Coster v. N. Y. & Erie Railroad

This case comes on, to be heard, upon an appeal from the judgment of the Special Term,-in favor of the defendants, upon their several demurrers to the complaint.

The complaint, in the first nineteen folios thereof, avers that the plaintiffs, and Cornelius Vanderbilt and James B. Townsend, were, on the 22d day of October, 1853, owners of the steamboat Francis Skiddy, in the proportions following: Coster and Andrews, the plaintiffs, each two-twentieths, Vanderbilt eleven-twentieths, and Townsend five-twentieths, and being such owners, they, on the day aforesaid, entered into an agreement with the defendants, the New York and Erie Railroad Company, by which they let, and delivered to the company, the said boat, and the company hired, and took possession thereof, and agreed to pay all expenses of running the same, and to keep her in good repair, and to pay to the said plaintiffs, Vanderbilt and Townsend, for the use thereof, one hundred dollars per day, “ during all such time as the said plaintiffs, Vanderbilt and Townsend, should permit the said boat tó be and continue in the possession of the said company, and not withdraw the same from such possession.”

That from the date of such agreement until now the said boat has been, and now is, in possession of the company, under such agreement, by the permission of the plaintiffs, and Vanderbilt and Townsend, and has never been withdrawn by them. That the said plaintiffs, and Vanderbilt and Townsend have duly performed, etc.; but that the said company have never paid the said sum of one hundred dollars per day for the use of the said boat. That the said company are liable to pay the amount aforesaid, and that the plaintiffs are each entitled to one-tenth part thereof, and that the company refuse to pay the same or any part thereof.

This is a plain statement of a good and sufficient cause of action, on a special contract, and for the recovery of money which, upon the facts stated, is due to the plaintiffs, and Vanderbilt and Townsend. The contract set forth is single and entire. The agreements, on the part of the company, are to, and with, the plaintiffs, and Vanderbilt and Townsend, jointly, and not severally. There is no intimation that the defendants have undertaken to pay the charter money to the several owners in the proportions of their respective interests in the boat.

But, in truth, as before observed, the company’s agreement is single; it is made with all; the title to recover under it is vested in all; the money due upon the agreement belongs to all, irrespective of the state of the accounts between them and the respective shares into which it may be divisible when recovered, with which the company have nothing to do; and all must unite in the action brought to enforce the agreement, and recover the charter money, unless some facts are stated in the complaint which excuse the plaintiffs from uniting Vanderbilt and Townsend with them as plaintiffs. If that be done, then, notwithstanding the rule be as we have stated it in actions at law, the plaintiffs may unquestionably proceed upon their equitable rights, and, in equity, enforce them and recover the money. But even then, they must make Vanderbilt and Townsend parties to the action, as defendants, unless they also show that Vanderbilt and Townsend have ceased to have any interest in the matters in controversy.

The only further statement in the complaint, affecting Vanderbilt and Townsend in any manner, and, therefore, the only one which bears upon the question above considered is, that after-wards the company, with malicious intent to cheat, etc., etc., “ fraudulently purchased from Vanderbilt and Townsend their respective five and eleven-twentieth parts of the said steamboat, in the name of Eli Kelly, but in trust, and for the benefit of, the said company.”

Whether this purchase was made with a bad motive or not is quite immaterial; the motive furnishes no ground of appeal to any court unless, nor until, some wrongful act is done, attempted, or threatened, which act it is proper should be either restrained or redressed. The act charged here is a perfectly lawful act, a purchase. The plaintiffs have no cause of complaint in that respect. Vanderbilt and Townsend had a right to sell; the company had a right to buy; and unless the plaintiffs mean that the purchase was a fraud upon Vanderbilt and Townsend, no wrong was done to any one thereby. When Vanderbilt and Townsend come into court, alleging that the purchase was fraudulent, the allegation may be material. This averment of fraud, therefore, has no bearing upon the question whether Vanderbilt and Townsend should be parties to the action. The plaintiffs are not, and could not, upon any facts stated, ask to have the sale set aside, and, if they did, they must make Vanderbilt and Townsend parties, either plaintiff or defendant. The case stands, then, upon the fact averred, that Townsend, on the 14th day of November, 1853, and Vanderbilt, on the 10th of March, 1854, sold to the defendants (who purchased in the name of Eli Kelly) their respective twentieth parts of the said boat; and the plaintiffs claim to recover for, not only the money accrued and payable for the use of the boat since those dates, but, also, from the day the original agreement was made, i. e., for over thirteen thousand dollars accrued before Vanderbilt sold his share of the boat; and there is not an intimation in the complaint that Townsend, for the period in which he continued to be an owner, and Vanderbilt, for the residue of the term, are not jointly interested with the plaintiffs in the recovery of that money. The averment of the sale of the boat does not, therefore,

If not made parties plaintiff they should have been made defendants. There is no averment that they refuse to join in the action; there is no averment that they have been guilty of any fraud, or are parties to, or are even cognizant of any fraud done, attempted, or contemplated by the company.

The demurrer for want of these parties was, therefore, properly sustained.

1. In reference to the cause of action now in question, the purchase of the boat by the company, if true as alleged, is undoubtedly a sufficient reason for proceeding by what would formerly have been termed a bill in equity. The union of interest in the company, as owner and hirer, would so embarrass an action at law, that adequate justice could not be done; but all parties interested in the charter money should be before the court.

2. The next cause of action, or combination of facts, upon which the plaintiffs rest a claim to recover, consists in averments that the company, in May, 1854, caused and procured the said sixteen-twentieths of the said boat to be conveyed, by the said Eli Kelly, to the defendant Daniel Drew, (the said Drew fraudulently pretending to be the owner, but being in fact the mere trustee and instrument of the company); and that Drew and the company have fraudulently combined to cheat the plaintiffs, the said company procuring the said Drew to consent, and Drew consenting to withdraw the said boat from navigation; the said Drew taking possession, laying her up at the dock and keeping her unemployed, with the fraudulent design of releasing and discharging the said contract of hiring; and that the said Drew on or about the 19th of May, 1854, as such pretended but fraudulent owner, took possession of the boat, and, without the plaintiff’s consent, withdrew her from the navigation in which she had been employed under the agreement .of hiring, laid her up at a dock where she has ever since remained unemployed and unused, but in the possession of the company, through and by means of said fraudulent combination and confederacy .with Drew; and the plaintiffs then aver that “ by reason of being so fraudulently withdrawn from navigation and laid up at dock by the defendants, and from want of care and attention on their part in her safe

The plaintiffs then add, that their shares of the boat were worth fifty thousand dollars before the said purchase by the company and the said withdrawal from navigation, which they charge will be lost by the wrongful acts mentioned, and which they claim to recover in addition to the said hire of the boat from the defendants herein.

The distinct and only cause of action here alleged, is the withdrawal of the boat from navigation, laying her up at the dock, and the damage and deterioration in value arising from that, and from neglect and want of repairs; and this is made the basis of a claim to recover her full value.

Now, if this cause of action is claimed to arise on the contract alleged in the complaint, it is liable to two difficulties. In the first place, no agreement by the company to employ the boat upon the Hudson River or elsewhere is alleged in the complaint; the promise and agreement by the company is to pay all expenses of running the boat, and to keep her in good repair, and to pay $100 per day for the hire thereof, so long as the owners should permit her to remain in the possession of the company. This undoubtedly discloses an intention to run the boat, and binds the company to pay the expenses, if any, so incurred, but so long as the company retain possession of the boat they must pay the hire whether they run the boat or not, and so long as the company pay the hire they were at liberty to run her or not at their pleasure.

And as respects the agreement to keep the boat in repair, we doubt very much the sufficiency of the averment in that respect. It is not stated in any manner which can be made the subject of a distinct issue, by denial, that the company have not kept the boat in repair. That, and that only, was their agreement, and it is not stated that they have not done so; but the statement is, that the boat “ has been greatly damaged, impaired, and deteriorated, and is constantly depreciating in value, by reason of being so fraudulently withdrawn from navigation and laid up at dock by the defendants, and from want of care and attention on their part

Besides, these facts do not warrant the relief prayed. If this cause of action is to be regarded as arising under the contract set forth in the complaint, the defendant Drew is not liable upon this cause of action at all; he has never contracted with the plaintiffs, and by virtue of the agreement in the complaint, he is not liable to damages; nor does the averment that the boat is constantly depreciating in value, and that the plaintiffs apprehend that her value will be wholly lost to them, warrant any recovery of her value as such. If the plaintiffs recover upon the contract they recover the damages actually sustained by a breach thereof, not the value of the boat, as such, nor damages which they apprehend will in the future be sustained. And it is, moreover, at least doubtful, so long as the company retain the possession of the boat and pay, or are called upon to pay the hire, (and both of these are alleged and insisted upon by the plaintiffs,) whether an action will lie on the agreement for not keeping the boat in repair, or if in form it may possibly be sustained, whether any more than nominal damages can be awarded; it is, however, not necessary to pursue that inquiry.

The only ground upon which Drew can be charged upon this cause of action, (if at all,) and the only ground upon which the company can be charged with him for the value of the boat, is that their fraudulent acts are tortious and tend to the destruction of the property, or amount to a conversion of the property to their own use. This was not insisted upon by the plaintiffs' counsel on the argument, and we apprehend it cannot be successfully insisted upon, see Moody v. Breck, ( 1 Sandf. 304 , and cases there cited); and if it could, then the complaint is bad, because it attempts to join such a cause of action with a cause of action arising upon contract only.

3d. The remaining cause of action, or ground for relief, consists in averments that the plaintiffs are citizens of this state, residing

Viewing this action as founded upon contract only, there is nothing in this averment calling for the interposition of the court, as a court of equity, in aid of the recovery of the money claimed; the relief prayed for, so far as it rests upon these last averments, is an injunction. If it be conceded that, upon the facts alleged, the plaintiffs would be entitled to come into this court, as a court of equity, and seek and have an injunction to prevent the removal of the boat beyond the jurisdiction of the state, there would be no propriety in inviting an inquiry into the right and power of the owners of a major part of the vessel to manage and control the same:with the claim to recover for the use of the boat. The act threatened does not render nor tend to render the judgment, which the plaintiffs seek for the hire of the boat, ineffectual, nor is there any thing stated showing it to be at all doubtful that the company are able to pay, and will pay, whatever they may be adjudged to pay.

So far as this part of the complaint proceeds upon the idea that, as part owners, the plaintiffs may come into a court of equity to restrain other part owners in the management or control of the vessel, it cannot be united with the action on a special contract for the hire thereof. I know of no rule of law or equity forbidding part owners selling their own interest in the vessel to any persons they may see fit, whether citizens or foreigners. But whether this court should, as a court of equity, take jurisdiction of the matter of the control and use of the vessel, or whether admiralty has exclusive, as it manifestly has appropriate jurisdiction, on that subject, we do not find it necessary to say, since we are of opinion that a ground of jurisdiction of this sort between part owners, as such, is not properly joined with an action on the agreement set forth in the complaint for the hire of the vessel, to recover the money due therefor.

The plaintiffs pray that both defendants be adjudged and decreed to pay the whole sum due for the hire of the boat. The defendant Drew is in no degree whatever interested in, and still less liable for any of the charter money accrued before the title to sixteen-twentieths of the boat was transferred to him; and as to what has since accrued he is no more liable, for if he is owner in fact, -and has done nothing to discharge the company from their obligation to pay, he, instead of paying, will be entitled to receive from the company a very large sum; but if the facts be as alleged and he only holds for the benefit of the company, still he has never agreed to pay to the defendants the hire of the boat. It is not alleged that he has collected it, or any part of it, and is liable to account to the other part owners therefor. A liability to such an accounting, and an action therefor, could not be joined with an action against the company for the hire unpaid, since in that accounting the company would have no interest.

I have already suggested that he is no more liable on the agreement for a neglect to repair; he has not agreed to repair, and a proceeding to recover damages against him, as part owner in possession, for neglect or carelessness, if it could be sustained, could not be joined with the action on the present agreement.

Still, in respect to the matter of the money due for the use of the boat, I apprehend that holding the legal title to sixteen-twentieths thereof, he is not an improper party, though it may be that if all the facts stated in the complaint be taken to be true and those sixteen-twentieths belong to the company, Drew would be a formal party only and it might not be erroneous not to join him.

Our conclusion is, that the demurrer, for the reasons stated above, was properly sustained, and that the judgment thereon should be affirmed. Doubtless leave would have been given to amend, if it had been desired by the plaintiffs.

Judgment affirmed, with costs.