car upon the track, where his legs were run over by the rear car of the train. The car on which the plaintiff attempted to set the brake was that of another company, which had been received for transportation at Buffalo. On an examination after the accident it appeared that the eyebolt, by which the chain had been attached to the foot of the brake staff, was broken. Evidence was given to the effect that the shank or pin of the eyebolt had been worn to such an extent that it was only half its original thickness; that this rendered the bolt liable to break, not only on account of the loss of metal, but because of the play which was given the pin in the hole in the brake shaft in which it was set. There was also evidence given from which the jury might have found that a reasonable inspection of the pin and brake shaft at this point would have disclosed the weakness of the parts. The car was inspected at Buffalo by the defendant's inspectors, but the condition of the eyebolt was not noticed. The jury rendered a verdict for the plaintiff, upon which, a motion for a new trial having been denied, a judgment was subsequently entered. On appeal the judgment and order were reversed by the appellate division, but, as stated in the order of that court, "upon questions of law only, the court having examined the facts and found no error therein."

The learned appellate division, in its discussion of the case, assumed that the question whether the defect in the eyebolt was discoverable or not by reasonable inspection was one of fact for the jury. This assumption, in our opinion, was warranted by the evidence, the details of which it would not be profitable to recite. That it is the duty of the master to furnish his servants with safe and suitable appliances, so far as reasonable care will accomplish that result, may be now considered as an elementary rule of law, and this duty applies to cars received from other companies as well as to its own. "A railroad company is bound to inspect the cars of another company used upon its road, just as it would inspect its own cars. It owes this duty as master, and is responsible for the consequences of such defects as would be disclosed or discovered by ordinary inspection. When cars come to it from another road which have defects visible or discernible by ordinary examination, it must either remedy such defects or refuse to take them." Goodrich v. Railroad Co., 116 N. Y. 398, 22 N. E. 397. See Gottlieb v. Railroad Co., 100 N. Y. 462, 3 N. E. 344, 5 L. R. A. 750; Railroad Co. v. Mackey, 157 U. S. 72, 15 Sup. Ct. 491, 39 L. Ed. 624. This doctrine was accepted by the learned court below, but it held that the defendant was exempted from liability bezause of the following rule prescribing the duty of its employés, to which plaintiff was deemed to have assented: "Rule 153. At all stoppings of trains the brakemen or trainmen must inspect the wheels, brakes, and

trucks of the car, and report any defects immediately to the conductor." The court reasoned that under this rule the duty of an inspection was devolved upon the trainmen equally with the car inspectors at Buffalo: that the inspectors were fellow servants of the trainmen in the duty of inspection; that the negligence of the former in the discharge of their duty was negligence of fellow servants; and that, if it was negligence on the part of the inspectors not to have discovered the defective character of the brake, similar omission on the part of the plaintiff or the trainmen constituted contributory negligence on the plaintiff's part. There can be no question that, apart from the rule quoted, inspectors are not fellow servants of the trainmen, so as to relieve a railroad company from liability to the latter for injuries occasioned by the negligence of the former. The duty which the master, as such, owes to his employés, of exercising reasonable care that the appliances furnished them should be safe and suitable, cannot be delegated so as to relieve the master from responsibility; and, so far as it is performed by others, the negligence of any servant, agent, or employé in the work is deemed not the negligence of a fellow servant, but that of the master himself. Fuller v. Jewett, 80 N. Y. 46; Bailey v. Railroad Co., 139 N. Y. 302, 34 N. E. 918. In the last case it is said: "The master is never exonerated by the negligent omission of subordinates to perform duties which are imposed upon him in his character as master, resulting in injury to other employés." Inspection to discover whether an appliance is defective is as much a part of the work of furnishing safe appliances as reparation after the defect is discovered, and in the Bailey Case the negligence alleged was failure to inspect.

We may concede that the question whether a faulty act or omission complained of is negligence in the discharge of the duty of the master, as such, or is in a detail of the work, may depend on the manner in which the work is carried on. We may also assume, for the argument, that it was within the power of the defendant to have so conducted its business as to have made its trainmen both brakemen and car inspectors. But the question remains whether it did so in this case, and whether such is the effect and object of the rule promulgated. The question is not without interest to the defendant in other cases than that before us. If the same servant is to discharge the duties of separate positions, he must have the necessary qualification for each, to be a competent fellow servant. If a brakeman is to act as car inspector, he must have the expert skill and knowledge which a jury might find was necessary to discharge the duties of the latter position, and the defendant might find itself very much circumscribed in its appointment of trainmen. We think it quite plain that the defendant never intended to blend, nor has

blended, the two distinct positions of brakeman and inspector. It appears that, as a matter of fact, it has assumed to inspect cars at its terminus by servants especially designated for that purpose. The rule promulgated by the company must have a reasonable construction. It imposed on the trainmen the obligation of examination of the appliances which their services compelled them to use, both for their own protection and the protection of the property of the master and the persons of their fellow servants. The examination, however, was not necessarily to be that of an expert inspector, but such as the ordinary knowledge of brakemen, and the time allowed for the purpose consistent with their other duties, would enable them to make. We concur in what is said by Justice Hatch in Myers v. Railroad Co., 44 App. Div. 11, 60 N. Y. Supp. 422: "It is quite evident that the measure of obligation which is imposed upon an employé of this character by virtue of this rule is much less strict than is imposed upon employés of the defendant charged with the specific duty of inspecting cars for the express purpose of discovering their condition, and the reason for such distinction is obvious. A brakeman has other duties and obligations resting upon him than that of inspection, and in many cases such duties almost wholly exclude any opportunity to examine the various appliances which he is required to use. Under such circumstances the rule, interpreted in the strict sense, would impose an obligation which the employé would have little or no opportunity to discharge. It must, therefore, be subject to a reasonable interpretation, measured in degree by the opportunity to examine and the character of the existing defect." Under this view, by reason of the difference between the duty of inspection, resting on the trainmen, and that imposed on the car inspectors, the two classes are not fellow servants within the rule which exempts the master from liability. The question of the effect of similar rules arose in Pratt v. Railway Co., 63 Hun, 616, 18 N. Y. Supp. 682, affirmed without opinion in 136 N. Y. 654, 32 N. E. 1016; and O'Malley v. Railroad Co., 67 Hun, 130, 22 N. Y. Supp. 48, affirmed without opinion in 142 N. Y. 665, 37 N. E. 570,-in both of which cases recoveries for defective appliances were upheld. These decisions seem conclusive on the question before us, though we have treated it as an original one.

From the views already expressed it is apparent that a failure to discover defects which would constitute negligence in a car inspector might not necessarily establish contributory negligence on the plaintiff's part. The question was for the jury. There is this further to be said: Under the rule, the duty of inspecting the brakes on the train did not rest on the plaintiff alone, but on him and the other trainmen. The evidence tends to show that in the necessary division of duties between the several trainmen the inspection

of the brake that proved defective did not fall: upon the plaintiff. Assuming that there was negligence on the part of his fellow brakemen, such negligence would not be imputable to the plaintiff, or preclude a recovery by him. Cone v. Railroad Co., 81 N. Y. 206; Coppins v. Railroad Co., 122 N. Y. 557, 25 N. E. 915. The judgment of the appellate division should be reversed, and the judgment entered on the verdict of the jury at trial term should be affirmed, with costs.

BARTLETT, MARTIN, VANN, and WERNER, JJ., concur. PARKER, C. J., not voting. GRAY, J., not sitting.

Judgment reversed, etc.

(163 N. Y. 360)

MASSACHUSETTS NAT. BANK et al. v. SHINN et al.

(Court of Appeals of New York. June 12, 1900.)

APPEAL-MINING LEASE-VALIDITY-CONSTI

TUTIONAL PROVISION.

1. A question of grave public policy, covered by an exception, will be considered by the court of appeals, though not raised by the pleadings or in courts below.

2. A lease of agricultural land for a term of 20 years for mining purposes, with a covenant precluding the lessee from doing any other business on the premises, and permitting land not needed for mining purposes to be used by the lessor for agricultural purposes without hindrance except as required by the mining operations, is not a violation of Const. 1846, art. 1, § 14, or Rev. Const. art. 1, § 13. prohibiting leases of agricultural land for a longer term than 12 years.

Appeal from supreme court, appellate division, Second department.

Action by the Massachusetts National Bank and another against William H. Shinn, as administrator of William P. Shinn, deceased, and another. From a judgment of the appellate division of the supreme court in the Second department (46 N. Y. Supp. 329) affirming a judgment for defendant George B. Butler, entered on a referee's report, plaintiffs and the defendant Shinn appeal. Affirmed.

Henry W. Hayden, for appellants Massachusetts Nat. Bank et al. Barclay E. V. McCarty, for appellant Shinn. Prescott Hall Butler, for respondent Butler.

VANN, J. This action was brought to foreclose a chattel mortgage given by William P. Shinn to the Sturtevant Mill Company, and by it assigned to the Massachusetts National Bank. The mortgage covered certain engines, boilers, dynamos, and other machinery belonging to a mining plant, erected pursuant to the provisions of a lease of part of a farm for mining purposes, which required the lessee to mine and ship at least 10,000 tons of iron ore each year, and to erect such buildings and provide such machinery as would enable him to do so. After the lessee and his assignee

had been removed from possession of the premises by summary proceedings under the statute for nonpayment of rent, the landlord refused to surrender possession of the machinery in question, and claimed to own the same. The substantial issue, which related to the ownership of such machinery, was decided by the referee before whom the action was tried in favor of the landlord, and the judgment entered accordingly was affirmed by the appellate division, one of the justices dissenting.

We think that all of the questions argued in the appellate division were properly disposed of by the prevailing opinion in that court, which we should adopt without writing one of our own were it not for the fact that a new question was discussed before us, to which the attention of the courts below was not called. Bank v. Shinn, 18 App. Div. 276, 46 N. Y. Supp. 329. It is now claimed for the first time that said lease, being for the term of 20 years, was a violation of that provision of the constitution which prohibits a "lease or grant of agricultural land for a longer period than twelve years, * in which shall

*

be reserved any rent or service of any kind." Const. 1846, art. 1, § 14; Rev. Const. art. 1, § 13. As this question was not presented by the pleadings, or at the trial, or on the intermediate appeal, the respondent insists that it is not properly before us for consideration. Inasmuch, however, as it is covered by the exception to the report of the referee, though not specifically mentioned, and touches the settled policy of the state with reference to a subject of such importance as to be embedded in the constitution, we think it our duty to decide it. Where an appeal involves a question of grave public policy, the people are indirectly parties to it, and their interests should be looked after by the courts, even when the party who might have objected is silent.

In October, 1890, the defendant Butler owned a farm of more than 300 acres in the county of Westchester, in one part of which an iron mine had been discovered, and it was supposed that the ore extended for some distance under the adjoining lands. On the 21st of October, 1890, he executed the lease in question, which recites as the object thereof that "the lessee is desirous of acquiring the exclusive right and privilege, upon the payment of certain royalties hereinafter reserved, to mine and ship iron ore from the said property." The granting clause followed, whereby the lessor conveyed to the lessee for the term of 20 years "all the iron ore (together with the exclusive right to mine the same) contained in, on, or under all that certain piece or parcel of land," which was thereupon described by metes and bounds. The land thus described consisted of 114 acres of said farm, excepting a piece of uncertain dimensions, and of no apparent importance. After the granting clause was the following statement: "The said ore is supposed to be con

tained in the hill known and designated as the 'Clover Hill,' but, in any event, is to be taken to include all the iron ore that can be economically mined or taken out of the above-described premises, together with all the neceseary rights and privileges of entering into and upon said lands and searching for, exploring, excavating, digging, and carrying away said ore, and of removing said ore through or out of any shafts, slopes, or tunnels which the lessee may dig, erect, or construct upon said premises, at his discretion, in the conduct of said operations of mining." The lessor further granted, during the term of the lease, the right of way for all necessary railroads, wagon roads, tunnels, etc.; the right of washing ore on said premises, of sinking wells, and using the surface waters for that purpose. There was also demised

to the lessee "all laud within the above-described premises that he may require for the purpose of erecting such buildings and machinery as he may deem necessary for the prosecution of his business of mining, together with land for piling ore or waste, * and for the erection of workmen's dwellings, and * * the right to take without charge, by quarrying or otherwise, from said land, all the stone, earth, or other materials (other than wood and timber) that the lessee may find necessary to use in the construction of his railroad and other appurtenances, and in general to enjoy every facility for mining, washing, and carrying away said iron ore, together with all tailings resultant from the aforesaid operations, as he would or could enjoy if he, the lessee, were the owner in fee of the premises." The habendum clause was confined to "the said iron ores and the said liberties, powers, and authorities." The lease was upon the condition that if the lessee at the end of three years from the date thereof should have failed to mine any ore from the said premises, the estate granted was to cease, and the instrument to become void, "the mining of ore upon, from, or under said premises, or some part thereof, within three years from the date hereof, being hereby expressly made a condition precedent to the vesting of any estate, legal or equitable, under these presents in the lessee." The lessee was to have the privilege of canceling and surrendering the lease at any time within two years from the date thereof "if the preliminary work proposed to be done by him fails to demonstrate to his satisfaction that the aforesaid ore can be economically mined and shipped." He was not to be held liable "for any injury done to the surface of said land by the mining, preparing, and removing said iron ore." It was provided that if "the lessor continues, with the consent of the lessee, to use for farming purposes any part of the said premises not used by the lessee for his mining operations," he should pay the taxes for each acre so used as "upon an acre of ordinary farming lands."

The lease contained provisions in great de

tail relating to the management of the mines in a workmanlike manner, for the drainage thereof, and the like. The lessee covenanted to fill up any openings made by him in prospecting for iron ore in which no ore should be found, and that he would not cut or destroy any timber upon the premises. He agreed to pay for each gross ton of ore mined and shipped a specified sum, but the minimum rent or royalties paid in any one year were to be not less than $5,000. He agreed not to "permit any business to be carried on upon said premises other than the business of mining, washing, concentrating, or shipping ore." The lessor had the right to use "such portions of the surface" for farming purposes as he chose until the lessee elected "to use the same for his mining operations." A large part of the lease was devoted to regulations for weighing, sampling, and analyzing the ores, so as to determine the amount of royalties to be paid, and for the settlement by arbitration of any dispute that might arise in regard thereto.

We think that this lease does not come within the spirit of the constitutional prohibition, because the property leased was an iron mine extending for an unknown distance under agricultural lands, and was to be used exclusively for mining purposes. The right granted was to mine and carry away the iron ore found under the surface of the ground, and, as incidental thereto, the further right to erect such structures and build such roads as were necessary for the primary object of mining. The lands not needed for this purpose were to be used by the lessor for agricultural purposes. There was to be no interference with the farming operations of the lessor, except as required by the mining operations of the lessee, who was made the sole judge of the necessity and the extent thereof. It was not a lease of agricultural lands for agricultural purposes, but of mineral lands for mining purposes. The lessee had no right to cultivate the land, for he could simply mine and ship the ore. The pursuit of agriculture was prohibited by the express covenant of the lessee to permit no business to be done upon the premises "other than the business of mining." The evil aimed at by the constitution is long leases of farming lands for farming purposes, not the leasing of part of a suburban farm for the erection of dwelling houses, stores, or manufactories, or of a mine in the bowels of the earth, with the right to bring ore to the surface and ship it. Even if the process of mining necessarily interferes to some extent with the tilling of the soil above the mine, it is merely incidental, and does not convert a mine lease into a farm lease. As was said by the court in Clark v. Barnes, 76 N. Y. 301, 304: "It is not provided that no lease shall be valid for a longer term than twelve years, but the provision is that the kind of lease described shall be invalid;" which is, as we think, a lease of agricultural lands for agricultural purposes of longer duration than the

to take ore may have been entirely worthless, and the whole value of the premises may have consisted in their use for agriculture, even though that may not have been the purpose for which the premises were in fact leased; still, being agricultural lands, and there being no restriction in the lease as to their use, the constitutional prohibition applies. If all that was intended to be demised was the mining right, the lease should have been put in that form, and it would have been free from objection." Odell v. Durant, 62 N. Y. 524, 525. Thus it appears that the lease must be for agricultural purposes, or must permit agricultural operations by the lessee, for the court declared that agricultural lands, if limited in their use to mining purposes, would not fall within the restriction of the constitution. It is true that in an earlier part of the opinion it was said that the character of the land is "the test of the validity of the lease, not the purpose for which the lease was made"; but the context shows that this means that the purpose of a lease of agricultural lands is immaterial so long as the lands may be used for agriculture. While the purpose of a lease may be to mine ores, if there is no restriction to that use, the land may be used as a farm, and the constitution thus violated. Hence the purpose is no test of validity, for the lease, whatever its purpose, if it covers agricultural lands, must exclude that use, or it will be void, provided the term exceeds 12 years. If that use is prohibited, the lease is not of a farm to be used as a farm, which, as the history of the times shows, was the particular mischief aimed at in adopting the provision in question. The theory of the convention which prepared the provision was that long leases of agricultural lands for agricultural purposes were detrimental to the interests of agriculture, because the tenants had "no desire to improve, by the best mode of cultivation, an inheritance which was liable to pass from them or their descendants without a compensation." Stephens v. Reynolds, 6 N. Y. 454, 456; Debates in Convention of 1846 (Atlas Ed.) pp. 1052, 1053, 1063; Willard, Real Est. p. 432. We think that the lease under consideration is valid, and that the judgment appealed from should be affirmed, with costs.

PARKER, C. J., and GRAY, MARTIN, and WERNER, JJ., concur. BARTLETT and CULLEN, JJ., not sitting.

Judgment affirmed.

(163 N. Y. 423)

HAMILTON TRUST CO. v. CLEMES et al. (Court of Appeals of New York. June 12, 1900.)

CORPORATIONS-MORTGAGE-EQUITABLE
FORECLOSURE-JUNIOR JUDG-
MENT CREDITORS.

1. Laws 1890, c. 564, § 20, enacting that directors shall be chosen from the stockholders "by a majority of the votes of the stockholders voting," has no application to directors for the first year, named in the certificate according to law.

2. A business corporation was organized under Laws 1892, c. 691, and three directors, as required by law, were appointed. While they were the sole directors they entered into a contract with an improvement company whereby the latter loaned to the corporation $30,000 and made extensive improvements on the property of the corporation. The corporation agreed to give the improvement company $50,000 in fully paid up stock, and $150,000 in bonds secured by first mortgage. The improvements increased the value of the corporate property so as to make its assets exceed by more than one-third the amount of the proposed mortgage. Before the mortgage was executed, the directors of the corporation were increased to seven; and, when the bonds were issued and the mortgage given, some of the new directors voted for the necessary resolution, and their votes were required to adopt it. All the directors and stockholders of the corporation afterwards signed a statement ratifying the delivery of bonds theretofore made, and authorized delivery of the remainder. The foreclosure of the mortgage was resisted by junior judgment creditors on the ground that the mortgage was a fraud against them. Held, that the rights of the junior judgment creditors were inferior to those of the stockholders, since the mortgage was valid in equity even if there was a failure to observe certain statutory requirements.

Appeal from supreme court, appellate division, Third department.

Action by the Hamilton Trust Company against G. Hector Clemes and others. From a judgment of the appellate division (45 N. Y. Supp. 141) affirming a judgment for plaintiff, defendants appeal. Affirmed.

This action was brought to foreclose a mortgage for $150,000, dated March 1, delivered June 1, and recorded June 12, 1895, given by the Horicon Improvement Company to the plaintiff, as trustee for the bondholders, upon certain premises near Lake George, known as the "Lake House and Prospect Mountain Properties." The appellants, as subsequent judgment creditors of the mortgagor, defend upon the ground that the mortgage is illegal and void as to them because it was given with intent to defraud, and without complying with certain statutory requirements. The trial justice decided all the issues in favor of the plaintiff, and the appellate division affirmed, but not unanimously, so far as appears.

C. H. Sturges, for appellants. Edwin C. Low, for respondent.

VANN, J. When the Horicon Improvement Company was organized, its charter provided for only three directors, but when the mortgage in question was given, a few

months later, the number of directors had been increased to seven. As the resolution to mortgage could not have been passed without the vote of one or more of the additional directors, who were not stockholders of record at the time, but simply assignees of a certain number of shares, represented by a stock certificate issued in the name of another person, it is claimed by the appellants that the mortgage is invalid, because it was authorized by directors who, not having been recorded as stockholders upon the stock book, were ineligible under the statute (Stock Corp. Law; Laws 1890, c. 564, §§ 20, 24, 29). The appellants also claim that the mortgage is void because the sum secured thereby exceeded "an amount equal to twothirds of the value of its [the corporation's] corporate property at the time of issuing the" bonds,-such value being more than the amount of the paid-up capital stock,-in violation of said statute (section 2). It is further claimed that the mortgage, although authorized by all the stockholders there were, was not in fact authorized by any stockholder, because there was no stock book, as requir ed by section 29, and hence no stockholders, within the meaning of the statute. These objections to the validity of the mortgage, as against subsequent judgment creditors, were urged, among others, in the courts below, but they were all disposed of upon satisfactory grounds by the opinion of the learned appellate division. Hamilton Trust Co. v. Clemes, 17 App. Div. 152, 45 N. Y. Supp. 141. We are also of the opinion that there is still another conclusive answer to the position taken by the appellants, which we will briefly discuss, as it has not thus far been considered.

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The Horicon Improvement Company was organized under the business corporation law (Laws 1890, c. 567; Laws 1892, c. 691). The three original directors named in the certificate of incorporation became such by direct command of the statute, and not through an election by stockholders. In the nature of things, there can be no stockholders at the date of incorporation, and hence the provision that the directors shall be chosen "from the stockholders by a majority of the votes of the stockholders voting" has no application to "the directors for the first year" named in the certificate pursuant to law. Stock Corp. Law, § 20; Business Corp. Law, § 2, par. S; McDowall v. Sheehan, 129 N. Y. 207, 29 N. E. 299; Davidson v. Light Co., 99 N. Y. 558, 565, 2 N. E. 894. In the case last cited the court, referring to a similar provision of another statute. said: "The language of section 1 of the act by express terms makes the persons named in the certificate of incorporation, as such, directors of the company for the first year of its existence, and confers upon such persons full power to act as directors in the performance of any corporate duty after the filing of such certificate. The corporate authority of