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nedy Tod, Alfred S. Heidelbach, and Eric P. Swenson, a committee of the share and bond holders of the corporation, parties of the
The purpose of the contract was to effect a reorganization of the corporation, and to issue new securities to the various classes of its creditors, according to a scheme set forth in the contract, which is called a "reorganization agreement," and the parties of the third part, a "reorganization committee.” The contract provides that the bond and share holders, who elect to become parties to the contract shall transfer the legal title to their shares and bonds and deliver the securities to the Central Trust Company of New York. Among other provisions, the reorganization agreement contains the following:
"Fourteenth. That the committee are vested with full power and authority to do any and all icts and things necessary and proper in their judgment to be done in order to carry out this plan of reorganization, including the power from time to time to make such changes in the same as they may consider necessary or expedient: provided, that no alteration or modification shall be made by the committee involving the acceptance by them, after reurganization, for distribution as hereinbefore provided, of any less amount or inferior quality of bonds or stock than are described herein. Publication daily for twenty days in such newspaper or newspapers published in the city of New York as the committee may designate of any alteration or modification shall be notice thereof to all parties to this agreement, and within two weeks after the last day of such advertisement any party to this agreement may with• • draw his securities on surrender of his certificate of deposit, and payment of his sliare of expense theretofore incurred in carrying out this agreement; and parties not so withdrawing shall be deemed to have assented to such alteration or modification. In the event of this agreement not becoming binding, or noi being consummated through the purchase of the property by the committee of reorganization, or through the rehabilitation of the now exitsing company, then the committee shall return to the several depositors their respective bonds, cou. pous, or stocks so deposited upon the payment of all advances paid and expenses incurred by the committee, including their remuneration, and upon the surrender of the certificates issued on the deposit of the same."
The plaintiff transferred his bonds and the unpaid coupons annexed to the Central Trust Company, receiving therefor certificates stating that the bonds were deposited under the agreement of March 2, 1891, and “that the holder hereof assents to said agreement by receiving this certificate." By the reorganization agreement the committee was authorized to complete the Waco line and the Buffalo Bayou extension, and to do various other acts involving the expenditure of large sums of money, for which the bonds and shares transferred to the trust company were to be held as security. The committee completed the Waco line, and expended large sums of money, the amount of which, and for what purposes, need not here be stated. On the 14th of December, 1892, the reorganization committee modified the scheme contained in the contract of March 2, 1891, so that the bondholders of plaintiff's class should receive for each bond a new one for $1,000, bearing 4 per cent. interest, instead of like bonds bearing 5 per cent. interest, as provided by the original reorganization contract. The plaintiff refused to accept of the terms of the modified agreement, and demanded a return of his bends, which the committee declined to deliver unless the plaintiff paid his pro rata share of the ex
penses incurred under the reorganization agreement up to that date, which are asserted to be about 50 per cent. of the face value of the bonds. The plaintiff brought this action to recover his bonds on payment by him of his pro rata share of expenses incurred, and asks that the defendants be restrained from dealing with the bonds so deposited by him.
The only disputed question of fact between the parties seems to be over the question how much the plaintiff should pay in order to secure a return of his bonds. That he is not bound to assent to the terms of the modified agreement is clear, it being so expressly provided; and it seems to us equally clear that, after the plaintiff gave his notice that he wished to withdraw his bonds, the reorgan. ization committee could not thereafter, in execution of the modified plan, create any further lien or charge upon them. Their right is limited to holding them as security for such expenses and advances as had been then made under the original reorganization agreement, and they clearly have no right to sell, transfer, or dispose of these bonds in any way for the purposes of carrying into effect the modified agreement to which the plaintiff has not assented. The plaintiff does not seek an injunction restraining the action of the committee under either agreement, nor in respect to any securities other than his own, and we are unable to see why he is not entitled to this relief. The order should be reversed, with $10 costs and printing disbursements, and the motion for an injunction granted, with $10 costs, upon the plaintiff's giving an undertaking to the effect that he will pay to the parties enjoined such damages, not exceeding $10,000, as may be sustained, as provided by section 620 of the Code of Civil Procedure.
BARRETT, J., concurs. VAN BRUNT, P. J., concurs in result.
(70 Hun, 472.)
BRENNAN V. ELLIS. (Supreme Court, General Term, Third Department. July 8, 1893.) MASTER AND SERVANT-NEGLIGENCE OF CONTRACTOR.
Where the owner of premises, whose duty it is to keep the same in repair, contracts with a third person to niake necessary repairs, and he fails to make them, the owner is liable for injuries resulting from the defective condition of the premises, though such third person was an independent contractor. Appeal from circuit court, Rensselaer county.
Action by Kate M. Brennan against William Ellis for personal injuries. From a judgment entered on a verdict in favor of defendant for $158.51 costs, and also from an order denying a motion for a new trial on the judge's minutes, plaintiff appeals. Reversed.
Argued before PUTNAM and HERRICK, JJ.
Merritt & Ryan, (James H. Ryan and Henry L. Landon, of counsel) for respondent.
PUTNAM, J. The action was brought to recover damages for the alleged negligence of the defendant, the owner of an apartment house in the city of Troy, in allowing a bridge laid from the second story of said house to the water-closet in the rear to remain out of repair, in consequence of which plaintiff was severely injured. It is not denied that it was the duty of defendant to use reasonable care in keeping the bridge in a safe condition, nor that the testimony in the case rendered it proper to submit to the jury the question whether said care was in fact used. The court, in his charge, used the following language, viz.:
“So that the question is not necessarily disposed of when you find (if you should find) that Mr. Wylie did not nail those boards. You may say it is suf. ficient-that it was sufficient-for this defendant to go to an experienced carpenter, if he did as he says he did, and as the carpenter says he did, and say: “This structure, which was originally safely constructed, is out of repair, and I want you to go over it, and look it over, and make repairs, and put it in condition.' Now that he testifies he did. That Mr. Wylie testifies he told him to do, and that he says he undertook to do.
* If you say as prudent, reasonable men, that in your judgment that is all that could be expected of a man under such circumstances, that it is what any other carefu) and prudent man would do, it would be your duty to find, of course, that he had not neglected to perform any duty which he owed to this plaintiff, or to any other tenant, in the occupation of this building."
The only question necessary to be considered is as to the propriety of the portion of the charge above quoted. Assuming that the relation of master and servant or principal and agent did not exist between defendant and Wylie, and that the latter occupied the position of a contractor, (see Larow' v. Clute, [Sup.] 14 N. Y. Supp. 616; Wood v. City of Watertown, 58 Hun, 304, 11 N. Y. Supp. 864,) the question arises whether defendant, being notified of the dangerous condition of the bridge, discharged his duty by contracting with a competent man to repair it, and was not there. after liable, although the contractor failed to do the work. It is well settled that where an owner enters into an agreement with a contractor to do work the former is not, ordinarily, liable for damages arising from any negligence of the latter in the doing of the work. But we understand that, if the work is a repair which the owner is bound to have done, and the contractor fails to do it, the owner remains liable for the injury caused by the want of such repair. Sturges v. Society, 130 Mass. 414, 415; Gorham v. Gross, 125 Mass. 232--240. In Pickard v. Smith, 100 E. C. L. 470, it is held, (page 479:)
"If an independent contractor is employed to do a lawful act, and in the course of the work he or his servants commit some casual act of wrong or negligence, the employer is not answerable.
That rule is, however, inapplicable to cases in which the act which occasions the injury is one which the contractor was employed to do; nor, by a parity of reasoning, to cases in which the contractor is intrusted with the performance of a duty incumbent upon his employer, and neglects its fulfillment, whereby an injury is occasioned.”
See, also, Worthington v. Parker, 11 Daly, 545, 546.
We think, therefore, that the defendant was not relieved from liability for the defective condition of the bridge in question, by
employing a competent contractor to repair it, and that in consequence of the instructions above quoted, given to the jury by the trial court, there should be a new trial. We think, also, that the exception of plaintiff to the refusal of the court to charge as requested sufficient to raise the question above considered; but, if not, this is a case where a new trial should properly be granted without an exception, within Whittaker v. Canal Co., 49 Hun, 400-405, 3 N. Y. Supp. 576, and Roberts v. Tobias, 120 NʻY. 5, 6, 23 N. E. Rep. 1105. The judgment should be reversed, and a new trial granted, costs to abide the event.
(70 Hun, 246.)
(Supreme Court, General Term, First Department. June 30, 1893.) NEGOTIABLE INSTRUMENTS—BONA FIDE HOLDERS.
In an action on a note for $2,500 it appeared that defendants made the note, and delivered it to one L. to have it discounted for defendants, instead of which L. delivered the note before maturity to plaintiffs, to whom he owed about $4,000, and was credited on his account with the amount. After the note fell due L. p:id plaintiffs $500, and received a release in full of all plaintiffs' claims. Held, that plaintiffs did not part wit's anything of value before maturity of the note, and therefore could not recover on it.
Appeal from judgment on report of referee.
Action by George F. Vietor, Carl Vietor, Thomas Achelis, Jr., and John Achelis against Moritz Bauer and Cacilie Bauer on a promissory note. From a judgment dismissing the complaint, plaintiffs appeal. Affirmed.
Argued before VAN BRUNT, P. J., and FOLLETT and BARRETT, JJ.
James Dunne, for appellants.
Donohue, Newcombe & Cardozo, (Benjamin H. Cardozo, of counsel) for respondents.
FOLLETT, J. This action was brought to recover on a promissory note made by Moritz Bauer September 18, 1885, whereby he promised to pay to his own order $2,500, four months after date, at the Murray Hill Bank. It fell due January 21, 1886. It is alleged and admitted that afterwards the maker and Cacilie Bauer, the other defendant, indorsed the note, but it is denied that it was made or indorsed for value, and it is also denied that it was delivered. As an affirmative defense it is all that the note was made, indorsed, and delivered to Leopold Levy for the purpose of having the same discounted, and the proceeds given to the defendants. The referee found that the note was made and "indorsed to the said Leopold Levy for the specified purpose of having the same discounted, and the proceeds thereof forthwith turned over to the defendants, or that otherwise the said note
should be returned to them.” This finding is supported by the evidence. A witness who was present when the note was made and delivered to Levy testified:
"I recognize the handwriting of the note. What I recollect to have oo curred in the interview between Moritz Bauer and Leopold Levy, having reference to this note, is that Mr. Bauer handed that note to Mr. Levy, requesting Mr. Levy to have that note discounted for him in the Bowery National Bank, Levs saying that he would get Mr. Hamilton to give him the money for it. Mr. Hamilton is the cashier of the Bowery National Bank. Bauer told Levy he needed the money very particularly, and asked if Levy would try and get it for him to-morrow, and Mr. Levy said he would try and have it done for him the next day, and that if he did not he would return the note the next evening to Mr. Bauer."
There was no dispute on the trial about the fact that the note was not discounted by any bank. October 15, 1885, Levy was in. debted to the plaintiffs in the sum of $3,940.36 on account, which was carried on their books under the head of “Suspended Debtors.” In the autumn of that year Levy went to Europe, carrying with him the note, and an agent of the plaintiffs followed him for the purpose of collecting their account. What occurred there does not appear. On the 18th of January, 1886, the plaintiffs, at the city of New York, received by mail this note from Levy, who was then in Germany. The plaintiffs, after making inquiry as to the responsibility of the maker and indorser, credited Levy's account with the note. Three days afterwards—January 21, 1886 —the note fell due, and was protested. February 4, 1886, this action was begun, and an answer was interposed denying the validity of the note. In November, 1886, an agent of the plaintiffs met Levy in Montreal, Canada, received from him $500 in cash, and executed and delivered to him a release in full of the claims of the plaintiffs. These facts were found by the referee, and the findings are supported by the evidence. Under this state of the evidence it was well found by the referee that there was no consideration for the note, but that it was made and delivered to Levy for the purpose of having the same discounted, and the avails delivered to the maker; and also that the plaintiffs did not receive the note before it fell due in part satisfaction or discharge of their account against Levy. The agreement to receive it in part satisfaction and discharge of the account, in November, 1886, was long after this suit was begun.
This case has now been three times tried. On the first trial a Verdict was directed for the plaintiffs. At that time it was not alleged in the answer that the note was made and delivered to Levy for a particular purpose, and had been by him diverted. On the trial the defendants offered to prove this fact. The evidence was objected to as immaterial and incompetent, but not on the ground that such a defense was not pleaded. The court, in considering the question as to whether the plaintiffs were holders for value, said:
“That the defendants were not precluded from making this defense to the note by the credit of it as a payment on the account they had against Levy, is quite well established by the authorities. By that credit they neither