text:
    Edward J. Quintal et al., as Trustees in Bankruptcy of Consolidated Factors Corporation, Appellants, v. Gilbert W. Kellner, Respondent.
    (Argued January 15, 1934;
    decided February 27, 1934.)

      John W. Simpson, 2nd, Abram I. Elkus, Charles F. Bailey and Hamilton A. Long for appellants.
    Each of the causes of action in the complaint sets forth facts sufficient to establish a cause of action which prior to the adjudication could have been enforced by the bankrupt. (Richards v. Wiener Co., 207 N. Y. 59; People v. Marcus, 261 N. Y. 268; Kavanaugh v. Kavanaugh Knitting Co., 226 N. Y. 185; Billings v. Shaw, 209 N. Y. 265; Continenta Securities Co. v. Belmont, 206 N. Y. 7; Jacobson v. Brooklyn Lumber Co., 184 N. Y. 152; Godley v. Crandall & Godley Co., 212 N. Y. 121; Worthington v. Worthington, 100 App. Div. 332; Deutsche Pres. Kirche v. Trustees, 104 Atl. Rep. 642.) The present action, being predicated upon rights of action which at the time of the filing of the petition in bankruptcy existed in favor of the corporation bankrupt, may now be maintained by the plaintiffs as its trustees. (Stephan v. Merchants Coll. Corp., 256 N. Y. 418; Matter of Levinson, 1 Fed. Rep. [2d] 851; Imperial Ins. Co. v. Livingston, 49 Fed. Rep. [2d] 745; Matter of Cantelo Mfg. Co., 185 Fed. Rep. 276; Matter of Baudouine, 96 Fed. Rep. 536; Chandler v. Nathans, 6 Fed. Rep. [2d] 725; English v. Richardson, 80 N. H. 364; Chesapeake Shoe Co. v. Seldner, 122 Fed. Rep. 593; Walkof v. Fox, 153 N. Y. Supp. 27; 155 N. Y. Supp. 1146; Bynum v. Scott, 217 Fed. Rep. 122; Irving Trust Co. v. Gunder, 254 N. Y. Supp. 630; Kessler v. Herklotz, 117 N. Y. Supp. 45; Tucker v. Western Union Tel. Co., 157 N. Y. Supp. 873.)

      David Haar and Michael Berman for respondent.
    The powers and duties of a trustee in bankruptcy are prescribed by the Bankruptcy Act (30 Stat. 544), and limited by its provisions. (Matter of V. & M. Lumber Co., 182 Fed. Rep. 231; Matter of Kreuger, 196 Fed. Rep. 705; American Woolen Co. v. Samuelsohn, 226 N. Y. 61; York Manufacturing Co. v. Cassell, 201 U. S. 344.) The rights of a trustee in bankruptcy being statutory, they are limited to rights of creditors injured by the wrong complained of. Lacking an allegation that creditors now in existence were creditors at the time of the payments complained of, the trustees have no rights against the defendant. (Kaminsky v. Phinizy, 54 Fed. Rep. [2d] 16; Milam v. Stubblefield, 271 S. W. Rep. 410; Ga Nun v. Palmer, 216 N. Y. 603; Lummis v. Crosby, 176 App. Div. 315.)

      Arnold A. Jaffe for Samuel Shapiro, amicus curiӕ.

    Assuming that the action does inure to the benefit of the trustees by virtue of succeeding to the rights of stockholders of the corporation to bring the suit, it is necessary for the complaint to allege that stockholders or the corporation have not assented and acquiesced in the alleged transfer and object to the transfers by the corporation to the defendant. (Continental Securities Co. v. Belmont, 206 N. Y. 7; Pollitz v. Gould, 202 N. Y. 11; Appleton v. A. M. Co., 65 N. J. Eq. 375; I. G. L. Co. v. Treman, 93 N. Y. 660; Kingman v. R., W. & O. R. R. Co., 30 Hun, 73; Belden v. Burke, 147 N. Y. 542; Dimpfell v. O. & M. Ry. Co., 110 U. S. 209; Parsons v. Hayes, 14 Abb. N. C. 419; Drake v. N. Y. Suburban Water Co., 26 App. Div. 499; Kent v. Quicksilver Mining Co., 78 N. Y. 159.)
   Lehman, J.

An action brought by trustees in bankruptcy of a corporation has been dismissed on motion of the defendants. Two questions arise on this appeal: First. Does the complaint set forth facts sufficient to constitute a cause of action which was vested in the corporation at the time of its bankruptcy? Second. Did that cause of action pass to the trustees in bankruptcy?

The complaint seeks to set forth three causes of action. The gist of each is that the defendant has received moneys which the officers of the corporation caused to be paid by said corporation from its moneys * * * in the attempted discharge of their personal and individual obligation to the said defendant.” There can be no doubt that a corporate officer who applies the funds of a corporation to purposes beyond the scope of his authority is guilty of conversion of the corporate funds, and the corporation may maintain an action against him and against any person who participates in the conversion and accepts its fruit. Against such person an action will lie for money had and received. There can also be no doubt that a corporate officer has no power, implied or apparent, to apply corporate funds to the discharge of his personal indebtedness. These rules have been enunciated so frequently and are so fundamental in the law governing corporate rights and powers, that citation is unnecessary. Here, however, there is no allegation that*''" the corporate officers acted without authority, at least in so far as the corporation could give such authority. Indeed, any possible inference of lack of authority that might be drawn from the allegation that the corporate moneys were used without consideration moving to the corporation is negatived by the allegations that the officers caused ” the corporation to pay the moneys. The action is not for conversion, for there can be no conversion of corporate funds through acceptance of corporate moneys paid out by the corporation itself. It is true that where action by the corporation is dictated by its officers for their personal interest, the corporation may, in proper case, disaffirm the transaction and demand restitution of corporate property alienated in its course. A stockholder, injured by refusal or failure of the corporate officers or directors to bring an action for the protection of the corporation, may bring such action in equity in its behalf, at least where he did not acquiesce in the transaction; but here there is no allegation that the corporation disaffirmed the transaction or even that all the stockholders did not acquiesce in payment by the corporation.

In actions brought to compel officers and directors to account for loss occasioned to a corporation by their ' misfeasance, we have drawn a distinction between transactions which, though voidable at the option of the corporation, were not void, and might be ratified by the corporation by a majority vote of its stockholders; and transactions which were void and, therefore, not subject to ratification by such vote. “ The direct of indirect misappropriation of assets of the corporation to his own use or benefit by an officer is incapable of being authorized or ratified by a vote or any act or omission of the majority of the stockholders.” (Pollitz v. Wabash R. R. Co., 207 N. Y. 113, 127.) Where ratification cannot render a void act valid, disaffirmance is unnecessary before action is instituted by the corporation to compel a delinquent officer to make good loss which the corporation sustained thereby, and, though acquiescence by all the stockholders may furnish a defense to such an action by the corporation or one of its stockholders, such acquiescence will not be presumed, but must be alleged in the answer and proven at the trial. (Continental Securities Co. v. Belmont, 206 N. Y. 7.) The allegations of the complaint are sufficient to show that here the officers of the corporation induced the corporation to use the corporate funds for purposes which the corporation could not authorize, at least without the acquiescence of all of its stockholders, but the action is not brought to compel thé officers to account for loss occasioned by their wrongful acts. The action is brought against the person to whom, it is alleged, the moneys were transferred by the corporation.

The Bankruptcy Law (Section 70) provides that (a) the trustee of the estate of a bankrupt * * * shall * * * be vested by operation of law with the title of the bankrupt * * * to all * * * (4) property transferred by him in fraud of his creditors; (5) property which prior to the filing of the petition he could by any means have transferred or which might have been levied upon and sold under judicial process against him * * * and (6) rights of action arising upon contracts,, or from the unlawful taking or detention of, or injury to, his property.” (30 Stat. 565; U. S. Code, tit. 11, ch. 7, § 110.) Quite evidently these provisions, unless elsewhere restricted, are sufficient to vest in the trustee in bankruptcy any right of action which at the time of the bankruptcy the corporation may have possessed, to recover from directors or officers losses caused by their misconduct. A claim against directors of a bankrupt corporation for damages due to their misconduct passes to and may be enforced by the trustee.” (Stephan v. Merchants Collateral Corp., 256 N. Y. 418, 421.)

The trustees’ title to the bankrupt’s property vested in him by subdivision a of section 70 of the Bankruptcy Law is not qualified or restricted by subdivision e of the same section, which provides that the trustee may avoid any transfer by the bankrupt of his property which any creditor of such bankrupt might have avoided, and may recover the property so transferred, or its value,' from the person to whom it was transferred, unless he was a bona fide holder for value prior to the date of the adjudication.” That subdivision constitutes an enlargement of the powers of the trustee, not a restriction upon the trustee’s title to the property of the bankrupt. Though it does not appear in this case that any creditor was injured by, or could have avoided, the transfer of corporate moneys to the defendant, made without consideration or benefit to the corporation (Graham v. Railroad Co., 102 U. S. 148), yet an action by the trustee would lie to compel the delinquent officers to make good a loss to the corporation caused by their wrong. (Manning v. Campbell, 264 Mass. 386, but cf. Skinner v. Hulsey, 103 Fla. 713.)

The question remains whether trustees in bankruptcy may recover, in an action for money had and received; moneys of the corporation which were wrongfully transferred to a third party by a corporate officer. The answer seems clear. If possession only and not title passed from the corporation, the trustee may bring an action to regain the property or to recover damages for invasion of its property rights. In such case it would probably be immaterial whether the action was for conversion or, in form, contractual for money had and received. On the other hand, if title to the property was transferred from the corporation, then the trustee in bankruptcy can bring an action to avoid such transfer only where a “ creditor of such bankrupt might have avoided” it. (Kaminsky v. Phinizy, 54 Fed. Rep. [2d] 16; Milam v. Stubblefield, 271 S. W. Rep. 410.) The trustee can acquire no right of action from the bankrupt other than rights of action, which the bankrupt possessed, “ arising upon contracts, or from the unlawful taking or detention of, or injury to, his property,” and a complaint brought to enforce such cause of action must allege all its essential elements. That is not the case here.

The complaint, as we have said, does not even attempt to allege a cause of action arising from a conversion of the corporate money. The corporation may have suffered loss through act of its officers in causing the corporation to pay out its moneys for their benefit, but if the corporation paid out its own money, even though by wrongful inducement of the officers, the defendant obtained title to the moneys so paid and did not convert the corporate money, and is not wrongfully detaining it. How the officers caused ” the corporation to transfer its property does not - appear. Perhaps the corporation might have a right of action to avoid the transfer. It has not chosen to bring such action, and we cannot pass upon the question whether a cause of action in equity to avoid a corporate transfer for fraud or overreaching by its own officers would pass to the trustee when no such cause of action is alleged. The answer to that question might depend upon the status of the transaction at the time of the bankruptcy, and upon the means adopted to cause ” the corporation to pay out its moneys. The fact is that the trustees have brought an action for money had and received to the use of the corporation upon allegations which show that the money was paid by the corporation for the purpose of transferring its moneys to the defendant for his own use. No such action lies. We may construe the allegations of a'complaint liberally and at times disregard the form of relief sought, if the essential elements of right to relief exist. We cannot create a cause of action which is not alleged. The complaint herein fails to allege a cause of action against the defendant arising upon any contract, express or implied, made with the corporation, or any " unlawful taking or detention of, or injury to ” the property of the bankrupt by the defendant. It fails to allege a cause of action to avoid a transfer which a “ creditor * * * might have avoided.” Therefore, the complaint was properly dismissed.

The judgment of the Appellate Division should be affirmed, with costs.

Pound, Ch. J., Crane, O’Brien, Hubbs and Crouch, JJ., concur; Kellogg, J., not voting.

Judgment affirmed.


source: Caselaw Access Project

author: Lehman, J.

license: Public Domain

text:
    In the Matter of the Application of Dennis P. Creedon, Respondent. Joseph L. Matt, Appellant; Thomas F. Walsh, Respondent.
    (Argued January 9, 1934;
    decided February 27, 1934.)

      Leo O. Coupe and James Coupe for appellant.
    The trial court properly excluded from the canvass the votes shown on the defective machines for Walsh and Thomas, and the Appellate Division erred in excluding the valid votes for Matt and Creedon. (People ex rel. Deister v. Wintermute, 194 N. Y. 107.)

      Warnick J. Kernan and Ezra Hanagan for Thomas F. Walsh, respondent.
    Justice requires the elimination of the vote for all candidates for Assessor on the three machines involved. (People ex rel. Judson v. Thacher, 55 N. Y. 525; Lynn v. Nichols, 122 Misc. Rep. 170; Matter of Penner, 77 Misc. Rep. 634.)
   Lehman, J.

At the general election held in November, 1933, two persons were to be elected as Assessors of the city of Utica. The Democratic, Republican and Socialist parties, each, nominated two candidates. The two Democratic candidates were also candidates of the Law Preservation Party." Upon the statement of returns' of the inspectors of election of all the election districts in the city, Thomas F. Walsh, Democrat, led with a vote of 20,110, and John G. Thomas, Republican, was second with a vote of 19,774. Walsh apparently led Matt, the other Democratic candidate, by 1,098 votes, and Thomas led Creedon, the other Republican candidate, by 313 votes. An inspection of the returns of three election districts disclosed, however, a great excess in the recorded votes for Assessors over "the number of persons voting in those districts. The three voting machines used in these three districts were examined. It was found that these three machines were so adjusted that a vote cast thereon for either Walsh, Democrat, or Thomas, Republican, was automatically registered as a vote for both. Thus, a vote cast for both Democratic candidates was automatically registered also as a vote for Thomas, Republican, and a vote cast for both Republican candidates was automatically registered also as a vote for Walsh, Democrat. The result is that almost fifty per cent more votes for the office of Assessor were registered in these districts than were actually cast.

The defective adjustment of the machines affected only the votes cast for Walsh and Thomas. Every vote registered for Creedon or Matt was actually cast for them. All such votes should, therefore, be counted for them. On the other hand, it is not possible to determine with certainty how the votes registered for both Walsh and Thomas were divided between them, and no votes may be counted for a candidate which were not actually cast in his favor. The justice at Special Term held that under these circumstances only the votes cast and registered for Creedon and Matt upon the three defective machines may be counted and that the votes registered for Walsh and Thomas must be eliminated. The boards of inspectors of the three districts in which these machines were used have been ordered to “ certify that no ballots and /or votes were cast upon either or any of said voting machines for said candidates Thomas F. Walsh and John G. Thomas.”

The official or officials charged with the duty of adjusting the voting machines made a mistake which is not chargeable against the voters who used the machines or the candidates for whom they voted. One thousand six hundred and thirty-three votes were registered for Walsh and Thomas. One thousand six hundred and thirty-three persons undoubtedly cast a vote for one of them. The effect of the order made at Special Term is to deprive two candidates of all the votes cast for them and to disfranchise partially the voters who cast these votes. Since on the face of the original returns for the whole city Walsh and Thomas led the other candidates by less than 1,633 votes, the result of the order would be to declare the two other candidates, Creedon and Matt, duly elected.

A vote lawfully cast is not void, even though by reason of a mechanical defect in the voting machine it has not been correctly registered. That has occurred here. Each time a voter pulled the correct lever over the name of either Walsh or Thomas he cast a vote for him. The circumstance that at the same time a vote was automatically registered for another candidate creates a problem as to how the votes lawfully cast may be counted. It has no other effect. Where proof is presented that a vote has been cast for a particular candidate, that vote must be counted in favor of the candidate, even though it has not been properly registered on the voting machine. (People ex rel. Deister v. Wintermute, 194 N. Y. 99.) The wholesale ehmination of all the votes cast for Walsh and Thomas might result in the election of a candidate by less than a plurality of all the votes lawfully cast. Where in a close election all the votes for certain candidates are ehminated in three districts because the machines did not properly register such votes while the vote for other candidates is counted, the successful candidates win not because they are the choice of the voters but through chance. For these reasons the Appellate Division has held that in fairness the entire vote of these three districts should be thrown out and the election determined by the vote cast in the rest of the city.

The statute gives the courts no power to disfranchise a single voter and certainly no power to disfranchise the voters of whole election districts. They must determine from the evidence presented the number of votes cast for the candidates. They cannot act on conjecture, but, as in all other matters presented to them, they may act on logical inferences based on human probabilities. In this case, Creedon, running on the Republican ticket, and Matt, running on the Democratic ticket, received respectively 607 votes and 1,054 votes and a combined vote of 1,661 votes. It cannot be said that the 1,633 votes cast for Walsh and Thomas, the other Democratic and Republican candidates, were cast in exactly the same proportion, but the only reasonable inference that can be drawn from the record is that Walsh received more than sufficient votes to elect him over Matt. In the rest of the city Walsh had received 517 more votes than Matt, his fellow candidate on the Democratic ticket. In almost every district he had run well ahead of the Democratic candidate for any office who received the smallest vote. The fact that the combined vote of Creedon and Matt so closely approximates the combined vote of the other Republican and Democratic candidates seems to indicate that the vote in these districts was based rather on party lines than on personal popularity or unpopularity. True, none of these considerations would fix with definiteness the exact number of votes to be credited to Walsh. Cumulatively they lead with almost absolute certainty to the inference that Walsh received more than sufficient votes to maintain his lead over Matt. Though allowance be made for every possibility in favor of Matt, analysis of the poll demonstrates beyond any reasonable doubt that a plurality of electors cast their ballots for Walsh. In such circumstances the Appellate Division correctly gave the will of the majority effect. The question would have been different if the effect of rejecting all the votes recorded on the three defective machines, might have been the election of a candidate who did not receive a plurality of the votes.

The order of the Appellate Division should be affirmed, without costs.

Pound, Ch. J., Crane, O’Brien, Hubbs and Crouch, JJ., concur; Kellogg, J., not voting.

Order affirmed.


author: O’Brien, J.

text:
    The Bank of the United States, Respondent, v. Armin Manheim, Appellant.
    (Argued December 11, 1933;
    decided March 6, 1934.)

      Jay Leo Rothschild and Louis Rivkin for appellant.
    The court erred in directing a verdict for the plaintiff, because a question of fact was presented with respect to whether or not an agreement was made between plaintiff and defendant for the release of defendant’s obligation, in consideration of defendant’s procuring for plaintiff an assignment of accounts from the corporation. (Kavanagh v. Wilson, 70 N. Y. 177; Greenpoint Nat. Bank v. Gilbert, 237 N. Y. 19; McDonald v. Metropolitan St. Ry. Co., 167 N. Y. 66; Phœnix Mut. Life Ins. Co. v. Doster, 106 U. S. 30; Fealey v. Bull, 163 N. Y. 397; Dwight v. Germania Life Ins. Co., 103 N. Y. 341; Anderson v. Southern Cotton Oil Co., 74 So. Rep. 975; Matter of Bennett, 207 App. Div. 388; 238 N. Y. 583; State Bank v. Siff, 228 App. Div. 2; 254 N. Y. 627.) " The counterclaim for cancellation of defendant’s obligation, predicated upon an executed consideration, was entirely valid, and free from any objection by reason either of the Statute of Frauds or of section 203 of the Negotiable Instruments Law. (Cons. Laws, ch. 38; McCreery v. Day, 119 N. Y. 1; McIntosh v. Miner, 37 App. Div. 483; Schwartzreich v. Bauman-Basch, 231 N. Y. 196; Susquehanna S. S. Co. v. Anderson & Co., 239 N. Y. 285; McGlynn v. Granstrom, 169 Minn. 164; Gorin v. Wiley, 215 Ill. App. 541; Hall v. Wichita State Bank, 254 S. W. Rep. 1036; Lockhart State Bank v. Baker, 264 S. W. Rep. 566; Forreston v. Waxahachie, 271 S. W. Rep. 290; Farmers State Bank v. Cottingham, 261 S. W. Rep. 426; Bradley v. McLoughlin, 87 Okla. 34; Jones v. Wettlin, 39 Wyo. 331; Epstein v. Gradowitz, 76 Cal. App. 29; Hinton First Nat. Bank v. Young, 145 S. E. Rep. 39; Henson v. Henson, 151 Tenn. 137; Hazelhurst Oil Mill Co. v. Booze, 160 Miss. 136.)

      Edward Garfield, Arthur Ofner, Warren C. Fielding and Carl J. Austrian for respondent.
    The oral agreement of release pleaded by defendant is unenforceable under section 203 of the Negotiable Instruments Law. (Whitcomb v. National Exchange Bank. 123 Md. 612; Baldwin v. Daly, 41 Wash. 416; Manly v. Beam, 190 N. C. 649; Page Trust Co. v. Lewis, 200 N. C. 286; Tisdel v. Bank, 90 Col. 114; Portland Iron Works v. Siemens, 135 Ore. 219; Dean v. Lyde, 223 Ala. 394; Pitt v. Little, 58 Wash. 355.) The trial court was justified in directing a verdict in favor of the plaintiff pursuant to section 457-a of the Civil Practice Act. (Kaplan v. Goodman, 187 App. Div. 505; Dwight v. Germania Life Ins. Co., 103 N. Y. 341; Fealey v. Bull, 163 N. Y. 397; Linkauf v. Lombard, 137 N. Y. 417; Hemmens v. Nelson, 138 N. Y. 517; Matter of Case, 214 N. Y. 199; Matter of Nicholas, 216 App. Div. 399; 244 N. Y. 531; Matter of Stern, 235 App. Div. 60; 261 N. Y. 617; Matter of Bennett, 207 App. Div. 388; 238 N. Y. 583; State Bank v. Siff, 228 App. Div. 2; 254 N. Y. 627; Serina v. New York Rys. Corp., 238 App. Div. 302.)
   O’Brien, J.

The complaint alleges and the answer admits that July 7, 1926, Tex-O-Ray Corporation executed a note for $35,000 payable to itself four months after date at plaintiff’s predecessor, Central Mercantile Bank; that the note was indorsed by the maker and by defendant and that it was delivered to the bank for value and before maturity. The answer denies the allegation that the note has not been paid and for a separate defense and counterclaim sets up allegations that defendant and the bank in August, 1926, agreed, in consideration of the procurement by defendant of an assignment to the bank by the Tex-O-Ray Corporation of its accounts and assets, that the bank would release defendant from his obligation as indorser. The answer further alleges that defendant did cause the corporation’s accounts and assets to be assigned to the bank which received various sums by reason of such assignment and demands that the complaint be dismissed and that defendant’s signature on the note be canceled. The reply denies the alleged agreement to release defendant from his obligation as indorser, the assignment of the accounts and assets of the corporation as a result of defendant’s efforts and the receipt of various sums of money by reason of the assignment of the corporation’s accounts and assets. At the trial defendant was allowed to plead as an added defense the allegatian that at the time of the commencement of this action the note had been fully paid. This allegation, as stated at the trial, is deemed denied.

Defendant in his bill of particulars specifies that the agreement, by which he argues that he was released from his liability as indorser, was oral and was made between himself and the president of the bank. Section 203 of the Negotiable Instruments Law (Cons. Laws, ch. 38) provides: Renunciation by holder. The holder may expressly renounce his rights against any party to the instrument, before, at or after its maturity. An absolute and unconditional renunciation of his rights against the principal debtor made at or after the maturity of the instrument, discharges the instrument. But a renunciation does not affect the rights of a holder in due course without notice. A renunciation must be in writing, unless the instrument is delivered up to the person primarily liable thereon.” This language seems plain and clear, in so far as some kind of a writing is required, in the absence of consideration or of delivery of the instrument to the person primarily hable. Although the Appellate Division in Leask v. Dew (102 App. Div. 529, 534; affd., without opinion, 184 N. Y. 599) observed obscurity in the statute, it certainly did not express a belief that, in the absence of a supporting consideration, its doubt was directed toward any lack of clarity concerning the necessity of some kind of a writing. In that case there was a writing but it did not comply with the requirements of section 203. It did not constitute an express renunciation dining the lifetime of the payee. The letter was merely expressive of a wish that the note be canceled in case of the death of the payee. Far from casting doubt upon the proposition that the holder, in the absence of consideration passing to him, cannot orally renounce, the decision emphasizes the rule that renunciation, unsupported by a consideration, can be effected only by such a writing as demonstrates a present, absolute and unconditional intention to renounce.

Appellant cites many cases in other jurisdictions which support his construction of the provisions of section 203 as they are incorporated in the statutes enacted by those States. (McGlynn v. Graustrom, 169 Minn. 164; Jones v. Wettlin, 39 Wyo. 331; Hall v. Wichita State Bank & Trust Co., [Tex.] 254 S. W. Rep. 1036; Gorin v. Wiley, 215 Ill. App. 541; 3 Williston on Contracts, § 1833.) Respondent replies with citations of Whitcomb v. National Exchange Bank (123 Md. 612); Baldwin v. Daly (41 Wash. 416); Manly v. Beam (190 N. C. 659); Page Trust Co. v. Lewis (200 N. C. 286); Tisdel v. Central Sav. Bank & Trust Co., 90 Col. 114, 131); Portland Iron Works v. Siemens (135 Ore. 219); Daniel on Negotiable Instruments ([6th ed.], § 1290); 2 Joyce’s Defenses to Commercial Paper ([2d ed.], § 998). We think the weight of authority as well as reason and justice leans in the direction of appellant. His contention that the purpose of the enactment of section 203 was to afford a means of cancellation without consideration is, in our opinion, meritorious. Prior to the adoption of this section, consideration was essential in many States, including New York (Crawford v. Millspaugh, 13 Johns. 87; Seymour v. Minturn, 17 Johns. 169), to make the discharge of a party effectual. Under the present law, however, a written consent, without consideration, is intended to lead to a discharge (3 Williston on Contracts, § 1833); so also, as we think, is an oral agreement based upon an executed consideration. Section 203, as we interpret it, requires a written renunciation only when no consideration passes. One who orally promises to renounce and does in fact accept a thing of value in exchange for such promise must be deemed to be estopped in the same degree as any other party affected by a statute of frauds where there has been full performance. (Thomson v. Poor, 147 N. Y. 402; Imperator Realty Co. v. Tull, 228 N. Y. 447; Foreman v. Foreman, 251 N. Y. 237.) The instrument itself, pursuant to section 200, may be discharged by any act which will discharge a simple contract for the payment of money. The holder’s rights against an indorser may of course be renounced without discharging the instrument, but the statute, as now existing, is not intended to erect an obstacle in the way of renunciation of. rights against a party more difficult than in the manner of discharging the instrument itself. A negotiable instrument, like a simple contract for the payment of money (§ 200), may be discharged by oral agreement supported by an executed consideration. No inference is warranted that a similar method respecting renunciation of rights against an indorser would not be efficacious. This is the view taken in many of the States and we think it is correct.

The pleadings create issues of fact whether an oral agreement was made for the release of defendant, whether the corporation’s assignment of its accounts was made as the result of defendant’s efforts and whether such efforts, if exerted and consummated, were referable to an oral agreement to discharge defendant, whether plaintiff received any sums of money by reason of the corporation’s assignment and whether this note for $35,000 has been paid.' The trial judge directed a verdict in favor of plaintiff. Does the evidence establish substantial conflict on any essential point? Has defendant produced any evidence which is not insufficient as matter of law? Has he presented moré than a scintilla? If he has failed, the direction of a verdict against him was proper.

All the testimony of witnesses for both parties has been carefully examined and scrutinized. To repeat it in detail would serve no useful purpose. The fact appears practically beyond any possibility of controversy that this note in suit has not been paid. On the issue whether the assignment of the corporate accounts was made as the result of defendant’s efforts and whether plaintiff received moneys by reason of the assignment, the evidence is strongly in favor of defendant, but on the issue whether the assignment is in any way referable to an oral agreement to discharge defendant from liability as indorser and on the issue whether any such agreement was made, the testimony of defendant and his son-in-law is so highly improbable that it fails to rise to the standard of substantial evidence. The effect of their testimony is entirely destroyed by defendant’s admission that he never took the trouble to obtain a physical cancellation or a written discharge prior to December, 1926, and that after that date he made no further request for either and by the fact that no conceivable motive can be assigned for such action as defendant, who was solvent while the maker of the note was on the brink of bankruptcy, asserts the bank took in respect to releasing him. A verdict for defendant, if rendered by a jury on such testimony, would necessarily have to be set aside. As matter of law it could not stand. There was no credible evidence to support it. The direction was, therefore, proper. (Matter of Case, 214 N. Y. 199; Getty v. Williams Silver Co., 221 N. Y. 34; Matter of Burnham, 234 N. Y. 475; Matter of Bennett, 238 N. Y. 583; Matter of Nicholas, 244 N. Y. 531; Matter of Stern, 261 N. Y. 617.) The doctrine as set forth in the two cases first cited finds legislative recognition in section 457-a of the Civil Practice Act, which is merely declaratory of the existing law.

The judgment should be affirmed, with costs. (See 264 N. Y. 511.)

Pound, Ch. J., Crane, Lehman, Hubbs and Crouch, JJ., concur; Kellogg, J., not sitting.

Judgment affirmed.


author: Pound, Ch. J.

text:
    Monica Realty Corporation, Respondent, v. One Twenty-two Fifth Avenue Corporation et al., Defendants, and Manufacturers Trust Company, as Trustee, Appellant.
    (Submitted February 27, 1934;
    decided March 6, 1934.)

      David Barnett for appellant.
    The agreement is enforceable even if there was no actual assignment of rents. (Harris v. Taylor, 35 App. Div. 462; 159 N. Y. 533. Bradley & Currier Co. v. Hofmann, 70 App. Div. 77.; The Statute of Frauds does not apply to plaintiff’s agreement. (Harris v. Taylor, 35 App. Div. 462; 159 N. Y. 533; Conley v. Fine, 181 App. Div. 675: Hammerstein v. Equitable Trust Co., 156 App. Div. 644; 209 N. Y. 429; Sprague v. Cochran, 144 N. Y. 104; National Bank of Deposit v. Rogers, 166 N. Y. 380; Schermerhorn v. Gardenier, 107 App. Div. 564; 184 N. Y. 612.)

      Alexander Pfeiffer and Joseph Lotterman for respondent.
    A junior mortgagee who procures the appointment of a receiver for his own benefit in an action brought to foreclose his mortgage, is entitled to the rents and proceeds collected by the receiver down to the time of the entry of an order extending the receivership to the foreclosure action of a prior mortgagee. (Sullivan v. Rosson, 223 N. Y. 217; Ranney v. Peyser, 83 N. Y. 1; Kroehle v. Ravitch, 148 App. Div. 54; Madison Trust Co. v. Axt, 146 App. Div. 121; Abrahams v. Berkowitz, 146 App. Div. 563.) The alleged oral arrangement violates the provisions of the Statute of Frauds. (Payn v. Beal, 4 Den. 405; State v. Royal Mineral Assn., 132 Minn. 232; King v. Kaiser, 3 Misc. Rep. 523.)
   Pound, Ch. J.

On June 3, 1929, premises known as One Twenty-two Fifth avenue, Manhattan, were subject to three mortgages — the first one to the Manufacturers Trust Company as trustee, in the sum of $1,000,000; the second one to the plaintiff herein, for the sum of $335,000; and the third one to an individual, in the sum of $20,377. On that day this action was commenced to foreclose the second mortgage. A receiver of the rents was appointed by the court, and the question here, arising upon the accounting of the receiver, relates to the ownership of the balance of the fund in the receiver’s hands. As against the second mortgagee, the plaintiff herein at whose instance the receiver was appointed and who would normally be entitled to the fund, claim was made both by the first mortgagee and by the third mortgagee.

The decision of the courts below was in favor of the second mortgagee. The claim of the third mortgagee is not involved in this application. We have simply to consider the issue as between the first and second mortgagees.

One Sharum controlled both the plaintiff corporation which held the second mortgage and the defendant One Twenty-two Fifth Avenue Corporation which owned the fee and which gave both mortgages. Defaults had occurred with respect to the first mortgage as far back as 1927 so that at all times since then the trustee under the first mortgage had the right to foreclose and thereby wipe out the subordinate mortgages as well as the equity of Sharum’s owner corporation. In view of that situation, an arrangement was made between Sharum and the parties interested under the first mortgage, whereby an agent was to collect the rents and apply the net income on account of the defaults under the first mortgage. There was a time when the third mortgagee threatened to foreclose and obtain the appointment of a receiver for his benefit. When Sharum informed the first mortgagee of that threat, the first mortgagee was disposed to begin foreclosure of its lien and request a receiver itself. Out of that situation an oral arrangement between Sharum, that is between the owner and the second mortgagee on the one hand and the first mortgagee on the other, was arrived at, whereby the second mortgagee was to foreclose, a receiver to be appointed, and the net income applied by the receiver on account of the first mortgage. In other words, that the then existing arrangement for the application of the income should be continued while the second mortgage was being foreclosed. Despite this agreement, which seems to have been proved by undisputed evidence, it has been held that Sharum or his corporation is entitled to the balance of the receivership fund. The referee’s opinion states the reason for that conclusion in substance as follows: In Sullivan v. Rosson (223 N. Y. 217) it was said: Apart from a special agreement or of circumstances affecting the rights and equities of the parties, a junior mortgagee may through a receiver obtain the rents and profits of mortgaged real property. A senior mortgagee desiring to obtain such rents to apply upon his mortgage should actually possess himself of them or of the right to them through some mutual arrangement therefor, or he should make application to the court to have the receivership extended for his benefit.”

The referee found no special agreement, i. e., no actual assignment of rents, and no estoppel. He ignored circumstances affecting the equities of the parties. The opinion in Sullivan v. Rosson as quoted supra very properly states what the senior mortgagee should do to obtain beyond peradventure the application of the rents upon his mortgage. It does not follow that the counsel of perfection therein contained, by a process of elimination, amounts to a determination that such are the only cases in which the senior mortgagee may become entitled to the rents.

If the senior mortgagee permits the junior mortgagee to go ahead with foreclosure proceedings, provided that the receiver in that action be instructed, after payment of operating expenses of the building, to turn over the balance of his collections to the senior mortgagee and actually forbears to begin a foreclosure action or to seek to have the receivership extended to cover the first mortgage, good faith requires that such an understanding should be upheld.

Sullivan v. Rosson (supra) decided only that the usual assignment of rents clause contained in a mortgage is not in itself sufficient to entitle a senior mortgagee to rents collected by a receiver appointed through the diligence of a junior mortgagee. In this case the representatives of the first mortgage certificate holder had been collecting the net rents for over a year prior to the receivership and would have continued to do so if no receiver had been appointed. They gave up their clear right to bring foreclosure because a special understanding was arrived at whereby they should continue to receive the net income.

That the rents were not an interest in real property or the arrangement relied upon by the appellant a sale of go.ods so as to come within the Statute of Frauds is too plain for discussion. The arrangement involved the disposition of the net proceeds of the receivership, which are neither real property nor goods.

When the rights and equities of .the first mortgage certificate holders in the net proceeds of the receivership herein are established without dispute, such holders should not be required to give up the prior rights to such rents and sacrifice their security.

Equity should direct the receiver to apply the balance in his hands for the benefit of the first mortgage certificate holders.

The orders should be reversed and order granted in accordance with this opinion, with costs in all courts.

Crane, Lehman, O’Brien, Hubbs and Crouch, JJ., concur; Kellogg, J., not sitting.

Ordered accordingly.


text:
    Amelia L. Wolf, as Administratrix of the Estate of Joseph F. Wolf, Deceased, Appellant, v. Baltimore and Ohio Railroad Company, Respondent.
    (Argued January 22, 1934;
    decided March 6, 1934.)

      John Van Voorhis for appellant.
    Failure of the flagman of the preceding train to warn the following train was properly submitted to the jury as a contributing proximate cause of the accident. (Rocco v. Lehigh Valley R. R. Co., 288 U. S. 275; Healy v. Erie R. R. Co., 259 N. Y. 40; Union Pacific R. R. Co. v. Hadley, 246 U. S. 330; Illinois Central R. R. Co. v. Skaggs, 240 U. S. 66; Grand Trunk Ry. Co. v. Lindsay, 233 U. S. 42; Brock v. Mobile & O. R. Co., 51 S. W. Rep. [2d] 100; Bird v. St. Paul F. & M. Ins. Co., 224 N. Y. 47; O’ Neill v. City of Port Jervis, 253 N. Y. 423.) The evidence did not establish as a matter of law that plaintiff’s intestate was guilty of contributory negligence. (Central Vermont Ry. Co. v. White, 238 U. S. 507; Danielsen v. Morse Dry Dock & Repair Co., 235 N. Y. 439; Dunn v. N. Y. C. & H. R. R. R. Co., 208 N. Y. 345.)

      William C. Combs for respondent.
    The conduct of plaintiff’s intestate was the primary cause of his death. (Unadilla Valley Ry. Co. v. Caldine, 278 U. S. 139; Unadilla Valley Ry. Co. v. Dibble, 31 Fed. Rep. [2d] 239; Davis v. Kennedy, 266 U. S. 147; Frese v. Chicago, B. & Q. R. R. Co., 263 U. S. 1; Great Northern R. R. Co. v. Wiles, 240 U. S. 444; St. Louis Southwestern Ry. Co. v. Simpson, 286 U. S. 346; Southern Ry. Co. v. Youngblood, 286 U. S. 313; Southern Ry. Co. v. Dantzler, 286 U. S. 318; Virginian Ry. Co. v. Linkous, 230 Fed. Rep. 88; Southern Ry. Co. v. Hylton, 37 Fed. Rep. [2d] 843.)
   O’Brien, J.

During a snow storm so violent that, according to some of the testimony, semaphores on defendant’s right of way were invisible from a train, plaintiff’s intestate, a locomotive engineer employed by defendant, drove bis passenger train past one of these signals into a block occupied by defendant’s freight train headed in the same direction but then stationary and, due to a collision between these trains, he was killed. This action is brought under the Federal Employers’ Liability Act (35 Stat. 65,66) and the principal issues relate to negligence by decedent, negligence by defendant, comparative negligence of the parties and, in the event of negligence by both, the proportion of damages payable by defendant.

The trial judge charged that failure by plaintiff’s intestate to stop bis train at the block signal constitutes negligence as matter of law. The Appellate Division took the same view and in addition held that his negligence constitutes the sole proximate cause of his death and precludes recovery.

There is evidence that the blizzard was so blinding that two employees standing eight feet apart at a point one-half mile from the semaphore could not see each other and that the location of the block signal was invisible from the train. The jury could infer from this evidence that, even assuming decedent looked for the signal, he could not discover its location and, therefore, was unable, under prevailing weather conditions, to know whether the signal registered danger. The question of fact then arises whether he acted as a reasonable man in proceeding through a storm which rendered all objects invisible. Instructions on the time table provide: The maximum speed of any train after passing an automatic block displayed at stop must not be in excess of twenty miles per hour until a caution or clear signal is displayed.” Here is a plain implication that an engineer is not, under all circumstances, forbidden to pass a stop signal even when it can be seen. Testimony in the case could have been accepted as true that even the location of the signal post could not be descried. If the engineer was unable by reason of the storm even to recognize the location of the signal then rule 885 need not be rigidly applied. That rule presupposes capability of knowing the proximity of the semaphore by the engineer but inability to decipher the signal. If he knows the signal is there but, due to fog or storm, he cannot read it, then his duty under rule 885 is to stop his train and to send a fireman or flagman ahead to read it. When the entire topography is so obscured that even the proximity of signals cannot be known, is the engineer absolutely bound to bring his train to a stop and remain stationary until the atmosphere clears and objects again become visible? In view of the instruction on the time table, we think that rule 885, as well as rules 504, 505 and 506, which direct as to the operation of trains stopped by block signals and the responsibility of the engineer, can be strictly applied only when the location of the signal can be known. The instructions on the time table detract from the force of any absolute prohibition to proceed. In proceeding, weather conditions may render compliance with rules 504, 505, 506 and 885 impossible. A jury, taking into consideration the duty which an engineer owes to passengers in transporting them to their destination and to the public in carrying the mails, might fairly draw an inference of fact that plaintiff’s intestate in advancing cautiously at fifteen or twenty miles an hour and in relying upon the crew of a preceding train to obey the rule in respect to warning of its presence by torpedoes acted as a reasonably prudent man and was not guilty of negligence. The correctness of his conduct is involved in obscurity by the provisions of the rules and the instructions on the time table. His negligence or lack of it is, we think, a question of fact, not one of law.

Assuming that a jury would determine this engineer to be guilty of negligence, it could also conclude on the evidence that his negligence was not the sole cause of his death. Rule 99 reads as follows:

When a train stops or is delayed, under circumstances in which it may be overtaken by another train, the flagman must go back immediately with stop signals a sufficient distance to insure full protection. On reaching the required distance (or on the approach of a train before that distance is reached) he will display stop signals, and, in addition, place two torpedoes on the rail opposite each other, so as to make one report. When recalled he may, unless an approaching train is within sight or hearing, return to his train, first removing the torpedo from the fireman’s side, and placing it on the rail on the engineer’s side 90 feet (3 rail lengths) from the other.

“At night, and in fog or storm, day or night, the flagman will, the last thing when recalled, in addition to placing torpedoes, place one lighted yellow fusee, upright outside the rail on the engineer’s side and one or more at other points, if necessary to protect his train while returning.

“ The front of a train must be protected in the same way when necessary by the front-trainman. If the front-trainman is unable to leave his train the fireman must go in his place.

“At night, or in foggy or stormy weather, day or night, red fusees must be used in addition to other stop signals, to insure stopping train.”

There is evidence for and against the proposition that the flagman on the preceding train placed torpedoes on the track as a warning to the approaching train driven by plaintiff’s intestate and the Appellate Division has decided that the verdict importing violation of this rule by defendant is not against the weight of evidence. The jury was instructed to determine, in the event that violation of this rule by defendant was proved, whether that violation was one of the proximate causes of the accident. In view of the verdict the jury must have decided that, even assuming negligence by plaintiff’s intestate, the accident would not have occurred except for defendant’s failure to warn his train. Under the decisions, the evidence would warrant such a verdict.

The judgment should be reversed and a new trial granted, with costs to the appellant to abide the event.

Pound, Ch. J., Lehman and Hubbs, JJ., concur; Crouch, J., dissents; Crane, J., not sitting; Kellogg, J., not voting.

Judgment reversed, etc.


text:
    In the Matter of the Probate of the Will of Henry Reimers, Deceased. Fred Antusch et al., as Executors, Appellants; Edna L. Weigelt, as Executrix, Respondent.
    (Submitted February 28, 1934;
    decided March 6, 1934.)

      Stanley C. Fowler, Richard A. Geis and Herman B. Forman for appellants.
    The Surrogate had authority under section 278 of the Surrogate’s Court Act to grant disbursements and costs, including counsel fees incurred as an expense, upon the appeals. (Matter of Staiger, 249 N. Y. 229; Matter of Hidden, 243 N. Y. 499.) The Surrogate and Appellate Division failed to distinguish between ordinary statutory costs of appeal, similar to those in a Supreme Court action (Surr. Ct. Act, § 283) and costs and expenses allowable to an executor under section 278 of the Surrogate’s Court Act. (Matter of Staiger, 249 N. Y. 229; Matter of Reimers, 261 N. Y. 337.)

      Arthur T. O’Leary and Stanley C. Simmons for respondent.
    The order appealed from is not reviewable and the appeal should be dismissed, with costs. (Eschenbrenner v. Gude Bros., 235 N. Y. 565; Noyes v. Children’s Aid Society, 70 N. Y. 481; Attorney-General v. Continental Life Ins. Co., 90 N. Y. 45; Nagy v. Arcas Brass & Iron Co., 242 N. Y. 97.) The remittitur of the Court of Appeals is mandatory upon the Surrogate who had no discretion but to enter an order in strict accordance with it. (Litchfield Const. Co. v. City of New York, 219 App. Div. 369; Rothmann v. Thompson Bros., Inc., 193 App. Div. 694; Hascall v. King, 54 App. Div. 441; Fulton v. Krull, 151 App. Div. 142.)
   Pound, Ch. J.

The last will of Henry Reimers was unsuccessfully contested by executors named in a prior will. The Surrogate allowed the unsuccessful contestants costs, disbursements and counsel fee. The Appellate Division struck out the allowance for counsel fee and expenses as not within the meaning of Surrogate’s Court Act (§ 278), with costs to appellant Weigelt (the proponent of the last will) payable out of the estate. (237 App. Div. 343.) This court reversed the Appellate Division and affirmed the Surrogate, with costs in this court to all parties filing briefs, payable out of the estate.” (261 N. Y. 337.) It afterwards denied a motion to amend the remittitur by granting costs in the Appellate Division. (262 N. Y. 468.)

An application was then made by the contesting executors to Surrogate’s Court, under section 278 of the Surrogate’s Court Act, for a reasonable allowance for counsel fees and other expenses. In denying such application the Surrogate said: The contestants-appellants are limited by the remittitur to their costs and disbursements in the Court of Appeals which are taxed at $1,598.45. There is no authority for granting either the additional allowance of $2,000 included in the bill of costs, or the suggested counsel fee for the services rendered on both appeals. The item of $2,000 is, therefore, stricken out of the bill of costs and the motion for an additional counsel fee denied.”

When the decree is made after appeal, pursuant to the direction of the appellate court, the surrogate may, in his discretion, allow to an executor, administrator, guardian or trustee such sum as the surrogate deems reasonable for his counsel fees and other expenses necessarily incurred on such appeal.” (Surrogate’s Court Act, § 278.) Does the determination of this court on the question of costs limit the power of the Surrogate to make an allowance for counsel fee and other expenses incurred on appeal to the Appellate Division? We think not, although it may affect the determination of the Surrogate on such an application. The allowance for such expenses and the amount allowed are both in the discretion of the Surrogate but his power to act is not limited by the action of the appellate court, and is not measured in terms of the statutory bill of costs. The question is one of a reasonable counsel fee and other necessary expenses.

The order appealed from is a final order. The decree is made after appeal, pursuant to the direction of the appellate court. The decree thus made must be entered in strict accordance with the remittitur. After the entry of such decree, the motion for an allowance for counsel fee and other expenses is an independent proceeding.

The refusal of the Surrogate in the reasonable exercise of his discretion to allow expenses would not be reviewable here, but the application was denied for lack of authority, and not in the exercise of discretion.

The orders should be reversed and the proceeding remitted to the Surrogate to dispose of appellants’ application in the exercise of discretion, with costs to appellants in all courts payable out of the estate. (See 264 N. Y. 602.)

Crane, Lehman, O’Brien, Htjbbs and Crouch, JJ., concur; Kellogg, J., not sitting.

Ordered accordingly.


author: Per Curiam.

text:
    In the Matter of Max Colmes et al., Appellants, against Edwin H. Fisher, as Director of Licenses of the City of Buffalo, et al., Respondents.
    (Argued February 27, 1934;
    decided March 6, 1934.)

      J ames C. Sweeney for appellants.

      George L. Grobe, Corporation Counsel (Hyman Sapowitch of counsel), for Edwin H. Fisher, as Director of Licenses of the City of Buffalo, respondent.

      Adrian Block and J. Clement Johnston for Retail Merchants Association et ah, respondnets.
   Per Curiam.

Appellants were granted licenses as ■public auctioneers within the city of Buffalo. Thereafter a proceeding was duly instituted before the Director of Licenses upon due notice in accordance with the provisions of the city charter to revoke such licenses. A hearing was had and as a result an order was made revoking such licenses. Chapter XXIV, section 5, of the’ ordinances of the city reads in part: Section 5. Acts prohibited. No auctioneer shall: 1. Make any false representations as to the character, quality, condition, value or ownership of any property offered for sale, or falsely represent that such property is in whole or in part bankrupt or insolvent stock or damaged goods or goods saved from fire.”

Upon the hearing testimony was received which tended to establish that the appellants had violated the provisions of section 5 above quoted, and thereafter the Director of Licenses made an order revoking the licenses. The testimony was sufficient if the Director believed it to justify the granting of the order. In any event a clear question of fact was presented. The Appellate Division has confirmed the order, and we believe it was justified in so doing by the evidence contained in the record.

It- is urged that section 6 is unconstitutional and void. It is not contended that subdivision 1 of section 5 is void. If section 6 should be held to be void it would not require a reversal in this case. We do not, therefore, deem it necessary to pass upon the validity of section 6.

The order should be affirmed, with costs.

Pound, Ch. J., Crane, Lehman, O’Brien, Hubbs and Crouch, JJ., concur; Kellogg, J., not sitting.

Order affirmed.


text:
    In the Matter of Eva Ballon, Appellant, v. Mary Riti et al., Individually and as Copartners under the Firm Name of City Coat and Apron Linen Supply Company, Defendants, and Joseph Kratenstein, Respondent.
    (Argued March 14, 1934;
    decided March 20, 1934.)

      Ernest J. Aries for appellant.

      Vincent C. De Carlo and Francis J. Dufy for Yonkers Lawyers’ Association, amicus curice.

      Benjamin Lewis and George X. Levine for respondent.
   Per Curiam.

This appeal must be dismissed. The appeal is not from the judgment of a court of record of original jurisdiction direct to this court. (Civ. Prac. Act, § 588, subd. 3.)

Passing that point, under such subdivision on such an appeal only the constitutional question shall be considered and determined by this court.

The Appellate Division holds: (1) Not only that section 4 of title I of chapter 416 of the Laws of 1893, providing that the City Court of Yonkers, which is a court of record, may issue its subpoena for service outside the county of Westchester is unconstitutional, but also (2) that it has been repealed by implication by section 3 of chapter 852 of the Laws of 1930, which is a general act in relation to the City Court of Yonkers.

The determination of this appeal requires a consideration of section 4 of title I of chapter 416 of the Laws of 1893, and the act of 1930, and the question of implied repeal.

If the act of 1893 has been repealed, we do not reach the question of constitutionality. Therefore, the question of constitutionality is not the only question to be considered.

The appeal should, therefore-, be dismissed, with costs.

Pound, Ch. J., Crane, Lehman, O’Brien, Hubbs and Crouch, JJ., concur; Kellogg, J., not sitting.

Appeal dismissed.