$3,000 a year; and that this was derived chiefly from his personal efforts as a canvasser or salesman, he employing no other salesman or drummer. Held, that the case was one involving the investment of an insignificant capital, as a mere incident or vehicle to the performance of services almost, if not quite, purely personal in their nature, so that it was improper to refuse to submit to the jury such evidence as showing that plaintiff had sustained damages through loss of personal services, and to exclude further evidence on the same subject.

[Ed. Note.-For cases in point, see vol. 15, Cent. Dig. Damages, § 490.]

to consider "the nature of the business in which the plaintiff was engaged, its extent, and the particular part therein transacted by him," and the court replied: "I charge that, with the statement that you are not to take into consideration his earnings as testified to by him, for the reason that he stated that he had capital invested." To this modification of his request the plaintiff's counsel excepted, and later he excepted generally to that portion of the charge in which the jury were instructed to disregard the testimony of the

Action by Adolph S. Kronold against the city of New York. From an order (89 N. Y. Supp. 1109) of the Appellate Division, affirming an order of the Trial Term denying a motion for a new trial, plaintiff appeals. Reversed.

Theodore Sutro, for appellant. John J. Delany, Corp. Counsel (Theodore Connoly, of counsel), for respondent.

WERNER, J. This action was brought to recover damages for personal injuries sustained by the plaintiff and alleged to have been caused by the negligent failure of the defendant to keep in proper repair a crosswalk at the intersection of Elm and Walker streets in the borough of Manhattan. For the purposes of this discussion we may assume, although we do not decide, that the defendant's alleged negligence and the plaintiff's freedom from contributory negligence were sufficiently established to present questions of fact to be disposed of by a jury, and we shall confine our discussion to the single question whether the learned trial judge properly refused to submit to the jury the plaintiff's alleged loss of earnings or income as an element of the damages which should be awarded to him if he is entitled to a verdict.

At the close of the evidence the learned trial judge announced that he would not submit to the jury the plaintiff's claim for loss of income, because it appeared from his own testimony that he had $1,000 of capital invested in his business, and there was no evidence to show how much of his income had been derived from his invested capital and how much from his personal efforts. When this ruling had been made, plaintiff's counsel asked permission to put the plaintiff on the stand for the purpose of interrogating him as to the reasonable value of his services, or what compensation similar services would command. This request was refused, and plaintiff's counsel took an exception. The case was then submitted to the jury under a charge in which the income or earnings of the plaintiff from his personal efforts was distinctly excluded from considération as an element of any damages which might be awarded to him. At the conclusion of the main charge plaintiff's counsel requested the court to instruct the jury that it was for them

These exceptions, when considered in the light of the evidence, are sufficiently definite, we think, to present for our review the question whether the rulings of the court above adverted to present legal error or not, and a brief synopsis of the plaintiff's evidence on this subject will serve to fix the point of view from which that question should be considered.

Prior to the accident the plaintiff had been engaged in the business of selling Swiss embroideries. He took orders from shirt waist manufacturers, Vantine and others who dealt in such articles. These sales were made from designs or drawings procured from sample embroideries. No considerable stock of these embroideries seems to have been carried by the plaintiff, and the capital which he had invested in his business was approximately $1,000. His office expenses, which included rent and the wages of an office boy, did not exceed $600 a year. His net income was about $3,000 a year, and it is fairly to be inferred from his testimony that this was derived chiefly from his personal efforts as a canvasser or salesman, for he stated: "I really made my living only with my legs and maybe a little head also, but most my legs. Of course, I have been laid down; then I had to stop. I did not employ any salesmen or drummers or anything like that. I was myself a saleman and a drummer; out of town sometimes." When we add to this brief, but comprehensive, statement the suggestion that the amount of the plaintiff's income as compared with the so-called capital invested is, of itself, an almost conclusive argument against the theory that the plaintiff was engaged in a business which yielded profits from capital invested, it will readily be seen that this case should be classed as one involving the investment of an insignificant capital as a mere incident or vehicle to the performance of services almost, if not quite, purely personal in their nature. We so regard the case on principle, but this view is also well sustained by authority. In Pill v. Brooklyn Heights R. R. Co., 6 Misc. Rep. 267, 27 N. Y. Supp. 230, affirmed 148 N. Y. 747, 43 N. E. 989, where the plaintiff was a custom corset maker who maintained a workshop and employed two girls to help her, it was held competent to prove loss of earnings resulting from the injuries on account of which the suit was brought. In Ehrgott v. Mayor, etc., of

New York, 96 N. Y. 264, 48 Am. Rep. 622, also an action to recover damages for persona: injuries, the plaintiff was a book canvasser and was permitted to show his earnings prior to his injuries. There the court, speaking through the late Earl, J., illustrated the plaintiff's position by likening it, so far as personal earnings were concerned, to the occupations of the lawyer, the physician, and the dentist, whose earnings are the result of their professional skill without capital invested. The lawyer has to have books, and, if he is busy enough, he employs clerks to assist him. The physician puts money into instruments, books, and medicines. The dentist invests in gold leaf, artificial teeth, and tools. And yet their incomes, which, to some extent, at least, are the product of such investments and expenditures, are classified as. personal earnings, the loss of which must be considered as an element of damages in actions for personal injuries. To the same effect are Simonin v. N. Y., L. E. & W. R. R. Co., 36 Hun, 214, where the plaintiff was a teacher of French; Nash v. Sharpe, 19 Hun, 365, where the plaintiff was a dentist; Lynch v. Brooklyn City R. R. Co. (Sup.) 5 N. Y. Supp. 311, affirmed 123 N. Y. 657, 25 N. E. 955, the case of a midwife; Thomas v. Union Ry. Co., 18 App. Div. 185, 45 N. Y. Supp. 920, where the plaintiff performed services as gauger for a copartnership of which he was a member; Waldie v. Brooklyn Heights R. R. Co., 78 App. Div. 557, 79 N. Y. Supp. 922, the case of a licensed pilot, and numerous other cases involving a variety of occupations, in which the element of personal earnings has been held to predominate over a small and purely incidental or supplemental investment of capital.

The cases above cited, as well as the case at bar, are clearly distinguishable, we think, from Masterton v. Village of Mt. Vernon, 58 N. Y. 391, Marks v. Long Island R. R. Co., 14 Daly, 61, Boston & Albany R. R. Co. v. O'Reilly, 158 U. S. 334, 15 Sup. Ct. 830, 39 L. Ed. 1006, and other cases relied upon by counsel for the respondent and the courts below, because these latter decisions are all based upon facts which disclose such a preponderance of the business element over the personal equation, or such an admixture of the two, that the question of personal earnings could not be safely or properly segregated from returns upon capital invested, in considering the damages to which the several plaintiffs claimed to be entitled.

In the case at bar there was not only evidence which tended properly to show that the plaintiff had sustained damages through loss of personal services, but competent evidence bearing upon the same subject was excluded, and we think the refusal of the learned trial court to submit to the jury the former, as well as its ruling excluding the latter, constitutes legal error, which entitles the plaintiff to a new trial. In this view of the

(Court of Appeals of New York. Oct. 2, 1906.) 1. BANKRUPTCY ADJUDICATION OF BANKRUPTCY - TITLE OF BANKRUPT APPOINTMENT OF TRUSTEE.

Under Bankr. Act July 1, 1898, c. 541, § 70, 30 Stat. 565 [U. S. Comp. St. 1901, p. 3451], providing that the trustee of a bankrupt's estate on his appointment and qualification shall be vested by operation of law with the title of the bankrupt as of the date he was adjudged bankrupt, the bankrupt having been merely adjudged to be such, and no trustee having been appointed, he still retains title to his property, so that he may maintain an action on a chose in action.

2. SAME-ACTION BY BANKRUPT-PROTECTION AGAINST ACTION BY TRUSTEE.

Defendant in an action on a chose in action by one who has been adjudged a bankrupt, but of whose estate no trustee in bank. ruptcy has been appointed, may in case of recovery protect himself against liability to auother suit by a trustee by application to the bankruptcy court.

3. APPEAL-DIRECTING JUDGMENT.

The Court of Appeals on reversing a judg ment of the Appellate Division affirming a judg ment dismissing the complaint after verdict for plaintiff had been set aside, on the ground that plaintiff had been divested of title to the claim by his being adjudged a bankrupt, will not direct judgment for plaintiff on the verdict, the action in setting aside the verdict involving a question of fact, especially where the Appellate Division expressed the opinion that the verdict was against the evidence.

[Ed. Note.-For cases in point, see vol. 3, Cent. Dig. Appeal and Error, §§ 4588-4591.] Appeal from Supreme Court, Appellate Division, First Department.

Action by Ezekiel C. M. Rand against the Iowa Central Railroad Company. From a judgment of the Appellate Division (89 N. Y. Supp. 212, 96 App. Div. 413), affirming a judgment at Trial Term dismissing the complaint after verdict for plaintiff had been set aside, plaintiff, by permission, appeals. versed.

Re

Frank K. Pendleton, for appellant. Arthur H. Van Brunt, for respondent.

WILLARD BARTLETT, J. The plaintiff in this action recovered a verdict of $2,840 for services alleged to have been rendered to the defendant corporation. Notwithstanding the verdict the court at Trial Term, by consent of counsel, entertained and finally granted a motion to dismiss the complaint. The

judgment thereupon rendered has been affirmed by the Appellate Division upon the ground that the plaintiff had been divested of all title to the claim in suit by reason of the fact that he was adjudicated a bankrupt after the cause of action had accrued in his favor and before the beginning of this suit. The adjudication in bankruptcy was deemed to have this effect, although no trustee in bankruptcy was ever appointed. It is apparent from the record that the omission to appoint a trustee must have been due to the failure of the plaintiff to disclose the existence either of this claim or any other property in the bankruptcy proceedings. While the concealment of any property on the part of a bankrupt must be deemed a reprehensible act as toward his creditors it by no means follows that such concealment has any bearing upon the question as to whether the bankruptcy proceedings have gone far enough to divest the bankrupt of title. In our judgment the proceedings in the case of the plaintiff had not progressed sufficiently to deprive him of the right to maintain an action in his own name in the state court upon the claim in suit. The bankruptcy act of July 1, 1898 (30 Stat. 565, c. 541, § 70 [U. S. Comp. St. 1901, p. 3451]), provides that the trustee of the estate of a bankrupt upon his appointment and qualification shall be vested by operation of law with the title of the bankrupt as of the date he was adjudged bankrupt. It is plain that this provision can never become effective until a trustee in bankruptcy shall have been appointed. Here none was appointed; hence the conditions did not exist which were requisite to render this provision of section 70 operative.

Such was the view necessarily adopted by this court in affirming the judgment in the case of Fuller v. Jameson, 184 N. Y. 605, 77 N. E. 1187, where the case turned upon the question whether the title to insured property had been changed by reason of an adjudication in bankruptcy against the owner, the insured property having been burned after the referee in bankruptcy had announced the appointment of a receiver but before the order of appointment was actually signed. We agreed with the courts below that the bankruptcy proceedings had not gone far enough at the time of the fire to divest the insured of his title. If that conclusion was correct it follows that the present judgment cannot be sustained. The proposition of law involved in that decision was that under section 70 of the bankruptcy act of 1898 the appointment of a trustee is essential to divest the bankrupt of a title to his property. As was said. by the Supreme Judicial Court of Massachusetts in another litigation growing out of the same fire: "No change of title was effected until the appointment and qualification of the trustee." Fuller v. New York Fire Ins. Co.,

184 Mass. 12, 67 N. E. 879. So here the plaintiff's title to the chose in action, which is the basis of the present suit, did not pass out of him in the bankruptcy proceedings since no trustee was appointed to whom it could pass.

But it is urged that the defendant by payment of a judgment herein to the plaintiff would not be protected if it should thereafter be sued upon the same cause of action by any trustee of the bankrupt estate who might hereafter be appointed. It seems to us that the defendant is not exposed to any serious danger in this respect. "If in such cases there is a recovery, and any question arises as to the right of the trustee or creditors to the money, or as to the defendant's being protected in paying it to the proper party, this may be secured by subsequent steps being then taken for that purpose." Griffin v. Mutual Life Ins. Co. (Ga.) 11 Am. Bankr. R. 622, 46 S. E. 870. We see no reason why such steps should not be taken if necessary by means of an application to the bankruptcy court. It may very well be that any sum recovered by the plaintiff in the present action will be held by him as trustee for his creditors; but this is a matter which does not concern the defendant so long as the plaintiff holds the legal title to the claim, and the defendant is secured against any possibility of being compelled to pay it twice We do not overlook the fact that the conclusion which we have reached upon the principal question presented by this appeal is in conflict with the view expressed by the Supreme Court of Minnesota in Rand v. Sage, 102 N. W. 864; but while entertaining the highest respect for that learned tribunal, we remain satisfied with the correctness of our own decision in Fuller v. Jameson, supra, which as has already been pointed out, is in harmony with the construction put upon section 70 of the bankruptcy act by the Supreme Judicial Court of Massachusetts.

It follows that the judgment of the Appellate Division and the judgment entered upon the dismissal of the complaint must be reversed, and a new trial granted, costs to abide the event.

We are asked by counsel for the appellant to direct judgment in favor of the plaintiff upon the verdict, but so far as the action of the trial court and Appellate Division set aside that verdict, it involved a question of fact, and is, therefore, not subject to review by this court, especially as the Appellate Division expressed the opinion that the verdict was against the evidence.

CULLEN, C. J., and VANN, WERNER, HISCOCK, and CHASE, JJ., concur. O'BRIEN, J., absent.

Judgment reversed, etc.

(186 N. Y. 35)

MCKNIGHT v. CITY OF NEW YORK. (Court of Appeals of New York. Oct. 2, 1906.) LIMITATION OF ACTIONS - DISABILITIES-INFANCY-ACTION AGAINST CITY.

Code Civ. Proc. c. 4, § 396, provides that if one entitled to maintain an action for negligence-limited to three years-be an infant when the cause of action accrues, the time of such disability shall not be computed. Section 414 of the same chapter provides that the provisions thereof shall constitute the only rules of limitation, save where a different limitation is specially prescribed by law. Laws 1886, p. 801, c. 572, provides that no action for negligence is maintainable against a municipality having 50,000 inhabitants or over unless the same be commenced within one year after the cause of action accrued. Held, that the latter statute is subject to the exception of section 396. Hiscock, J., dissenting.

Appeal from Supreme Court, Appellate Division, First Department.

Action by James McKnight, Jr., an infant, by James McKnight, his guardian ad litem, against the city of New York. Appeal by the plaintiff by permission from a judgment of the Appellate Division (90 N. Y. Supp. 1105), overruling plaintiff's exceptions to the dismissal of the complaint. Reversed.

J. Brownson Ker, for appellant. John J. Delany, Corp. Counsel (Theodore Connoly, of counsel), for respondent.

WILLARD BARTLETT, J. This is an action against the city of New York to recover damages for personal injuries alleged to have been sustained by reason of the negligence of the defendant. It was admitted upon the trial that the accident in which the plaintiff was injured occurred on the 15th day of June, 1897, and that this action was not commenced until the 21st day of January, 1902. It was also conceded that at the time of the accident the plaintiff was an infant under the age of 14 years. Upon these facts counsel for the defendant moved to dismiss the complaint upon the ground that the action was barred by chapter 572, p. 801, of the Laws of 1886. The learned trial court granted the motion and ordered plaintiff's exceptions to be heard in the first instance at the Appellate Division. There the exceptions were overruled and judgment was rendered in favor of the defendant. From that judgment the Appellate Division has permitted an appeal to this court.

The question presented for determination is whether this action is barred by chapter 572, p. 801, of the Laws of 1886, which provides, in substance, that no action for negligence is maintainable against a municipality of this state having 50,000 inhabitants or over "unless the same shall be commenced within one year after the cause of action therefor shall have accrued." It is the contention of the appellant that this statute was not operative against the plaintiff during his infancy by reason of the exception contained in section 396 of the Code of Civil Procedure,

a disability is not a part of the time limited in this title for commencing the action," etc. Section 396 is found in chapter 4 of the Code, which also contains in section 414 the following declaration: "The provisions of this chapter apply, and constitute the only rules of limitation applicable to a civil action or special proceeding, except in one of the following cases: (1) A case where a different limitation is specially prescribed by law, or a shorter limitation is prescribed by the written contract of the parties." The respondent contends that this exception deprives the infant plaintiff of the benefit of the provisions of section 396, because the act of 1886, p. 801, c. 572, is a law which

specially prescribes a different limitation in a case against a city having 50,000 inhabitants, where the action is brought to recover damages for personal injuries.

We think that this is too narrow a construction. The effect of the one-year limitation prescribed by the act of 1886 was to amend by implication section 383 of the Code of Civil Procedure by reducing the period of limitation in actions for personal injuries due to negligence from three years to one, where the defendant was a municipality with a population of 50,000. In this change we can find no evidence of a legislative intent to deprive an injured infant in such cases of the benefit of the general exception contained in section 396 which prevents the statute of limitations from running against a claimant while the disability, of infancy exists. "The tendency of the latest decisions of this court has been to extend to all claims the benefit of the exceptions given by the Code of Civil Procedure to the bar of the statute of limitations, except where there is an express statute or contract to the contrary." Conolly v. Hyams, 176 N. Y. 403, 68 N. E. 662. This statement in the opinion of Cullen, J., is sustained by the cases which he cites, and it is not necessary to repeat the citations here. The principle which is approved and applied therein demands that in the present case we hold that while chapter 572, p. 801, of the Laws of 1886 created a special limitation in respect to negligence (personal injury) suits against a particular class of defendants, it left that special limitation, like the general limitations prescribed in chapter 4 of the Code of Civil Procedure, subject to suspension during the existence of any of the disabilities specified in section 396, one of which is infancy.

The learned counsel for the respondent contends that in construing the sections of the Code of Civil Procedure which constitute exceptions to the general statute of limita

tions, the courts have invariably held that they did not extend the period of limitation prescribed by section 572, p. 801, of the Laws of 1886. We are referred to four cases which are said to sustain this proposition, namely: Titman v. Mayor, etc., of N. Y., 57 Hun, 469, 10 N. Y. Supp. 689, affirmed on opinion below, 125 N. Y. 729, 26 N. E. 757; Barnes v. City of Brooklyn, 22 App. Div. 520, 48 N. Y. Supp. 36; Crapo v. City of Syracuse, 183 N. Y. 395, 76 N. E. 465, and Norton v. Mayor, etc., of N. Y., 16 Misc. Rep. 303, 38 N. Y. Supp. 90. In the Titman Case the only question considered was whether an action brought for wrongfully causing death by negligence was an action "for damages for personal injuries alleged to have been sustained by reason of the negligence" of a municipal corporation within the meaning of chapter 572, p. 801, of the Laws of 1886 so as to be barred by the one-year statute of limitations. The applicability of the Code exceptions to the general statute of limitations was not considered or discussed therein. In the Barnes Case it was merely held that a cause of action to recover damages for negligence resulting in the death of the plaintiff's intestate did not accrue until the appointment of an administrator. No such question was considered as that which is involved in the present appeal. The decision in the Crapo Case was to the same effect. The Norton Case was a Special Term decision wherein the learned judge who rendered it did express the opinion that the exceptions in section 396 of the Code of Civil Procedure had no application to the act of 1886. There is no discussion of the question, and it is only necessary to say in respect to that case that the view expressed is in conflict with the trend of decisions on the subject in this court, and that we cannot concur in it.

The judgment appealed from must be reversed, the plaintiff's exceptions sustained, and a new trial granted; costs to abide the

event.

CULLEN, C. J., and VANN, WERNER, and CHASE, JJ.. concur. HISCOCK, J., dissents. O'BRIEN, J., absent.

Judgment reversed, etc.

(186 N. Y. 28)

BOWERS v. MALE et al. (Court of Appeals of New York. Oct. 2, 1906.) 1. CORPORATIONS-IMPROPER USE OF CORPORATE FUNDS-DIRECTORS-LIABILITY.

The directors of a credit insurance com. pany sought to increase the reserve by the cancellation of $50,000 of its stock and by raising $50,000 in cash through the medium of a new company organized by the directors of the insurance company. The new company agreed to furnish the additional reserve. The directors of the insurance company subscribed for shares of the new company. Subsequently the directors procured the insurance company to purchase

78 N.E.-37

such shares, which were worthless. Held, that the transaction constituted a wrongful use of the insurance company's funds, rendering the directors liable for the loss sustained.

[Ed. Note. For cases in point, see vol. 12, Cent. Dig. Corporations, §§ 1401-1408.] 2. SAME-RECEIVERS-RIGHT TO SUE DIREC

TORS.

Where the directors of a corporation misappropriated corporate funds to their personal use, the receiver of the corporation, representing both it and its creditors, may maintain an action to recover from the directors the damages occasioned to the corporation.

[Ed. Note.-For cases in point, see vol. 12, Cent. Dig. Corporations, §§ 1413, 2280.]

Appeal from Supreme Court, Appellate Division, First Department.

Action by John M Bowers, as receiver of the Mercantile Credit Guarantee Company of New York, against William H. Male and others. From a judgment of the Appellate Division (97 N. Y. Supp. 722, 111 App. Div. 209), affirming a judgment entered on the report of a referee in favor of plaintiff, de-: fendants appeal. Affirmed.

Chas. A. Collin and Wm. J. Curtis, for appellants. Geo. Zabriskie for respondent.

WERNER, J. The referee's opinion, upon which the judgment herein was affirmed at the Appellate Division, so fully sets forth the facts of the case, and so clearly demonstrates the legal liability of the defendants that we should also feel disposed to affirm without discussion were it not for one feature of the able and ingenious argument of counsel for the appellants that should not pass unchallenged.

Counsel contend that the courts below have erred in ascribing illegality to the whole of a concrete transaction by selecting for condemnation a single one of the parts which, although concededly repugnant to good morals and sound legal principles, when considered by itself, is said to be purged of all vicious characteristics and invested with the attributes of legal honesty when associated with other phases of the same transaction. The statement of a few facts will suffice to disclose the precise point of appellants' contention and our answer to it. In 1894 the defendants were directors of the Mercantile Credit Guarantee Company, which was engaged in the business of "guarantying or insuring merchants against excessive or unlooked for losses." The operations of the corporation, which was organized under the laws of this state, extended into other states. Among these was the state of Ohio, under the laws of which this corporation was classed as an insurance company whose reserve or surplus must equal 50 per cent. of the premiums on insurance in force at the end of each year. The financial condition of the company rendered it impossible to comply with this requirement of the laws of Ohio. The stress of this emergency developed a plan for the temporary creation of a fictitious surplus. The scheme, stated in bare outline,