Village of Port Jervis v. . First National B'k.

96 N.Y. 550, 1884 N.Y. LEXIS 525

• Court: New York Court of Appeals
• Decided: October 7, 1884
• Status: Published

Opinion

Huger, Oh. J.

The appellant states four grounds of objection to the judgment in this action, and they will be noticed in the order in which they are raised.

The first proposition is that the plaintiff should have been nonsuited, because of its omission to notify the defendant of the prior action of Hart v. Village of Port Jervis, such notice being claimed to be a condition precedent to a recovery in this action, for the reason that the plaintiff had authorized the defendant to make the excavation which caused the injury for which Hart recovered damages, and also because the notice claimed to have been given was insufficient.

It is well settled that a municipal corporation which has been compelled to pay a judgment recovered against it for damages sustained by an individual through an obstruction, defect or excavation in the sidewalk or street of such corporation, has an action over against the person who negligently or unlawfully created the defect which causes the injury. (City of Rochester v. Montgomery, 72 N. Y. 67, and cases there cited.)

This liability grows out of the affirmative act of the defendant and renders him liable not only to the party injured, but also mediately liable to any party who has been damnified by his neglect. Liability in such a case is predicated upon the negligent character of the act which caused the injury and the general principle of law which makes a party responsible for the consequences of his own wrongful conduct. (Clark v. Fry, 8 Ohio St. 359; Ellis v. Sheffield Gas Co., 75 Eng. C. L. 767.)

The liability of the author of the act which occasions the injury does not depend upon the fact of his receiving notice of the action brought by the injured party against the municipality, which, under the law, is also liable for the damages occasioned by its neglect of duty in keeping its streets and sidewalks in repair, but rests upon his original liability to all persons who may have suffered damages from his affirmative act of negligence. (Chicago City v. Robbins, 2 Black, 423.) The only object of notice in such a case is to enable the corporation to avail itself of its right to impose the burden of defense upon the party ultimately liable, and to estop the author of the injury by the judgment recovered, from again contesting the facts upon which such judgment depends.

The omission to give notice in such case does not go to the right, of action, but simply changes the burden of proof, and imposes upon the party against whom the judgment was recovered the necessity of again litigating and establishing all of the actionable facts. (Aberdeen v. Blackmar, 6 Hill, 324; Bridgeport Ins. Co. v. Wilson, 34 N. Y. 281; Binsse v. Wood, 37 id. 530.)

But if the party who is ultimately responsible has notice of the pendency of an action against his indemnitee and is .given an opportunity to defend, and neglects it, he is still bound by the result of the action and estopped from controverting in an action subsequently brought against him by such indemnitee, the facts which were litigated in the original action.

Consent given by a corporation to a citizen to make an excavation in a public street does not vary the rights or liabilities of the parties in respect to such a cause of action when it is based upon the wrongful and negligent manner on which the act was done, and not upon its unlawfulness. (Mairs et al. v. Manhattan Real Estate Association, 89 N. Y. 503.)

Consent by a municipal corporation to a person to do a lawful act merely permits it to be done in a careful, prudent and lawful manner, and when it is performed in any other manner and injury to third persons ensues, the author of the injury is liable therefor.

Upon receiving a license from the body authorized to grant it to dig in a street, the licensee impliedly agrees to perform the act in such a manner as to save the public from danger and the municipality from liability. (Village of Seneca Falls v. Zalinski, 8 Hun, 571; City of Chicago v. Robbins, supra; Congreve v. Morgan, 18 N. Y. 84; Newton v. Filis, 85 Eng. C. L. 123.)

It was also said that the evidence was insufficient to establish notice of the pendency of the former action. While this point is not important upon the question of the motion for a non-suit it is material as affecting the admissibility and effect to be given to the former judgment as against the defendant in this action, and may properly be here considered.

In all cases where one stands in the position of indemnitor to others who are also immediately liable to a third party, his liability may be fixed and determined in the action brought against his indemnitee by notice of the pendency of such action, and an opportunity afforded him to defend it. (Aberdeen v. Blackmar, supra; Robbins v. Chicago City, supra ; Chicago City v. Robbins, supra.) In such case it has been held that it is unnecessary that he should.have notice in writing, or even express notice, but that notice may be implied from his knowledge of the pendency of the action, and his participation in its defense. (Barney v. Dewey, 13 Johns. 226 ; Beers v. Pinney, 12 Wend. 309 ; Heiser v. Hatch, 86 N. Y. 614.)

If he has notice of the pendency of the action, and of the intention of the defendant therein to look to him for indemnity in case of a recovery, and is not denied an opportunity to defend, he is bound by the result of such action. (City of Rochester v. Montgomery, supra; Heiser v. Hatch, supra ; Robbins v. City of Chicago, supra.) In the latter case it was said by Justice Clifford, that “persons notified of the pendency of a suit in which they are directly interested must exercise reasonable diligence in protecting their interests, and if, instead of doing so, they willfully shut their eyes to the means of knowledge which they know are at hand to enable them to act efficiently, they cannot subsequently be allowed to turn around and evade the consequences which their own conduct and negligence have superinduced. ”

It was shown in this case that one Everett was the president of the bank,, and was also a trustee of the village as well as a member of a committee of the defendant auth orized to contract for and superintend the construction of the bank building ; that he consulted with the attorney for the village with reference to the defense of the Hart case, and was informed of the probable liability of the bank to the village in case of a recovery by Hart in that action. He was a witness on that trial, and directed an appeal which was taken from the judgment recovered therein against the village. There can be no question but that the president was the proper agent of the bank, and chargeable with the duty of taking such measures for the protection of its interests as necessity or prudence required. He was empowered through its by-laws to call special meetings of its directors when, in his opinion the interest of the defendant required it, and was specially charged with the duty of controlling and directing the conduct of its subordinate officers, and of communicating to the board of directors all such information as he might think of sufficient importance to impart. He was held out by the corporation as the natural and official head of the institution, and from necessity, as well as delegated authority, was the channel through which the corporation received from and communicated to third persons information and notice requiring corporate action. His authority was not limited to the locality where the defendant transacted business, but wherever he might be, he was subject to receive notice on behalf of the bank, and it then became his duty to communicate the information received by him to the board of directors, if circumstances required it.

Whenever the law requires notice to be given to a moneyed corporation, it is well served by being communicated to its chief financial officer (New Hope & Del. Bridge Co. v. Phenix Bank, 3 N. Y. 166), and when his agency is of a continuous character, and the duty rests upon him to communicate information acquired by him. to his principal, his knowledge, however and wherever acquired, becomes the knowledge of his principal, and it is bound thereby. (Holden v. N. Y. & F. Bank, 72 N. Y. 286; Fulton Bank v. N. Y. & S. Canal Co., 4 Paige, 127.)

A corporation can acquire knowledge or receive notice only through its agents, and if they should be thus debarred from receiving it, it would be deprived of an essential and important function of its corporate existence.

Numerous cases are cited by the appellant to the effect that knowledge acquired by a director of a corporation when engaged id business transactions outside of his official duty, is not chargeable to the corporation of which he is a director, as its knowledge. These cases obviously have no - application to the facts of this case. A director of a corporation is an agent with limited powers, and has no original and independent capacity to represent or act for the corporation of whose governing body he is a mere factor. He may, of course, be delegated by the corporation to act for it in any special transaction, or may even be given general authority to act as its agent; but in the absence of such special authority, he can act for his principal only as a member of its board of directors in conjunction with his associates. (Nat. Bank v. Norton, 1 Hill, 572; Fulton Bank v. N. Y. & S. Canal Co., supra.)

We cannot doubt that within the authorities cited the evidence in this case was sufficient to authorize the jury to find that the defendant had notice of the pendency of the original action, and an opportunity to defend it if it had so desired. This being the ease, it was barred by the result of that-action, and the judgment-roll therein was conclusive evidence in this case of all facts litigated on the trial of that actioti. (City of Rochester v. Montgomery, supra ; Lovejoy v. Murray, 3 Wall. 18.)

The point taken that the court erred in admitting the judgment-roll in the action of Hart v. The Village of Port Jervis is therefore not sustainable.

Another point in connection with the evidence of notice to the defendant was also taken which may conveniently be disposed of here. The defendant excepted to that portion of the charge of the court wherein the jury was instructed that “the uncontradicted evidence -proves that the bank did have such notice as to bind them by the judgment recovered by Helena M. Hart against the village of Port Jervis.” The facts from which notice to the bank is implied in this case were those which have been stated, and were practically undisputed. It is true that Hr. Everett testified with reference to the testimony given by the attorney for the village, that he informed the bank president that the village had the right to look to the defendant for indemnity in case it was defeated in the Hart action, that he did - not recollect the conversation. This evidence hardly presented such a conflict as rendered it necessary for a jury to pass upon it; but we consider it unnecessary to decide that question, since there is another sufficient reason for holding the exception unavailing.

The court had, in declining the motion for a nonsuit, which was based upon the insufficiency of proof of notice, held that the evidence was sufficient to entitle the plaintiff to go to the jury. The defendant did not after that ask to go to the jury on that question. If the defendant’s counsel desired that the question of fact involved should have been submitted, he should have so requested the court. Having neglected to take the point when opportunity presented itself, he has no right now to raise it. (Ormes v. Dauchy, 82 N. Y. 443.) The question presented by the exception to the charge is the same in character as that raised on the motion for a nonsuit, and required, as was probably intended, the consideration merely of the legal sufficiency of the evidence of notice. We have considered and approved of the disposition of that proposition by the court below.

The only remaining question is that raised by the .exception taken to the ruling of the court excluding evidence to show the condition of the barricades around the excavation on the day after the accident occurred. Under the circumstances of the case this evidence had no tendency to show the condition of the barricades upon the preceding day, and was, therefore, properly excluded by the court.

The judgment should, therefore, be affirmed.

All concur.

Judgment affirmed.