Leinkauf v. Lombard

Citation137 N.Y. 417,33 N.E. 472
PartiesLEINKAUF et al. v. LOMBARD et al.
Decision Date14 March 1893
CourtNew York Court of Appeals

OPINION TEXT STARTS HERE

Appeal from superior court of New York city, general term.

Action by Joseph H. Leinkauf and another against Josiah Lombard and others to recover for goods lost while in defendants' care under a contract of shipment. From a judgment of the general term (17 N. Y. Supp. 953) affirming a judgment in favor of plaintiffs, defendants appeal. Reversed.

O'Brien, J., dissenting.

Goodrich, Deady & Goodrich, (John A. Deady, of counsel,) for appellants.

Horace E. Deming, for respondents.

GRAY, J.

The plaintiffs were a mercantile firm in Mobile, Ala., and have brought this action to recover for the value of goods shipped to them from New York upon a steamship of what was known and advertised as the New York & Mobile Steamship Line. The shipping contract had been made with a person signing as ‘agent,’ merely; the paper being headed ‘New York & Mobile Steamship Lin.’ The vessel was lost upon the voyage, and the defendants are sued as having been engaged as common carriers, under the name above stated, in the business of transporting freight and merchandise between the ports of New York and Mobile. Their answer denies that allegation. Upon the trial it was shown that the New York & Mobile Steamship Line was not a corporation, but a mere name or title; and the plaintiffs introduced evidence for the purpose of establishing that the defendants were associated together in transacting the business under that name. Upon the part of the defendants, evidence was given to show that the defendants were the officers and managers of a corporation organized under the general manufacturing act of this state, and transacting business under the name of Lombard, Ayres & Co., and that this steamship enterprise was conducted by that corporation in connection with their chartered business, which was the ‘distilling and refining of petroleum,’ and the buying, selling, or otherwise dealing ‘in all materials, apparatus, and products necessary or useful thereto, or resulting therefrom,’ etc.

The defendants' counsel, at the close of the plaintiffs' proofs, moved to dismiss the complaint on the ground, among others, that no cause of action was shown against the defendants; and when all the proofs were in he moved to direct a verdict for the defendants, on the ground that no connection was shown between the plaintiffs and them in the contract. Both motions were denied, and the denials were excepted to, and the question is thus raised as to whether there was any evidence for the jury to consider which established, or tended to establish, the fact that the defendants were associated in running this steamship line in their individual interest, and not the corporation of Lombard, Ayres & Co. If the evidence was conflicting upon that question, if it was open to opposing inferences by the jury, we should not be authorized to interfere with their verdict; but we are unable to find anything in the record from which it could justly be inferred that these defendants were individually concerned in this enterprise, or that, in all its incidents, it was not conducted by and for Lombard, Ayres & Co.; the defendants, as the managers of that corporation, having the management and direction of the steamship business, through agents, selected by them, at the two ports. This was made evident upon the testimony of the witnesses whom the plaintiffs called and examined. One of these witnesses, named Tweedy, had been a clerk of the firm of Bowring & Archibald, who chartered the vessels, and his testimony was that that firm acted as agents for the corporation of Lombard, Ayres & Co. in securing the charter party; that they acted for a while as agents of the line, and kept an account for each voyage; and that the expenses in excess of receipts were paid by Lombard, Ayres & Co., and when receipts were in excess of expenses they would hand over a check to that corporation. From the evidence of that witness it would seem clear enough that the defendants did not inaugurate and run the linefor themselves. Upon the evidence, however, of another witness (Haven) it is insisted that the jury were warranted in finding against the defendants on the question of who were the principals behind the agent who had made the contract with the plaintiffs. But his testimony does not, when fairly read, bear the construction, nor justify the inference, contended for. Haven was secretary of the Lombard, Ayres & Co. corporation, and he particularly managed this line of steamships. From his testimony, it appeared that the establishment of the line was determined upon between himself and Mr. Lombard and Mr. Ayres, who were, respectively, the president and vice president of the Lombard, Ayres & Co. corporation. Undoubtedly, between these three, the inauguration of this enterprise, its policy, management, and all measures in the interest of the line were, or we must assume that they were, discussed and decided upon. There seems to have been no reference of matters to the action of the board of trustees of Lombard, Ayres & Co., and the official records of that company were said to be bare of any official action by that body in reference to the direction of the affairs of the line; and it appeared that those three gentlemen decided all such matters by themselves, and in the most informal way, so far as the corporation was concerned. While from Haven's testimony it did certainly appear that this line of steamers was started and run as the result of the informal action or decision of himself and his two associates; that they controlled and managed it equally informally between themselves; that the board of trustees of Lombard, Ayres & Co. did not act officially with respect to it; and that the company's books contained no record of resolutions, nor memoranda, upon the subject of the management of this line,-nevertheless it did appear upon his examination by plaintiffs that Lombard, Ayres & Co. furnished the agents of the line with the funds to pay its bills and expenses, and, upon his cross-examination, that Mr. Lombard and Mr. Ayres were the appointed managers of the affairs of Lombard, Ayres & Co., having absolute control; that the agents of the steamship line were the agents for that corporation; that this line was run as one of its departments; and that the witness, Lombard, and Ayres were neither associated together nor had any interest in the line, except as they were interested in the corporation as stockholders and the principal officers or managers.

The plaintiffs placed much reliance upon this evidence in its failure to show any facts making this steamship enterprise to appear in any wise as a corporate matter, and because, from the way it was started and conducted, it might fairly be inferred that these three defendants were concerned in the undertaking as individuals, and not as trustees. They argue that this inference is not only warranted by the evidence, but that it is borne out by the legal limitations upon the chartered powers of Lombard, Ayres & Co., which, being incorporated under the provisions of the general manufacturing act, was legally incapable of operating a steamship line, or of acting as common carriers in the transportation of merchandise. They say that...

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