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and 121 New York State Reporter I also think that, by a great preponderance of evidence, the amount of work that Mertz & Gibb left undone at the time the contract was in effect abandoned by them was much in excess of the amount which, according to Mertz's testimony, was unfinished at the time they abandoned the work. The whole testimony upon which the finding that work of the value of $2,800 rentained to be done to entitle Mertz & Gibb to the total amount to be paid to them under the contract was based upon the testimony of Mertz. He testified as to the work that remained to be completed, and that it would cost $2,800 to finish it. He is contradicted by his letter that he wrote to the defendant on May Ist. That letter pretends to give a brief statement of the facts showing the present relations of the parties to the contract, and says:
“We have performed all of the work under our contract, except about $8,800 worth. We are unable to complete that, on account of the abandonment of the work by our employees. We claim that this abandonment was without any default on our part. You claim that the abandonment was a strike, alleged to have been induced by our conduct toward the delegate of a labor union.”
Mertz, when confronted with this letter, admits that he dictated it; that he read it over, signed it, and sent it; but he states that he did not mean to say that there was $8,800 worth of work not finished, but that he was to receive that amount from Norcross when the contract was completed. But the letter shows that that could not have been his meaning. He was speaking of the completion of the contract, not of the amount that he would be entitled to receive upon the completion of the contract; and from the whole letter it is quite evident that it was written under what he speaks of in his letter as the “advice of reliable counsel.” It is not conceivable that a carefully prepared letter, written under the advice of counsel, could have contained such a mistake as Mertz seeks to show that it contained; and in the face of the evidence by the defendant showing that a much larger amount of work was undone than that testified to by Mertz, and that the cost of doing that work was several thousand dollars more than the total amount that would have been payable to Mertz & Gibb by Norcross if they had completed their work, I do not think that the finding that the work left undone amounted to $2,800 was sustained by the evidence.
Taking this controversy as it stands, the question is whether the plaintiff, who furnished Mertz & Gibb with materials to do their work, or Norcross, who was compelled to do the work left undone by Mertz & Gibb at an expense in excess of that at which Mertz & Gibb were to receive, is to bear the loss; and, to impose a liability for that loss upon Norcross, it must appear that Norcross did owe Mertz & Gibb the amount that the plaintiff clained from Mertz & Gibb. It seems to me that if Mertz & Gibb had been plaintiffs, and were suing Norcross to recover a balance due upon a contract, Norcross could not be held liable; and, as the plaintiff can only recover the amount that was due by Norcross to Mertz & Gibb, I think that there was nothing due, and that the plaintiff was not entitled to recover. The order given by Mertz & Gibb in favor of plaintiff, and which was accepted by Norcross, does not justify a recovery against Norcross, because, so far as appears, all moneys agreed to be paid to plaintiff, except the 25 per cent. of the value of the materials furnished, had been paid, and, as that 25 per cent. was to be paid out of the amount due on the last payment to Mertz & Gibb when the plastering work was finished, and as no last payment ever became due to Mertz & Gibb, they never having finished the plastering work, nothing was due to the plaintiff.
It follows that the jụdgment appealed from must be reversed, and a new trial ordered, with costs to the appellants to abide the event. All concur.
(92 App. Div. 1.)
In re LONG ISLAND LOAN & TRUST CO.
• Appeal of SLOAN.
(Supreme Court, Appellate Division, Second Department. March 18, 1904.)
1. TBUST--SALE OF TRUSTEE'S PROPERTY TO TRUST-PUBLIC POLICY.
The sale by a trustee of its own property to the trust is yoid as against
public policy. 2. SAME-ESTOPPEL OF BENEFICIARY-NOTICE.
The entry, "February 1, 1893, L. I. L. & T. CO., T. Donohue Mtge. No. 3. $7,800," in a report of a trustee to a beneficiary, was insufficient to give notice that the trustee had sold the mortgage, which previously belonged to it, to the trust, so as to form the basis of an estoppel of the beneficiary
from questioning the invalidity of the act. 3. SAME-DECREE IN ACCOUNTING.
A decree on a trustee's accounting does not estop the beneficiary from questioning the validity of a prior act of the trustee which was not liti.
gated on that accounting. 4. SAME-BURDEN OF PROOF.
Where a trustee relies on a decree in a former accounting to estop the beneficiary from questioning the validity of a sale by the trustee to the
trust, the burden is on the trustee to show that the question was litigated. 5. SAME-REFUSAL TO OPEN DECREE.
Where the validity of a sale by a trustee of its property to'the trust was not litigated on an accounting, the refusal of the court to open the decree does not estop the beneficiary from questioning the validity of the trustee's act in a subsequent accounting, the opening of a decree being a matter within the discretion of the court.
Appeal from Surrogate's Court, Kings County.
Proceedings in the matter of the judicial settlement of the account of the Long Island Loan & Trust Company, as substituted trustee under a trust for the benefit of Lillie G. Sloan, created by the last will and testament of Stephen Garretson, deceased. From a decree judicially settling the accounts of the trustee, the beneficiary appeals. Reversed.
Argued before HIRSCHBERG, P. J., and BARTLETT, JENKS, WOODWARD, and HOOKER, JJ.
Charles D. Ridgway, for appellant.
WOODWARD, J. Stephen Garretson, by his last will and testament, created a trust fund for the benefit of Lillie G. Sloan, and upon her death the trust fund was to be divided among her children. The Long Island Loan & Trust Company is the substituted trustee, and this appeal is from a decree. made in an intermediate accounting by and 121 New York State Reporter the trustee, whereby the trustee's account covering the period from June 20, 1898, to February 28, 1903, was "sustained in every respect.” The life tenant objected to the account, and urged before the learned Surrogate's Court that a certain piece of real estate known as “No. 1459 Fulton Street, Brooklyn,” inventoried by the trustee in its account at $9,106.61, be adjudged to be the property of the trustee, and the trustee be adjudged to repay to the trust fund the amount at which it is inventoried, with interest at 6 per cent. from the time of the foreclosure, less such income therefrom as may have been paid to the appellant.
It seems that the principal of this trust fund amounts to $28,556.63, and that when it came into the hands of the present trustee in 1889 it was all invested in bonds and mortgages. On the 4th of June, 1888, the present trustee, in pursuance of its own business, had made six mortgage loans of $8,000 each to Thomas Donohue on six four-story houses erected on lots 20 by 100 feet, situated on the southerly side of Fulton street, just east of Brooklyn avenue. With these mortgages in its possession, the executive committee of the board of trustees of the Long Island Loan & Trust Company in 1893 adopted the following resolution :
"Resolved, that in consequence of the difficulty of procuring satisfactory bonds and mortgages for the uninvested funds held by this company as trustee, etc., the following bonds and mortgages, being the property of the company, shall, after the first of February next, be held for the different trusts, as named below, viz.: Bond of T. Donohue, No. 3, amount, $7,800, for the trust of Lillie G. Sloan,” etc.
There appears to have been no other transfer of this mortgage to the trust fund created for Lillie G. Sloan, and the life tenant urges with great force that, assuming this to have been a sale to the trust by the trustee, it is in violation of the public policy of this state, which forbids a trustee dealing with the trust estate both as buyer and seller. Subsequent to this resolution, which did not convey the mortgage to the trustee, and on the 7th day of August, 1894, the Long Island Loan & Trust Company began an action for the foreclosure of this mortgage in its own name, and not as a trustee. Judgment of foreclosure and sale was entered November 12, 1894, and on the rith day of December, 1894, the mortgaged premises were sold at public auction by the sheriff of Kings county, and purchased by the Long Island Loan & Trust Company, and the same were transferred to the said company in its own right in fee simple, and not as trustee. What the life tenant demands, and what she is entitled to if she is not estopped to assert her rights, is that this piece of property shall be adjudged to belong, as it does, to the trustee, and that the trust fund shall be made good, with interest at 6 per cent., less any income which may have been paid to the life tenant. The transaction on the part of this trustee, no matter what degree of good faith may have been back of the resolution of 1893, is counter to public policy. Trustees cannot be permitted to deal with trust funds in the dual capacity of buyer and seller. It has long been settled, and upon principles which cannot be controverted, that a trustee cannot deal in his own behalf with the funds intrusted to his charge for the benefit of another. He can neither purchase the trust funds for himself nor exchange them for his own property. Acker
man v. Emott, 4 Barb. 626, 649; Smith v. Howlett, 29 App. Div. 182, 51 N. Y. Supp. 910.
It does not appear to be seriously contended that the trustee had a right to deal with the trust fund in the manner which it is agreed was done, but it is urged that the life tenant has ratified the action of the trustee, or has been estopped by a former decree. It appears that in 1893 the trustee made a report to her, in which appears this entry: “February 1, 1893, L. I. L. & T. Co., T. Donohue Mtge. No. 3, $7,800." Just how this was calculated to give the life tenant notice of the state of facts which is now developed it is difficult to understand, and we are clearly of the opinion that it did not serve any such purpose. Where ratification on the part of a cestui que trust is set up, it must appear not only that the cestui que trust knew all of the facts, but that she had been informed of her rights under the law; that she had been told of the disposition which a court of equity would make under the known facts. Smith v. Howlett, 29 App. Div. 190, 51 N. Y. Supp. 910, citing Adair v. Brimmer, 74 N. Y. 539, 554. There was no ratification on the part of the life tenant, and we are persuaded likewise that the decree of June 21, 1898, is not a bar to this appeal.
The trustee accounted in 1898, but none of the questions here raised was put in issue in that proceeding, and the decree on that accounting discharged the trustee only as to the assets directed to be distributed thereunder and the amount of the trust estate. As the trustee claims this decree to have worked an estoppel, the burden of proof is upon the trustee to show clearly that the question in issue in this case was litigated and determined in the former action (Rudd v. Cornell, 171 N. Y. 114, 127, 63 N. E. 823, and authority there cited), and, having failed to show this, the life tenant is not estopped to assert her rights at this time. Nor is the position of the trustee changed by the fact that the life tenant made a motion in May, 1903, to open the decree of August. 1898, in which the matters here involved were set up as a reason for opening the former decree. The opening of the former decree rested in the discretion of the learned surrogate, and, as the former decree did not attempt to settle any of the questions which weré urged on this motion, the denial of the motion did not affect any substantial right of the life tenant, and under well-established rules it could not work an estoppel on this accounting. Dutton v. Smith, 10 App. Div. 566, 42 N. Y. Supp. 80.
The decree should be reversed, and the life tenant should be given the relief demanded. All concur, except JENKS, J., taking no part.
(91 App. Div. 583.)
STRAUSS v. NEW YORK, N. H. & H. R. CO. (Supreme Court, Appellate Division, Second Department. March 15, 1904.) 1. DEATH BY WRONGFUL ACT-INJURY IN FOREIGN STATE-SIMILARITY OF STAT
Gen. St. Conn. 1887, tit. 18, c. 73, & 1008, providing that actions for injuries to the person, resulting in death, shall survive to the executor or administrator, is sufficiently similar to Code Civ. Proc. $ 1902, conferring upon the executor or administrator the right to maintain a suit for wrongand 121 New York State Reporter fully causing the death of decedent, that an action may be maintained in New York for the death of a person caused by injuries received in Con
necticut. 2. SAME-RAILROADS_DEFECTIVE CAR OF ANOTHER COMPANY.
A railroad company is liable for the death of an employé from injuries caused by the defective condition of cars in its use, but belonging to
another corporation. 3. MASTER AND SERVANT-CONCURRENT NEGLIGENCE OF FELLOW SERVANT.
Where a master is negligent, the fact that an injury to a servant was partly due to the negligence of a fellow servant does not bar a recovery against the master. Appeal from Special Term, Dutchess County,
Action by Iona Strauss, as administratrix of John Strauss, deceased, against the New York, New Haven & Hartford Railroad Company. From a judgment for defendant, plaintiff appeals. Reversed.
Argued before HIRSCHBERG, P. J., and BARTLETT, JENKS, WOODWARD, and HOOKER, JJ.
William H. Wood, for appellant.
WILLARD BARTLETT, J. The plaintiff's intestate, a brakeman in the employ of the defendant, was killed while at work upon one of its trains in the state of Connecticut. His death occurred while the person in charge of the train was endeavoring to couple two freight cars belonging to the Baltimore & Ohio Railroad Company. The brake at which the deceased was stationed was at the end of one of these cars, so that he had to stand between the cars to operate it. Along the top of each car was a running board. These boards prow jected over the roofs of the cars, so that when they came together there was a space of but four inches between the ends of the boards. The plaintiff's intestate was caught between these ends as the cars came together, and sustained injuries, from the effects of which he died.
The complaint was dismissed at the close of the plaintiff's case upon three grounds: (1) Because the statute of Connecticut permitting a recovery for negligently causing the death of a person was deemed to be essentially different from the statute on the same subject in this state; (2) because the proof was regarded as insufficient to charge the defendant with negligence; and (3) because the evidence showed that the cars came together at the rate of six or seven miles an hour, indicating negligence on the part of the operator of the train, a fellow servant of the deceased.
The dismissal of the complaint cannot be sustained on any of these grounds. It is true that the Connecticut statute set out in the record is not exactly like ours. It provides that actions for injury to the person, whether the same do or do not instantaneously or otherwise result in death, shall survive to the executor or administrator of the person killed. Section 1008, Gen. St. Conn. 1887, tit. 18, c. 73. Our statute, on the other hand, confers upon the executor or administrator a right to maintain a suit for wrongfully or negligently causing the death of
1 2. See Master and Servant, vol. 34, Cent. Dig. $$ 195, 236.