. Their value cannot be estimated by ascertaining what similar pieces of property in that vicinity have been sold for, because there are no similar pieces of pi’operty. Opinions of witnesses as to value are usually confined to market value, and as there is no market value to these parcels, opinions are valuable only as they are based on some facts, from which, as made known in the evidence, it is the duty of the commissioners to draw their own conclusions. Groat Island (and in using this term we include therewith all the adjacent or appertaining islands—Luna, and the Three Sisters, and others), contains some sixty-two acres. These islands are in their natural state, and considered without reference to income, far the most valuable piece of property propose to be taken. They command the greatest variety of beautiful and magnificent views of the Falls and the Bapids. In exten t they are much greater than Prospect Park. They are absolutely necessary to a State reservation at Niagara, for a reservation, or park, not including these islands, would do little towards satisfying the desire of the public for a park, which will give to the people of the world free access to the objects of admiration and wonder at Niagara.</p> <p>In estimating the value of these properties several considerations have been presented to us :</p> <p>(1.) Appeal has been made to sentimental considerations. Counsel have been eloquent with reference to the beauties of Niagara Falls. They have spoken in fitting terms of the far-sounding roar of the cataract. the magnificence of the clouds of spray rising from its base, the rushing of the rapids, the splendor of the rainbows, and the general grandeur and beauty of the natural scenery visible from the islands and from Prospect Park. The tumultuous sound of the waters has been well likened to the “ voice of God,” and it was asserted that there was a certain dignity in the ownership of this property, amounting to almost a patent of nobility; and for this it was claimed that due compensation should be made. Considerations of this kind can have very little weight with us. The question involved is not poetical but eminently practical. The claimants, though they own the land under grants from the State of New Y ork, have no title to the rushing waters ; they do not own the pillars of spray that rise from the foot of the cataract, nor have they any title to the rainbow to be seen from Luna Island; we have held that they do not even own the bed of the river. The State of New York never owned and could not grant the running water, the spray, or the rainbow, or the roar of the cataract. These are not subject to human proprietorship ; they are the gift of God to the human race, and no one claiming under a grant from the State of New York can arrogate to himself any dignity or “patent of nobility” by reason of such ownership. These wonders of nature confess no human authority or control. What the present claimants have obtained under the grant from the State, is a legal right to exclude others from certain standpoints where they might view these impressive sights, and this right is subject to the power of the State, in the exercise of its prerogative of eminent domain, to resume possession of these lands, so as to restore to mankind the right freely, “ without money and without price,” to gaze upon these marvelous works of God. It is only for about three score years and ten, the limit of a single short human life, that the present proprietors or their ancestors have had any title to these lands. The wonder and beauties of the place were just as great for hundreds and thousands of years before the State of Hew York made its grants as they have been since. Augustus and Peter B. Porter and’ their descendants are unquestionably entitled to great credit for having preserved the primeval forest upon the islands, and for their not having permitted them to be desecrated by jDrofane hands. For this they should ever be held in grateful remembrance ; but for the supposed dignity of ownership we can certainly see no propriety in a pecuniary award.</p> <p>(2.) We have considered somewhat the valuations heretofore practically put upon this property by the owners. In the absence of any evidence of market value this has seemed a necessary element in coming to a conclusion. It is unnecessary here to go into details on this subject. The highest price ever put upon the Goat Island property by its owners in the conveyance of undivided interests to each other has been about $410,000. An individual interest sold at public auction brought a much less proportionate value. In regard to Prospect Park the highest valuation that has ever before this appraisement been put upon it practically by the owners has been that at which the property was last capitalized, namely, $280,000. We have not, as our awards will show, considered these prices as controlling, but have given them some weight.</p> <p>(8.) Opinions of witnesses in these cases, as already stated, not being based upon market value, have seemed to us valuable only in connection with the facts in evidence. The witnesses for the owners of the Goat Island property were one of the owners, Hr. Peter A. Porter, the Messrs. Symonds, who have for many years been agents of other owners of the property, and Mr. George W. Wright, who is a lessee and occupant of a portion of the property. These are all gentlemen of intelligence and character, but from interest and association prone to take a rose-colored view of the property. They based their opinions mainly upon their estimate of what the property could be made to produce, not upon the actual income derived from it. It seems to us that this is hardly a sufficient basis for the estimate they give, although it is not to be denied that the capabilities of property are to be taken into account. Such capabilities, however, must be shown by facts, and not rested upon mere conjecture. The actual net anual income of the Goat Island property has for several years past averaged about $15,000. The witnesses above referred to express the opinion that it might have been better managed ; that there have been circumstances which have prevented the use of the property for all it is worth, such as the infancy of one of the owners, and the fact that some of them were ladies who upon religious or sentimental grounds objected to the employment of such means as have been found advantageous in the case of Prospect Park. The witnesses called for the owners of Prospect Park, on the other hand, base their estimate on the actual receipts of the property for several years past, and upon the assumed fact that the net income will continue to be as much or more than it has been in the past.</p> <p>(4.) The income of the premises. The general rule, as we understand it, is that while rental value may be considered in estimating actual value, the profits of a business transacted upon it are not legitimate evidence of such value. The reason of this is that many considerations enter into the profits of a business other than the intrinsic value of the real property. Lawyers in one office in New York city may be deriving an in come from their profession of $50,000 a year, while lawyers in adjoining rooms precisely similar are not earning one-tenth part of that sum. It would hardly be claimed that the rental value of the two suites of offices was in proportion to the income of the lawyers occupying them. The same comparison might be made as to adjoining stores occupied by merchants. The sagacity, ability, and economy of the merchant are large elements in determining the profits of his business. This principle, however, is not applicable to these properties to the same extent as it would be to law offices or stores or other places of ordinary business. The evidence of income in each case has been given without objection, and is before us, and we feel bound to consider and give it due weight. We are compelled to do this to some extent, by the absence of proof of market value which has been already referred to. We do not see how it can be omitted as an element in getting at the value of these properties. But before we can make the ascertained net income a measure of value we must be satisfied that it has the element of permanency, and that such income is derivable from the property itself, and not from the skill of the management of the property. The actual net annual income of Goat. Island is about $12,000. This is derived mainly from the charge for admission across tbe bridge to the island. It seems not to have derived many aids from skillful management or advertising. This sum would be the interest at 5 per cent, upon $800,000. We think this is an inadequate price, however, for the islands. We think that with reasonable diligence and skill the revenue from the islands themselves, considered as places for obtaining views of the natural scenery surrounding them and visible from them, might be considerably increased.</p> <p>• But there are limits to the addition that can reasonably be made from this consideration. These islands were granted to Augustus Porter in 1816. That was before the time of railroads, although it was after the application of steam to the uses of locomotion upon water. The deed to Augustus Porter expresses no consideration except the payment of certain ;back taxes. How much these were is not shown, nor .are we informed what was actually paid for the grant. It' is fair to presume, however, that it was not a large sum, probably not one-hundredth part of the amount of our award. Suppose the legislature of 1817, con-winced of the folly of the grant of the year previous, .had enacted a law similar to that of 1883, for resuming possession, having had the sagacity to foresee that it was not for the advantage of the State that any individual should control the right of access to the scenery of the Falls, and that a commission had in that year been appointed to determine the compensation/to be paid to Augustus Porter. The Falls, and the Rapids, the spray and the rainbow, were quite as grand and 1 beautiful then, as now. Suppose some sagacious witness had been called who foresaw the immense strides in population and in the facilities of travel which this country has taken since that time, and had given as his opinion that in the course of sixty or seventy years by proper management the island might be made to produce to its owner a net income of some $10,000 to : $15,000 a year, and that in his honest opinion the property was worth $300,000. Can it be believed that .at that daté, such a proposition would have been listened to for a moment, or that it would not have met with universal ridicule, or that such a demand, made then by the owner, for a piece of property which had perhaps only cost him $1,000 the year before, would have been deemed so exorbitant as almost to be evidence of insanity % Now circumstances have changed. The actual annual net income has become about $15,000, and it may fairly be presumed that it will be somewhat increased. But we cannot assume that it will reach such proportions as to justify the high valuation claimed by the owners. Trying to give due weight to all these considerations, we have at last, after considerable difference of opinion and discussion, concluded to award for this property the sum of $525,000, which seems to us full compensation to the owners, and at the same time, in view of the situation and importance of the property to the State, not an extravagant price to be paid by the State therefor.</p> <p>(5.) In regard to Prospect Park, the position is different. The actual income there is proved to have been larger than that of the Goat Island property. 'The average net annual income for eleven years since its organization is proved to have been over $16,000. For the last three it has been about $22,000. If this is tobe considered the assured permanent income of the property, the estimates of the witnesses on the part of the owners might not be considered very extravagant. But there are some elements of permanence lacking in this case. In order to continue to procure this net income, the receipts must be kept, up and the expenses kept down. It may readily be seen that neither of these events is certain. There are many things which may lessen the receipts, although perhaps the probabilities are in favor of their continuing or increasing ; but it seems to us that there will be very serious difficulties in keeping the expenses down. Two items seem to us of great importance in connection with this subject; first, the expense of management. It is evident that Mr. Townsend’s services had been invaluable to this company but he has not been paid for them. The fact that he and his wife own the great majority of the stock has undoubtedly made him willing to render his services without charge. It is conceded that the fair value of this property is the sum which a prudent man able to buy would be willing to pay for it. The prudent purchaser would see at once that he must have an equivalent to Mr. Townsend’s management, and that he would not be able to obtain such equivalent without paying a considerable salary. $2,000 a year would not seem to us extravagant to cover this expense. The second item is that of taxation. It appears in evidence that the taxes paid on the real estate have been from $1,000 to $1,200 a year. It does not appear what has been the assessed valuation of the property, or the rate of taxation. It is said by the learned counsel of the company, that as the law presumes assessors did their duty, it is to be presumed that they assessed this property at its full value, and that it has paid taxes thereon. This may be so in one sense, but there is certainly no presumption that the assessors valued this property at the price put upon if by the witnesses of the owners. It was their duty to assess it at its full value as estimated and decided by a majority of themselves. There is no presumption that the assessors were informed of its income, or tlfat they decided that it was worth a million of dollars or any like sum. The question is, what would a prudent purchaser estimate as the sum which he would have to pay by way of taxes upon a property claimed by its owners to be worth a million of dollars ? A very slight acquaintance with the rates of taxation throughout the State of New York would teach tlnv purchaser that, if his property was conceded to be worth a million, he would be very fortunate if he escaped with less than from $10,000 to $15,000 annual tax, instead of the $1,000 or $1,200 which the present owners have been fortunate enough' only to be required, to pay.</p> <p>Thus it will be seen that the “prudent purchaser” might add from $13,000 to $18,000 at once to the annual expenses to which he was liable to be subjected, and thus the probable future net income be reduced by this amount. Again, he should take into consideration the fact that some portion of the income is derived from a ferry, which is operated without license from any authority in this State.</p> <p>Still, it must be conceded that the property is a valuable one. It has for the last two years paid a dividend of seven per cent, upon a capital of $380,000. Before that it had paid a similar dividend upon a capital of $150,000. We have, therefore, in view of the financial prosperity of the company and the large income it has derived from the property, awarded to the owners a full and extremely liberal compensation, the sum of $335,000. In the case of both these properties we have awarded somewhat more than the highest estimate made by any witness called on the part of the State.</p> <p>It seems unnecessary to comment upon any other of the awards which we have made, other than to say that we have endeavored, while-rejecting merely speculative values, to award to each owner full and liberal compensation for the property proposed to be taken.</p> <p>Note on the Acquisition op Riparian Rights by Prescription.</p> <p>In the case in the text, the Commissioners did-not pass upon the question whether the riparian owners on the shore of ilie Niagara River, or the owners of islands in the stream, could acquire by prescription as against the State, the right to use the water power.</p> <p>Upon the negative of this question, the points and authorities found in the brief of Ansley Wilcox, Esq., of counsel for the State, are here condensed.</p> <p>I. No prescriptive right can be acquired by riparian owners as against the State to use the power furnished by the rapids of the river, however long continued, or however valuable the improvements they may have made. The whole doctrine of prescription, aud the limitation of actions, is based upon theories of policy and not of justice. The question is one of mere right between the parties, not of expediency or justice. Canal Appraisers v. People, 17 Wend. 570, 606. The case of Crill v. City of Rome, 47 How. Pr. 398, fully sustains the above proposition, applying it to the Mohawk River, which was then no longer navigable in fact, though naturally a navigable stream. The case of Burbank v. Fay, 65 N. Y. 57, is a direct authority in our favor. See also Fort Plain Bridge Co. v. Smith, 30 N. Y. 44; Attorney-General v. Cohoes Co., 6 Paige, 133.</p> <p>By the English law, prescription can be asserted of a purpresture but not of a nuisance. Gould on Waters, §§ 21, 22, 93, 93a, 167, 168, 212, 532. See Houck on Rivers, §§ 800-310; Angelí on Watercourses, §§ 554-561.</p> <p>The rule in this country, and particularly in this State, is that any encroachment upon a strictly navigable and public stream is a public nuisance, whether it is a material hindrance to navigation or not. Wood on Nuisances, §§ 628-653. No right to continue a public nuisance can be obtained by prescription. Ib. §§ 710-746.</p> <p>This doctrine is not based upon the impossibility of presuming a grant, since the State can legalize obstructions in navigable waters, subject only to the power of Congress to regulate interstate commerce. See Wood on Nuisances, § 628, et seq.; Houck on Rivers, chap. 7, especially § 209; Langdon v. Mayor of N. Y., 93 N. Y. 129; People v. N. Y. & S. I. Ferry Co., 68 N. Y. 71. The true basis of this doctrine is to be found in the proposition that every continuance of a public nuisance, is in itself a fresh erection of the nuisance in judgment of law. Wood on Nuisances, § 726; Renwick v. Morris, 7 Hill, 575; Brown v. Cayuga, &c. R. Co., 12 N. Y. 486; Conhocton Stone Co. v. B. N. Y. & E. R. Co., 52 Barb. 390; Vedder v. Vedder, 1 Denio, 257; Beckwith v. Griswold, 29 Barb. 291.</p> <p>The following are all the cases in this State which have any bearing on this question: St. Vincent Orphan Asylum v. City of Troy, 76 N. Y. 108; Babcock v. Utter, 1 Abb. Ct. App. Dec. 27, 37; Jackson v. Babcock, 4 Johns. 418; Luce v. Carley, 24 Wend. 451; 1 Washb. on Real Prop. 400 n.; Walker v. Caywood, 31 N. Y. 51; 41 Penn. 270; Bliss v. Johnson, 94 N. Y. 235; Doe v. Thompson, 5 Cow. 371; Thompson v. Burhans, 79 N. Y. 93, 99; Mills v. Hall, 9 Wend. 315; Dygert v. Schenk, 23 Wend. 446; People v. Cunningham, 1 Denio, 524; Furman v. Mayor of N. Y., 5 Sandf. 16; Kellogg v. Thompson, 66 N. Y. 88; Rochester v. Erickson, 46 Barb. 92; Gillespie v. Forrest, 18 Hun, 110; Milhau v. Sharp, 27 N. Y. 611; Ogdensburgh v. Lovejoy, 2 T. & C. 83; afl’d in 58 N. Y. 662; Campbell v. Seaman, 2 Supm. Ct. (T. & C.) 231; aff’d in 63 N. Y. 568; Post v. Kreisher, 14 Abb. N. C. 38; s. c., 32 Hun, 49; People v. Vanderbilt, 26 N. Y. 287; 28 N. Y. 398; approved and followed in People v. N. Y. & S. I. F. Co., 68 N. Y. 71, 82; and see 38 Barb. 282; Commrs. of Pilots v. Clark, 33 N. Y. 251; Davis v. Mayor, &c. of N. Y., 14 N. Y. 506 ; Com. Dig. tit. Navigation, A. B.; Lansing v. Smith, 4 Wend. 9; Bellinger v. N. Y. C. & H. R. R. R. Co., 23 N. Y. 42; Hart v. Mayor, &c. of Albany, 3 Paige, 213; 9 Wend. 571; Moore v. Board of Commrs. of Pilots, 32 How. Pr. 184; Hecker v. N. Y. Bal. D. Co., 24 Barb. 215; s. c., 13 How. Pr. 549; Mayor, &c., of N. Y. v. Baumberger, 7 Robt. 219; Manhattan Gas Light Co. v. Barker, 7 Robt. 523; Blanchard v. W. U. Tel. Co., 60 N. Y. 510; D. H. Canal Co. v. Lawrence, 2 Hun, 163; aff’d in 56 N. Y. 602; Chenango Bridge Co. v. Paige, 83 N. Y. 178; Wetmore v. Atlantic White Lead Co., 37 Barb. 70; Peckham v. Henderson, 27 Barb. 207; Walker v. Caywood, 31 N. Y. 51; People v. Third Ave. R. R. Co., 45 Barb. 63.</p> <p>The foregoing cases clearly establish certain distinctions: 1st. In the cases relating to obstructions in highways or rivers where the public does not own the fee, but only an easement of the passage, it is generally held that such obstructions do not amount to nuisances, unless they are practical and material interferences with the public right. 2nd. The cases relating to encroachment upon rivers and highways by persons claiming authority from the legislature are clearly distinguishable from the case at bar. So long as the authority has not been exceeded, no act under it can create a nuisance. 3rd. The dicta in some of the earlier cases which conflict with the proposition above stated, are based on .the English doctrine distinguishing a nuisance from a purpesture, which distinction does not now exist in this State. Furman v. Mayor, &c. of N. Y., 5 Sandf. 16; Wetmore v. Atlantic White Lead Co., 37 Barb. 70. 4th. There is a class of cases which hold absolutely that any encroachment upon a public river is, in New York, a purpresture, and per se, a nuisance, whether it be an actual interference with the public right of navigation or not. The leading case on this subject is People v. Vanderbilt, 38 Barb. 282; 26 N. Y. 287; which is followed in People v. N. Y. & S. I. Ferry Co , 68 N. Y. 71, supra; and the same principle is laid down in several of the cases above cited.</p> <p>Taking this rule in connection with the doctrines laid down in Crill v. City of Rome (47 How.Pr. 398), and Burbank v. Fay (65 N. Y. 57), it appears to be clearly established that the land-owners at Niagara Falls cannot have established a prescriptive right to encroach upon the river bed, and use the water power as against the State. Whether this conclusion is based upon the theory that their acts have created a technical public nuisance, or upon the proposition that no private rights can be obtained in public waters by adverse user without regard to the doctrine of nuisances, makes no difference.</p> <p>II. As to the proof necessary to establish a prescriptive right to use the water power of the Niagara River.</p> <p>(а) The period of prescription is to be computed in analogy to the time fixed by the local statute of limitations as limiting the right of entry upon lands (Colvin v. Burnet, 17 Wend. 564, 567; Parker v. Foote, 19 Wend. 309; Miller v. Garlock, 8 Barb. 153; Hammond v. Zehner, 23 Barb. 473; Wood on Nuisances, § 701; 2 Washb. on Real Prop. [4th ed.] 318, 319, 322, 330 ; Vol. 3, Id. 52; Angelí on Watercourses, §§ 208, 209, 372, 375, note 4),and only the statutes as to limiting action by the people of the State apply since the State was originally the owner of the bed of the river and of the water power. People v. Denison, 17 Wend. 312; People v. Livingston, 8 Barb. 253; People v. Arnold, 4 N. Y. 508; People v. Trinity Church, 22 N. Y. 44.</p> <p>Prior to 1830, the limitation of an action by the people for real estate was forty years (2 L. 1788, c. 43, § 1; 1 R. L. 1801, p. 562, c. 183; 1 R. L. 1813, p. 184, c. 183), and was then made twenty years, by the Revised Statutes (2 R. S. 392, §§ 1, 2;, which limitation continued in force until 1848, when the Code of Procedure (§ 75) changed the limitation to forty years, as it now remains (Code Civ. Pro. § 362).</p> <p>The statute of limitations affects the lemedy only, and unless otherwise indicated by its terms, operates upon existing demands as well as upon those which arise in the future. Acker v. Acker, 81 N. Y. 143; Johnson v. Albany, &c. R. R. Co., 54 N. 7. 416. But it has been frequently held that neither of the statutes above referred to affects causes of action and.rights of entry upon land which existed before they took effect. Appleby v. Brown, 24 N. Y. 143; People v. Denison, 17 Wend. 312; Champlain & St. Lawrence R. R. Co. v. Valentine, 19 Barb. 481; Van Alen v. Feltz, 4 Abb. Ct. App. Dec. 439. See other cases cited in 4 Abb. N. Y. Dig. 245, 246.</p> <p>It follows, first, that where the adverse use of water power began before January 1, 1830, it must be shown to have been continued for forty years uninterruptedly; second, that where such adverse use began after January 1, 1830, and before July 1, 1848, it must have continued twenty years; third, that where such use began since July 1, 1848, it must continue forty years. See Champlain & St. Lawrence R. R. Co. v. Valentine, 19 Barb. 484; La Frombois v. Jackson, 8 Cow. 589.</p> <p>(б) The burden of proving a prescriptive right is upon the party asserting it. Wood on Nuisances, §§ 709, 710, 712; Gould on Waters, § 341; Hammond v. Zehner, 23 Barb. 473; Hart v. Mayor, &c. of Albany, 3 Paige, 213, 218; People v. N. Y. & S. I F. Co., 68 N. Y. 71, 77; cases cited in 4 Abb. N. Y. Dig. p. 247, par. 70; Hart v. Vose, 19 Wend. 365.</p> <p>(c) The land-owners’ prescriptive right to use the water power must be measured strictly by the user, and not by the claim under which they were acting. Washb. on Real Prop. 4th ed. vol. 3, pp. 321, 322, 330, 331; vol. 3, p. 54; Wood on Nuisances, §§ 704, 710-712, 717; Miller v. Garlock, 8 Barb. 153; Stiles v. Hooker, 7 Cow. 266; Russell v. Scott, 9 Cow. 279; Rexford v. Marquis, 7 Lans. 249, 261, 263; Angell on Watercourses, §§ 224, 379; Corning v. Gould, 16 Wend. 529.</p> <p>(d) The use must have been uninterrupted and continuous, Washb. on Real Prop. 4th ed. vol. 2, p. 326, et seg.; Gould on Waters, §§ 335, 336; Wood on Nuisances, §§ 703, 716, 719; Colvin v. Burnet, 17 Wend. 564; Miller v. Garlock, 8 Barb. 153; Parker v. Foote, 19 Wend. 309; Postlethwaite v. Payne, 8 Ind. 104; Stein v. Burden, 24 Ala. 130; 2 Washb. on Real Prop. 328; Campbell v. Seaman, 63 N. Y. 568, 585.</p> <p>(e) And the use must have been clearly adverse,—that is, an actual interference with the rights of the State and not under its permission. Townsend v. McDonald, 12 N. Y. 381; Flora v. Carbean, 38 N. Y. 111; 2 Washb. on Real Prop. 322, and cases cited; Wood on Nuisances, §§ 712, n. 2, 716, 727; Angelí on Waters, § 219; Gould on Waters. § 339; Colvin v. Burnet, 17 Wend. 564.</p> <p>(f) The use must be not only adverse to the interest of the owner of the servient tenement, but also acquiesced in by him, in order to give rise to a presumption of a grant and create a prescriptive right. 2 Washb. on Real Prop. § 326; Wood on Nuisances, § 715.</p> <p>Lucius N. Bangs, Esq., on behalf of the Niagara Falls Paper Manuf. Co., on the other hand contended, that such right to use the water power could be and liad been acquired by prescription.</p> <p>The only question is, has the adverse use continued for such length of time as to establish the presumption of a grant against the State ? The evidence discloses the fact that a paper-mill was constructed and operated as far back as 1884, upon the site of the present mill; and the statute of limitations, which was then twenty years, commenced running under that limitation and continued under that notwithstanding the change in the period of limitation made by the Revised Statutes in 1830. Champlain & St. Lawrence R. R. Co. v. Valentine, 19 Barb. 484. The contention that the occupancy of the stream was no obstruction in navigable waters, and therefore a nuisance which no length of time can legalize (Washb. on Easem. 480) is without force, because the river is permanently unnavigablc at-the point in question; and an erection in a navigable stream is not per se a nuisance, unless it is an interference with actual navigable uses. Regina v. Betts, 22 English L. Eq. 240, 246; Dutton v. Strong, 1 Black, 23. The burden of showing that the erection obstructs navigable waters lies with" the State in this case (Dutton v. Strong, supra), and the question must be determined by general and Axed laws and not arbitrarily. Yates v. Milwaukee, 10 Wall. 497.</p> <p>This company is not guilty of erecting a nuisance unless such erection renders proper passage of bouts, etc., inconvenient or unsafe. Ex parte Jennings, 6 Cow. 518; Chenango Bridge Co. v. Paige, 83 N. Y. 178, 185. See the opinion of Senator Beardsley in Canal Appraisers v. People, 17 Wend. 570,606. It is not necessarily a nuisance to erect an obstruction in a stream used to a limited extent for transportation, as for floating logs and such like uses. Lancey v. Clifford, 54 Maine, 487; Morgan v. King, 35 N. Y. 454; Ledyard v. Ten Eyck, 36 Barb. 102; 1 R. S. 7th ed. 573, § 67.</p> <p>The immediate and continued use by this company of the water for manufacturing purposes, is to be considered in construing the grant, if the language thereof is in any way questionable. Jackson v. Wood, 13 Johns. 346; Owen v. Bartholomew, 9 Pick. 520; Chad v. Tilsed, 2 Brod. & B. 403, 406.</p>

Demurrer to complaint. John Eggers sued Rudolph B. Klussmann to recover money deposited with defendant upon a wager.

I. June, 1884. Appeal to the county court of Orleans county from, a judgment of a justice of the peace in favor of the plaintiff. William J. Prussia, as overseer of the poor of the town of Gaines, sued George Guenther, before a justice of the peace, for penalties, alleged to have been incurred under L. 1857, c. 628, as amended by L. 1870, c. 175, and L. 1873, c. 820, by the sale of spirituous liquors in said town without a license.

Trial by the court. Harlan J. Woodward brought this action by Frank E. Smith, his guardian ad litem, against Julia L. James, individually and as executrix, &c., of the last will and testament of Frederick P. James, deceased, and others, for a construction of said will. The material facts appear in the opinion.

Trial by the court. Action by the widow of Mortimer Ward, deceased, as one of his executors, against Be Witt C. Ward, her co-executor, for the construction of the will of the deceased.

Final accounting of Arthur L. Andrews, as administrator with the will annexed of Andrew McClyment, deceased. The material facts appear in the opinion.

• Application for books and papers under article 5, §§ 55-61, title 6, chapter 5, and part 1 of the revised statutes (1 R. S. [2 ed.] 114 ; 1 R. S. [7 ed.] 376). John F. Bridgman, claiming to be the chamberlain of the city of Troy, applies for an order compelling Benjamin H. Hall, who also claims title to, and is in the actual possession of such office of chamberlain, to surrender to him the books and papers appertaining to said office.

Anna Baker sued Henry Baker, for damages, for maliciously and wrongfully enticing away plaintiff’s husband and thereby depriving her of the comfort, protection and benefit of his society and companionship. The plaintiff had a verdict, and defendant moved ' for a new trial on a case and exceptions.

Richard B. Whittmore and Thomas O. Hill, stockbrokers in the city of New York, in partnership as Whittmore & Co., sued A. Bell Malcolmson, Jr., for a balance claimed to be due on account of certain transactions in stocks. At the trial the plaintiff had a verdict, and defendant made this motion on the minutes of the trial justice for a new trial. Further material facts appear in the opinion.

Trial by the court. Application by Anthonius Sluiter and Nicolaus F. Sluiter, relators, for a mandamus to compel the respondents, The Holstein Friesian Association of America, to admit the relators to membership in such association, and to inspect and register in its herd-book, certain cattle owned by the relators. The material facts appear in the opinion.

The proceedings were instituted by Peter Schneider and others against Ignatz Altman and another as judgment debtors. In the course of the examination of Altman, it appeared by his testimony that the defendants had made a general assignment for benefit of creditors shortly before the judgment was recovered. Defendant’s counsel objected to a question thereafter asked, as to the claim of a certain creditor of the defendants at the time of the assignment.

I. Trial of issues raised by demurrer to complaint. Alfred A. Cohen sued the defendants, composing a firm of bankers in New York city, to rescind a syndicate agreement between the parties to this action and others.

Ralph Bagaley brought this action against William K. Vanderbilt, and others, personally, and as a committee for the subscribers of the South Pennsylvania Syndicate, and against the other subscribers to the syndicate, and the American Construction Co. and the South Pennsylvania Railroad Co., to procure a judgment adjudging the contract, made between the said railroad company and the said construction company, for the construction of said railroad, to be beyond the powers of…

<p>Action for Accounting. —Corporation ; what contracts ultra VIRES; PARTNERSHIP WITH INDIVIDUALS.—CONTRACTS; EXECUTED ENFORCED, THOUGH ULTRA VIRES; RESTRAINT OF TRADE.-PLEADING; PERFORMANCE OF CONDITIONS.</p> <p>A complaint by an Ohio corporation alleged the making of a contract between plaintiff and defendants, for refining and dealing in oil, and the retention by defendants of large sums in excess of their share of profits under the agreement, and asked for an accounting, payment, &c. On demurrer,—Held, that, assuming the contract to have been one of partnership between the parties, and, therefore, ultra vires as to the plaintiff corporation under its charter, that fact, while it would justify a court in refusing to aid the plaintiff in enforcing the contract by injunction so far as it remained executory, it did not avail the defendants as an answer to a claim that, so far as the contract was executed, they had applied to their own use moneys to which they were not entitled.</p> <p>A contract made the basis of a complaint will not, upon demurrer, be deemed void as in unlawful restraint of trade, and, therefore, contrary to public policy, if the contract is capable of a construction consistent with a lawful intent, although, upon a trial where all the facts are disclosed, it might appear that the arrangement was illegal, and to effect a combination inimical to the interests of the public.</p> <p>The rule that all reasonable intendments are to be indulged in support of a pleading demurred to,—applied.</p> <p>Although a contract designed to artificially enhance the price of a commodity by keeping the product of other persons out of the market, is illegal, yet one who puts money into a joint undertaking with strangers may lawfully bind them not to do more business than he thinks will be warranted by the capital to be employed, even if the result is to limit the production of a particular commodity.</p> <p>A complaint alleging that the plaintiff and defendants “ entered upon and continued to carry on ” the joint business provided for in the' contract between them in suit; that the defendants had applied to their own use from the receipts and profits of said business large sums of money greatly exceeding their proportion thereof, and that they refused to account,—Held (on demurrer for insufficiency in not averring due performance of all the conditions of the contract on the plaintiff's part), sufficient to sustain an action for an accounting.</p> <p>Note on t-he Legal Rules applicable to Syndicates and Pools, and their members.</p> <p>These organizations are voluntary associations which, by reason of their temporary character and limited objects, are not, to the full extent, subject. to all of the rules affecting partnerships, or, where they are so subject, it is often within narrow limits fixed by the character and objects of the organizations.</p> <p>The name “ syndicate ” was originally given and is still chiefly used to designate a combination of merchants or capitalists, to accomplish a venture beyond the resources and influence of any one of them. But it is sometimes used, as “ pool ” more commonly is, to designate a combination intended to bring about changes in the market price of a commodity or stock, or in rates of toll, or other common public charges. In either use of the word, it designates co-operation by uniting all interests of its members, in taking common ground as towards the public, and adjusting the results as between the members equally or according to special agreement.</p> <p>Such organizations are now extremely common, not only on the large scale in which they attract public attention, but in minor forms in which they are hardly deemed of sufficient significance to receive the name of syndicate. Their transactions have not very frequently been the subject of litigation until recently ; but the profession are frequently called upon to advise on them ; and the legal principles underlying them are common to all the various forms in which such organizations appear.</p> <p>The chief elements of fact usually involved in the existence and management of such an organization are :</p> <p>First. A combination for the purpose of acquiring interests or managing existing interests, together, in a different way from what the members would as individuals acting independently ; the object being to accomplish some financial result which could not be accomplished by individual action, and often with the purpose to gain some advantage over others of the same class who are not in the combination.</p> <p>Second. The subjection of the specific interest or business of each member, as far as agreed, to the control of the combination or of its managing member or committee.</p> <p>Third. The desistence of each member from other transactions of the same kind except under such control.</p> <p>Fourth. The administration, usually by a manager or managing committee, of the combined p'roperty or business, so as to take advantage of the paramount influence secured by the aggregate amount thus brought under single control.</p> <p>Fifth. The advantage expected to be enjoyed by all from peculiar facilities or means of information or judgment attributed to the member or committee entrusted with control.</p> <p>Sixth. The securing of an advantage to each member, either by the consequent more profitable management of each separate interest or by his right to share in the profits of all the transactions accomplished by the combination.</p> <p>The characteristic difference between a syndicate and a pool appears to be that a pool is usually the combination of a part of a class,—as a part of the stockholders or bondholders of a corporation or part of a number of corporations enjoying similarfranehises,or part of the merchants in a particular trade, —with the intention to bring their transactions into “ hotchpot ” and share in a fixed proportion the aggregate income or profit, while in a syndicate the interests of the members are often separate and distinct, like those of tenants in common.</p> <p>The principal questions of law which concern the subject are :</p> <p>What are the express obligations of each member under the arrangement made in the particular case ?</p> <p>What is the degree of good faith required in respect to acting exclusively for the common interest, and abstaining from any outside transactions for individual account ?</p> <p>What special degree of good faith is required of the manager, or members entrusted with control?</p> <p>What are the limits prescribed by law to the advantages which a part of the owners of shares in a corporation or in any property owned in common, or the owners of a few out of many franchises, may seek to obtain over the others by a combination to which the others are not admitted ?</p> <p>What are the limits prescribed by law to the attempt to influence prices, either in the markets at large, or of a particular estate or property, or of transportation charges and the like borne by the public generally, by means of a combination to diminish competition ?</p> <p>In the absence of any considerable body of adjudications made in reference to these organizations, the answers to these questions are to be sought in the general principles of the law of partnerships, voluntary associations, corporations, agency, contracts, trusts, and frauds, all of which are in turn, and in the various modes, involved.</p> <p>In the interesting group of cases which are presented in the text the first one,—Cohen v. Ellis,—relates to the obligation of the manager or managing committee or bankers of a syndicate. The second,—Bagaley v. Vanderbilt,—involves to some extent the right of members among themselves, and the power of the majority where there is a dissenting member. The third case,—Standard Oil Co. v. Scofield,—turns on the question of the power of corporations to enter into combinations, and the validity of a contract for such purposes.</p> <p>The following cases will afford the reader a convenient clue to research into the manner in which the American courts have applied familiar legal principles to the transactions of these organizations and their members.</p> <p>I. Judicial Construction op Joint Undertakings.</p> <p> A. Where there has been held to he a partnership. </p> <p>Five persons formed what was called a syndicate for the purchase of a coal mine with a view of forming a company, agreeing that the profits should be equally divided. He Id, that this formed a partnership for this limited purpose. Sir George Jbssel said: “ It is called a syndicate but it is nothing but a partnership.” Anderson’s Case, L. R. 7 Chan. Div. 75, 96.</p> <p>Several parties purchased land on speculation, each party contributing to the expense. The title was taken for convenience sake in the name of trustees. Held, to be a partnership. Morse v. Richmond, 97 111. 303.</p> <p>Where there was an agreement that land should be bought and held in trust for all parties, the absence of a stipulation that the parties should share equally in losses, was held not to prevent its being a partnership. Richards v. Grinnell, 63 Iowa, 44; S. C., 18 Northw. Rep. 668.</p> <p>Complaint alleged that complainant was to give his services and defendant to advance money for the purchase of land ; that complainant and defendant were to have equal interest in lands so purchased and divide profits. Held, on demurrer, that the allegations made out a case of partnership and not of mere agency. Hunt v. Erikson (Mich. 1885), 23 Northw. Rep. 832.</p> <p>Three parties agreed to manage certain property “ as a company.” Held, that this formed a present partnership, although the agreement provided' for a postponement of division of the profits. Bybee v. Hawkett, 12 Fed. Rep. 649.</p> <p>Where the evidence showed that one party was to have half of the profits of a venture to be conducted chiefly by the defendant, and testimony as to the exact nature was conflicting, it was held that whether the agreement formed a contract of partnership or not, there existed between the parties a fiduciary relation entitling the plaintiff to an accounting. Sutherland v. Carter, 52 Mich. 151, 471; S. C., 18 Northw. Rep. 223, 875.</p> <p>In Cooley v. Broad, 29 La. Ann. 345; S. C., 29 Am. R. 332, partnership by community of profits was held to be established by a contract by which the owners of vessels united in one association.</p> <p>In Marsh v. Russell, 66 N. Y. 288; rev’g 2 Lans. 340, a combination of recruiting agents to pool their profits and losses in their respective businesses of furnishing town quotas, upon an agreement requiring each to keep up the price,-—was held a partnership.</p> <p> B. Where it has been held that a partnership did not exist. </p> <p>A- scheme contemplated the raising of subscriptions to form a fund for the purpose of purchasing municipal bonds. The bonds were to be purchased by a committee named in the deed. The subscribers to the fund received certificates entitling the holders to part of the profits. It was held, that the subscribers were not partners. Johnson v. Lewis, 2 McCrary, 479.</p> <p>Compare Abb. Tr. Ev. 210, para. 16.</p> <p>A contract was made between A., the owner of a marble quarry, and B., that A. should quarry the marble and deliver it to B. and pay half of express charges ; that B. should build the mill, manufacture the marble, sell it; and that the profits should be divided between the two. Held, not to constitute a partnership. Flint v. Eureka Marble Co., 53 Vt. 669.</p> <p>Several persons signed articles of association with the object of forming a company. The scheme of incorporation failed, but the persons named in the articles for president and treasurer of the company which was to be formed, carried on business with the consent of the subscribers. Held, that they were not partners. Ward v. Brigham, 127 Mass. 24.</p> <p>See also Stafford Bk. v. Palmer, 47 Conn. 443.</p> <p>in Adriatic Fire Ins. Co. v. Treadwell, 108 U. S. 361, a combinafdon of corporations to defend suits, which should be brought against them severally, the suits to be managed by a committee, and the companies to pay pro rata for counsel,—was held, in effect, not a partnership.</p> <p>See, also, cases cited in brief of counsel in the case in the text, ante, p. 367.</p> <p>II. Oases relating to Doties of Pasties to Joint Undebtakings BETWEEN THEMSELVES.</p> <p> A. Partners. </p> <p>After a firm was dissolved, it was agreed to carry on the liquidation of the business together, in the premises occupied by the firm. Thereupon one of the members and a third party procured a renewal of the lease of the premises to them without the knowledge of the other members. Held, that they held such leases as trustees for the firm. Spiess v. Rosswog, 48 Super. Ct. (J. & S.) 135; applying the case of Mitchell v. Reed, 61 N. Y. 123 ; S. C., 19 Am. R. 252 ; reversing 61 Barb. 310. The case of Mitchell v. Reed was approved in 2 Pom. Eq. Jur. 624, n. Followed in Green v. Green, 2 Redf. Surr. 408. Qualified in Abb. Ann. Dig. N. Y. 1883, p. 361, opin. of Cooley, J. See a further decision in Mitchell v. Reed in 19 Hun, 418 ; affirmed in 84 N. Y. 556.</p> <p>See also cases collected in 34 Moak Eng. 299.</p> <p>Where a partnership business was to be carried on under the articles at a given spot, “or in such other place or places as the partners may agree upon,” and the lease of the premises where one branch of the business was carried on expired, it was held that one partner had no power to renew the lease without the consent of the other partner. Clements v. Norris, 38 L. T. R. N. S. 591.</p> <p>After the death of one partner, one of the surviving partners falsely represented to his copartners that he had bought the interest of his deceased, and thereby prevented their negotiating for the purchase. He subsequently did purchase such interest. Held, that he held it in trust for all. Warren v. Schainwald, 62 Cal. 56.</p> <p>Some of the partners purchased the interest of a copartner, through a third person, concealing that the purchase was made for their account. Held, that this did not amount to fraud as a matter of law. Geddes’s Appeal, 80 Pa. St. 442.</p> <p>Where the articles of copartnership provided that none of the partners should engage in speculation or in any other business on his own account, and one of the partners, with the knowledge and without the objection of the others, devoted part of his time and material [belonging to the firm to the perfecting of certain patents,—Held, that these facts did not give the member of the firm any interest in these patents. Belcher v. Whittemore, 134 Mass. 330.</p> <p>See, as to right of one partner to give to another an interest in his share, Cassels v. Stewart, L. R. 6 App. Cases, 64.</p> <p>By articles of partnership, defendant, the managing partner, covenanted that “he would not alone, or with any other person, either directly or indirectly, engage in any trade or business except on account and for the benefit of a partnership.” The business of the firm .was that of salt brokers, selling salt on commission for manufacturers. After the expiration of the partnership, the plaintiff, the other partner discovered that the defendant, after the formation of the patnership, had entered into a secret partnership with one of their customers, and had carried it on simultaneously with the partnership with the plaintiff. Held, that the plaintiff had no right to share in the profits of defendant in the secret partnership, but the only remedy was by injunction or dissolution, or, after the termination of the partnership, by action for damages. Dean v. M’Dowell, 26 Weekly Rep. 486.</p> <p>Plaintiff had been a sort of silent partner in working a construction contract. He brought action for an accounting, and recovered $5,000 for his share of the profits on work done after his partner had canceled the contract made with him, or pretended to do so on account of his absence, and had taken in another .partner. The court applied the principle that one partner cannot by his own mere will dissolve a partnership formed for a definite purpose or period, and thereupon appropriate to himself the assets or turn over the shave of his partner to another with whom he proposes to form a new partnership, and that if he does so, the excluded partner is nevertheless entitled to his share of the profits realized. Pearce v. Kuykendall (U. S. Supm. Ct. Oct. 1884).</p> <p>See, as to mining partnerships, Bissell v. Foss, 114 U. S. 252. It is held there that a member of a mining partnership has the right, without consulting his associates, to sell his interest in the partnership to a stranger. It is further held that there is no relation of trust and confidence between such partners as makes the purchase of the Interest of an associate by another inure to the benefit of all. See Kahn v. Smelting Co., 102 U. S. 641 ; First Nat. Bank v. Bissell, 2 McCrary, 73.</p> <p> B. Stockholders. </p> <p>A company owned an iron mine. The defendants organized a corporation to work the mine, of which they held all the stock; they purchased a majority of the stock of the company which owned the mine, and assumed control of the business. At their instance a stockholders’ meeting was held, which removed the directors, appointed defendants in their stead, and authorized the lease of the property at very disadvantageous terms to the corporation organized by defendants. Held, a fraud on the minority of the mining company, and that they had the right to have the lease set aside. Meeker v. Winthrop Iron Co., 17 Fed. Rep. 48 (with, note by Francis Wharton). See Goodin v. Cinc. Canal Co., 18 Ohio St. 169, 182.</p> <p>Where, in dissolving a corporation, a majority of stockholders favor unduly the interest of another corporation, in which they also form a majority, at the expense of the interests of the minority,—Held, that the court would interfere, though the acts were within the charter powers of the corporation. Ervin v. Oregon Ry. & Nav. Co., 20 Fed. Rep. 577.</p> <p>See note to Cook v. Sherman, 20 Fed. Rep. 167; Wright v. Orville Mine Co., 40 Cal. 27; Menier v. Hooper Tel. Works, L. R. 9 Ch. App. 350, 353; Barr v. N. Y., L. E. & W. R. R. Co., 96 N. Y. 444.</p> <p>All the stock of a corporation had been issued to certain defendants who were elected its officers. They afterwards entered into some transactions about the stock between themselves. Held, that as to these they dealt at arm’s length, and though, as officers and stockholders, they occupied trust relations to the corporation, that fact did not create trust relations inter sese. Gillett v. Bowen, 23 Fed. Rep. 625.</p> <p>See, also, Reichwald v. Commercial Hotel Co., 106 Ill. 439.</p> <p> G. Bondholders. </p> <p>Where a statute provides that a reconstruction of a company can be made at the instance of a majority of the debenture-holders, the court has the right to inquire whether the persons voting in favor of the scheme were acting bona fide in the interest of all the debenture-holders ; and it was held that the vote of persons who would be benefited to a much greater extent by the proposed reconstruction in other capacities than they would be injured by it as holders of bonds, could not be taken into consideration. In re Wedgwood Coal Co., L. R. 6 Ch. Div. 627.</p> <p>A statute of a foreign State, by which the majority of bondholders of a corporation created under the laws of that State, were given the right to bind the minority, was held not to be inequitable, and was enforced, although it was passed after the bonds had been issued. It was intimated that the same provisions might be made in a statute Of the United States, under the provisions of the constitution confering power to establish uniform laws on the subject of bankruptcy. Canada South. R. R. Co. v. Gebhard, 109 U. S. 527.</p> <p>It was held in Gilfillan v. Union Canal Co., 109 U. S. 401; that though bondholders are not necessarily bound like stockholders, in the absence of fraud or undue influence, by the will of the majority, they occupy to some extent an analogous position towards each other. A law passed by a State, that unless the holders of bonds should signify their dissent from a proposed plan of reorganization, they would be held to assent,—Held, proper and not an impairment of the obligation of the contract.</p> <p>In Pennock v. Coe, 23 How. (U. S.) 117, the defendants, holders of some of the mortgage bonds of a corporation, got a judgment on the bonds and were about levying execution on the property covered by the mortgage. In an action to enjoin them from levying execution, it was held that all the bondholders had a common interest in the security, and were equally entitled to benefit from it, and that to permit one of them to proceed at law would give him an inequitable preference over his associates.</p> <p>III. Cases Relating to duty on Persons Organizing and Managing such Associations.</p> <p>A syndicate was formed between five persons to purchase a certain mine. One of the five, who was entrusted with the negotiations, and of whose knowledge and information the other four availed themselves, represented to them that it was impossible to obtain better terms than the price asked by the vendor. At the time he made those statements, he had made a secret contract with the vendor guaranteeing to him a large bonus, if the sale should take place. The sale was made to the syndicate while the other parties were in ignorance about this agreement. Held,, that, as between the members of the syndicate, the sale could not be sustained. Beck v. Kantorowicz, 3 K. & J. 230.</p> <p>Where a person had induced another, by false representations that he had no interest in the matter, to authorize him to purchase certain property at a much higher price than it could be bought for, and part of the excess was paid to the agent,—Held, that the remedy of the party deceived against the agent was an action at law for damages not an action in equity to rescind the contract. McMillan v. Arthur, 98 N. Y. 167.</p> <p>A., B. and 0. agreed to put up a certain amount to purchase a particular piece of real estate, and left the negotiations to A. A. agreed secretly with the seller that the latter would convey part of the property to him, if he succeeded in bringing about the sale. Thereupon A. told his associates that part of the lot had been sold, but that the remainder could be bought for the sum they had put together. The sale was made, and part of the lot conveyed to D. at request of A. On discovery of the fraud, it was held that A.’s associates were entitled to a decree that, D. held that part as trustee for them also. Hodge v. Twitchell (Minn. 1885), 23 Northw. Rep. 547.</p> <p>In an action by a limited liability company against certain persons who were promoters thereof, to set aside a contract for the sale to the company of certain property, in which the promoters were the real vendors, it was held, sustaining'the company’s right to the relief asked, that the promoters stood in a fiduciary position to the company, analogous to that of a trustee, so far as to preclude them from deriving any profit from the sale in question. New Sombrero Phosphate Co. v. Erlanger, L. R. 5 Ch. Div. 73.</p> <p>In Wilson v. Church, 41 L. T. R. N. S. 50, it was held that bondholders who had lent their money for a common object, which turned out to be, in a business and commercial sense, impracticable, had a right to have their money returned, as against any number of other bondholders who insisted that the money, which had not yet been applied, should be used as intended ; that the majority of bondholders could not bind the minority, but the minority had no right to insist on having the common fund thrown away.</p> <p>Several persons signed and issued a subscription agreement, to the effect that they, with those who should unite in the agreement, designed to become joint purchasers of certain property at a certain price. One of these persons undertook to receive the sums subscribed as a trustee for the purpose of applying them to the payment of the purchase money. Held, that these persons were precluded from making a profit out of their associates by being themselves the vendors of the property, which they had acquired for a much smaller sum than the one mentioned in the agreement. Getty v. Devlin, 54 N. Y. 403 ; S. C., 70 Id. 504. This case is explained in Brewster v. Hatch, 13 Abb. N. C. 460, below cited, and in Moak's Underhill on Torts, 1 Am. Ed. 535.</p> <p>Where a person is organizing a mining company and induces other persons to sign a paper by which they agree to take some of his stock, there is no such trust relation between him and the subscribers as compels him to disclose all the arrangements between him and the company. The agreement on its face shows that the subscribers do not get stock, issued directly to them by the company, but buy the stock of the person who induces them to subscribe; and the only duty of that person to them, therefore, was not to make false representations. Brewster v. Hatch, 13 Abb. N. C. 460. See same case, on demurrer, 10 Abb. N. C. 400.</p> <p>Where a person who was owner of an undivided half of land and was charged with the sale, introduces evidence tending to prove that before obtaining his power of attorney he told his co-owners that he would make special terms for his own share, and that they consented to this, it is error for the court to charge in an action brought to recover a share in the extra profit, that the plaintiffs are entitled to recover, unless it is shown that all the facts relating to the sale, even after the power of attorney has been obtained, have been communicated to them. The evidence tended to show that there was an antecedent consent fairly obtained, and the charge of the court was to take this point from the jury. Ranney v. Barlow, 112 U. S. 207.</p> <p>See Emma Silver Min. Co. v. Grant, L. R. 11 Ch. Div. 938, to the effect that the liability of a trustee de son tort to refund a profit is incurred at the moment the profit is made, and is not affected by the fact that, by some subsequent arrangement, the purchase price is reduced so that the cestui qui trust does not incur any damage.</p> <p>As to the liabilities of third persons who act with knowledge that the manager is unfaithful to his trust, see Bear v. American Rapid Tel. Co., 60 How. Pr. 274.</p> <p>As to the rights of manager, if a contract has been made with him that he shall have exclusive management, see Grant v. Parker, 115 U. S. 51. In that case it was held that where a person had joined a syndicate to buy the majority of stock in a mining company, on condition that he should control the management of the mine, and had thereupon been elected president, it was no violation of the agreement if the directors passed resolutions to the effect that checks should be countersigned by the secretary, and that the vice-president should have the power to sign checks in the absence of the president.</p> <p>Bor recent cases as to averments necessary to excuse the fact that a party has not understood the meaning of an instrument lie signed, see Hazard v. Griswold, 21 Fed. Rep. 178 ; McKinney v. Herrick, (Iowa, 1885), 23 Northw. Rep. 767 ; Linington v. Strong, 111 Ill. ; Abstr. S. C., 32 Alb. L. J. 157 ; Davis v. Snider, 70 Ala. 315. See also Redgrave v. Hurd, L. R. 20 Ch. Div. 1. In the latter case, an attorney had advertised that his practice was worth £300 a year. An intending purchaser was shown papers showing receipts to the amount of £200. On asking for the remaining £100, he was shown some memoranda, which in reality, only amounted to a few pounds. Without reading them, he closed the sale. Held, in an action to rescind, that he did not give up his original reliance on the false statements and that his mere negligence to inquire further was not sufficient to debar him from equitable relief.</p> <p>The distinction between an agency of bankers acting for a munic- . ipal corporation to place a loan by its issue of bonds, and a purchase by bankers or a syndicate from a municipal corporation, was discussed in Whelen’s Appeal (Penn. Supm. Ct., October, 1885, 2 Eastern Rep. 1), the court holding that where the city had power to issue bonds, provided they be sold at not less than par, but with power to allow reasonable compensation for sale on negotiation—a sale at par by bankers with the reservation of a commission to the-latter to be deducted from the price was ultra vires.</p> <p>IV. Agreements for Joint Action held Void.</p> <p> A. As being opposed to the Policy of a Statute. </p> <p>A statute authorized a town to receive sealed proposals for the collection of the taxes of that town, and awarded the collection thereof to the persons offering terms most favorable. Agreement-was made between two parties, who sent in proposals, that, if either of them obtained the award of the collection of the taxes, both should share equally in the profits and be liable to an equal share of the losses. Held, that such an agreement was void, even though it did not appear that such agreement did really produce any result detrimental to the public interest. Atcheson v. Mallon, 43 N. Y. 147.</p> <p>A statute provided that a town should give its printing to the lowest bidder ; an agreement was made between several printers that they would make a joint bid and that all would participate in the profits. Held, that such a contract was void, if the intention, effect or necessary tendency was to diminish competition,’and that the burden of proof to show that this was not the fact was on the persons wishing to enforce the contract : (citing Breslin v. Brown, 24 Ohio St. 565). Woodruff v. Berry, 40 Ark. 251. Compare, however,, Marsh v. Russell, 66 N. Y. 288; rev’g 2 Lans. 340.</p> <p> B. Combination of Common Carriers. </p> <p>The owners of canal-boats made a pooling arrangement, and agreed! to divide all the earnings made, in a certain ratio. Held, that such an agreement was an act “injurious to trade,” and was illegal within the provisions of the statutes on that subject. Hooker v. Vandewater, 4 Den. 349.</p> <p>Compare Hatch v. Am. Union Tel. Co., 9 Abb. N. C. 223, 233; see-also Stanton v. Allen, 5 Den. 434, with which compare also note in 30 Am. R. 106; art. in 16 West. Jur. 329.</p> <p>A contract made between two connecting railroad companies to-pool profits, and not to do any business with companies which might be organized within the territories over which the business of the parties to the contract extended, held unlawful. Denver & N. O. R. R. R. Co. v. Atchinson, Top. & Sta. Fe R. R., 15 Fed. Rep. 650.</p> <p>It was further field in that case, that another railroad subsequently organized, might claim the same facilities for traffic, and the same rights which had been arranged between the parties to the agreement. The case was reversed on that point in 110 U. S. 667. The decision of the supreme court does not seem to be adverse to that part of the decision of the circuit court which was quoted above. See, as to pooling arrangements, note in 15 Fed. Rep. 667.</p> <p> G. To liaise the Price of Merchantable Commodities. </p> <p>A voluntary association of salt manufacturers, providing that all the salt manufactured should become the property of the company, and should be sold at prices to be fixed by the company, and prohibiting the members of the association from selling except at retail, —Held, to be invalid. Salt Company v. Guthrie, 35 Ohio St. 666.</p> <p>The grain dealers of a town entered into a secret arrangement to poo] profits, fixing the price at which grain should be sold and stored. The agreement provided that the business should be conducted outwardly as if there were no partnership. Held, a fraudulent combination in restraint of trade, and void. Craft v. McConoughy, 79 Ill. 346; S. C., 22 Am. R. 171.</p> <p>In Hoffman v. Brooks (Cinn. Super. Ct., 11 Weekly L. Bull. 258), a pooling contract, made by all the tobacco warehousemen in Cincinnati, to provide against competition, by forbidding certain methods of doing business, and fixing a complete schedule of prices, was held void as against public policy. The contract provided for the collection of a guarantee fund from a pool formed out of part of the receipts, and each party was made liable to forfeit his interest, as well as to pay a heavy fine, in case of his violation of any condition of the contract. The action was brought on a certificate of indebtedness given to the trustees of the association, as representing part of the receipts to be put into the pool; and the plaintiffs sought also for an account of the business done by the defendants subsequent to the time when they refused to continue to abide by the contract. The court held that, as the contract embraced all the persons engaged in the business in the city, was unlimited in duration, and had the effect to remove prices beyond the operation of every natural cause of fluctuation, it must be regarded as against public policy; and as the invalid provisions could not be separated from some which were otherwise valid, no recovery could be had.</p> <p>An agreement between two coal companies by which one agrees to buy a certain quantity of the other, in consideration of that company. not selling to any one else, is void. Arot v. Pittstown and Elmira Coal Company, 68 N. Y. 558; S. C., 23 Am. R. 190; rev’g 2 Hun, 591; S. C., 5 Supm. Ct. (T. & C.) 143. Followed in Raymond v. Leavitt, 46 Mich. 447; S. C., 41 Am. R. 170 ; McBirney & Johnston White Lead Co. v. Consol. Lead Co., 9 Cin. L. Bul. 310. See also Lewin v. Johnson, 32 Hun, 408. See Morris’ Run Coal Co. v. Barclay Coal Co., 68 Penn. St. 173 ; S. C., 8 Am. R. 159.</p> <p>An agreement to advance the selling price of stocks by means of fictitious dealings designed to produce a false impression on the minds of observers concerning their real value, is void. Livermore v. Bushnell, 5 Hun, 285.</p> <p>An agreement was made on the following terms: “For value received from and paid to each other, we, the undersigned stockholders of the Genesee Valley Canal Railroad Company, mutually agree with the other and to all, that we will not sell, assign, transfer, set over, pledge or give power of attorney to vote, or agree to sell, assign, transfer, set over, pledge or give power of attorney to vote in any way, shape or manner the stock which we respectively or individually own or possess in said company, without the concurrent consent of all the signers to this instrument. . . This agreement is made for mutual protection, and to prevent the sale of the company’s franchise by a majority of the members of the present board of directors who are and who represent a minority of the shares of the capital stock of this company.” Held, that this agreement was void, as being, among other reasons, against public policy and in restraint of trade. Fisher v. Bush, 35 Hun, 641.</p> <p>See articles on the subject Am. L. Reg. April and May, 1885 ; 19 Cent. L. J. 62, 81.</p> <p>V. Contracts for Joint Action which have been Sustained.</p> <p>An agreement among the stevedoies of a certain port to divide the stevedoring business, sustained. Collins v. Locke, 4 L. R. App. Cas. 674.</p> <p>Pooling agreements between railroads, sustained, in Hare v. London & Northw. Rw. Co., 30 L. J. Chan. Div. 817 ; Shrewsbury R. R. Co. v. The Same, 20 L. J. Chan. Div. 90, 102.</p> <p>An agreement was made between parties engaged in the business of furnishing recruits, to divide profits and not to furnish recruits under $100. Held, valid, and the case of Hooker v. Vandewater, 4 Denio, 349, and similar cases, distinguished, on the ground that in the case at bar the primary object was not to raise prices. Marsh v. Russell, 66 N. Y. 288; rev’g 2 Lans. 340; reviewed in Story Partn. 7 ed. § 6, n.</p> <p>Several parties owning stock of a corporation entered into an agreement, with the purpose of affecting a change in the administration of the company's affairs, to the effect that the stock of the parties should be combined and not sold until after election. Held, that the agreement was valid. Havemeyer v. Havemeyer, 43 Super. Ct. (J. & S.) 506; affirmed, 86 N. Y. 618.</p> <p>It was held, incidentally in Wabash, St. L. & P. R’y. Co, v. Cent’l Trust Co., 22 Fed. Rep. 138, that the holders of bonds of a corporation have such common interests that combinations for the common protection should be recognized and enforced by the court.</p> <p>In Harrison v. Lockhart, 25 Ind. 112, the rule was laid down, that an agreement which would have been void as tending to raise the price of commodities according to general rules, would be enforced if the trade which it restrained was contrary to public policy, and that therefore such an agreement between dealers in spirituous liquors should be sustained.</p> <p>VI. Distribution of Proceeds accumulated under Illegal Contract.</p> <p>An agreement was made to which directors of a corporation were parties to purchase land and sell it to the railroad in order to locate its tracks. In an action for an accounting, brought after the sale was made, against the p.erson who had received the money, it was held, that a person who had merely contributed services was not entitled to such an accounting, as to allow this, would be to enforce an illegal contract; but otherwise as to one who had actually contributed money as his right of action was not based on the illegal contract, but existed independently of it. Cook v. Sherman, 20 Fed. Rep. 167.</p> <p>See also Western Un. Tel. Co. v. Burln. & Sth. Westn. R. R. Co., 11 Fed. Rep. 1, 6 ; Wann v. Kelly, 5 Fed. Rep. 584 ; Norton v. Blinn, 39 Ohio St. 145 ; Woodworth v. Bennett, 43 N. Y. 273.</p> <p>A pooling contract between two railroads had been fully carried out, and its existence was known to the parties who, on foreclosure of a mortgage made by one of the railroads, had asked for the appointment of a receiver. Held, that the receiver would be ordered to pay over the money accumulated under the contract to the other railroad in pursuance of the provisions of the agreement, without reference to its original validity. Cent. Trust Co. v. Ohio R. R. Co., 23 Fed. Rep. 806.</p>

<p>Action to enjoin publication of plaintiff’s name as a debtor. —Temporary Injunction.</p> <p>An association incorporated to protect dealers from giving credit to delinquent debtors to members thereof, cannot be restrained by injunction from publishing to its members, the plaintiff’s name as such a delinquent, if he be in fact so indebted, and such publication will be the truth.*</p> <p>* A complaint alleging that the defendant, a commercial agency, published a false statement of a recovery of judgment against the plaintiff, and that “ such false and libelous publication greatly injured and damaged the plaintiff,” states no cause of action, as no special damages are alleged, and none are presumed to have ensued from such a libel. Woodruff v. Bradstreet Co., 35 Hun, 16.</p>

<p>Claim against the State.*—Negligence op public officers.— Witness having interest.—Maxim, respondeat superior.</p> <p>The State of New York is liable to an individual, under the board of claims act (Z. 1870, c. 321, § 1),—which provides for claims against the State, for damages from the canals or from their use and man* agement, or resulting or arising from the negligence or conduct of officers of the State, having charge thereof, or resulting from any other matter or thing connected with the canals, provided the facts would create legal liability if established against an individual or corporation,—whenever an individual or corporation engaged in a similar enterprise would be liable.</p> <p>* See notes on Bemedies against a State, at the end of this case.</p> <p>The case of Lewis v. State, 96 N. Y. 71, distinguished.</p> <p>The liability is not confined to cases arising from the negligence of officers having the duty of general supervision, but includes damages resulting from the negligence of subordinate officers and employees.</p> <p>The maxim respondeat superior applies against the State in such cases.*</p> <p>The liability arises in favor not only of those who navigate the canals or whose property is transported, but also of the public at large; and one whose premises are injured by a break in the canal in ' consequence of the want of proper care on the part of the lock-tender, has a right to recover against the State.</p> <p>It is the duty of the State to maintain a constant watch at such gates at dangerous places, until the close of navigation and the permanent fastening of the gates for the season. &</p> <p>The testimony of the employee that he performed the duty which plaintiff alleges to have been neglected, is not conclusive against the liability of the State, even in the absence of affirmative evidence showing who caused the injury; for, being an interested witness, the trial court is not under legal obligation to give implicit credit to his testimony.</p> <p>* Otherwise of ordinary claims for negligence, not embraced in any such statute. Gibbons v. United States, 8 Wall. 269; Clodfelter v. State, 86 N. C. 51; S. C., 14 Rep. 410.</p> <p>Note on Remedies against a State.</p> <p>The common law rule that a sovereign State could not be sued has been encroached upon in several directions t 1, by statutes adopted in a few of the States, allowing actions against them ; 2, by a recent decision sustaining the right of a citizen to sue his own State in the United States circuit court; 3, by decisions recognizing, somewhat more distinctly than formerly, if not extending, the right to sue an officer of the State, in respect to property or powers held by him as such, or acts done as such under circumstances which may often entitle him to require the State to indemnify him if judgment goes against him; 4, by statutes adopted by the United States, and by this State and some others, establishing courts or boards of claims, which proceed in a judicial manner.*</p> <p>The following cases illustrate these remedies.</p> <p>In a case where the State is not liable to be sued, appearance by the attorney general and answering, does not give jurisdiction (Matter of Dunn, 8 S. C. 207 ; Adams v. Bradley, 5 Sawyer, 217); except, perhaps where it is joined not to make it liable, but because it has an interest in the subject of'the action, and is joined and appears for the purpose of protecting that interest.</p> <p>Compare Orford Union Cong. Soc. v. West Cong. Soc., 55 N. H. 463 ; Skiddy v. Atlantic M. & O. R. R. Co., 3 Hughes (U. S.) 320 ; Dabney v. Bank of the State, 3 S. C. 124 ; Stevens v. Stevens, 24 N. J. Eq. 77 ; (where the court directed the attorney general to file an information); Swasey v. North Carolina R. R. Co., 1 Hughes (U. S.) 17.</p> <p>1. Statutes expressly authorising. States to be sued.</p> <p>Actions against the State have been authorized to a greater or less extent iu:</p> <p>Alabama, State v. Hill, 54 Ala. 67.</p> <p>Mississippi. Whitney v. State, 52 Miss. 732 ; Green v. State, 53 Id. 148.</p> <p>Nebraska. State v. Stout, 7 Nebr. 89.</p> <p>Tennessee. State v. Bank, 3 Baxt. (Tenn.) 395.</p> <p>Wisconsin. Chicago, M. & St. P. Rw. Co. v. State (53 Wisc. 509; S. C., 10 Northw. Rep. 560 ; Baxter v. State, 10 Wisc. 454 ; Sloan v. State, 51 Wisc. 547, 623; S. C., 8 Northw. Rep. 393.</p> <p>England, by petition of privilege, see U. S. v. O’Keefe, 11 Wall. 178, 184, and U. S. v. Lee, 106 U. S. 196, 205, 238.</p> <p>Also in New Zealand. Reg. v. Williams, 51 L. T. R. N. S. 546.</p> <p>An act enabling to sue does not imply an admission of a cause of action. Commonwealth v. Stevens, 3 Ky. L. Rep. 165 (not to be Otherwise reported). S. P., Webb v. U. S., 13 Wash. L. R. 587.</p> <p>An act enabling to sue is a matter of grace, and with the repeal of an action brought under it, falls. Exp. State, 52 Ala. 231; South. & North. Ala. R. R. Co. v. State, 53 Id. 637.</p> <p>But query, as to actions on contracts made with the State, and transactions had, after the enactment of such a law.</p> <p>* The reader will find a ready clue to other recent discussions of the liability of a State to be sued within itself, in 7 Southern L. Rev. N. 8 544 ; 18 Am. L. Rev. 814.</p> <p>It was held in Trustees of Male High School v. Hewitt (Ky., 1882) 4 Ky. L. Rep. 34, that the State statute authorizing actions to be brought against the State, without mentioning the subject of limitations, did not make such actions subject to the general statute of limitations; but left such actions subject to the common law principle that the statutes of limitations of a State do not affect the State itself unless so expressed. See, also for that rule, Whitney v. State, 52 Miss. 732.</p> <p>S. P. in the case of a discharge in bankruptcy. State v. Shelton, 47 Conn. 400; abstr. S. C., 23 Alb. L. J. 453.</p> <p>So held also of a provision that the statute of limitations should be applicable to all actions brought by or against all bodies corporate or politic. Des Moines v. Harker, 34 Iowa, 84.</p> <p>But compare Baxter v. State, 10 Wisc. 454.</p> <p>Compare Gibson v. Chouteau, 13 Wall. 92, where the fact that the mischief to be remedied by a statute of limitations is of such a nature that it must necessarily be included, was recognized as a ground for allowing the application of the general statute of limitations by-implication.</p> <p>See next case, post, and foot-note, p. 448.</p> <p>In Strong v. State, 57 Ind. 428, the statute of limitations was, applied against the State.</p> <p>If this be sound, the question then arises whether the limitation,, when the statute contains one, is available if not specially pleaded by the State.</p> <p>See an analogous question in respect to the special limitation ini the statute of divorce, in Kaiser v. Kaiser, 16 Hun, 602; and see Londriggan v. N. Y. & N. H. R. R. Co., 12 Abb. N. C. 273, 274, note..</p> <p>2. Right of a citizen to sue his own State in the United States circuit' court.</p> <p>The recent decision to this effect in Harvey v. State of Virginia, 20 Fed. Rep. 411; abstr. S. C., 18 Am. Law Rev. 1078, has been commented on in 19 Cent. L. J. 118, and 8 Va. L. J. 384, 445, 641.</p> <p>The New York and New Hampshire, statutes allowing citizens to-assign claims against another State to- their own State, for purpose of a suit for their benefit were held unconstitutional*. New Hampshire and New York v. Louisiana, 108 U. S. 76. Mr. Field’s argument in this case is in vol. 2 of- his Speeches, p. 422.</p> <p>3. Suits against officers.</p> <p>For recent decisions on the extent and limit of. the power to-recover against an officer when an action against the State itself would be precluded by the common law rule, see U. S. v. Lee, 106 U. S. 196, 215; Poindexter v. Greenhow, 114 U. S. 270, 286; State v. Doyle, 40 Wisc. 175; Graham v. Horton, 6 Kans. 343; Western R. R. Co. v. De Graff, 27 Minn. 1; S. C., 15 West. Jur. 120; Chaffraix v. Board of Liquidation, 11 Fed. Rep. 638; State of Louisiana v. Jumel, 107 U. S. 711, 726; abstr. S. C., 21 Am. L. Reg. N. S. 136; Cunningham v. Macon, &c. R. R. Co., 109 U. S. 446, &c.; and see Branch v. Macon, &c. R. R. Co., 2 Woods, 385.</p> <p>Although a suit is nominally brought against an executive officer of a State by his name, yet if he has no interest, and a right of the State is the only matter in controversy, the State is the real defendant, and the suit is within the prohibition of U. S. Const. Amend. 11; State v. Doyle, 40 Wisc. 175.</p> <p>A government is not subject to garnishment; nor is an officer of its revenue when funds sought to be reached belong to government or are claimed by it and it has the - possession thereof by him, he having no connection therewith as a private person, but having received them in his official capacity from his superiors as public money and holding them as such when served with the summons, and continuing so to hold it until transferring them by order of government to another similar officer. And it makes no difference that the government is not de jure, but merely de facto. Wilson v. Bank of Louisiana, 55 Ga. 98.</p> <p>A suit in a United States court to compel, by mandatory injunction, the executive officers of a State to comply with a contract of the State by enforcing the State laws, is, to all intents and purposes, a suit against the State itself, within the prohibition against such suits in the 11th amendment to the constitution of the United States. McCauley v. Kellogg, 2 Woods, 13.</p> <p>The fact that a State is the sole proprietor of a corporation, does not prevent the corporation from suing or being sued. [Following U. S. Bank v. Planters’ Bank, 9 Wheat. 904.] Western, &c. R. R. Co. v. Taylor, 6 Heisk. (Tenn.) 408; Hutchinson v. Western, &c. R. R. Co., Id. 634.</p> <p>Under U. S. Rev. Stats. § 1059, either house of congress may refer to the court of claims any claim against the United States for adjudication on the facts and the law, and for judgment; but such reference creates no legal rights and admits nothing but the right to sue. It is for the court to determine whether or not the government is liable upon the cause of action referred to it. Webb v. U. S., 15 Wash. L. R. 587. .</p> <p>The case in the text and the one following it, are important as indicating some principal rules of liability óf the State under the new statutes by which claims against the State can be prosecuted before the New York Board of claims.</p> <p>See also the notes to the next case.</p> <p>The statutes and rules governing proceedings before this board are as follows:</p> <p>Jurisdiction.'] The board of audit have power to hear all private claims or accounts against the State (except such as are now heard by the canal appraisers according to law). L. 1876, p. 477, c. 444.</p> <p>“ Said board shall have jurisdiction to hear, audit and determine all private claims against the State, which shall have accrued within two years prior to the time when such claim is filed, except claims barred by any existing statute, and to allow thereon such sums as should be paid by the State. Such board, however, shall have jurisdiction of such claims as were formerly cognizable by the State board of audit, provided they shall be filed on or before July 1, 1884, and shall not have accrued more than six years prior to such filing.” L. 1884, p. 60, c. 60, § 4; amd’g L. 1883, p. 213, c. 205, § 7.</p> <p>By L. 1884, p. 62, c. 60, § 8; amending L. 1883, p. 215, c. 205, § 13, it is provided that “all the jurisdiction and power to hear and determine claims against the State, formerly possessed by the canal appraisers and the State board of audit, is hereby vested in the board of claims. Whenever a claim against the State is pending before said board of claims, which the canal appraisers have heretofore had jurisdiction to hear and determine, the board shall take testimony in the vicinity where the damages are alleged to have accrued, and the premises alleged to have been damaged shall be personally viewed by said board, and said board shall hold an adjourned session in said vicinity for the purpose of hearing said claim.”</p> <p>The amendments consist in referring to the jurisdiction and powers formerly possessed by the canal appraisers, instead of now possessed, as in the act of 1883, and in the verbal amendment of substituting the word “ session ” for “ term,” in the last line.</p> <p>By L. 1884, p. 400, c. 336, the superintendent of public works or other authorized agent .of the State may serve on the owner or occupant of the lands, streams or waters appropriated for the construction of or improvement of a canal or feeder, a notice of such appropriation describing the premises, and the board of claims were given jurisdiction “ to hear, audit and determine the claim of the owner or owners of such lands, streams or waters, and to allow thereon such sums as should be paid by the State, provided such claim shall be filed within two years after the service of said written or printed notice.”</p> <p>And, on the taking of premises appraised at less than $200, may award an allowance for the expense of abstract and search. ,</p> <p>By L. 1884, c. 418, p. 494, the board of claims were given exclusive jurisdiction of claims arising under that act, which authorized the governor to cause animals threatening infection or contagion to be destroyed.</p> <p>A similar provision as to animals is contained in L. 1884, p. 81, c. 85.</p> <p>By L. 1884, c. 318, p. 383, the board was given jurisdiction to determine the claims of the State for balances from interest on State tax, defalcation of county treasurers, and other causes from Clinton, Kings, Putnam, Richmond and Schuyler counties.</p> <p>By L. 1884, p. 396, c. 329, appeals pending before the canal board from the canal appraisers, and appeals thereafter taken were transferred to be heard by the board of claims with the same powers as then possessed by the canal board.*</p> <p>Amendments.] The board in furtherance of justice may amend a claim in any return on appeal. L. 1885, p. 666, c. 355, where the power is defined in detail.</p> <p>General powers.] Each commissioner and the clerk have power to administer oaths. The board can make rules for establishing the forms and methods of procedure, can issue and enforce subpoenas, and can punish for contempt in like cases and in like manner as the supreme court. L. 1883, p. 213, c. 205, § 3.</p> <p>And can issue commissions to take testimony either within or without the State to be used before it in like cases and in like manner as the Supreme Court, lb.</p> <p>Clerh's office.] The office of the clerk shall bo kept open between the hours of 9 A. M. and 5 P. M. on all days except Sundays and legal holidays. Mule 2, last clause.</p> <p>Counter-claims against the claimant.] It is provided by the second clause of L. 1884, p. 60, c. 60, § 4, above cited, in reference to the jurisdiction of the Board, that “it shall also have jurisdiction of all claims, on the part of the State, against any person making a claim against the State before said board, and shall determine such claim or demand, both on the part of the State and the claimant; and if it finds that the demand of the State exceeds the demand of the claimant, it shall award such excess in favor of the State against the claimant.</p> <p>*It was previously intimated that the courts have no jurisdiction to review a decision of the canal appraisers as to a claim against the-State for damages for property taken for public use, and that the only remedy is that provided by the legislature, that is, by the action of the canal appraisers as modified by an appeal to the canal board. [Citing People v. Dennison, 84 N. Y. 272.] People ex rel. Benedict v. Dennison, 28 Hun, 328.</p> <p>Sessions.] There are to be at least four sessions in each year, at Albany, commencing respectively on the second Tuesday in January, April, September and November, and adjourned sessions elsewhere. L. 1884, p. 60, c. 60,- § 2.</p> <p>Substitution of attorneys.] Rule 5 of the board of claims. In case of substitution of attorney for claimant, written notice of substitution shall be filed with the clerk, and notice thereof served on the attorney-general, and the clerk shall make the necessary entry thereof.”</p> <p>Pleadings.] Rule 6. “Every claimant shall file a written or printed claim, which shall be entitled substantially:</p> <p>IN BOARD OF CLAIMS.</p> <p>A. B., Claimant. against > The State of New York. j</p> <p>“ Shall state in a brief and concise manner the facts constituting the claim, the time when and the place where the claim arose, and shall annex thereto, and as a part thereof, a bill of particulars, stating in detail each and every item claimed, and the amount of such item.</p> <p>“If the claim is for lands permanently or temporarily appropriated by the State, a specific description of the land, showing its location and amount of laud.</p> <p>“Every claim shall state that the claim has never before been presented to any department or officer of the State, or, if it has been, shall state when and to what department or officer, and with what results, and what action has been had thereon.</p> <p>“Every claim shall-state that said claim has not been assigned, or, if assigned, when and to whom, and shall state the name and residence of every person interested in the claim, and that no other-person has any interest therein, or if other person has any interest therein, shall state specifically what interest.</p> <p>“ The claim and the bill of particulars shall be signed by the claimant or his attorney.</p> <p>“ The claim shall be verified in the same manner as pleadings in the supreme court.</p> <p>“ Every claimant, or his attorney, signing claim, shall indorse thereon his office and post-office address.”</p> <p>Verification, filing, &cj\ Rule 7. “ No claim shall be filed by the clerk unless verified as required by these rules.”</p> <p>RuIeS. “ Claims on the part of the State, to be used as counterclaims, shall be verified by attorney-general, or by a deputy, and shall be governed by the same rules as to claims against the State, and shall be filed before the hearing, or sufficient reason given for such omission.”</p> <p>Rule 9. “ The claimant shall, at the time of filing his claim, or within ten days thereafter, deliver to the clerk twelve printed copies of his claim and bill of particulars, six of which shall be for the commissioners, three for the attorney-general, and three for the use of the clerk. If the claim does not exceed $200, written copies may be furnished. In case of claims on the part of the State, the attorney-general shall file like number of printed copies, three copies of which shall be by the clerk delivered to claimant or his attorney.”</p> <p>Motions in nature of demurrer.] Rule 11. “ The attorney-general may, upon ten day’s notice, move to dismiss a claim, on the ground that the facts stated in claim, do not constitute a legal or equitable claim against the State. Such notice shall state particularly the ground of the motion, and point out specifically the alleged defects in the claim.</p> <p>“ Any claimant, against whom a claim is filed as a counter-claim on the part of the State, may make like motion upon like notice to the attorney-general.”</p> <p>Amendments.} Rule 12. "The board may, before the hearing, upon notice to the adverse party, or upon the hearing in furtherance of justice, amend any statement of claim or defense, by adding or striking out the name of a person as a party, or a mistake in any other respect, or by inserting an allegation material to the case; or where the "amendment does not change substantially the claim or defense, by conforming the statement of claim or defense, or other proceeding to the facts proved. And in every stage of the action the board must disregard an error or defect in the statement of claim or defense or other proceedings, which does not affect the substantial rights of the adverse party.”</p> <p>Dismissal for want of prosecution.] Rule 4. At any session of the board any claim called in its order, on the regular call of the calendar, and at any adjourned session for the hearing of local claims, at which claims are specifically set down for hearing, any claim called in its order, aud in which no appearance shall be made for claimant, may, in the discretion of the board, be dismissed for want of prosecution.</p> <p>The hearing.] Rule 17. “ Cases may be brought to hearing at any session of the board by either party, upon notice to the other, as prescribed by sections 977 and 980 of the Code of Civil Procedure.*</p> <p>“ When the board has appointed a session to be held at any place other than the city of Albany for the hearing of local causes, and has made an order designating the causes to be placed on the calendar for hearing at that session, such causes shall be deemed to have been noticed by both parties.”</p> <p>Evidence.] The Board of Audit has power to administer oaths, to take testimony in relation to any claim. L. 1876, p. 477, c. 444, § 2.</p> <p>“Upon the hearing of all claims before the board the rules of evidence now prevailing in the courts of record of this State shall be observed, and the practice upon such hearings of claims . . . shall conform, as near as may be, to the practice now prevailing in the supreme court of this State upon the trial of actions.” L. 1884, p. 61, e. 60, § 7; amending L. 1883, c. 205, § 11.</p> <p>In the adjudication of a claim against the State for the value of materials furnished in excess of the price received therefor, under contract, owing to erroneous computation or measurement, the State board of audit can proceed upon common law evidence only [L. 1876, c. 444 ; L. 1881, c. 211, § 3], and only claims so dealt with can be paid or allowed by the legislature. Swift V. State of N. Y., 89 N. Y. 52; rev’g 26 Hun, 508.</p> <p>* Section 977 of Code Civ. Pro., is the one which prescribes notice of trial fourteen days before commencement of term, notice of issue at least twelve days before commencement of term.</p> <p>The clauses in the sections of the Code here referred to are as follows :</p> <p>§ 977, 1st clause. “At any time before the joinder of issue, and at least fourteen days before the commencement of the term, either party may serve a notice of trial.”</p> <p>There is also a local exception in the counties of New York and Kings, dispensing with two notices for succeeding term.</p> <p>Section 980 provides that either party, who has served the notice, may bring the issue to trial; and, in the absence of the adverse party, unless the judge holding the term, for good cause, otherwise directs, may proceed with the cause, and take a dismissal of the complaint, or a verdict, decision, or judgment, as the case requires. An inquest, for want of an affidavit of merits, cannot be taken where the answer is verified.</p> <p>Effect of canal commissioners award.] The State board of audit has pow.er to inquire into the justice or equity of a claim against the State, and is not concluded by a certificate of award thereon by the canal commissioners. [Citing Dobson v. Pearce, 12 N. Y. 156 ; State of Michigan v. Phoenix Bank, 33 Id. 9 ; Kinnier v. Kinnier, 45 Id. 535.] Bauk of Monroe v. State of N. Y., 26 Hun, 581.</p> <p>Briefs.] Rule 10. “In all claims reserved for argument, printed copies of brief shall be delivered to the clerk. The clerk shall distribute same as copies of claims are distributed.”</p> <p>Rule of decision.] The general act of 1876 provides that the Board is “ to determine on the justice and amount thereof, and to allow such sums as it shall consider should equitably be paid by the State to the claimants.” ' L. 1876, p. 477, c. 444, § 2.</p> <p>The State is bound by its pleadings and admissions and by estoppel, and its own ratification, equally as any other party. State v. Taylor, 28 La. Ann. 460; State v. Ober, 34 Id. 359; S. C., 14 Reporter, 331; People v. Stephens, 71 N. Y. 527, and cas. cit.</p> <p>Otherwise, it is said, of implied liens. Matter of De Cesnola, 9 Wash. L. Rep. 490. Compare U. S. v. Central Nat. Bk., 6 Fed. Rep. 134; S. C., 27 lnt. Rev. Rec. 66.</p> <p>Although no action lies against the sovereign for a breach of a contract, yet, whenever that contract in any form comes before the ¿ourts, the rights and obligations of the parties to it must be adjusted upon the same principles as if the contracting parties were private persons. People v. Stephens, 71 N. Y. 527 (and see brief of counsel in 72 Id. 621).</p> <p>When the State comes into court as a party, in a controversy with an individual, the intent of the legislature in any action it lias taken respecting it may be ascertained in the same manner as in a controversy between individuals where instruments executed by cither are to be construed in the light of environment, lb.</p> <p>Followed in People v. Dennison, 19 Hun, 137 ; aff’d in 80 N. Y. 656.</p> <p>The State cannot destroy or avoid the obligation of a valid contract., entered into by its authorized agents, unless "by express stipulation authorizing it so to do; and although it may refuse to perform or arrest performance by the contractor, its liability for the breach is the same as that of an individual, and the contractor is entitled to prospective profits. [Citing Lord v. Thomas, 64 N. Y. 107; Masterton v. Mayor, &c. of Brooklyn, 7 Hill, 61; People v. Stephens, 71 N. Y. 527, 549; U. S. v. Speed, 8 Wall. 77; U. S. v. Smith, 94 U. S. 214; Thompson v. U. S., 9 Ct. of Cl. 187; Jones v. Judd, 4 N. Y. 411; distinguishing McKee v. U. S., 12 Ct. of Cl. 504; S. C., 17 U. S. 233; The Apollon, 9 Wheat. 362; Jones v. U. S., 1 Ct. of Cl. 383; Deming v. U. S. Ib. 190; Wilson v. U. S., 11 Id. 513.] Danolds v. State of New York, 89 N. Y. 36; aff’g 14 Weekly Dig. 263.</p> <p>As to the effect of compromises between a creditor of the State and its officers,—see Comstock v. U. S., 9 Ct. of Cl. 141.</p> <p>Costs. ] It is to be observed that by § 15 of the act of 1883 (L. 1883, c. 205) a section not noticed in the amendatory act of 1884, it was provided that “ costs, witness fees and disbursements shall not be taxed, nor shall counsel or attorney fees be allowed by said board to any party.”</p> <p>Effect of decision on appeal from canal board,.] A decision of the canal board, on an appeal from a decision by the canal appraisers upon a claim, is conclusive, if the respective boards have kept within their jurisdiction. [Citing People v. Dennison, 84 N. Y. 272; L. 1829, c. 368; L. 1868, c. 579; People ex rel. Seymour v. Canal Board, 7 Lans. 220; People ex rel. Benedict v. Dennison, 28 Hun, 328; Code Civ. Pro. § 2143.] People ex rel. Peck v. Canal Board, 29 Hun, 159.</p> <p>The addition of the words “ appeal dismissed,” to an affirmance by the canal board of a decision by the canal appraisers does not take away the right to apply for a rehearing. Ib.</p> <p>Motions.] Rule 14 prescribes that “ All motions shall be noticed for first day of session, or for such other days as shall be designated by the board.”</p> <p>Hotices.] Rule 16 prescribes that “Any notice required to be served by the rules or practice of this board may be served by mail. If upon the claimant or his attorney, by directing same to him at the post-office address, indorsed upon claim filed.”</p> <p>General regulations.] Rule 18. “ The time within which an act is required to be done, except time to bring an appeal, make a case or to file claims, may be extended by order of the board or a commissioner thereof.”</p> <p>Rule 19. “The rules and practice of the supreme court, so far as the same may be applicable, and not inconsistent with these rules, shall be deemed rules of this board.”</p> <p>Appeals.] Appeals to the court of appeals, where the amount exceeds $500, are allowed to be taken within thirty days after service of notice of the final order or award. L. 1884, p. 61, c. 60, § 6; amending § 10 of L. 1883, c. 205.</p> <p>No security is required on appeal. L. 1884, p. 61, c. 60, § 7; amending L. 1883, c. 205, § 11.</p> <p>—findings.] Rule 15 provides that “ when an appeal shall be taken from the award of the board, either party may present, at time of settlement of ease, requests in writing to find questions of fact and of law, setting forth the same as required by rules of supreme court.”</p> <p>A finding by the State board of audit that a claim presented to the canal commissioners was fictitious and fraudulent is not required in express terms to warrant such board in rejecting the claim, if such a conclusion is warranted by the other facts found by such board and by the evidence. Bank of Monroe v. State of N. Y., 26 Hun, 581.</p> <p>— evidence.] On all questions not raised by the notice of appeal, it is to be presumed, in the court of appeals, that sufficient evidence was given on the hearing to sustain the order of the Board. L. 1884, p. 61, c. 60, § 7 ; amending L. 1883, c. 205, § 11.</p>

On August 19, 1873, the plaintiff entered into two contracts with the State for work upon the Erie canal, and deposited two sums of money amounting to $1,800 as security for the performance of the contract uniter chapter 766 of the Laws of 1873.

<p>Action against Bank for Amount of Check.—Bank; deposit as agent ; right of principal to recover of bank.— Factors.—Parties.</p> <p>Money received by a commission merchant or factor on the sale of his consignor’s goods, is held by him in a fiduciary capacity; and although mingled with the money of others, yet if made up in a sum deposited in bank to the credit of the factor as agent, it may be followed by the principal.</p> <p>Such a deposit is a trust fund, and if the bank has notice of the fact it cannot, even with consent of the depositor, apply it to payment of his indebtedness to the bank.</p> <p>The factor or agent, by giving the principal a check upon such account for the balance due him, sets apart, to him, so much of the deposit account.</p> <p>The factor testified that he sold the goods of various persons on commission, receiving sometimes money, sometimes checks, sometimes notes. He was accustomed to put the money in his safe, and pay therefrom his own expenses to the extent and sometimes in excess of the amount of commissions earned; to deposit the checks in bank to his credit in an account opened by him as agent, and headed with his name and the addition “ agt.to remit the notes to the consignor of the goods sold, with an account of sales from time to time, and his own check on such bank account for the balance due the consignor. Held, that a consignor, having received such a check, could, on the bank’s refusing payment because of a prior indebtedness of the factor to itself, maintain an action directly against the bank.</p> <p>In the absence of evidence that other consignorsor principals claimed to share the bank deposit in reduction of plaintiff’s claim, it was not necessary to make sucii other consignors parties.</p>

<p>Conversion.—Execution; when may issue against person.</p> <p>A complaint which alleges the receipt by plaintiff of defendant’s money in a fiduciary capacity, and a conversion of it to his own use, may be regarded as stating a cause of action for conversion, for the purpose of sustaining an execution against the person.*</p> <p>*See Code Civ. Pro. § 1487; Catlin v. Adirondack Co., 11 Abb. N. C. 377, rev’g 20 Hun, 19; Peck v. Root, 5 Hun, 547; 8 Abb. N. Y. Dig. New ed. Supp. 501, &c.</p> <p>See, also, cases in preceding volume of this series, pp. 458-474.</p>