New York Law Review

Tag: 1883

  • Barry v. New York Cent. & Hudson River R.R. Co., 92 N.Y. 289 (1883): Duty Owed to Licensees on Railroad Tracks

    92 N.Y. 289 (1883)

    A railroad company owes a duty of reasonable care to individuals who frequently cross its tracks at a specific point with the company’s knowledge and acquiescence.

    Summary

    This case addresses the duty of care a railroad company owes to individuals crossing its tracks regularly with the company’s permission. The court found that the long-standing public use of a path across the railroad tracks, with the railroad’s acquiescence, created a duty for the railroad to exercise reasonable care in protecting those crossing from injury. This duty required the railroad to provide suitable warnings, such as lights, whistles, or bells, to alert individuals of approaching trains. The court affirmed the judgment in favor of the plaintiff, emphasizing the importance of reasonable care in situations where the public is known to frequent railroad crossings.

    Facts

    The deceased was struck and killed by a train while crossing the defendant’s railroad tracks. The crossing point was not a designated street or highway but a well-used footpath. Evidence showed that the public had consistently used the path for many years, and the defendant railroad company was aware of this practice, having even installed turnstiles at some point. The trial court acknowledged the conceded fact of public use with the railroad’s permission.

    Procedural History

    The case proceeded to trial where the central issue was whether the railroad company had exercised reasonable care to prevent the accident. The trial judge instructed the jury that the defendant was bound to use reasonable care to protect individuals crossing the tracks at the point where the accident occurred, given the conceded public use with the railroad’s consent. The jury found in favor of the plaintiff. The defendant appealed, arguing that the deceased was a trespasser and the railroad owed no duty other than to refrain from willful or reckless injury.

    Issue(s)

    1. Whether a railroad company owes a duty of reasonable care to individuals who frequently cross its tracks at a specific point with the company’s knowledge and acquiescence.
    2. Whether the trial court erred in refusing to instruct the jury that the deceased was a trespasser who assumed the risks associated with walking on the tracks, and that the railroad’s only duty was to avoid intentional or wanton injury.

    Holding

    1. Yes, because the long-standing public use of the path across the railroad tracks with the railroad’s acquiescence created a duty for the railroad to exercise reasonable care in protecting those crossing from injury.
    2. No, because the evidence supported the finding of a public passageway, and the key issue was whether the defendant’s servants had exercised reasonable care in providing suitable warning of the train’s approach.

    Court’s Reasoning

    The court reasoned that the conceded fact of the public using the path across the railroad tracks with the railroad’s permission established a duty of reasonable care. The court distinguished this case from situations where individuals are considered trespassers. Here, the railroad’s acquiescence to the public’s use of the path created an obligation to protect those using it. The court relied on precedents such as Byrne v. N.Y.C. & H.R.R.R. Co. to support the proposition that a conceded right of way or public passageway imposes a duty of reasonable care on the railroad. The court emphasized that the trial judge properly left it to the jury to determine whether the defendant had exercised reasonable care by providing adequate warning signals, such as a light, whistle, or bell. The court stated, “when the instruction followed, that the defendant was bound to use reasonable care to protect the persons from injury, whom it so permitted to cross at that point, the court was within the rule in such cases.” The court affirmed the judgment, concluding that there was no error in the submission of the case to the jury.

  • Plimpton v. Bigelow, 93 N.Y. 592 (1883): Attachment of Stock in a Foreign Corporation

    Plimpton v. Bigelow, 93 N.Y. 592 (1883)

    Shares of stock in a foreign corporation are not subject to attachment in a state where the corporation is not domiciled, even if the certificates representing those shares are physically present within that state.

    Summary

    This case addresses whether shares of stock in a foreign corporation can be attached in New York when the certificates are held within the state. The Court of Appeals held that such an attachment is invalid because the stock itself is located in the state of incorporation, not where the certificates happen to be. The court reasoned that the shares represent an interest in the corporate assets held in the foreign state, and New York courts lack jurisdiction over those assets. This decision highlights the principle that jurisdiction over property generally requires the property itself to be located within the jurisdiction.

    Facts

    The plaintiff, Plimpton, sought to attach shares of stock owned by Bigelow, a non-resident, in a foreign (Pennsylvania) corporation. The certificates representing these shares were physically located in New York. Plimpton attempted to levy on the stock by serving a warrant of attachment on the individual in possession of the certificates in New York.

    Procedural History

    The lower court upheld the validity of the attachment. The General Term reversed this decision, holding the attachment invalid. The New York Court of Appeals affirmed the General Term’s decision, finding that the shares of stock were not properly subject to attachment in New York.

    Issue(s)

    Whether shares of stock in a foreign corporation are subject to attachment in New York simply because the certificates representing those shares are physically present in New York.

    Holding

    No, because the situs of the stock is in the state where the corporation is domiciled, and therefore, not subject to attachment in New York based solely on the presence of the stock certificates.

    Court’s Reasoning

    The Court of Appeals reasoned that shares of stock represent an ownership interest in the corporation, and that interest is tied to the corporation’s assets and domicile. The court stated: “The general rule that the situs of personal property is the domicile of the owner is subject to many exceptions, and it is clear that for the purposes of taxation, and for other purposes where the sovereignty of the state is to be exercised, personal property may have an actual or constructive situs within the state, although the domicile of the owner is elsewhere.” However, this principle does not automatically apply to attachments. The court distinguished between the certificates, which are merely evidence of ownership, and the shares themselves, which represent an interest in the corporation’s assets. The court emphasized that the corporation exists under the laws of Pennsylvania, and New York courts cannot exercise direct control over the corporation’s internal affairs or assets. The court noted, “The foreign corporation is not here; it has no property in this state which can be taken by virtue of the attachment. The certificates of stock are not the property itself, they are but evidence of property… The shares are held by the company in Pennsylvania.” The court further observed that to allow attachment based solely on the presence of the certificates would create significant practical problems, as multiple states could potentially claim jurisdiction over the same shares. The dissenting opinion argued that the certificates, when endorsed, effectively transfer the property they represent, and thus should be subject to attachment where found. The majority, however, rejected this argument, emphasizing the importance of the corporation’s domicile in determining the situs of the stock. The court relied on the principle that a state’s jurisdiction generally extends only to property located within its borders, and that shares of stock are deemed to be located in the state of incorporation.

  • Marvin v. Brooks, 94 N.Y. 71 (1883): Equitable Accounting for Quasi-Trustees

    Marvin v. Brooks, 94 N.Y. 71 (1883)

    Equity jurisdiction extends to cases involving fiduciary relationships where an agent is entrusted with the principal’s money for a specific purpose, creating a quasi-trustee relationship that warrants an accounting.

    Summary

    Marvin sued Brooks seeking an equitable accounting related to the purchase of stock. The court addressed whether a fiduciary relationship existed between Marvin and Brooks. The Court of Appeals held that Brooks acted as Marvin’s agent in purchasing stock, thereby establishing a fiduciary duty, and entitling Marvin to an equitable accounting to determine if the funds were properly used. The court reasoned that an agent entrusted with a principal’s money becomes a quasi-trustee, justifying equity’s intervention to ensure proper handling of funds and transparency in transactions.

    Facts

    Marvin and Brooks agreed to jointly purchase a controlling interest in a mining company. Brooks traveled to Detroit to negotiate the purchase. He telegraphed Marvin requesting funds to cover Marvin’s share of the down payment, representing that it would secure one-half of the Ward interest in the company. Marvin remitted the funds. The stock-note and Ontario shares were not delivered with the other securities. Marvin claimed he had paid for property he did not receive. Brooks argued he had fully accounted for the stock and bonds.

    Procedural History

    Marvin sued Brooks seeking an equitable accounting. The referee found that Brooks had fully accounted for the stock and bonds. The trial court dismissed the complaint based on the referee’s findings. The General Term affirmed the dismissal. The Court of Appeals reversed the lower courts’ decisions, holding that Marvin was entitled to an equitable accounting.

    Issue(s)

    Whether a fiduciary relationship existed between Marvin and Brooks such that Marvin was entitled to an equitable accounting regarding the funds entrusted to Brooks for the stock purchase.

    Holding

    Yes, because Brooks acted as Marvin’s agent and was entrusted with Marvin’s money for a specific purpose, thus establishing a fiduciary relationship and creating a quasi-trustee situation that warrants an equitable accounting.

    Court’s Reasoning

    The court emphasized that while bare agency is insufficient for equitable accounting, a fiduciary relationship involving trust and confidence justifies equity’s intervention. The court distinguished between a simple debtor-creditor relationship and one where an agent is entrusted with funds for a specific purpose. In the latter case, the agent becomes a quasi-trustee, obligated to provide a full and transparent accounting of how the funds were used. The court noted, “[A]s between principal and factor the equitable jurisdiction attached, because the latter partook of the character of a trustee, and that ‘so it is with regard to an agent dealing with any property * * * and though he is not a trustee according to the strict technical meaning of the word, he is quasi a trustee for that particular transaction,’ and, therefore, equity has jurisdiction.” The court found that Brooks’s actions in purchasing the stock on Marvin’s behalf, coupled with the entrusting of funds, created a fiduciary duty, entitling Marvin to an equitable accounting. This accounting was necessary because Marvin could not independently verify whether Brooks properly applied all the funds or what securities were actually purchased.

  • Meltzer v. Doll, 91 N.Y. 365 (1883): Enforceability of Accommodation Notes and Consideration

    Meltzer v. Doll, 91 N.Y. 365 (1883)

    An accommodation note is enforceable if supported by valid consideration, such as an agreement to forbear from prosecuting a debt against a third party.

    Summary

    This case addresses the enforceability of a promissory note where the defense of lack of consideration is raised. Meltzer Bros. sued Nicholas Doll’s estate to collect on a note. The estate argued the note was merely for accommodation and lacked consideration. The plaintiffs contended that the note was given in exchange for their agreement to suspend legal action against a third party, Merkle. The New York Court of Appeals affirmed the judgment for the plaintiffs, holding that forbearance from pursuing a claim against a third party constitutes valid consideration for a note, and the jury’s finding in favor of the plaintiffs on conflicting evidence was supported.

    Facts

    Meltzer Bros. held a note against George Merkle. Merkle was undergoing involuntary bankruptcy proceedings. Meltzer Bros. claimed that Nicholas Doll gave them a promissory note in exchange for their agreement to temporarily halt prosecution of their claim against Merkle. After both John and Gottfried Meltzer died, Gottfried’s executor continued the suit against Nicholas Doll’s estate, seeking to enforce the note.

    Procedural History

    The case was initially brought in a lower court, where a jury found in favor of the plaintiffs (Meltzer’s estate). The defendant (Doll’s estate) appealed, arguing that the note lacked consideration and that the court erred in admitting certain evidence. The New York Court of Appeals affirmed the lower court’s judgment, finding no reversible error.

    Issue(s)

    Whether an agreement to forbear from prosecuting a claim against a third party constitutes valid consideration for a promissory note.

    Holding

    Yes, because forbearance from pursuing a legal claim, even against a third party, is recognized as sufficient consideration to support a promise, including the promise embodied in a promissory note.

    Court’s Reasoning

    The court reasoned that valid consideration existed if the note was given in exchange for Meltzer Bros.’ agreement to forbear prosecution of their claim against Merkle. The court emphasized that it was the jury’s role to weigh the conflicting evidence and determine whether the note was an accommodation note or was supported by consideration. The court noted that evidence was presented showing Doll potentially had an interest in Merkle’s financial well-being, thus providing a motive for Doll to provide the note to induce Meltzer Bros. not to pursue action against Merkle. The court further stated that, “It was competent for the plaintiff to show an intent or motive on the part of the witness in testifying as he did on the trial which might affect his credibility before the jury.” The court also addressed the admissibility of the bill of sale and chattel mortgage, finding they were relevant to demonstrate Doll’s potential interest in Merkle’s financial stability. The court also addressed the defendant’s argument that the plaintiffs proving a debt in bankruptcy before the three months expired negated any consideration; the court found this argument without merit because the deposition in bankruptcy stated that the debt was owed to one member of the firm individually, not to the firm as a whole, and it could be presumed that the individual had lawfully obtained ownership of the debt. Furthermore, “the ex-parte proof in bankruptcy is not such an adjudication as to the existence of a fact as to legally preclude the person making it from afterward explaining or contradicting the statement therein contained, especially as against one who was not in a legal sense a party to that proceeding.” Because there was no estoppel, the court affirmed the judgment for the plaintiffs.

  • People ex rel. Post v. Grant, 13 Civ. Proc. R. 233 (N.Y. 1883): Enforcing Civil Judgments Through Contempt Proceedings

    People ex rel. Post v. Grant, 13 Civ. Proc. R. 233 (N.Y. 1883)

    When a court has personal jurisdiction over a party in a civil action, it retains that jurisdiction to enforce the judgment, and an order to show cause for contempt for failure to comply with the judgment may be served on the party’s attorney, rather than requiring personal service on the party themselves.

    Summary

    This case addresses the issue of proper service in a civil contempt proceeding brought to enforce a judgment. The defendant, Grant, was ordered to convey property to the plaintiffs. He failed to comply, claiming a prior mortgage foreclosure prevented him. An order to show cause why he should not be held in contempt was served on his attorney, not him personally. The court held that personal service of the order to show cause was not required because the court already had jurisdiction over Grant from the underlying action, and service on his attorney was sufficient. This contrasts with criminal contempt, where personal notice is required.

    Facts

    The plaintiffs obtained a judgment for specific performance against the defendant, Grant, ordering him to convey certain premises.

    Grant had fraudulently conveyed the premises to another party, who was also named as a defendant.

    A certified copy of the judgment was personally served on Grant, requiring him to appear before a referee and convey the property.

    Grant failed to appear but his counsel appeared and offered an affidavit stating that, prior to the judgment, a mortgage on the premises had been foreclosed, making it impossible for Grant to convey the property.

    The referee rejected the affidavit and reported Grant’s non-compliance.

    An order to show cause was issued, directing Grant to show cause why he should not be punished for contempt. This order was served on Grant’s attorney, not on Grant personally.

    Grant claimed he had no personal knowledge of this order until after the order for his imprisonment was issued.

    Procedural History

    The Special Term adjudged Grant guilty of contempt and ordered his imprisonment.

    Grant moved to set aside the order of commitment, which was denied by the Special Term.

    The General Term reversed the Special Term’s order and discharged Grant from imprisonment.

    The plaintiffs appealed to the New York Court of Appeals from the General Term’s order.

    Issue(s)

    Whether personal service upon the defendant of the order to show cause, with the affidavits upon which it was granted, was necessary to hold the defendant in contempt for failure to comply with a judgment in a civil action.

    Holding

    No, because when the court has obtained jurisdiction of the person of the defendant in the action, it retains that jurisdiction for all purposes of enforcing the judgment, and the order to show cause was properly served on the defendant’s attorney.

    Court’s Reasoning

    The court distinguished between criminal contempts and civil contempts, noting that civil contempt proceedings are used to enforce civil remedies. In such cases, the defaulting party has already had the opportunity to contest their liability.

    The court reasoned that the proceeding to enforce the judgment is essentially an execution of the judgment, similar to an execution against a person in an action of tort, where imprisonment can result without further opportunity to show cause.

    The statute governing contempt proceedings does not specify how the order to show cause should be served. Therefore, the court applied the general practice of the court, which allows for service on the attorney of the party in an ongoing action.

    The court emphasized that the papers that brought the party into contempt were the certified copy of the judgment and the referee’s summons requiring the defendant to appear, which were personally served. Grant’s refusal to comply with these constituted the contempt.

    The court also rejected the argument that the order to show cause was defective because it referred to the issuance of an attachment, finding that this did not mislead the defendant.

    Finally, the court stated that interrogatories were not required in this type of proceeding, and that the court retained jurisdiction over the defendant’s person for the purpose of enforcing the judgment. The court stated, “The court having obtained jurisdiction of the person of the defendant in the action, retains that jurisdiction for all purposes of enforcing the judgment, until its requirements are fully performed and executed.”