(195 N.Y.S.)

tionment; but such power should not be exercised, unless it clearly appears that plaintiff's rights will be irreparably injured by the mere passage of the resolution. If the facts be as contended by the plaintiff, that the final permit was properly issued and has been illegally revoked, and that plaintiff has paid out money and incurred obligations pursuant to permission heretofore granted, it cannot be deprived of a vested private right by any contemplated action of the board of estimate. City of Buffalo v. Chadeayne, 134 N. Y. 163, 31 N. E. 443.

The power of the superintendent of buildings to revoke permits is governed by subdivision 7 of section 4 of the Building Code, and is limited to false statements or misrepresentations of a material fact in the application on which the permit or approval was based. The plaintiff may litigate these matters in an application for a writ to compe! the reissuance of the permit, or in an action in equity to restrain the enforcement of any alleged illegal resolution passed by the board of estimate.

(119 Misc. Rep. 174)

SPENCER, KELLOGG & SONS, Inc., v. DELAWARE, L. & W. R. CO. (Supreme Court, Trial Term, Erie County. June, 1922.)

1. Carriers 32(1)—Carrier is answerable for own and agent's acts in enforcement of tariff schedules, and must see that rebate is paid and no discrimination practiced by them.

A carrier is not only answerable for its own acts, but for the acts of its agents as well in the rigid enforcement and observance of all provisions of the filed tariff schedules, and is bound to see that no rebate is paid and no discrimination practiced by any of its employés or agents.

2. Carriers 32(1)-Where charges for handling grain made by rebating elevator company were collected by carrier, it could not retain them, and payment thereof to the company on a judgment would not make the carrier liable. Where the published tariff schedule on ex-Lake grain for export inIcluded a charge not exceeding one cent per bushel made by the Buffalo elevators, which rate was collected by a railroad company on grain passing through an elevator, but without knowledge of a rebate by the elevator company, the carrier could not retain elevator charges collected, and theory that the elevator company acted for it in rebating when it paid commissions to forwarding agents of the owners, and payment of the charges collected to the company, in pursuance of a judgment, would not create any liability against the carrier, either civil or criminal.

Action by Spencer, Kellogg & Sons, Inc., against the Delaware, Lackawanna & Western Railroad Company. On motions by both parties for direction of a verdict. Verdict for plaintiff.

Lewis & Carroll, of Buffalo, for plaintiff.

Locke, Babcock, Spratt & Hollister, of Buffalo, for defendant.

BROWN, J. In the tariff schedules filed in behalf of the defendant and 14 other railroad companies with the Interstate Commerce Commission, specifying freight charges on ex-Lake grain for export applying at and east of Buffalo, Erie, Pa., and Oswego, N. Y., to the seaboard, effective June 1, 1920, it is specified:

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*

"The rates named herein include a charge of not exceeding one cent per bushel made by the Buffalo elevators against the grain for elevation and transfer from lake vessels to cars, and five days storage; said charge to be retained wholly by such elevator companies as compensation for services performed."

It is also provided in such schedule that such rates will apply to the elevator of the plaintiff and seventeen other elevators. The plaintiff specifically agreed to such provisions of the schedules as apply to its elevator. In September and October, 1921, the plaintiff elevated from Lake vessels and delivered to the defendant in its cars for shipment to New York 153,559 bushels of grain, for which service the defendant collected from the shippers or owners of the grain the sum of $1,535.59 for the plaintiff, to recover which this action is brought.

It appeared upon the trial that the plaintiff solicited of the forwarding agents representing the owners or shippers the business of elevating, storing, and delivering such grain, and that the plaintiff paid such. forwarding agents the sum of $695.59 as commissions for furnishing such grain for plaintiff's elevator. It thus appeared that of the moneys earned by the plaintiff, viz. $1,535.59, $695.59 had already been expended as a favor or advantage to the shipper. The defendant asserts that such expenditure was in violation of the schedule of freight rates filed with the Interstate Commerce Commission, of which the plaintiff was a party; that, when the plaintiff agreed that it would retain the elevator charge of one cent a bushel as its compensation, it thereby agreed that it would not rebate any of its charge to the shipper; that a voluntary payment by the defendant of the one cent per bushel which it has collected under the freight schedules to the plaintiff, with knowledge that the plaintiff has already made an illegal discrimination in favor of and rebate to the shipper, would subject the defendant to civil and criminal prosecution for Violation of federal statutes relative to interstate commerce.

[1] The paying of the commissions by the plaintiff to the shipper or his agent for the privilege of elevating the grain and earning the one cent per bushel very likely is paying a rebate out of the tariff rate. Such act is condemned by federal statute. The crucial question is whether defendant in any wise would be responsible in whole or in part therefor by paying the plaintiff's claim so as to be subjected to criminal prosecution. It must be conceded that defendant cannot be compelled by judgment to pay moneys, the payment of which would subject it to criminal prosecution. The defendant is not only answerable for its own acts, but for the acts of its agents as well in the rigid enforcement and observance of all provisions of the filed tariff schedules. It is bound to see that no rebate is paid, no discrimination is practiced, by any of its employees or agents.

[2] In the transaction of elevating the 153,559 bushels of grain from the Lake steamers and delivering it into defendant's cars, the plaintiff did not in any wise act for or represent the defendant. The grain was not shipped to the defendant at Buffalo. It was shipped to the forwarding agents of the owners; it was delivered to the plaintiff by the masters of the boats at the request of the forwarding agents; the

(195 N.Y.S.)

forwarding agents paid the freight charges for its transportation to Buffalo. The defendant had no interest in, control of, or responsibility for the grain prior to its delivery to the defendant in its cars; prior to that delivery the plaintiff certainly was not the defendant's agent as to that grain, and the defendant was not responsible to any one for plaintiff's acts relative thereto. It is very difficult to see how it could be successfully argued that the plaintiff acted as agent or representative of the defendant when it paid the commissions to the forwarding agents. While it is true that the plaintiff promised that it would not pay such commissions out of its charges for elevation, etc., of one cent per bushel, and it may be that a violation of that promise is a federal offense, yet how does such offense create any liability, criminal or otherwise, against the defendant? If the defendant had no knowledge of such wrongful act, it is very clear that no possible liability could be created by the payment of plaintiff's claim.

Does the fact that defendant now knows that the plaintiff has paid such commissions legally authorize defendant to retain the $1,535.59 that it has collected for the plaintiff's service in handling the grain? What is to become of such money? Does the fact that defendant now knows of plaintiff's payment of such commissions give defendant title to such money? Whatever offense was committed was committed by the paying of the commissions some time in 1921, with which act defendant was in no wise connected. By paying the moneys now in defendant's hands to the plaintiff, it is inconceivable how defendant could be said to aid, abet, or assist plaintiff in the commission of a violation of the federal statute in 1921. It is very clear that the defendant up to the present time has incurred no liability, criminal or otherwise, by plaintiff's paying such commissions. The criminal act of rebating, if committed at all, was complete in 1921.

In the absence of some testimony connecting defendant with the plaintiff's act of paying the commissions, the conclusion is reached that such payment was not made by the plaintiff as defendant's agent, that defendant is not responsible therefor, and that the paying of the moneys in defendant's possession, collected of the shipper, to the plaintiff for elevating the grain, in pursuance of a judgment of the court, would not create any liability, civil or criminal, against it.

Verdict is directed in favor of plaintiff against defendant for $1,535.59, which will be entered by the clerk, and an exception noted for the defendant.

Ordered accordingly.

(119 Misc. Rep. 63)

DOLL & STUFFED TOY MANUFACTURERS' ASS'N v. IDEAL NOVELTY & TOY CO.

(Supreme Court, Appellate Term, First Department. July 12, 1922.) Corporations 370(1)-Corporation cannot be member of membership corporation.

In view of General Corporation Law, § 10, providing that no corporation shall possess any corporate powers not given by law or not necessary to the exercise of the powers so given, and section 4, providing that a certificate of incorporation must be executed by natural persons, a corporaFor other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

tion other than one engaged in gathering information from members under Membership Corporation Law, § 41, cannot legally become a member of a membership corporation.

Appeal from Municipal Court, Borough of Manhattan, Third District.

Action by the Doll & Stuffed Toy Manufacturers'. Association against the Ideal Novelty & Toy Company. Judgment for plaintiff, and defendant appeals. Reversed, and complaint dismissed.

Argued June term, 1922, before GUY, BIJUR, and McCOOK, JJ. George L. Cohen, of New York City, for appellant.

Joseph, Demov & Feinstein, of New York City (Abraham L. Feinstein, of New York City, of counsel), for respondent.

GUY, J. The plaintiff corporation sued to recover dues from defendant, alleged to be a member of plaintiff membership corporation, and also to recover assessments alleged to have been duly levied by plaintiff corporation upon defendant as such member. The answer denies the material allegations of the complaint, including the allegation of defendant's membership, and as separate defenses alleges that on April 1, 1921, defendant resigned from membership in said plaintiff corporation and withdrew therefrom, by presenting its resignation in writing and tendering dues for the month of March, 1921, and as to the second cause of action alleges that the levying of said assessments was illegal, and plaintiff had no power to levy an assessment against members.

It is unnecessary to consider the separate defenses, as the legality of defendant's membership in the plaintiff corporation is distinctly placed in issue by the denials contained in the answer. During the trial and at the close of the case defendant moved to dismiss the complaint, on the ground that the corporation could not legally become a member of the membership corporation. Section 10 of the General Corporation Law (Consol. Laws, c. 23) provides:

"No corporation shall possess or exercise any corporate powers not given by law, or not necessary to the exercise of the powers so given."

Section 4 of the General Corporation Law provides:

"A certificate of incorporation must be executed by natural persons." The only provision in the Membership Corporations Law (Consol. Laws, c. 35) for the admission of corporations as members is contained in section 41 of said statute, which applies to corporations engaged in the gathering of information and intelligence for the use of the members in connection with the publication thereof, and plaintiff does not come within the provisions of said section.

It is quite evident, therefore, that the statute contemplated only membership on the part of such persons, natural persons, as under the provisions of section 4 were qualified to sign the articles of incorporation, except as modified by the provisions of section 41, as heretofore stated. As defendant did not and could not, under the statute, be legally admitted to membership in the plaintiff corporation, plaintiff

(195 N.Y.S.)

failed entirely to make out a cause of action, and the motion to dismiss should have been granted.

Judgment reversed, with $30 costs, and complaint dismissed upon the merits, with costs, with leave to defendant to appeal to the Appellate Division, First Department. All concur,

JOHNSON v. HEIDENFELDER.

(Supreme Court, Appellate Term, First Department. July 12, 1922.)

1. Courts 189(14)-Setting aside judgment prerequisite to new trial in Municipal Court.

Under Municipal Court Code, § 129, subd. 3, unless the judgment is set aside, no new trial can be had.

2. Courts 189(15)—Municipal Court not authorized to grant new trial on motion to set aside order of arrest.

On defendant's motion in Municipal Court to set aside an order of arrest and for other and further relief, the trial judge was not authorized, 40 days after entry of judgment and 20 days after the date within which a motion to set aside a judgment could be made returnable, to set aside the judgment and grant a new trial.

3. Fraud 60-Expenses for storage held not recoverable.

In an action by buyer of an automobile against seller for fraudulent misrepresentations, buyer was not entitled to recover expenditures for storage of the automobile.

Cross-appeal from Municipal Court, Borough of Manhattan, First District.

Action by Thelma C. Johnson against John P. Heidenfelder. From an order setting aside a verdict for plaintiff and granting a new trial, both parties appeal. Judgment and order reversed, and new trial ordered.

Argued June term, 1922, before GUY, BIJUR, and McCOOK, JJ. Holley & Oxenberg, of New York City (S. Joseph Oxenberg, of New York City, of counsel), for plaintiff."

Hardy, Stancliffe & Whitaker, of New York City (Noah A. Stancliffe and William F. McDermott, both of New York City, of counsel), for defendant.

PER CURIAM. These are cross-appeals-one by plaintiff from order setting aside "verdict" and granting a new trial; the other by defendant from judgment in favor of plaintiff.

Plaintiff recovered judgment for $500 and costs in this "action for fraud and deceit" in the purchase by her of an automobile from defendant. Plaintiff moved at the close of the trial for a body execution, and the judgment, dated June 17, 1921, accordingly contained a direction for the issuance of a body execution. On July 8 defendant procured an order to show cause why an order should not be made vacating and setting aside the "order of arrest granted," and for such other and further relief, etc. Defendant at the same time appealed from the

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