[1] It seems to me quite clear that the agreement in question constitutes a valid and binding contract on the part of defendant, which is enforceable by the plaintiff. It recites that the parties were all interested in the establishment of a milk station, and for that reason they subscribed and agreed to pay for the capital stock of a corporation to be organized for the purpose of building and equipping the same, which was to receive, sell, ship, or manufacture into butter or cheese the milk produced by the persons aforesaid.

[2] The agreement further provided that each person should deliver all the milk he produced at said station when ready for occupancy, except such milk as was needed for family purposes, during the existence of the plaintiff as a corporation, and that if he failed to do so he would pay the plaintiff as liquidated damages $2 per cow for each season. Acting upon this agreement, the plaintiff was incorporated, constructed and equipped a milk station, and received and disposed of all the milk produced by the subscribers to said agreement, and paid them their dividends therefor down to April 1, 1916, except the defendant, who withdrew his milk therefrom on March 31, 1915, as above stated. It is apparent, therefore, this agreement possessed all the elements of a valid and binding contract. It is now elementary law that where a volunteer promise is made, which expressly or impliedly requests the doing of some act on the strength of the promise, if such act is performed, it is a sufficient consideration to uphold the promise. Presb. Church v. Cooper, 112 N. Y. 517, 20 N. E. 352, 3 L. R. A. 468, 8 Am. St. Rep. 767; Keuka College v. Ray, 167 N. Y. 96, 100, 60 N. E. 325; Horton v. Erie Preserving Co., 90 App. Div. 260, 85 N. Y. Supp. 503; Avon Springs Sanitarium Co. v. Weed, 119 App. Div. 560, 104 N. Y. Supp. 58; Locke v. Taylor, 161 App. Div. 46, 146 N. Y. Supp. 256.

[3] So, also agreements made on behalf of a corporation by a promoter before its incorporation are binding on the corporation when organized, if adopted by it. Mesinger v. Mesinger Bicycle Saddle Co., 44 App. Div. 26, 60 N. Y. Supp. 431; Bommer v. Am. Spiral, etc., Co., 81 N. Y. 469; Oakes v. Cattaraugus Water Co., 143 N. Y. 431, 38 N. E. 461, 26 L. R. A. 544; Quee Drug Co. v. Plaut, 55 App. Div. 87, 89, 90, 67 N. Y. Supp. 10; Hall v. Herter Bros., 83 Hun, 19, 31 N. Y. Supp. 692; Munson v. S., G. & C. R. R., 103 N. Y. 76, 8 N. E. 355; Martin v. Remington-Martin Co., 95 App. Div. 18, 88 N. Y. Supp. 573.

[4] I cannot see how the agreement in any respect offends the law, as being an illegal monopoly and an unreasonable restraint of trade. Kohart v. Skou, 163 App. Div. 899, 147 N. Y. Supp. 509.

[5] The defendant sets up, both as a defense and counterclaim, the failure of the plaintiff to pay dividends upon the capital stock, and also certain overpayments of dumpage which he claims was deducted by plaintiff from his dividends. It is quite true that the agreement provided, for the payment of dividends at the rate of 5 per cent. per annum, but in making this agreement the parties must be presumed to have had in mind the provision of the Stock Corporation Law which forbids directors declaring dividends except from surplus profits, and

(179 N.Y.S.)

the agreement must be read and construed in connection with that statute. Stock Corporation Law (Consol. Laws, c. 59) § 28.

[6] Moreover, an action never lies to recover a dividend until the same has been duly declared. Courts cannot by suit control the actions of trustees of corporations. If they in bad faith refuse to declare dividends, it is possible their action might be reviewed by the court in an appropriate proceeding; but in any event no action at law would lie until a dividend had been declared. Scott v. Central R. R., 522 Barb. 45, 48; Beveridge v. N. Y. El. R. R., 112 N. Y. 27, 19 N. E. 489, 2 L. R. A. 648; 10 Cyc. 568; Boardman v. L. S. & M. S. R. R., 84 N. Y. 157; Hiscock v. Lacy, 9 Misc. Rep. 594, 30 N. Y. Supp. 860. As there is no evidence that any surplus profits had accumulated from which a dividend could be declared, it follows that this defense must fail.

[7] As to the claim for excess in dumpage charge, the agreement provided for the deduction of a dumpage charge of 1 per cent. as to stockholders. This was changed by action of the trustees during the month of February, 1914, to 2 per cent. for stockholders and 3 per cent. for nonstockholders. In March, however, the amount of dumpage to be deducted was changed back to 1 per cent. for stockholders. The total excess of dumpage deducted from defendant's dividends during that period is conceded to be $2.28. It, however, appears that, upon the defendant objecting to the increase, it was changed back as above stated, and the officers of plaintiff offered to refund the excess, which defendant said he would not take, because it was such a small amount. Under these circumstances, I do not think the defendant has any claim on the plaintiff for such excess. Indeed, it would seem to be a proper case to apply the principle "de minimis non curat lex," which is still a recognized maxim in the law. Bergen v. Boerum, 2 Caines, 256; Colman v. Shattuck, 2 Hun, 508; Crook v. Rindskopf, 105 N. Y. 484, 12 N. E. 174; Ross v. Hardin, 79 N. Y. 85; Pronk v. Brooklyn Hts. R. R. Co., 68 App. Div. 390, 74 N. Y. Supp. 375.

[8] It is quite clear that the penalty of $2 per cow fixed in the agreement may be recovered as liquidated damages in this action. Little v. Banks, 85 N. Y. 258; Curtis v. Van Bergh, 161 N.. Y. 47, 55 N. E. 398.

[9] As to the amount the plaintiff is entitled to recover, it is conceded that the defendant owned and lived on the Virkler farm, and that 22 cows was the average number kept on that farm for the year in question. He also owned another farm, called the home farm, where his son lived, on which the average number of cows kept was 25. Doubtless the provisions of the contract imposing a penalty can only be enforced against dairies which were owned and controlled by the delinquent stockholder; but the case shows that, when a dumpage charge of 3 per cent. was deducted from the dividend going to the home farm, on the ground it was conducted by a nonstockholder, the defendant objected to the same, and claimed the farm belonged to him, and, at his request, the dumpage charge was reduced to 1 per cent., the amount which was properly chargeable to stockholders only. It seems to me that the defendant is bound by this election, and there

fore the plaintiff is entitled to recover as liquidated damages $2 per cow for 47 cows, or in all $94 damages, together with costs.

Findings accordingly may be prepared, and, if not assented to, settled before me on five days' notice. The plaintiff's attorney will serve a copy of this opinion with the proposed findings.

(189 App. Div. 586)

SIEBERT v. ERIE R. CO.

(Supreme Court, Appellate Division, First Department. December 5, 1919.) 1. CARRIERS 114-TRANSPORTATION OF ORE; POSSESSION AT TIME OF THEFT. Where railroad, pursuant to notation on bill of lading, placed car containing bags of ore on one of its sidings, while car was en route, for purpose of enabling shipper's agent to sample ore, and where, after ore had been unloaded, sampled, and reloaded into car, and after railroad's agent had counted bags, given receipt therefor, and sealed car, the car was broken into and the ore stolen before car was attached to a train for resumption of transportation, the car and ore at time of theft was in possession of railroad as a common carrier, and railroad was liable for loss of ore.

2. CARRIERS

114-RAILROAD'S LIABILITY FOR ORE STOLEN FROM CAR ON

SIDING EN ROUTE.

A railroad is not relieved from liability for ore stolen from car placed on siding en route for sampling of ore, since railroad's agreement to leave car on siding temporarily en route for shipper's accommodation, not being authorized by uniform bill of lading, was unlawful under Elkins Act, § 1, Interstate Commerce Act, §§ 3, 6, and Hepburn Act, § 2 (U. S. Comp. St. §§ 8565, 8569, 8597).

3. CARRIERS 32(2)-AGREEMENT TO LEAVE CAR ON SIDING EN ROUTE FOR SHIPPER'S ACCOMMODATION IS UNLAWFUL.

Under Elkins Act, § 1, Interstate Commerce Act, §§ 3, 6, and Hepburn Act, § 2 (U. S. Comp. St. §§ 8565, 8569, 8597), carrier's agreement to temporarily leave car on siding en route solely for shipper's accommodation, being unauthorized by uniform bill of lading, was unlawful, and not binding on carrier.

4. CARRIERS

180(1)-LIMITED LIABILITY OF CONNECTING CARRIER CHARGING REDUCED RATE WITHOUT SHIPPER SIGNING RELEASE CLAUSE.

Where shipper did not sign release clauses on shipping order and bill of lading agreeing to limitation of carrier's liability, and where joint freight tariffs of carriers participating with initial carrier required signing of release clause for limitation of carrier's liability, a participating carrier whose freight tariff contained similar requirement, was not entitled to limited liability, notwithstanding it charged merely the reduced rate; the shipper not having signed release and not having been entitled to such reduced rate.

5. CARRIERS 177(4)-LOSS BY THEFT; SAMPLING OF ORE EN ROUTE BY SHIPPER'S AGENT.

Where connecting carrier, pursuant to single contract of shipment, placed car of silver ore on siding for sampling by shipper's agent, consented to removal of ore from car for sampling, left car to be reloaded when sampling process was finished, and knew upon reloading that there was a shortage in the number of bags, and where carrier under like conditions temporarily delivered considerable ore for sampling, the separation of silver metallics or nuggets from other ore and placing them in the car was not a fraud on the carrier, releasing it from liability for loss of the silver by theft; carrier being chargeable with notice of process of sampling, and being bound by knowledge of its agent acquired in receipting for ore.

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

(179 N.Y.S.)

6. CARRIERS 129-LIABILITY FOR THEFT OF ORE FROM CAR ON SIDING; ESTOPPEL.

Carrier having granted shipper of ore special privilege of having car placed on siding en route for sampling of ore, in violation of law, should not be permitted to defend, in shipper's action for loss of ore by theft, on ground that the separation of metallics from other ore constituted fraud, so as to release carrier from liability.

7. CARRIERS 110-INCREASE OF VALUE BY SAMPLING EN ROUTE; ESTOPPEL. Carrier, having granted shipper of silver ore special privilege of having car placed on siding en route for sampling of ore, could not complain, in shipper's action to recover for theft, after separation from rest of ore, that the stolen ore constituted articles of extraordinary value, within section 6 of the uniform bill of lading, providing for a higher rate therefor, and had not been so classified, since the increased value was due to separation in process of sampling, made possible by carrier's unlawful agreement.

Appeal from Trial Term, New York County.

Action by Charles A. Siebert against the Erie Railroad Company. From a judgment dismissing the complaint, pursuant to the direction of the court on the submission of the issues to the court at the close of the evidence on the trial, which was before the court and jury, and from an order denying his motion for a new trial, plaintiff appeals. Reversed, and judgment rendered for plaintiff.

Argued before CLARKE, P. J., and LAUGHLIN, DOWLING, SMITH, and MERRELL, JJ.

Tipple & Plitt, of New York City (Arthur W. Clement, of New York City, of counsel, and Wilson E. Tipple, of New York City, on the brief), for appellant.

Stetson, Jennings & Russell, of New York City (Harold W. Bissell, of New York City, of counsel, and William C. Cannon, of New York City, on the brief), for respondent.

LAUGHLIN, J. This is an action on the assigned claim of a shipper against the defendant as a common carrier for the loss of certain freight. The freight constituted part of a carload of silver ore which the plaintiff's assignor, the Crown Reserve Mining Company, Limited, delivered to the Temiskaming & Northern Ontario Railway, at Cobalt, Canada, on the 27th of November, 1908, to be shipped on a through bill of lading consigned to the American Smelting & Refining Company at Perth Amboy, N. J. In the shipping order given by the consignor, evidently on a blank furnished by the carrier, and in the bill of lading issued by the initial carrier the freight is described as "550 bags silver ore," said to weigh about 60,000 pounds. In the body of the shipping order and of the bill of lading there was a notation in typewriting as follows: "To be stopped off at Bergen Junction for sampling at Ledoux & Co. works"-and a notation indicating that the shipment was to be made via the Grand Trunk and Erie Railroads. It does not appear by the shipping order or the bill of lading that the shipper specified the value of the freight; but the printed provisions of both the shipping order and the bill of lading show that the shipment was to be made subject, among other things, "to the terms and conditions of the current

For other cases see same topic & KEY-NUMBER in all Key-Numbered Digests & Indexes

classification of freight and tariff," all of which was agreed to by the shipper as the basis upon which the carrier's receipt was to be given for the property "and as a special contract in respect thereof."

It is to be inferred from these provisions that the initial carrier had an official classification of freight and tariff by which, on a limitation of the common-law liability of the carrier, freight was transported at a lower rate, and that this shipment was therefore intended to be made under such classification, instead of on an unrestricted liability, for which a higher rate would be charged. It is, however, conceded by both parties that the provisions of the Canadian bill of lading with respect to classification and rates, and in so far as they purport to limit the liability of the carrier, are void for the reason that the classification and rate were not filed with and approved by the Canadian Board of Railway Commissioners and filed with our Interstate Commerce Commission, and that in any event they were inoperative after the shipment passed the Canadian line and came into the United States, and that thereupon the uniform classification prescribed by our Interstate Commerce Commission and the tariff filed by the defendant thereunder attached, and that they govern and control the decision of the issues in this action.

The car containing the freight was transported by the initial carrier to North Bay, Canada, and there delivered to the Grand Trunk Railway, and by it delivered to the defendant at Suspension Bridge, Niagara Falls, N. Y. Pursuant to the notation on the bill of lading, the defendant placed the car on one of its sidings at Bergen Junction, opposite a freight platform of Ledoux & Co.'s sampling works. Ledoux & Co. unloaded all of the ore and ran it through a crushing machine, evidently for the purpose of obtaining more uniform samples. When received by the initial carrier, the ore consisted of silver and the "binder" of rock and other substance in which it was contained, and was of the average value of $3,000 per ton. The crushing and the screening separated part of the silver from the "binder." The part so separated is known as silver metallics or nuggets, and averaged about 80 per cent. silver; the remaining 20 per cent. being other mineral. The process, however, involved no smelting or refining, and the original condition of the ore was not otherwise changed. The change thus made merely altered the size of the lumps of the ore, and resulted in part of the separated lumps of ore containing a much higher percentage of silver, and the remainder a lower percentage, than the average of the ore as originally delivered to the carrier.

Ledoux & Co. then took a sample of the 80 per cent. and of the remaining ore, and replaced all of the ore, excepting the samples, in the bags from which it had been taken, and reloaded it into the car; but that containing the higher percentage, known as nuggets, was kept separate and filled 5 bags. This was about eight days after Ledoux & Co. took possession of the ore, and thereupon they notified the representative of the agent of the defendant that the car was ready to go forward, whereupon he came to the car, looked it over, counted the bags, sealed the car, and signed a receipt presented by Ledoux & Co., therefor, specifying that the defendant had received 241 bags of cer