such force as to break the shafts of the truck which the plaintiff was unloading, to throw down the horse which was harnessed to that truck, and to crush the plaintiff between the truck and some boxes which were piled up about three feet distant. There was evidence tending to establish, further, that at the time of the collision the horse attached to the plaintiff's truck was standing still.

The learned trial justice dismissed the complaint at the close of the case on the ground that there was no evidence of defendants' negligence which would warrant a submission of the question to the jury, saying to the plaintiff's counsel, "I think you must show some act on the part of the driver that was reckless or negligent, or wanton or wrong in some way, and I do not see that you have shown any." There being evidence from which the jury might have reasonably inferred that the plaintiff's horse was standing quietly at the time, and that the collision was consequently the result of an effort on the part of the defendants' driver to turn or back his truck upon the dock, it was a question of fact whether that result could not have been accomplished in the exercise of ordinary care, without the violent contact which ensued. No claim was made that there was not ample room for both trucks, or that the defendants' driver was prevented in any manner from seeing what he was doing. Indeed, that driver presented his version of the occurrence, and, assuming that the event as he described it was not a physical impossibility, it certainly raised a clear issue of fact. The plaintiff's truck was standing east and west, the horse facing westerly, with the truck backed towards the river or easterly end of the pier. The defendants' driver drove upon the dock from the shore end, and when he reached the neighborhood of the river end he endeavored to turn his horses for the purpose of backing up alongside of the other truck. He testified:

"As I turned around, trying to back to Mr. Burke's truck, backing up- As I was turning around I hollered, 'Hey, there!' and the horse backed down, and his truck got into mine and crushed alongside of the dock, and I stopped my horse as quick as I could. * While I was backing in, Burke's truck

*

*

backed up in my way, and I hollered, 'Hey there!' as I was swinging around trying to back in. His truck hit mine. The two trucks collided. Burke's truck was standing into the river, and the horses standing to the shore, like. The horse was west and the truck was east, That is, the truck was backed up and the horses swung to one side, right alongside of the dock. Just before the accident my truck was just the same thing. When I was backing up, Mr. Burke's horse backed up and backed into my truck, and the two trucks come together. I was looking back all the time. Burke's horse was standing still when I started to back up. Up to that time I hadn't stopped at all. I was trying to get in. I was swinging in to get in position, and Mr. Burke's horse backed up."

It is not very clear how, under the circumstances, the horse attached to the truck which the plaintiff was unloading could have backed that truck against the defendants' truck, but even if the statement of the witness was such as was calculated, if accepted, to exculpate him from the blame and consequent liability with which he would otherwise be chargeable, his credibility was a matter for the consideration of the jury. That the case should have been submitted to the jury for determination has been often decided in controversies involving somewhat similar conditions. See Murphy v. Weidmann Cooperage, I App. Div.

$7 N.Y.S.-59

and 121 New York State Reporter

283, 37 N. Y. Supp. 151; Smith v. Bailey, 14 App. Div. 283, 285, 43 N. Y. Supp. 856; Nead v. The Roscoe Lumber Company, 54 App. Div. 521, 66 N. Y. Supp. 419; Curley v. Electric Vehicle Co., 68 App. Div. 18. 74 N. Y. Supp. 35; Steinacker v. The Hills Bros. Co. (Sup.) 87 N. Y. Supp. 33; Kettle v. Turl, 162 N. Y. 255, 56 N. E. 626. The judgment should be reversed.

Judgment reversed, and new trial granted; costs to abide the event. All

concur.

WALSH v. HANAN et al.

(Supreme Court, Appellate Division, Second Department. April 29, 1904.) 1. TORTS-JOINT TORT FEASORS-RELEASE OF ONE-DISCHARGE OF OTHERS.

Where the release of a joint tort feasor contains no reservation it operates to discharge his joint tort feasors, but where it expressly reserves the right to pursue others than the one released it is not a technical release, but a covenant not to sue, and the other tort feasors are not discharged.

2. COURTS-APPELLATE DIVISION-DECISIONS OF Court of APPEALS-EFFECT. Where, after a decision of affirmance by the Appellate Division, based solely on the construction of an instrument, the Court of Appeals places a different construction on an instrument, identical in legal effect, the Appellate Division, on reargument of the case in which its decision was rendered, must overrule that decision.

On Reargument. Judgment reversed.

For former opinion, see 66 N. Y. Supp. 1066.

Argued before HIRSCHBERG, C. J., and JENKS, BARTLETT, WOODWARD, and HOOKER, JJ.

JENKS, J. The judgment must be reversed, and a new trial must be granted. Mr. Duncan, the owner of a building, leased the shop and the basement thereof to Messrs. Hanan, who sublet the basement to Mr. Abramson. The plaintiff complained against the Messrs. Hanan, in that they negligently and unlawfully failed to protect steps which afforded access to the basement, so that the intestate fell down the steps to his death. At the close of the whole case the learned trial court dismissed the complaint, but not alone upon the plea of release hereinafter referred to, and the plaintiff appealed to this court. We affirmed the judgment, and I wrote for the court. Brogan v. Hanan, 55 App. Div. 92, 66 N. Y. Supp. 1066.

The defendants pleaded, inter alia, that the plaintiff had released under seal Mr. Duncan, the owner of the premises, from all liability, and read the release in evidence. The plaintiff had reserved therein all rights of action for negligently causing the death of her intestate against the Messrs. Hanan as lessees, and against all other person or persons in possession and control of the premises at the time of the casualty and prior thereto. We held that the defendants Hanan well pleaded the release in bar, because they were joint tort feasors with the owner of the premises. The many authorities for that proposition are cited in the opinion reported in the 55th Appellate Division Reports. But, since our judgment, the Court of Appeals has decided

Gilbert v. Finch, 173 N. Y. 455, 66 N. E. 133, 61 L. R. A. 807, 93 Am. St. Rep. 623. In the opinion the court, commenting upon a release with a reservation, say:

"Reservations of this character in releases are not uncommon, and their effect has been the subject of frequent adjudication by the courts. It is quite true that the courts of our sister states have reached different conclusions upon the question, and that a sharp conflict exists in the courts of our own state, as, for instance, Matthews v. Chicopee Mfg. Co., 3 Robt. 712, Commercial Nat. Bank v. Taylor, 64 Hun, 499 [19 N. Y. Supp. 533], on one side, and Mitchell v. Allen, 25 Hun, 543, Delong v. Curtis, 35 Hun, 94, and Brogan v. Hanan, 55 App. Div. 92 [66 N. Y. Supp. 1066], upon the other side."

After a long discussion, the opinion concludes:

"Where the release contains no reservation it operates to discharge all the joint tort feasors, but where the instrument expressly reserves the right to pursue the others it is not technically a release, but a covenant not to sue, and they are not discharged. It follows that the release, so called, did not operate to discharge the defendants."

Inasmuch as the clash of authorities seems to have been stilled by this decision of our highest court, our former judgment, which was based solely upon the release, must be overruled, and under the circumstances we think that a new trial of the issue is required. We do not intend to express any opinion upon the merits of the case aside from the feature of the general release, or in any other way to trammel the action of the court upon the new trial granted.

Judgment reversed, and new trial granted; costs to abide the event. All concur.

SLAYBACK v. RAYMOND et al.

(Supreme Court, Appellate Division, First Department. April 22, 1904.) 1. EQUITABLE JURISDICTION-TRUSTS IN PERSONALTY-DELIVERY FOR SPECIFIC PURPOSE.

Where stock in a corporation was delivered by a stockholder to an officer of the corporation under an agreement that it was to be transferred by the officer to a capitalist to induce him to give the corporation financial and other aid, the officer held the stock in trust for the purpose for which it was delivered to him, so that, on his failure to so use it, equity had jurisdiction to enforce an accounting.

2. SAME RESCISSION.

It appearing that the officer never intended to use the stock for the purpose for which it was delivered to him, equity also had jurisdiction to enforce a rescission of the contract and redelivery of the stock.

3. FRAUD-LIMITATION OF ACTIONS.

A stockholder in a corporation, who was also creditor thereof, delivered stock to an officer of the corporation under an agreement that it was to be transferred to a certain capitalist to induce him to render financial assistance and uphold the credit of the corporation. The officer had, at the time the stock was delivered to him, no intention of transferring it as agreed, and did not transfer it. Held that, though the credit of the corporation was maintained, the transaction was fraudulent as against the stockholder, so that under Code Civ. Proc. § 382, subd. 5, the stockholder's right of action was not barred by limitations until six years after his discovery of the facts constituting the fraud.

4. SAME-DISCOVERY OF FRAUD-VIGILANCE.

A person who has been defrauded owes no duty to exercise vigilance in discovering fraud and taking prompt steps to rescind the contract induced thereby.

and 121 New York State Reporter

Appeal from Special Term.

Action by John D. Slayback against Charles M. Raymond and another. From a judgment for plaintiff (83 N. Y. Supp. 15), defendants appeal. Affirmed.

Argued before VAN BRUNT, P. J., and MCLAUGHLIN, PATTERSON, INGRAHAM, and HATCH, JJ.

Louis Marshall, for appellants.

Delos McCurdy, for respondent.

HATCH, J. The careful consideration which this case received at the hands of the learned trial judge, and the full discussion which was had of the facts and the law, has rendered our labor in disposing of the questions involved comparatively easy. We do not feel called upon to again recite the facts, which have been elaborately reviewed by the learned court below. Indeed, we should not find it necessary to give any expression of our views herein, were it not for the earnest insistence of counsel for the appellants that the court adopted erroneous rules of law in making disposition of the controversy. He earnestly contends that the plaintiff has an adequate remedy at law in the recovery of damages for the wrong which he claims to have been done him, in consequence of which the defendants are entitled to a trial by jury of the question of fact which the case presents. We are unable to support this contention. When the stock was delivered by Slayback to Raymond, it was upon the distinct understanding and agreement that it was to be delivered to Hemphill, Sr., for the purpose of inducing him to come to the rescue of the Carbon Steel Company by sustaining its credit. Plaintiff was pecuniarily interested in securing the continued credit and solvency of the Carbon Steel Company, in order that the securities which he held of the company might remain valuable, and also that it might be able to discharge the indebtedness held by the plaintiff and his wife against it. The stock was delivered to Raymond under such circumstances as brought the latter into a fiduciary relation with the plaintiff. In fact, he held the stock in trust, for delivery to Hemphill, having for its object the continued solvency of the Carbon Steel Company and the maintenance of its credit. Raymond had no right or authority to divert this stock from such purpose, and when he transferred it to his nephews and nieces, and failed to make use of it with Hemphill in securing the credit of the company, he was guilty of a breach of trust, violated his fiduciary duty, and rendered himself liable to account for the stock, its proceeds and earnings. If we substitute for the delivery of stock by the plaintiff to Raymond the delivery of money for the specific purpose for which Raymond was to use the stock, we have in all essential respects the case which was presented in Marvin v. Brooks, 94 N. Y. 71. In that case there was a delivery of money to be expended for a specific purpose, and the court, in holding that equity acquired jurisdiction of the subject-matter and could compel an accounting of the money thus received, said:

"But the jurisdiction of the latter court over trusts and those fiduciary relations which partake of that character remains, and in such cases the right to an accounting seems well established."

Here the stock was delivered for a specific purpose agreed upon between the parties. There would have been no delivery of the stock had the declared purpose of its use not been made obligatory upon Raymond. Having obtained possession of the stock under these circumstances, equity will lay hold of the transaction and require him to account for the manner in which he has performed the duties devolved upon him, and upon him rests the burden of showing that he has discharged the trust reposed in him with fidelity. The doctrine of this case has never been disturbed in this state, and the same rule applies in an accounting for property as for money received under such circumstances. Schantz v. Oakman, 163 N. Y. 148, 57 N. E. 288; Underhill v. Jordan, 72 App. Div. 71, 76 N. Y. Supp. 266. In addition to this, it appears that plaintiff's remedy at law is inadequate. He was not only authorized to recover any damage which was sustained by reason of the diversion of the stock, but, upon discovering the fraud perpetrated upon him, he became entitled to a rescission of the entire transaction and the return of the stock, so far as the stock remained under the control of Raymond, or so far as the plaintiff was able to follow it into the hands of others than bona fide holders. Rescission of a contract may be had where a party has been defrauded in making it, and the property remains in a form unaffected by accruing bona fide rights, and where change has not been worked in the rights of third parties as would render inequitable such rescission so far as it applied to these. This rule has been uniformly applied in the case of agencies through which unfair and fraudulent dealings have been had. Erlanger v. New Sombrero Phosphate Co., L. R. 3 App. Cas. p. 1218.

It is the right of the plaintiff to have restored to him the property which has been misapplied, and to receive benefits therefrom so far as the same may be derived from the present situation and the rights of innocent third parties will not be prejudiced. This entitles him to a return of the stock for the purpose of surrendering it in order that an equivalent of shares may be issued to him by the new corporation. This relief he cannot obtain in an action at law, and to this relief the plaintiff is entitled. Pollock v. National Bank, 7 N. Y. 274, 57 Am. Dec. 520; Cushman v. Thayer Mfg. Jewelry Co., 76 N. Y. 365, 32 Am. Rep. 315; Bedford v. American Aluminum, etc., Co., 51 App. Div. 537, 64 N. Y. Supp. 856. The same principle is recognized in Bosley v. N. M. Co., 123 N. Y. 550, 25 N. E. 990, relied upon by the appellant. The fact that a rescission may not be practicable upon the rendition of a judgment does not oust the court of its equitable jurisdiction. Having once acquired jurisdiction, it may retain it and award a money judgment where there would otherwise be a failure of justice. Valentine v. Richardt, 126 N. Y. 272, 27 N. E. 255. It is made to appear in the present case that a large proportion of the stock which was delivered to Raymond still remains under the latter's control, is capable of delivery, and when delivered can be surrendered for shares in the new company. Upon both grounds, therefore, that a fiduciary relation creating a quasi trust existed which entitled the plaintiff to an accounting, and also upon the right to a