net earnings to pay the interest on the bonded indebtedness of the plaintiff company, and that company was placed thereby under an equal obligation to repay to the defendant the amount of such advances upon demand, or, in other words, immediately. Such an obligation is not the subject of a decree for a specific performance in equity. If there be any remedy at all, that remedy is at law, by a recovery of damages. Carter v. United Ins. Co., 1 Johns. Ch., 463; Sichel v. Mosenthal, 30 Beav., 371; Crampton v. Varna Railway Co., L. R., 7 Ch. App. Cas., 562; Pierce v. Plumb, 74 Ill., 326, 330, 331.

Of course, in the action at law there must be proof in the case showing in some form and to some extent the amount of the damages that the plaintiff has sustained by the defendant's breach of his agreement. And it is equally plain that it must be a rare case, indeed, where it can be said that a person has sustained any damages by the refusal of another to advance money which he has agreed to advance, where the person to whom it is to be advanced is by the agreement under a valid obligation to pay it back immediately. Equity, at all events, never enforces such an agree ment, and in a court of law there must be proof of damages. But we may assume, without deciding, that the defendant, in case it advanced the money, would not have the legal right to demand an immediate repayment, and consequently would not have the right to maintain an action to enforce it, although not compelled to await the existence of net earnings before claiming such repayment. There yet remains an unanswerable objection to the maintenance of this action, and that objection lies in the fact that the plaintiff company is, and for some time prior to the com mencement of this action had been, hopelessly insolvent, and the payment of the interest on its bonds by the defendant would be neither more nor less than a pure gift, as the plaintiff could not repay it, and the security for such repayment proves to be entirely worthless. This is a condition of things not contemplated by either party at the time of the execution of the contract. claimed that the insolvency of the plaintiff company was one of the facts which, he contract provided for, as the plaintiff company would be insolvent if it could not earn enough to pay its operating expenses and the interest mentioned, and that it was in just such case that the contract provided for an advance by the defendant to the plaintiff company.

It is

But this is clearly not the correct construction. The contract was made March 12, 1883. The plaintiff company was chartered in 1881, and in the year 1882 it had earned more than enough to pay operating expenses and interest on its bonds and a dividend to its shareholders, besides leaving a surplus in its treasury. It never could have been contemplated that the company would permanently cease to earn enough even to pay operating expenses, and it cannot be supposed that it was ever in the thoughts of the officers of either of the two companies that the time would speedily come when such a contingency would arise and seemingly become a fixed financial condition. The obligation to continually pay N. Y. STATE REP., VOL. XXXIII. 78

1

the interest on the bonds of company which could not earn enough to pay its own operating expenses is one which we cannot, in the light of the proved facts in this case, credit the plaintiff company with obtaining, or charge-the defendant with assuming. The consideration which the defendant would obtain by reason thereof is grossly insufficient to predicate the voluntary assump tion by it of any such obligation. I think it may be properly assumed that the obligation to advance was founded upon a belief that in the future it might be with the plaintiff company, as with others, owing to temporary embarrassments, or the working of unforeseen though temporary causes, a contingency might arise by which a particular payment of interest could not be made be cause of an insufficiency of net earnings from which to pay it, and in that event the defendant was to advance enough to make up such deficiency, and this advance was to be secured by the pledge of the future net earnings. It was clearly contemplated and supposed that there would be such earnings, although their existence was not a condition precedent to the right to claim repayment for such advances. A perusal of the whole agreement leaves upon my mind a clear impression that it was assumed there would generally be sufficient net earnings to pay the interest on the bonds of the plaintiff company, but that the contingency might, "from time to time," arise when there would be a temporary deficiency in such net earnings to pay such interest, and in that event the defendant was bound to advance enough to make such payment, taking as security for a repayment thereof the first charge upon the net earnings fund after the payment of the interest and a first lien on the property and franchises of the corporation after the mortgage bonds. This, of course, contemplates that there would be such surplus net earnings, and not that there would be a continuous annual deficit therein, together with a deficiency in the earnings, to an extent rendering it impossible to pay the ordinary operating expenses of the railroad.

Events subsequent to the making of the agreement have actually placed the plaintiff company in a position where, for a long time, its earnings have scarcely, if at all, equalled its operating expenses, and where, if the defendant were to advance a sum sufficient to pay the interest, or any part thereof, on the plaintiff company's bonds, it would find that the security for repayment provided for by the agreement had become, contrary to the expecta tions of both parties, of no value. To enforce the specific performance of such a contract would work an unexpected hardship upon the defendant and would, in truth, do it great injustice. Â contingency has happened in the case not within the contemplation of either of the parties to the contract, to wit, the continuous failure of the plaintiff company to earn money enough pay all of its operating expenses, and hence the failure of the plaintiff company to realize net earnings out of which to pay the interest, or some portion thereof, on its bonds, has been not only partial, but complete; not "from time to time" only, but all the time, and hence it would be oppressive for a court of equity to enforce performance. Under such circumstances no specific performance

will be decreed. Trustees of Columbia College v. Thacher, 87 N. Y., 311, and cases cited.

Thus far I have considered this case as if it were an action in equity asking for a decree for the specific performance of the agreement. As thus considered, I think the action, for the reaso is already stated, cannot be sustained. But it may be urged that an accounting was necessary between the parties, and hence a court of equity had jurisdiction to take it, and having obtained jurisdiction for one purpose, would retain it for all and give final relief. The answer is that no accounting whatever is necessary. The plaintiff simply alleged that there had been no net earnings and therefore asked that the full amount of the interest on its bonds should be paid to it by the defendant company.

The fact of there being no net earnings was a fact to be proved like any other fact. To make such proof it might be necessary to examine the books of the plaintiff company for the purpose of discovering what the gross earnings had been and how such gross earnings had been paid out. But that involved no "accounting between these parties, as such term is used in speaking of the jurisdiction of a court of equity over the matter of accounts.

If, however, the action be regarded as one at law, seeking to recover money damages for a violation of the agreement by the defendant, I am of the opinion there is a fatal defect in the plaintiff's case. In the first place, no facts are pleaded showing any damages sustained by the plaintiff company, consequent upon defendant's alleged violation of the agreement, and in the next place no facts are proved which show that the plaintiff company has in truth sustained any damages.

It would seem that the whole agreement taken together shows that whatever obligation the defendant might rest under to make the advances to cover up the deficiencies alluded to, yet if this obligation were performed by defendant, and the moneys were in fact advanced, an equal obligation would at once spring up on the part of the plaintiff company to repay such money immediately, or as soon as the defendant should ask for its repayment. However this may be, certainly no damages have been proved by the insolvent company plaintiff arising from the failure of defendant to pay this interest.

The claim that the plaintiff company has in all things performed its part of the contract, and it would therefore be inequitable to permit defendant to repudiate its obligations, does not meet the objection of the unforeseen insolvency of the plaintiff company. The facts of the case do not bring the plaintiff within the principle of a part performance by it, and a resulting liability on defen lant's part to specifically perform for the future.

While not necessary to the determination of this case upon the grounds already discussed, the argument that the plaintiff company has lost the right to claim performance by the defendant because the corporate control of plaintiff company by defendant provided for in the contract has been lost by the appointment of a receiver, does not lack plausibility. If it have not lost the right on that ground, we think it plain that the right has been lost by

this unexpected contingency, the insolvency of the plaintiff company.

For these reasons, we are of the opinion that the judgment herein should be reversed and a new trial ordered, with costs to abide the event.

ANDREWS, EARL, GRAY and O'BRIEN, JJ., concur; RUGER, Ch. J., and FINCH, J., dissent.

THE TONAWANDA VALLEY & CUBA RAILROAD CO. and BIRD W. SPENCER, as Receiver, Resp'ts, v. THE NEW YORK, LAKE ERIE & WESTERN RAILROAD Co., App'lt.

(Court of Appeals, Filed October 21, 1890.)

PECKHAM, J.-The facts are substantially the same in this case as in The Bradford, Eldred & Cuba Railroad Company v. The Same Defendant, and the cases were argued together.

For the reasons given in the other case, the judgment herein should also be reversed and a new trial granted, with costs to abide the event.

ANDREWS, EARL, GRAY and O'BRIEN, JJ., concur; RUGER, Ch. J., and FINCH, J., dissent.

JOHN P. CRAIGHEAD, Resp't, v. THE BROOKLYN CITY RAILROAD Co., App'lt.'

(Court of Appeals, Filed October 28, 1890.)

1. NEGLIGENCE-STREET RAILROADS.

Plaintiff, after speaking with a conductor of an open street car, stepped down from the rear platform to the outside step of the car, and while moving along the step to the front part was struck on the head by a closed car coming along on the down track and knocked off. There was a space of seventeen inches between the outside step of the open car and the body of the closed car For twenty years thousands of passengers had stood on the steps of open cars and no one had been injured by closed cars passing. Held, that defendant was not guilty of negligence because it did not have more space between its tracks.

2. SAME.

There was no negligence on the part of the conductor in failing to prevent the plaintiff from going on the step or in failing to warn him of any possible danger which might arise therefrom.

APPEAL from a judgment of the city court of Brooklyn, general term, affirming judgment entered on a verdict of a jury at a trial term in favor of plaintiff.

Samuel B. Morris, for app'lt; William J. Lynch, for resp't.

PECKHAM, J.-Upon the undisputed evidence we are of the opinion that the plaintiff failed to make out a case of negligence against the defendant.

The evidence of the sister of the plaintiff is as favorable as that of any witness called on his part. She says when the plaintiff finished speaking with the conductor of the open car on which they all were, he stepped down from the rear platform to the out

side step of the car, which runs its entire length, and she saw the other car coming along on the down track and it struck the plaintiff while he was still on the step, turned him around and knocked him off the car. The witness was looking directly at the plaintiff at this time, and he was looking at her and was moving along the step from the rear towards the front part of the car where she was sitting facing the rear. She saw the car strike his head, and she stated positively that he did not slip off the side of the car and fall against the other car. This was when the plaintiff was standing either at the first or second stanchion from the rear of the car.

It appeared that the smallest space between the tracks at or near this spot was such that these cars had a space between the outside step of the open car and the body of the closed car of at least seventeen inches. The place where the accident happened was a crowded street, and horse cars were continually there passing each other.

The company had some open cars that were seven inches wider than the one upon which the plaintiff was riding. Open cars had been in use daily during the summer months for twenty years. All the closed cars were of a uniform width. Thousands of persons, during this long period, had been seen riding at or near this spot on the outside steps of the open cars at times when they met cars coming from the opposite direction and the cars had passed each other, and no one had ever been hurt nor had any accident ever before happened there or at any other portion of the road from any such cause. The space between the tracks was about uniform along the length of the defendant's road, sometimes a few inches more or less.

At the place where this accident occurred, and about the time in the day of its occurrence, cars were passing each other certainly every half minute.

Policemen and employes of the road frequently stood at this place, or near it, between the rails of the up and down tracks, when cars passed each other, and no one had ever been hurt. This was an every-day occurrence. The inspector of the defendant, who had been in its employment for thirty-four years, said that open cars had been in use on the road for twenty years, and he had seen at this place, thousands of times, people standing on the step of an open car and pass a closed car at the same time on the other track, and he had never heard of an accident before this

one.

Upon these facts we cannot see how the defendant can be convicted of negligence because it did not have more space between its tracks. For twenty years such space had been sufficient, although precisely the same opportunities for accidents had arisen many times daily during that period and yet not one had occurred. Clearly the accident was one not to be apprehended, and a failure on the part of the defendant to take such measures as would make its happening under any circumstances a physical impossibility cannot be said to be an omission of duty. The accident was not to be apprehended because thousands of passen