text:
    In the Matter of the Accounting of the United States Trust Company of New York, as Trustee under the Will of Emily A. Watson, Deceased, Respondent. Harvey A. Dwight et al., Appellants; Jean B. Dwight et al., Respondents.

      (Argued June 14, 1933;
    decided July 11, 1933.)

      G. Alexander Capron, H. Vincent Smart and William F. Hamilton for Herwarth von der Decker, appellant and respondent.

      Frank L. Wiswall and A. Kendall Roberts for Harvey A. Dwight et al., appellants.

      William S. Siemon for Eleanor H. Marihugh et al., appellants.

      E. Sheldon Stewart, William A. W. Stewart and Arthur McCausland for United States Trust Company of New York, as executor of John W. Dwight, deceased, appellant.

      Vermont Hatch and Windsor B. Putnam for Jean B. Dwight et al., respondents.

      Edgar G. Wandless and Berwick B. Lanier for Pauline A. de G. J. de la Mettrie et al., respondents.

      Howard Thayer Kingsbury and Thomas W. Kelly for Victoire L. Niel, respondent.
   Crane, J.

The order of the Appellate Division modifying the decree of the Surrogate must itself be modified in a particular hereafter stated, and as thus modified will be affirmed.

This will has been here before (Dwight v. Fancher, 245 N. Y. 71), and this appeal again calls for an interpretation of the instrument. In fact, the respondents insist that the prior decision is res adjudicóla in this proceeding, but as parties are now before the court who were not in that litigation, the decision is rather an authority than a binding judgment here.

Emily A. Watson died February 1, 1924, a resident of Westchester county, leaving a very large estate, and a last will and testament wherein she made twenty-three specific bequests, ranging from $10,000 to $75,000 each, and creating five trusts in sums of $25,000 to $75,000 each, for the benefit of persons named. She was a spinster, eighty years of age; at the time of her death, with no nearer relatives than cousins. She had a sister who predeceased her, leaving no children.

Harvey A. Dwight and George W. Pratt (cousins), mentioned in the residuary clause of the will, hereinafter quoted, had been in business with her father, and Miss Watson evidently desired to make recognition of the relationship by bequests to the respective families. She seems to have been unfamiliar with the children and grandchildren of these two gentlemen, for there are omissions in her will which can be accounted for by nothing in the history of Miss Watson’s life. The omissions must be due, so far as we can tell, to an ignorance or forgetfulness upon her part of her remote relatives or the oversight of herself or the lawyer of the possible consequences arising from the language used.

The tenth clause of the will, to which we are now coming, and which is the cause of all this litigation, reads as follows:

“ Tenth. All the rest, residue and remainder of my property, both real and personal, of whatever kind or nature and wherever situate, as well that which I may hereafter acquire as that which I now possess, I give, devise and bequeath to the United States Trust Company of New York, in trust, however, to divide the same into as many shares or portions as there may be children of my cousin, Harvey A. Dwight, and grandchildren of my cousin, George W. Pratt, surviving at the time of my death, and to invest and keep invested one such share or portion for the benefit of each child of my said cousin, Harvey A. Dwight, and each grandchild of my said cousin, George W. Pratt, then surviving, and to pay over the income and profits therefrom to the child or grandchild for whose benefit such fund is so held, during his or her natural life, and upon his or her death to pay over and deliver the principal of the fund with all accumulated income to his or her issue, per stirpes, and in default of such issue, I direct that the same be divided equally between said surviving children and grandchildren, and the issue of any who may have died, per stirpes.”

Our decision in Dwight v. Fancher was in an action brought to obtain a construction of this tenth paragraph. Harvey A. Dwight had five children, one of whom died before Miss Watson, leaving two children who survived her. These grandchildren, Harvey A. Dwight and Jessie R. Dwight Orage, were the plaintiffs in the action, and they claimed that the law gave them the same share as their father, Harvey L. Dwight, would have taken if he had survived Miss Watson. The only answer that could possibly be made to their very just claim was the will itself. This left them out by its clear and exact language. The court would very gladly have interpreted this will so as to include them within the benefits of this tenth paragraph if it could have done so with any legal justification. No reason whatever was advanced in the Dwight case nor has any been advanced here for the action of Miss Watson. Neither can we imagine that she had any desire or intention to omit any of these relatives who appeared before the court in the Dwight case or who are now before us in this litigation. We have, however, only one rule to follow — it is fundamental. The intention of a will-maker is to be found in the words used in the will, and when these are clear and definite there is no power to change them. The Legislature has the power to restrict the disposition of property and has done so regarding certain gifts to charity and as to the amount which must be left to the widow. But beyond such limitations a person may will his property as he pleases, and the courts are to carry out the directions, not add to, or take from them. The very full, complete and helpful briefs which have been submitted in this case contain many canons of construction to guide courts in the interpretation of wills, but these apply only when the language is ambiguous or doubtful.

We, in our short opinion (245 N. Y. 71), said that Miss Watson’s will admitted of but one construction; in other words, that her directions were very clear, and confined the division of the trust into as many shares as there were children of Harvey A. Dwight surviving at the time of her death. Harvey L. Dwight had died in 1910 and was not surviving when Miss Watson died; therefore, neither he nor bis children, the plaintiffs in the Dwight case, took a share under this residuary clause. Every one naturally feels that the will should have been the other way, but courts do not make wills, and lawyers should draft them with such care that these results cannot happen unless foreseen and intended. The intention of one who makes a will can only be gathered after death from the instrument itself. We did not feel free to say that Miss Watson meant to include a child who had died before she did, when she had distinctly confined the shares to the children surviving at the time of my death.” She may have known what she was doing — who can tell? What guide have we to follow except the words of Miss Watson? Our own personal mclinations, which we share with the attorneys for the appellants, are not to influence us. Whether the will be a mistake or was intended as written no one will ever know, for none of the circumstances give us any light. Canons of construction to which appeal is made are never used to force language out of a will.

Our decision in the Dwight case, therefore, is equally-binding upon Herwarth von der Decken and Elizabeth Graeffin Finch von Finckenstein, children of Elizabeth Bleecker von der Decken, a grandchild of George W. Pratt, who died November 24, 1907, before Emily A. Watson. The grandchild of George W. Pratt, Elizabeth Bleecker von der Decken, was not surviving at the time of Miss Watson’s death. This is the reason for our opinion in the case of Dwight v. Fancher, and the reason still holds good for this case, including the interpretation of the last clause of the tenth paragraph, which is now brought up for construction and interpretation for the first time.

The trusts set up by the United States Trust Company of New York were seven in number. Four children of Harvey A. Dwight and three grandchildren of George W. Pratt survived the testatrix. One of these trust shares was created and held for John W. Dwight, a son of Harvey A. Dwight. He died in 1931, leaving a last will and testament wherein he virtually bequeathed his estate to his brother-in-law, Herbert 0. Bailey, or his issue. Bailey had married his sister, for whom one of the trusts had been set up under the tenth clause of Miss Watson’s will. John W. Dwight had a one-seventh interest or share in Miss Watson’s large residuary estate. What becomes of it? Miss Watson tells us. She says that the income from this one-seventh interest or share is to be paid to John W. Dwight for life. She did not name him in the will, but she designated him as a child of Harvey A. Dwight “ surviving at the time of my death.” Upon the death of John W. Dwight, without issue, she said, I direct that the same be divided equally between said surviving children and grandchildren, and the issue of any who may have died, per stirpes.” To whom do the words, any who may have died,” refer? By our decision in the Dwight case we held that this will created seven distinct trusts, four for the children of Harvey A. Dwight and three for the grandchildren of George W. Pratt who survived the testatrix. There was inequality in this disposition because the issue of a child, Harvey L. Dwight, who had died before the testatrix, were thus excluded; in other words, the offspring of a dead child were not provided for. Nevertheless, this was the will. It centered upon children and grandchildren who survived Emily A. Watson. This was the class she had in mind. These were the individuals for whom trusts were created with the same distinctness and clarity as if she had named them. Children and grandchildren ” became synonyms for the individual names. One of these trusts terminates by the death of John W. Dwight, and we find the testatrix still clinging to the basic distinction, children and grandchildren.” Had John W. Dwight left a child, we would not have this discussion. The child would take his share, the principal of the trust fund. The appellants, the descendants of Harvey L. Dwight and Elizabeth Bleecker von der Decken, would not then be claimants, for it is conceded that they would have no shadow of a claim under such circumstances. That the testatrix never had Harvey L. Dwight or Elizabeth Bleecker von der Decken, who predeceased her, or their children, in mind, is quite evident from the previous interpretation of this will, and also from their complete exclusion should John W. Dwight or any of the other surviving children or grandchildren die leaving issue. No help, therefore, is gathered from any apparent intention of the testatrix which will justify our turning these last words of paragraph ten from their natural meaning.

Miss Watson divided her residuary estate into as many shares as “ there may be children of my cousin, Harvey A. Dwight, and grandchildren of my cousin, George W. Pratt, surviving at the time of my death.” Here the words children and grandchildren ” are confined to those surviving the testatrix. The income from the shares is to be paid over to the children or grandchildren for whose benefit such fund is held during his or her natural life. Upon the death of the child or grandchild, the principal is to be paid over and delivered to his or her issue, and in default of such issue, “ I direct that the same be divided equally between said surviving children and grandchildren.” If this had been the end of the clause, would there be any doubt as to the meaning of this provision of the will? Said surviving children and grandchildren ” are the seven taking the residuary at the death of Miss Watson. I do not see how the words can possibly mean any thing else. We have not only the words, said children,” but the said surviving children,” which removes all doubt as to the individuals intended. The additional phrase, “ and the issue of any who may have died,” according to its grammatical as well as natural meaning, refers to any of said surviving children and grandchildren who may have died since the creation of the trust or the death of the testatrix. Outside of a desire to do what we think Emily A. Watson should have done, we find nothing to justify us in changing this plain meaning into one which would make the word any ” refer to a child or grandchild who had died before the testatrix. All the canons of construction, so ably briefed by counsel for the appellants, are not applicable where the words are plain and simple and the meaning clear.

Neither do the authorities construing other wills afford us any aid except for the general principles underlying the interpretation of all documents. The language of each will leads to its own conclusion. No two persons are alike; neither are their wills. Every one has bis own peculiar family history, temperament, duties and responsibilities. No two estates are alike. How, then, can we expect one will to be a pattern for another? This is one field where standardization has proved ineffectual. We still take each document on its own merits. Either for good or ill, a testament has no progeny. Each is a new creation. Thus, Teed v. Morton (60 N. Y. 502, 505) is not an authority controlling in this case. True, the words', my surviving children, and the issue of such of them as may have died leaving issue,” were held to apply to issue of any child, whether surviving the testator or not. This is very much like Miss Watson’s will, and I am not surprised that the appellants so strenuously press it upon our attention, yet in fact, it is not the same because we have, before the words, surviving children,” in Miss' Watson’s will, the little word said,” and the children and grandchildren about which something was said ” were those only surviving at the time of my death.” So we see how little things often count for much. If as much effort were spent in preparing a will as is devoted to either breaking or construing it, we would not have all these perplexing questions.

We, therefore, affirm the Appellate Division in its holding that the principal of the trust for John W. Dwight must be divided equally between the children and the grandchildren surviving Emily A. Watson, and did not include the issue of any child or grandchild who died before her. The testatrix, not we, has directed the exclusion of the claimants Harvey A. Dwight, Jessie E. Dwight Orage, Herwarth von der Decken and Elizabeth Graeffin Finch von Finckenstein.

The question still remains, whether the estate of John W. Dwight shares in this distribution. Again we look to the will and take it at its face value. He is dead, and the testatrix says, I direct that the same [that is, his share held in trust] be divided equally between said surviving children and grandchildren.” These are a fixed, definite class, and are, Jean B. Dwight, Harriette D. Bailey, Lucia K. Dwight, Comtesse Victoire Louise Niel, Countess Pauline Andre de Gasquet James de la Mettrie, Count George Watson Pratt de Gasquet James. John W. Dwight comes within this designation. The will reads as if the testatrix had said, “ Upon the death of John W. Dwight, I give the principal of his share to his issue, or, in default of issue, to him absolutely.” While somewhat unusual for language of this kind to be used, yet it is not illegal or even surprising. We take wills as we find them, and, unless contrary to some statute, give them effect as written. This is what the lawyer who drew the will has caused Miss Watson to say is her intention. (See Doane v. Mercantile Trust Co., 160 N. Y. 494; Wadsworth v. Murray, 161 N. Y. 274; Matter of Bump, 234 N. Y. 60; Matter of Leonard, 143 Misc. Rep. 172; Bishop v. Bishop, 257 N. Y. 40.) The legal effect of such language is to give to John W. Dwight a life interest and a vested remainder to be divested upon the coming of issue. There being no issue, the remainder passes to, or remains in, his estate, to be disposed of as other property under his will. The one-seventh of his share received by the living children and grandchildren can by them be given away or disposed of by will. Accordingly, the share held in trust for John W. Dwight is divided equally between the children and grandchildren living at the death of Miss Watson, including himself, that is, his estate. One-seventh goes to each. (Kent’s Commentaries, vol. IV, pp. 202 and 203; Moore v. Littel, 41 N. Y. 66; Livingston v. Greene, 52 N. Y. 118.)

A remainder is vested when there is a person in being who would have an immediate right to the possession of the property on the termination of all the intermediate or precedent estates. (Real Prop. Law; Cons. Laws, ch. 50, § 40.) Under this definition, and upon the creation of the trusts, there were persons in being having a right to immediate possession of the property, should the trust terminate. All the surviving children and grandchildren were living, and if any died, terminating the trust, the remainder passed to living persons, and in the case of the one dying, his or her one-seventh would pass to his or her issue or estate. (Stringer v. Young, 191 N. Y. 157, 162.) The law favors the vesting of estates, and, unless a contrary intention is unequivocally expressed, it will not be-imputed. (Connelly v. O’Brien, 166 N. Y. 406; Hersee v. Simpson, 154 N. Y. 496.) Again, this interpretation prevents any possibility of there being an intestacy as to the remainder of the last surviving trust share. If the last life tenant should die without leaving issue and there should then be no issue of the other life tenants then living, the testatrix would die intestate as to such last trust fund. The vesting of these remainders, subject to being divested, upon the survival of issue, prevents this very improbable occurrence. (Matter of McGowan, 134 Misc. Rep. 409; 228 App. Div. 779; 254 N. Y. 513.) This is the part wherein we differ with the Appellate Division and must modify their order accordingly.

We do, however, further agree with that court and with the Surrogate in the disposition made of the accumulated income. The trustee was directed upon the death of the life beneficiary to pay over and deliver the principal of the fund with all accumulated income to the ultimate remaindermen. There is some $11,000 of accrued income upon the investments which was not yet due upon the date of the death of John W. Dwight, the life tenant. The Surrogate decided that this should be apportioned in accordance with section 204 of the Surrogate’s Court Act; that is, the amount due up to the date of his death should go to his estate, and that part accruing thereafter, termed “an accumulation,” should go to the remaindermen. This we think a fair and correct interpretation of the will. The above section of the Surrogate’s Court Act provides for such an apportionment unless it shall be “ expressly stipulated that no apportionment be made.” The will contains no express statement that this rule shall not be followed. The reference to “ principal and accumulation ” is sort of a “ stock phrase ” and means the accumulation to which the remaindermen are entitled according to law.

For the reasons here expressed, the order of the Appellate Division should be modified in accordance with this opinion, and, as thus modified, affirmed, with costs to all parties fifing briefs in this court, payable out of the estate.

Pound, Ch. J., Lehman, O’Brien and Crouch, JJ., concur; Kellogg, J., dissents and votes for affirmance; Hubbs, J., not sitting.

Ordered accordingly.


source: Caselaw Access Project

author: Crane, J.’

license: Public Domain

text:
    In the Matter of the Accounting of the Rochester Trust and Safe Deposit Company, as Executor of Arthur T. Hagen, Deceased, Respondent. Patricia C. Williams et al., Appellants; Emma J. Hagen, Respondent.

      (Argued June 8, 1933;
    decided July 11, 1933.)

      Thomas H. Remington, as special guardian, for appellants.

      Ernest C. Whitbeck for Emma J. Hagen, respondent.
   Crane, J.’

The rule of Matter of Osborne (209 N. Y. 450) has again arisen in this case to perplex us. Arthur T. Hagen died January 13, 1917, leaving a last will and testament in which he bequeathed the residue of his property to a trustee to pay the income to his wife for life and the principal on her death to his three grandchildren. The trustee (now the Bochester Trust and Safe Deposit Company) set up the trust as of the date of the testator’s death at which time 814 shares of the General Baking Company constituted part of the principal. Actually there was at first 700 shares, subsequently increased to 814, and other property, but as this case involves only the stock of the General Baking Company we will start with a trust estate of 814 shares of the preferred stock, which paid seven per cent, with a right of participation in any other dividends after payment of a like per cent on the common stock. The common and preferred were then to share alike. By a resolution of December 13, 1921, taking effect January 1, 1922, there was a change made in the capital structure of the General Baking Company.” This is the testimony of Albert A. Clarke, secretary and treasurer of the company. One share of the preferred stock was to be exchanged, “ upon surrender of the certificates, properly endorsed,” at the1 rate of one share of preferred stock of no nominal or par value and one share of common stock with no nonfinal or par value. The trustees made the exchange and then had in the trust 814 shares of preferred stock of no par value paying eight per cent, and 814 shares of common stock of no nominal value, in place and stead of the 814 shares of preferred par ($100) stock paying seven per cent with the participating rights as stated. The new preferred had no such participating rights. Mr. Clarke testified that this was a conversion of par value stock into no par value stock; that the par value stock had participating rights which on January 1, 1922, were of value to the holder, and that because of this feature the no par common stock was given in exchange or, at least, this was part of the consideration.

Later, and in December of 1922, a stock dividend was declared on the common stock and the trustees received 1,628 additional shares of common stock which, under the rule of the Osborne case, is claimed by the life beneficiary. The surplus justifying this stock dividend it is conceded had been earned since January 13,1917, the date of the testator’s death, and the setting up of the trusts. On the other hand, the special guardian for the infant remaindermen claims that part of these shares should be allotted to the trust principal.

On December 31, 1921, just before the reorganization of the General Baking Company, a share of common stock was of the book value of $46,278, so that the 814 shares were worth $37,670.29. This is the figure at which the remaindermen say the trust principal must be maintained. After the reorganization of the company, the common stock was of less value, $22.0194 per share, but the value of the trustee’s holdings had increased, for it now had the original 814 shares of common stock and the declared stock dividend of 1,628, making in all 2,442 shares which, at $22.0194 per share, equals $53,771.37 in value. If on January 1 the common stock held by the trustee had a book value of $37,670.29, and this figure is to be continued, all over that goes to the life beneficiary as representing earnings between January and December of 1922. The balance between $37,670.29 and $53,771.37 is $16,101.08, which represents [so states the accountant, G. Arthur Jackson] the amount of earnings on the shares from the date of the receipt of new shares to the date of the declaration of the stock dividend.” This all goes to the life beneficiary, but as we are dealing in shares of stock and not in dollars, we must divide this balance by $22.0194, the value of a single share, and this gives us 731 shares to go to the life estate and 897 to the trust principal.

All this seems perfectly clear if we take January 1, 1922, as the date for valuing the trust instead of January 13, 1917, or, in other words, if we consider the exchange of stock as a material increase in capital investment and not in the nature of a stock dividend. The rule of the Osborne case was supposed to be simple and just; it proved to be confusing and at times unjust. (See the complexities arising in United States Trust Co. v. Heye, 224 N. Y. 242.) The Legislature gave us the much needed relief by enacting chapter 843 of the Laws of 1926, amending section 17-a of the Personal Property Law (Cons. Laws, ch. 41), whereby all stock dividends were declared to be principal, not income. As these provisions were not retroactive we must do the best we can with the apportionment rule, recognizing, however, that even -under the Osborne case all increase in the value of the trust estate is not income. Cash dividends go to the life beneficiary — no question about that — stock dividends, and stock dividends only, go to the life beneficiary if they have been declared out of subsequent earnings; if not, they must be apportioned. Any natural increase in the value of the trust estate remains principal. Gain by increment- in capital valuation goes to principal. (Pratt v. Ladd, 253 N. Y. 213.) Stock set up in the trust may have a market value far in excess of book value as taken for principal or by increase in the value of property. Should the trustees decide to sell such stock, turn the trust estate into cash, the life beneficiary would not be entitled to any part of this increased value, at least so long as the income was not lessened. (Matter of Schley, 202 App. Div. 169; 234 N. Y. 616.) We said in the Heye case, referring to the rule of the Osborne case: This does not mean that the principal of the trust fund has to remain at the same value, and that all increase belongs to the life beneficiaries. While the corpus of the fund may not be depleted, yet the corpus may accumulate or increase, and until there is some division in the nature of a dividend payable out of accumulated earnings or profits, there is nothing that can be awarded as income to beneficiaries” (p. 253). (See, also, Bourne v. Bourne, 240 N. Y. 172.)

Thus, the right to subscribe for new shares of stock given to stockholders and the profits from the sale of such subscription rights are capital of the trust to which the life tenant is not entitled. (Baker v. Thompson, 181 App. Div. 469; 224 N. Y. 592.)

There was no stock dividend declared until December, 1922. The reorganization or readjustment of the corporate stock structure which took place in January of that year was not a stock dividend, nor was it intended to be. The form of the transaction was no attempt to deceive or cover up a dividend. There was outstanding preferred stock of a nominal par value of $100, paying seven per cent and with the valuable right to share equally in further dividends after seven per cent had been paid on the common stock. What the value of this right was in 1917 we do not know. That it had a potential value is ; evident from subsequent developments. This right might have raised and very likely did raise the market value of , the stock above its book value; in other words, after determining the capital and surplus as of 1917, there would be considered as a factor entering into the value, j this right to future earnings. It does not appear that the trustee attempted to ascertain this value -— probably ' no one could estimate it — as it depended upon the j future prospects of the company. When, however, the capital structure of the company was changed, the value j of this right was considered in seeking to induce stock- i holders to exchange their stock. The nature of the, preferred was affected — non-par was given for $100 par j value stock — eight per cent for seven and one share of the new common for each of the preferred as a consideration for the relinquishment of the participating rights. This was not a dividend declaration, but a substitution of one class of stock for another; one was given up and others taken, just as if the trustees had sold the preferred and bought a larger number of the new issue — the increased value would go to principal, or amount to an increase in the value of the trust holdings. Any increase in the cash dividends would of course go to the life beneficiary. The rule to be applied to such a situation was correctly stated by the Surrogate in his revised decision, wherein he stated that income ” does not include ascertainable increase in the value of capital, nor profits on sale of corporate stock out of the corpus of the trust, nor value accruing to such stock by reason of subscription rights attaching to, or awarded it, or the proceeds of the sale of such rights.

The value, therefore, of these new shares of stock taken in exchange upon the reorganization of the company is to be fixed as of the date when received, January 1, 1922. The figures are given above and result in 897 shares of the stock dividend passing to the principal of the trust as determined by the Surrogate.

These shares have since been exchanged for stock in the General Baking Corporation, and part of these in turn have been sold, but this is immaterial to the issue before us, which is solely the ownership of the 200 per cent stock dividend of the General Baking Company, declared in December, 1922.

The order of the Appellate Division should be reversed and the decree of the Surrogate’s Court affirmed, with costs in this court and in the Appellate Division to all parties payable out of the estate.

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

Ordered accordingly.


author: Kellogg, J.

text:
    In the Matter of the Accounting of John J. Fenelon, as Administrator of the Estate of Bessie Fenelon, Deceased, Respondent. Elizabeth Yauch, Appellant.
    (Reargued June 8, 1933;
    decided July 11, 1933.)
    (See 262 N. Y. 57, 539.)

      Harry W. Williams for appellant.

      Charles E. Brennan for respondent.
   Kellogg, J.

On the reargument of this case there was shown to us, for the first time, the original ledger of the Albany Savings Bank, an exhibit in the case, upon which its patrons placed their signatures when signing up as depositors. In respect to the two depositors, Bessie Fenelon and Elizabeth Yauch, the page of the book exhibiting their signatures showed that the black ink with which they wrote their names, wherever the lines of the two impressions crossed, overlaid the red ink with which the statutory words, declaring the account to be a joint account, had been stamped. This was apparent to the naked eye and was conceded by the respondent, so that, notwithstanding the testimony of the bank clerk to the contrary, upon which we relied in writing our previous opinion (262 N. Y. 57), it must be taken as the very truth that the legend was present when the women signed beneath. It cannot be gainsaid, therefore, that the two women entered into the relationship of depositors with the bank by authorizing the bank to credit the moneys deposited to a joint account in the statutory form. The bank made entries accordingly, recording the initial and subsequent deposits on a ledger card, which displayed as a heading the words “ Bessie Fenelon and Mrs. Elizabeth Yauch, Joint Account with right of survivorship, payable to either depositor or to survivor.” On the other hand, the pass book, simultaneously delivered to one of the depositors, was headed “Albany Savings Bank in acc’t with Bessie Fenelon and Mrs. Elizabeth Yauch,” no words stating that the account was joint being added. The question, to which our attention is now definitely called, is whether the words of the ledger card, or the words of the pass book are controlling.

On the signature book, above the names of the two depositors, in addition to the statement that the account is joint, there is the following: “ I hereby assent to the By-Laws, Bules and Begulations of the Albany Savings Bank, as set forth in Pass book of said institution furnished me, and agree to be bound thereby.” By-law VIII provides that the “Acceptance of the pass book by the person making the deposit shall constitute an agreement, and the only agreement, between the bank and the depositor, to be observed, kept, fulfilled and enforced subject to the By-laws, Rules and Regulations of the Bank as they then exist or may be thereafter lawfully altered or amended.” It is thus stipulated that the printed words of the by-laws and rules, as they appear in the pass book, are a part of the contract, as well as the words handwritten, or typewritten, therein, and that where the two conflict the latter must give way to the former. It is not at all clear that words recording the deposit, as typewritten in the pass book are not in conflict with the terms of rule 3 of the rules and regulations of the bank. That rule in part provides as follows: “ No employee of the bank other than the president or the treasurer, shall make any agreement, oral or written, involving the bank, beyond the ordinary entries made in the pass books of depositors inclusive of entries creating joint accounts and trust accounts.” The “ ordinary entries ” made in pass books are clearly words crediting deposits to the accounts of individuals. It would seem, therefore, that bank officials, other than the president and treasurer, would have power to make no other entries than those crediting moneys to individual accounts, “ joint accounts ” or “ trust accounts.” Two alternative conclusions would seem to follow. Either the credit made to the account of Bessie Fenelon and Mr-s. Elizabeth Yauch,” as those words appear without more in the pass book, construed in the light of rule 3, constitute a credit to joint account, as they would not at common law when employed in the setting of ordinary circumstance; or the terms of the pass book, since not expressly approved by the president or treasurer, set up a form of deposit not authorized under rule 3, and have no effect either as constituting a contract or as evidence thereof.

The question is, however, not what was the precise agreement between the depositors and the bank, but what were the terms of the deposit as made. The statute says that the presumption applies when a deposit shall be made ” in the statutory form, payable “ to either or the survivor” of two depositors; that the “making of the deposit in such form ” shall, in certain cases, such as this, “ be conclusive evidence ” that the depositors intended to vest title in the survivor. (Banking Law; Cons. Laws, ch. 2, § 249.) It is not the pass book which governs, for that word is not used in the statute. It is the “ making ” of the deposit in statutory form which controls. How, then, is that accomplished? We think the deposit is made when the initial deposit moneys are paid over, with instructions to credit the same in a certain form and the deposit is accepted and credited as directed. Rule 3 of the bank in part provides: “ On making the first deposit every depositor, if he or she is able to write, shall be required to enter his or her name on the signature card or book provided for that purpose.” This, Bessie Fenelon, the initial depositor, did, signing her name, as did Elizabeth Yauch, made by her a fellow depositor, as it now appears, under the legend “ A joint account with right of survivorship, payable to either of the undersigned depositors, or the survivor, is hereby created and the bank notified accordingly.” The moneys were then turned over to the bank and credited on the ledger card to joint account. This completed the “ making ” of the deposit, and that deposit was in statutory form, as authorized by the depositors. The bank pass book, subsequently delivered, did not constitute the “ making ” of the deposit; it was no more than evidence, if even that, of a deposit previously made'

The order of the Appellate Division and the decree of the Surrogate’s Court should be reversed, and judgment directed in favor of the appellant, with costs in all courts.

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

Ordered accordingly.


text:
    Sikora Realty Corporation, Respondent, v. The City of New York, Appellant.
    (Argued June 6, 1933;
    decided July 11, 1933.)

      Arthur J. W. Hilly, Corporation Counsel (William H. King and Isaac Phillips of counsel), for appellant.

      William Gilligan for respondent.
   Kellogg, J.

This action was brought to eliminate, as a cloud on title, a portion of the taxes for the years 1925, 1926 and 1927, levied upon certain real estate situate in the borough of Queens, New York city, which was owned by the plaintiff. The taxes levied were based upon assessments for those years which included the valuation of two buildings upon the premises, which the plaintiff claimed were entitled to exemption from local taxation, under a tax exemption ordinance, enacted by the Board of Aldermen of the city, pursuant to section 4-b of the Tax Law (Laws of 1920, ch. 949; Cons. Laws, ch. 60). Under the ordinance the buildings were entitled to exemption provided “ construction ” of the same was commenced “ before April 1st, 1923,” and “ completion for occupancy ” had been “ effected within two years after such commencement.”

The Board of Taxes and Assessments of the city of New York, for the purposes of the tax levy of the year 1925, as required by section 892 of the Greater New York Charter (Laws of 1901, ch. 466, amd. L. 1911, ch. 455), completed its annual record of the assessed valuation of real estate within the city on the 1st day of October, 1924. Thereafter the record remained open “ for public inspection, examination and correction ” until November 16, 1924. The record disclosed a valuation of the plaintiff’s real estate, as improved by the construction of the two buildings, without exemptions or deductions for the purposes of local taxation. On or about the 13th day of November, 1924, the plaintiff made application to the board for the allowance of such exemptions. The petition asserted that the construction of the buildings was begun on March 29, 1922; that construction was completed on May 23, 1924. Two certificates from the Superintendent of Buildings of the borough of Queens, certifying that the construction of the buildings was begun on March 29, 1922, and completed on May 1, 1924, were filed with the petition. As both the petition and the certificates showed that the buildings were not completed within two years from their commencement, the Board refused to allow the exemption.. No application for a writ of certiorari to review the assessment for the year 1925 was made by the plaintiff. When the assessment rolls, completed for the taxes of 1926 and 1927, were filed, no application was made by the plaintiff to the tax board for their correction, in relation to its property, by the - allowance of exemptions in respect to the buildings.

The plaintiff claims that, while the buildings had in fact been completed prior to March 29, 1924, or within two years from the commencement of construction, it was unable to present the true state of facts to the tax board since the certificate of the Superintendent of Buildings, showing that the completion had not occurred until May 1st, 1924, was conclusive. It asserts that after the lapse of several years it finally procured a mandamus order for a corrected certificate showing completion within two years; that meanwhile the time limit for the institution of certiorari proceedings to correct the assessment had expired. In this manner, the plaintiff seeks to excuse its course in proceeding by action to have the assessments declared illegal in part, rather than by certiorari to correct them as erroneous.

The assertion of the plaintiff that it could establish the true date of the completion of the buildings, on its application to the tax board to correct the assessment, only through the certificate of the Superintendent of Buildings, is clearly without foundation. The provisions of section 4-b of the Tax Law, pursuant to which the tax exemption ordinance was passed, do make the certificate of the Superintendent of Buildings, in respect to the commencement of construction, the only proof whereby that fact may be established. They provide that “ said authority shall thereupon issue to such owner or architect a certificate setting forth the date when the plans were filed with him and the date when excavation was actually commenced, which certificate shall be conclusive evidence of the date when construction was commenced, for the purpose of obtaining the benefits of this section.” The section does not provide that such authority shall issue a certificate as to completion for occupation, or that such a certificate shall constitute evidence, either conclusive or rebuttable as to the date of completion of the building for the purpose of obtaining the benefits of exemption.

The plaintiff calls our attention to section 411-a of the Greater New York Charter (as amd. L. 1916, ch. 503, § 5). Subdivision 1 of that section provides: “No building hereafter erected shall be occupied or used, in whole or in part, for any purpose whatever until a certificate of occupancy therefor in such form as may be authorized by the building code and the board of standards and appeals, certifying that such building conforms to the requirements of all laws, ordinances and rules and regulations of the board of standards and appeals applicable thereto shall have been issued by the superintendent of buildings of the borough in which such building is situated.” Subdivision 5 provides that every certificate of occupancy so issued shall “ be and remain binding and conclusive upon all officers, departments, commissions, board and bureaus of the city * * * as to all matters therein set forth, and no order, direction, or requirement at variance therewith shall be made or issued by any officer, department, board or bureau of the said city.” It will be observed that the certificate is made necessary for no other purpose than establishing a right to begin occupation of the premises, since no building erected after the adoption of the subdivision “ shall be occupied or used, in whole or in part, * * * until a certificate of occupancy ” certifying that the building complies with all laws and ordinances applicable thereto shall have been issued by the superintendent of buildings.” The failure to obtain a certificate therefor may prevent occupancy; it debars the owner from no other act or proceeding in relation to his building. Certainly the acquisition of a certificate is not an essential requisite in a proceeding by the owner to obtain an exemption of bis buildings from local taxation. It was not so made by the tax exemption ordinance nor by the statute pursuant to which the ordinance was enacted. Under these, so far as any prohibition is expressed, the owner might proceed to establish completion, according to the fact, by ordinary proof, regardless of the existence of a certificate.

Concededly, the land without the buildings was subject to taxation for all purposes; concededly, the property, not having received an exemption in respect to the buildings, was overvalued for the purposes of local taxation. We have shown that the tax board had full power to hear the true fact, correct the assessment and grant the exemption. We have, then, the ordinary case of an erroneous but not an illegal assessment, a case in which the only relief is by certiorari proceedings. “ If partial invalidity only is established, no case is made for the interposition of equity to remove a cloud. It is no cloud if the lien is to any extent valid.” (Heywood v. City of Buffalo, 14 N. Y. 534, 542.) Nor will the collection of a tax be restrained, which is merely erroneous and not void.” (Mercantile Nat. Bank v. Mayor, 172 N. Y. 35, 48.) Here an assessment, valid at least in part, was a cloud on the title, and a cloud of such a nature that it could not be removed except upon certiorari or by action of the assessing officers.” (People ex rel. Wessell, Nickel & Gross v. Craig, 236 N. Y. 100, 104.) The general principle is so well settled that we shall not cite further authority, except two cases wherein the holdings made are peculiarly appropriate to the situation arising here.

Weaver v. Devendorf (3 Den. 117) was an action brought by a taxpayer against a board of town assessors to recover damages for an illegal assessment. The plaintiff, who was a minister of the gospel, claimed that he had not been allowed his exemption of $1,500 as such, for which a statute of the State then provided. It did not appear that the value of the property of the taxpayer was less than the sum of $1,500. Accordingly, as the property of the taxpayer was assessable in some amount, it was held that the assessors, even if the'y erroneously denied the exemption, acted with jurisdiction in making the assessment, and were not personally liable for a wrongful and illegal act. Young Women’s Christian Assn. v. City of New York (217 App. Div. 406; 245 N. Y. 562) was an action to cancel as a cloud on title taxes on certain premises belonging to the plaintiff, on the ground that they were exempt from taxation because of their exclusive use for religious and charitable purposes. It was found that a part of the building upon the premises was used for a restaurant, which was open to the public and run for a profit, so that the building was not, as an entirety, entitled to an exemption. It was held that the building was so entitled only to the extent of the value of that portion of the building otherwise used, and, therefore, the action did not lie. The court at the Appellate Division said: The tax assessors having jurisdiction, the assessment was not illegal. There probably was an over-valuation by the improper inclusion of exempt property. This at most was an error in valuation and not a lack of power to assess the premises as a whole.” The court followed with the sentence: “Accordingly the assessment here complained of cannot be attacked as illegal because of error in over-valuation. The only relief to the taxpayer is by certiorari proceedings as prescribed by the statute ” (p. 410).

We think that in this case there was an overvaluation for the purposes of local taxation, that the tax board had the power to correct the original assessment by granting the exemptions claimed, if a proper case had been made therefor, and that as the assessment was not wholly illegal, the action does not lie to cancel or modify the assessment.

The judgment should be reversed and the complaint dismissed, with costs in all courts. (See 262 N. Y. 636.)

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

Judgment reversed, etc.


author: Pound, Ch. J.

text:
    Anthony Gostkowski, Respondent, v. The Roman Catholic Church of the Sacred Hearts of Jesus and Mary et al., Appellants. William Gostkowski, an Infant, by Anthony Gostkowski, His Guardian ad Litem, Appellant, v. The Roman Catholic Church of the Sacred Hearts of Jesus and Mary et al., Respondents.
    (Argued June 13, 1933;
    decided July 11, 1933.)

      Guy 0. Walser, David Gilmartin, Pierson Hildreth and Julia L. Seider for appellants in first above-entitled action.

      J. Harry Saxstien and Isidore Scheinberg for respondent in first above-entitled action.

      J. Harry Saxstien and Isidore Scheiriberg for appellant in second above-entitled action.

      Guy 0. Walser for respondents in second above-entitled action.
   Pound, Ch. J.

These actions were brought against defendants for the wanton desecration of the grave of the plaintiff Anthony’s deceased wife who was the plaintiff William’s deceased mother and the removal of the remains therefrom to another burial place. The church is in Southampton, Long Island. Plaintiff is a Pole. His wife was an Irish woman. They had four children. She was a communicant and active member of the defendant church.

After his wife’s death plaintiff Anthony bought a lot in the cemetery of the defendant church of which the defendant Father Killeen was the parish priest. Mrs. Gostkowski was buried therein with the usual funeral rites of the church to which she and her family belonged. This was on July 15, 1931. Father Harrigan, the curate, had charge of the funeral. Father Killeen was out of town. About three weeks after the funeral, Anthony came with one of the children to visit the grave and say a prayer by its side. They discovered that the funeral flowers had been moved to another grave and then learned that the body had been moved and reinterred in another lot. Then they went to see the defendant, Father Killeen. According to plaintiff’s evidence he was abusive, dictatorial and harsh. He said in substance: “ You Polish people should be glad to bury any old way. Any place is good enough for you. You have no cemetery of your own. If you don’t like the place which is good enough for her and you too, you can go somewhere else and buy a plot.”

Then it was disclosed that Father Killeen had ordered the body moved to a new lot without notice to the Gostkowski family, because the wrong lot had been sold to Mr. Gostkowski. It had already been sold to another. On August 28, 1931, Father Killeen wrote to plaintiff’s attorney in a defiant manner again indicating that plaintiff had no cause to be dissatisfied with the treatment he had received.

The jury in the husband’s case brought in a verdict for $2,000, which the Appellate Division reduced to $1,000. Two of the justices voted for reversal and a new trial.

Appellant contends that although compensatory damages should include- damages for mental suffering and anguish (Meagher v. Driscoll, 99 Mass. 281, 285), the court erred in saying that punitive damages might be allowed if the jury should find that the acts of the defendants were “ wilful and malicious and wanton.” If this was error, reduction of the verdict would not cure it — at least if the verdict were so excessive as to indicate that punitive damages were included. (Bishop v. New York Times Co., 233 N. Y. 446, 451.) We are, however, of the opinion that Father Killeen’s whole conduct showed such conscious indifference to the effect of his acts on the minds of the family of the deceased woman that the jury might well have found such acts “ wilful and malicious and wanton.” He acted as if the husband had no right to be considered and that plaintiff should consider himself fortunate to be permitted to bury his wife’s body anywhere in the cemetery as of favor rather than of right — an inexcusable attitude to adopt toward the owner of a burial lot.

1 Punitive damages and damages for wounded feelings, though similar, are not the same. (Bannister v. Mitchell, 127 Va. 578; s. c., 16 A. L. R. 768.) Whoso disturbs a dead body merely to suit his own convenience does so at his own risk. He may do a wrong for which he should be punished. He knows what he is doing. If he is willful and malicious in his wrong-doing, he should be punished to deter others from acting likewise. The husband has the right to protect the remains of the dead which should be left undisturbed unless good reasons and proper regard for the proprieties permit removal. “ The dead are to rest where they have been laid unless reason of substance is brought forward for disturbing their repose.” (Yome v. Gorman, 242 N. Y. 395, 403.)

It has been said that it is only in cases where a body has been mutilated or destroyed that money damages may be recovered and that if there has been any other damage it is entirely sentimental and not pecuniary. (Henry v. Vintschger, 234 App. Div. 593; appeal dismissed, 260 N. Y. 578. Cf. Meek v. State, [Ind.] 185 N. E. Rep. 899.) The question in the case cited was one of pleading. The widow was contesting with her mother-in-law the right to select the place of burial. Everything was done regularly and in order by the cemetery association. Damages in such a case were said to be sentimental only. That case is no authority for a rule that there can be no recovery of money damages for mere arbitrary interference with dead bodies after interment.

Juries may be allowed to give damages that express indignation at the defendants’ wrong rather than a value set on plaintiff’s loss. (Voltz v. Blackmar, 64 N. Y. 440, 444; Pollock on the Law of Torts [11th ed.], p. 190.) Considering the moderate degree of indignation manifested by the verdict herein, we cannot say that it was error to submit the question to the jury. The Appellate Division decided the question with a dubitatur, although it did not hold that the charge was erroneous.

The judgment in the husband’s case should be affirmed, with costs.

As to the son’s case, we conceive the rule to be that the surviving spouse whose duty it is to bury the deceased, has the sole right to sue, during bis or her lifetime, for damages due to interference with the dead body. To such a one is intrusted the duty to guard the dead. True it may be that he may neglect to exercise such right. Others may then act. Possibly the surviving members of the deceased’s family might join as plaintiffs (Boyle v. Chandler, 33 Del. 323), but it is inconceivable that each member of the family could maintain a separate action to recover for mental pain and anguish. In the multitude of such actions there is injustice. The son, therefore, had no cause of action. The complaint was properly dismissed. (Const, art. VI, § 8.)

In each action the judgment should be affirmed, with costs.

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

Judgments affirmed.


author: O’Brien, J.

text:
    Aneless Corporation, Respondent, v. Albert E. Woodward, Appellant.
    (Argued June 8,1933;
    decided July 11, 1933.)

      Frederick C. McLaughlin and Eugene W. Annis for appellant.

      Otto C. Sommerich, Maxwell C. Katz and Raymond T. Heilpern for respondent.
   O’Brien, J.

In plaintiff’s brief the sole issue is stated to be whether personally or through his agents, defendant had notice of the diversion of plaintiff’s funds.

Plaintiff is a New York corporation. Oscar J. Wile, who was its treasurer, was personally indebted in a-sum •upwards of $33,000 to defendant from whom he had misappropriated that amount and who resides in England. There is a finding that Wile was empowered to execute corporate checks for corporate purposes. In order to discharge this personal obligation, the day before defendant left New York Wile as treasurer drew plaintiff’s corporate check in favor of defendant upon the National City Bank, caused it to be certified, wrote upon the back the words: “ For deposit to the credit of A. E. Woodward,” underneath these words inscribed Aneless Corporation, Oscar J. Wile, Treas.,” delivered the check to the Royal Bank of Canada and surrendered to defendant a duplicate deposit slip which did not indicate the form of the check. The bank collected it and paid the proceeds to defendant. It had no knowledge that the check was drawn in payment of a personal indebtedness and, until the institution of this action, defendant had no knowledge of the fact that plaintiff’s funds had been used to pay Wile’s indebtedness nor even any knowledge of plaintiff’s existence.

As between Wile and defendant a valuable consideration subsisted. If Wile had abstracted $33,000 in cash from plaintiff’s safe, deposited it to the credit of his own account and drawn a check against it to the order of defendant who, without knowledge or means of knowledge of the circumstances, took possession of the proceeds, defendant would not be liable. (Stephens v. Board of Education, 79 N. Y. 183; Newhall v. Wyatt, 139 N. Y. 452, 456.) Even if Wile had deposited a forged check to defendant’s credit in the Royal Bank without knowledge by the bank or by defendant of the forgery and defendant had in good faith transferred this credit to his own bank in England, the victim of the forgery could not recover against him. In Nassau Bank v. National Bank of Newburgh (159 N. Y. 456, 459), on facts analogous to this supposition, application was made of the rule that when money has been received by a person in good faith in the usual course of business and for a valuable consideration, it cannot be pursued into his hands by one from whom it has been obtained through the fraud of a third person. If this check in evidence had been delivered to defendant in person he would have been put on notice by its form. He had actual knowledge that the debt to him was not corporate. If the bank had possessed the same knowledge concerning the personal nature of the debt, it also would have been put on notice. The bank, however, was defendant’s agent only for the purpose of collecting a check (Neg. Inst. Law; Cons. Laws, ch. 38, § 350-c) presented in the usual course of business, regular on its face and bearing no indicia of such defects as would constitute a warning. If the form of the instrument was not unusual and if delivery was not accompanied by any suspicious circumstances, there is no rule that the bank was bound to communicate to the payee specific information in relation to the details of the transaction. The two principals were Wile and defendant. In converting corporate assets and directing them into channels whereby they eventually reached defendant, Wile acted alone and was the agent of no one. His fraudulent performance was for his own benefit. He was merely defendant’s debtor and plaintiff’s despoiler. He simply paid a debt in his own behalf with other people’s money. It was the bank and only the bank which acted as defendant’s agent and its powers were restricted to receipt of the deposit for collection and transmission. Without purporting to indorse as defendant’s agent, Wile did pretend to act for plaintiff in instructing the collecting bank to receive the deposit for defendant’s account. Defendant never saw the check. His agent for a limited purpose never was aware and was under no duty to make inquiry in relation to the situation forming the background of its issue. Unlike the facts in Wen Kroy Realty Co. v. Public Nat. Bank & Trust Co. (260 N. Y. 84), we have here the strongest basis for a finding of apparent authority by the drawer of the check. Wile was empowered by bis corporate principal to issue a check in this form and it was certified by the bank upon which it was drawn. We cannot hold that the actual facts, one of the essentials being unknown to the principal and the other unknown to the agent, can be so combined as to impute to the principal knowledge of the whole transaction. In order to hold defendant, either actual knowledge must have been possessed by him that the individual debt was paid by corporate check or actual knowledge by the bank that the corporate check was drawn to discharge a personal debt. If defendant’s agent had known both these facts, or if any circumstance had been sufficient to put it on notice, its knowledge or notice would be imputable to defendant. But the mere knowledge of an agent in relation to the particular form of a written instrument which apparently is properly used in the usual course of business is not imputable to one who in good faith and for consideration becomes the beneficiary. We think, therefore, that there is no evidence that defendant either personally or through his agent had notice of the diversion of plaintiff’s funds.

The judgment should be reversed and the complaint dismissed, with costs in all courts.

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

Judgment reversed, etc.


text:
    Julius Lehrenkrauss et al., Copartners, under the Firm Name of J. Lehrenkrauss & Sons, Appellants, v. Universal Tours, Inc., Respondent.
    (Argued June 12, 1933;
    decided July 11, 1933.)

      Joseph J. Zeiger, Ephraim Berliner and Morton Both for appellants.

      Benjamin Reass, Irving Moldauer and Emanuel Newman for respondent.
   Pound, Ch. J.

The controversy between plaintiffs and defendant is over the use of the words “ Universal Tours ” as a trade name or symbol descriptive of their travel agency business.

The trial court made findings of fact that plaintiff’s predecessors had adopted the legend “ Universal Tours ” as a trade name in the travel agency business in the year 1915; that in the year 1924 plaintiffs’ predecessors adopted the legend Universal Lehrenkrauss Travel Agency ” as a trade name; that in May, 1925, plaintiffs adopted the arbitrary legend “ Universal Travel Agency ” as a trade name in the travel business; that neither plaintiffs nor plaintiffs’ predecessors had discontinued or abandoned the use of said trade names; that the said trade names had acquired a secondary meaning; that the defendant company was engaged in a travel agency business in New York city under the name Universal Tours, Inc.,” and was incorporated after its predecessor in title had received actual notice of plaintiffs’ claim of exclusive right to the trade name Universal Tours ” and that the use by the defendant of the legend “ Universal Tours ” as a part of its corporate name has caused confusion in the trade with the result that numerous concerns have extended credit to tourists bearing credentials issued by the defendant and have forwarded said credentials to plaintiffs for redemption in the mistaken belief that said credentials emanated from or were issued by plaintiffs.

The court found as conclusions of law that the legend “ Universal Tours ” is a good and valid trade name and is owned by the plaintiffs; that the defendant by the use of its corporate name is trespassing upon the rights of plaintiffs and is guilty of unfair competition and that plaintiffs are entitled to a perpetual injunction enjoining and restraining the defendant from the use of the words Universal Tours ” as a part of its corporate name.

The Appellate Division reversed, made new findings of fact and dismissed the complaint. Such findings were largely based on the fact that plaintiffs’ predecessors, after having filed certificates in the Kings County Clerk’s office (Penal Law, § 440) to the effect that they were conducting business under the assumed name of Universal Tours ” and “ Universal Tour Company,” filed, in February, 1924, in said Clerk’s office certificates discontinuing the assumed names “ Universal Tours ” and Universal Tour Company.” The form of this certificate of discontinuance was as follows, signed by the plaintiffs’ predecessors: “We certify that we have discontinued and terminated the conduct and transaction of any business under the name of Universal Tours [the other certificate reading Universal Tour Company], and hereby direct and authorize the Clerk of the County of Kings to cancel the certificate made and acknowledged by them [giving the date of the filing of the certificates as heretofore stated].”

Defendant was incorporated in 1927. Jack Jacobs, the president of the defendant corporation, had been in the travel agency business with his father prior to 1924 under the assumed name “ European Travel Service.” The business grew. The name “ Universal Tours ” impressed him as more suitable. He adopted the name “ Universal Tours ” as an assumed name under which to do business in 1926 and incorporated under the name “ Universal Tours, Inc.,” in 1927. Before he incorporated he was advised by plaintiffs’ representative that plaintiffs claimed the exclusive right to use the name “ Universal Tours.”

Confusion has arisen over the discontinuance by plaintiffs of doing business under the assumed name of “Universal Tours ” and “ Universal Torus Company ” and the continuance by them of the use of “ Universal Tours ” as a trade name descriptive of their business.

The findings of the trial court that plaintiff’s predecessors adopted the trade name “ Universal Tours ” as early as the year 1915, and continuously employed the same, without regard to the name or assumed name under which they did business is fully sustained by the evidence. The trade name remained the property of the plaintiffs throughout. They identified that name with their travel agency business. It became a symbol descriptive of their business. They never discontinued the use of the legend “ Universal Tours ” in connection with such business although they did business under an assumed name.

Defendant, and Jack Jacobs before it, appropriated the plaintiffs’ trade name as an assumed name under which to do business and as a corporate name, with knowledge and notice that such name was the property of plaintiffs. The plaintiffs were thereby subjected to unfair competition by a rival; to an invasion of the good will acquired by them for the trade name. (International News Service v. Associated Press, 248 U. S. 215, 246; Fisher v. Star Co., 231 N. Y. 414, 427; Forsythe Co. v. Forsythe Shoe Corp., 234 App. Div. 355; modfd., 259 N. Y. 248; Tiffany & Co. v. Tiffany Productions, 237 App. Div. 801; affd., 262 N. Y. 482.) The assumed innocence of the defendant’s president, Jacobs, who testified that in an investigation he had made he had overlooked a sign in one of the windows of plaintiffs’ place of business and had failed to find advertising matter bearing the words “ Universal Tours,” indicates either that he was looking with eyes shut or seeing only what he wanted to see. The conclusion seems inevitable that Jacobs relied mainly on the certificate of abandonment and discontinuance of the right “to do business ” under the assumed name or names which plaintiffs’ predecessors had filed, in order to appropriate the trade name which plaintiffs had always used in connection with their business.

Defendant may not justify the use of plaintiffs’ trade name by the idle pretense that it was misled by the filing of the certificates of discontinuance of the right “ to do business ” under the assumed name into the belief that plaintiffs had discontinued and abandoned their property right to use the trade name “ Universal Tours ” as a symbol descriptive of their business. An assumed name under which to do business is not the same as such name when used as a symbol of plaintiffs’ travel service. One may do business under one name and symbolize the business by another name. (Fisher v. Star Co., supra.) The fact remains that the symbol Universal Tours ” was inseparably attached to plaintiff’s business, under whatever name such business was conducted; that there was no non-user and no intent to abandon the trade name. (Rockowitz C. & B. Corp. v. Madame X Co., 248 N. Y. 272, 277.)

Defendant’s incorporators had a perfectly good name for a travel service agency. If that was not satisfactory, many other names were available. Why should they appropriate plaintiffs’ trade name “ Universal Tours ” except to breed confusion and to mislead the traveling public?

The judgment of the Appellate Division should be reversed and that of the Special Term affirmed, with costs in this court and in the Appellate Division.

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

Judgment accordingly.


author: Per Curiam.

text:
    Arthur N. Dusenbury et al., Copartners, under the Firm Name of Dusenbury & Roberts, Respondents, v. Strathcona Apartments, Inc., Appellant.
    (Submitted June 13, 1933;
    decided July 11, 1933.)

      Stephen R. J. Roach for appellant.

      Morris Orenstein for respondents.
   Per Curiam.

As this case originated in the City Court of White Plains no appeal can be taken to this court except by leave of the Appellate Division. (Civ. Prac. Act, § 589, subd. 1.)

The appeal should be dismissed, with costs.

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

Appeal dismissed.


author: Pound, Ch. J. Lehman, J. (dissenting in part).

text:
    In the Matter of the Accounting of Preston P. Satterwhite et al., as Executors of Florence C. Satterwhite, Deceased, Respondents. William G. Brokaw, Appellant; Lilla B. Renshaw et al., Respondents.

      (Argued June 4, 1933;
    decided July 11, 1933.)

      Archibald R. Watson, Ralph O. Willguss and Hyman W. Gamso for appellant.

      C. Alexander Capron and W. Meade Keller for Preston P. Satterwhite et al., as executors, respondents.

      E. J. Dimock, Charles B. Lauren and Jeremiah Wood for Lilla B. Renshaw et al., respondents.
   Pound, Ch. J.

The question is whether taxes and carrying charges on unproductive real estate should be paid by the life tenant or apportioned to capital. This not unusual dispute between those entitled to the principal and those entitled to the income of a trust estate has been before us recently in Matter of Jackson (258 N. Y. 281). We there held on the authority of Lawrence v. Littlefield (215 N. Y. 561) and other cases cited that if the language of the will indicates an intention of the testator to constitute an imperative power of sale and an equitable conversion of the real estate into personalty at the time of the testator’s death, it must be presumed that while the trustees were converting the real estate into personalty the right of .the life tenant to income was the same as if the fund had come into existence immediately after testator’s death and that an exception to the general rule of loading on the life tenant charges of carrying unproductive real property pending a sale thus came into existence.

On the other hand, it was said that where there is no imperative power of sale or equitable conversion; where the testator authorizes the trustees to sell in their discretion, the only inference is that testator intended to benefit the principal of his estate and not the life tenants.

A simple and workable rule has been suggested. It provides that in all cases, except where the will otherwise provides, the proceeds of the sale of unproductive real property as between life tenant and remainderman shall be apportioned between principal and income. (Apportionment between Principal and Income of Proceeds Derived from the Sale of Unproductive Realty Held in Trust, 40 Yale Law Journal, 275, 278, note 18.)

Appellant contends in substance that Matter of Jackson (supra) tends to adopt the rule suggested above as an expression of the policy of this State. He concedes, however, that we have not gone so far as to adopt it. We still seek the intention of the testator as expressed in the language of the will, interpreted in the light of surrounding circumstances. Let us so consider the will before us.

Testatrix died May 1, 1927. She was possessed of personal property of the appraised value of approximately $5,000,000 and unproductive real estate used as family homes and not bought for speculation, as in the Jackson Case (supra), worth about $1,000,000 more. The unproductive real estate consisted of two parcels, the home at Great Neck, Nassau county, New York, known as Martin Hall,” having an appraised value of $970,000, and a winter residence at Palm Beach, Florida, having an appraised value of $590,000. “ Martin Hall ” was sold September 27, 1930, for $585,000 (sale confirmed December 31, 1930), and the Palm Beach property was sold December 23, 1929, for $425,000, including contents appraised at $62,176.50, aggregating a sum in excess of $900,000 for the unproductive real estate.

As to the Martin Hall property she had provided in her will:

“ Twenty-ninth. * * * It is my will and I direct that my said husband have possession of ' Martin Hall,’ its land and all the buildings thereon, for use and occupancy from the time of my decease down to the time when the sale of said property shall be carried out and effected as herein provided and said property is duly conveyed to the purchaser.
“ I hereby direct my executors and trustees to sell at private sale or public auction within three years after my decease, for the best price and upon the best terms obtainable, my lands with the dwelling house and other buildings and improvements thereon erected, situated at or near Great Neck, Nassau County, New York, now known and designated as £ Martin Hall,’ being one of the residences occupied by my husband, Preston P. Satterwhite, and myself since our marriage, and to place the proceeds thereof, whether cash or bond and mortgage, in the residuary fund of my estate.”

The appellant, who has a life interest in a residuary trust under the will, objects to the carrying charges of the .unproductive real estate, Martin Hall and Casa Florencia, amounting to $144,596.58 to the time of sale, being charged against income and contends that such sum should have been charged against principal.

As to Martin Hall, we have an imperative direction to the executors and trustees to sell within three years after testator’s decease and place the proceeds in the residuary fund of the estate. This is to be offset by the direction that testator’s husband shall have the use of the property until it is sold, within three years after her decease. Meantime the life tenant would pay the carrying charges quite independently of when that property became a part of the trust estate. From the end of three years after her death, May 1, 1930, until September 27, 1930, when Martin Hall was sold, there was an equitable conversion of the real estate into personalty. The learned Surrogate has held that from May 1, 1930, until the actual conveyance of Martin Hall the carrying charges should be charged to principal. This we think is the correct rule. The appellant says the apportionment should date from the day of death.

As to the Palm Beach property, known as Casa Florencia, the power of sale in the will applicable to this property is the general power of sale contained in the forty-fifth clause which reads as follows: I authorize and empower my said executors and trustees and the survivor of the survivors of them, or the ones who shall qualify, for any purpose whatever which they, he or it may deem necessary, to sell and convey the whole or any part of my real property, not herein specifically devised, at such time or times, in such manner, and on such terms as to them, him or it shall seem proper; * *

This is the widest and most discretionary language possible. It contains no words of direction which can be construed as evidencing an intent or desire that the property shall be sold before the trustees may deem it necessary. The property was sold December 23, 1929, two years and eight months after the death of the testator. It cannot be said that the trustees were unnecessarily dilatory in making the sale of costly Florida real estate. Contrasted with the imperative direction to sell Martin Hall, the choice of language by testator seems judicious and well chosen to give the widest discretion without intimating any direction as to when they should act.

Furthermore, there is no reason why we should torture language- to find an intent to do the right thing. The appellant was a brother of testator. He was not the chosen object of her bounty. He took but twenty per cent of the residuary trusts for his benefit during his lifetime! The special objects of Mrs. Satterwhite’s solicitude were her sister, Lilia Dugmore, and her children. Lilia takes thirty-five per cent of the income of the residuary trusts. Testator was at pains to say in her will: I have made the liberal provisions herein contained for my sister, Lilia Dugmore, and her children, for the reason that she has sustained great financial losses and her fortune has been greatly depleted, and I wish to give to her children that financial protection and support which she is now unable to give them.” Mrs. Dugmore’s children take the entire residuary estate.

As to her husband, he also is dealt with liberally. He takes forty-five per cent of the income of the residuary trusts.

In the cases cited supra special reasons, which were assumed to have influenced the intention of the testators, were found for apportioning the carrying charges. William Gould Brokaw, the brother, represents in amount twenty per cent of the life beneficiaries. He does not appear to be the special object of testatrix’s bounty. Eighty per cent are content. He alone protests. As said in Matter of Jackson (supra, p. 291), it is the obvious intent of the testator alone which justifies the inference that “ the first object of his solicitude ” should have the advantage therein bestowed on him.

The order appealed from should be affirmed, with costs to all parties, payable out of the estate.

Lehman, J. (dissenting in part).

If the only question involved in this case were whether there was an equitable conversion either of the Palm Beach property or the Martin Hall property, I should agree entirely with the opinion of Pound, Ch. J. That is, in fact, the only question which was discussed in the original briefs, but as I indicated upon the argument, it seems to me quite clear that in regard to the Martin Hall property there is another question involved, to wit, the date at which that property became part of the residuary trust funds.

The Palm Beach property is not specifically mentioned in the will of the testatrix. It passes under the will to the executors and trustees as part of the residue of the estate, and under the terms of the will the executors and trustees were required to hold this residue in three separate trusts. Thus, even before the property was sold it became part of the residuary trust funds. The entire income of the trust funds, including the real property, was payable to the life tenants, but the expenses of maintaining the properties in the trust funds are deductible before the net income from the trust funds can be fixed. The fact that part of the trust funds consists of unproductive real property from which no income was derived does not change the rule, unless the testatrix commanded that the real property should promptly be converted into personalty or should be treated as personalty even before sale. In that contingency we would give effect to the intent of the testatrix. That intent could be carried out only by apportioning the net proceeds of the sale when made, after deducting all expenses of holding the property till the sale was made, between principal and income in such manner that there shall be credited to the income of the trust funds the return which the life tenants would have derived from the portion credited to capital, if the property had been converted into money at the time the trust funds were created. Here, we find neither imperative command for an immediate sale nor intent that the real property before sale should be treated as if converted into personal property. Even though the testatrix directed that all trusts created by this my will shall be established as of the date of my death and draw interest from such date,” her executors might in the exercise of their discretion hold this real property as part of the trust funds if they chose to do so, and the will does not show an intent that the real property even before sale should be treated as personalty.

The question is different in regard to Martin Hall. The testatrix in her will, before the clauses disposing of the residue of the estate to the executors and trustees, has made a specific disposition of this parcel of real property:

Twenty-ninth. * * * It is my will and I direct that my said husband have possession of ‘ Martin Hall,’ its land and all the buildings thereon, for use and occupancy from the time of my decease down to the time when the sale of said property shall be carried out and effected as herein provided and said property is duly conveyed to the purchaser.
I hereby direct my executors and trustees to sell at private sale or public auction within three years after my decease, for the best price and upon the best terms obtainable, my lands with the dwelling house and other buildings and improvements thereon erected, situated at or near Great Neck, Nassau County, New York, now known and designated as ‘ Martin Hall,’ being one of the residences occupied by my husband, Preston P. Satterwhite, and myself since our marriage, and to place the proceeds thereof, whether cash or bond and mortgage, in the residuary fund of my estate.”

Here there is no devise of the real property to be held by the executors and trustees for specified life tenants. There is only a direction to sell and then “ to place the proceeds * * * in the residuary fund.”

Unless there was an equitable conversion of Martin Hall, then by the express terms of the will it never became part of the trust funds, created under the residuary clause of the will as of the date of death of the testatrix, for before that clause the testatrix had provided that her husband might occupy that real property until sale, and directed the executors to sell it and “ to place the proceeds thereof * * * in the residuary fund of my estate.” Until the actual sale of the property or its equitable conversion there could be no “ proceeds.”

In unmistakable terms the testatrix has provided that before the property can become part of the residuary fund ” it must be converted into personalty. If the directions of the testatrix are carried out, then the real property never becomes a part of the trust funds. If the executors and trustees fail to carry out these directions, then a court of equity will adjust the rights of the parties as if the executors and trustees had performed their duty.

It is conceded by all parties that the direction to sell Martin Hall is imperative, but the imperative direction to sell is, as Pound, Ch. J., has pointed out, qualified by provisions that the sale must be made within three years, and that until the time when the sale is made and carried out, the husband of the testatrix shall have possession of the property, then until the expiration of three years there could be no equitable conversion of the property. So long as the executors and trustees were not under a duty to seE, and the husband of the testatrix had a right of possession, the testatrix could not have intended that the life tenant should enjoy any income or profits from her property, and, therefore, the proceeds of the sale should not be apportioned between the life tenants and the remaindermen. They must, in accordance with the terms of the will, be added to the capital of the trust funds.

It does not follow that out of the income from the trust funds the expenses of maintaining and carrying the real property until sale should be paid. On the contrary, the same reasoning which has brought us to the conclusion that until the expiration of three years there was no equitable conversion, leads, I think, to the conclusion that, until then, the property did not become part of the residuary trust fund, and the expenses of the property cannot be charged against the income. Perhaps if the husband, who under the terms of the will had a right of possession to the real property until sale, had been the sole life tenant of the entire trust fund, it might be argued that in spite of inept language the testatrix did intend that Martin Hall should immediately become part of the trust funds, and that the expenses should be paid out of the income of the trust funds until sale. Here, however, the husband is the life tenant of only one of the three residuary trusts. The objectant appellant is the life tenant of another fund. He could derive no profit or benefit from the real property, and there is nothing in the language of the will which permits an inference that even before sale a share in this real property was held in trust for him. Thus it seems to me quite clear that from the conclusion that there was no conversion of this real property until three years had passed, it must follow that until that time Martin Hall did not become part of the residuary trust funds. Any other construction would, it seems to me, do violence to the express language of the.will and defeat the intent of the testatrix.

Since the testatrix provided that only the proceeds of the sale of Martin Hall should become part of the residuary trust funds, I cannot see any basis for holding that the income of these trust funds can be charged with the expense of maintaining and carrying that property before sale. Such expenses should be deducted from the amount received upon the sale before the amount of the “ proceeds ” of the sale can be determined and added to the “ residuary funds.” The Surrogate has determined that the “ net proceeds ” of the sale of Martin Hall after deducting therefrom all expenses of maintenance and other carrying charges accruing after May 1, 1930,” should be apportioned between principal and income. He was correct in his holding that the apportionment of the “ proceeds ” as between income and principal should be made from the date of the equitable conversion of the real property. He erred in holding that the net proceeds to be so apportioned could be arrived at without deducting also the expenses and other carrying charges between the date of the death of the testatrix and May 1st, 1930, when through equitable conversion of the property the “ proceeds ” became part of the trust funds. Between those dates these expenses and charges were not a burden on the trust funds payable out of the income, but were deductible from the amount received on the sale before the net proceeds were added to the trust funds.

The order of the Appellate Division and decree of the Surrogate should be reversed to that extent, and the matter remitted to the Surrogate for further proceeding in accordance herewith, with costs to all parties, payable out of the estate.

Kellogg, O’Brien and Crouch, JJ., concur with Pound, Ch. J.; Lehman, J., dissents in part in opinion in which Crane, J., concurs; Hubbs, J., not sitting.

Order affirmed, etc.


text:
    John Weis, Respondent, v. The Long Island Railroad Company, Appellant, Impleaded with Another.
    (Argued June 6, 1933;
    decided July 11, 1933.)

      William McNamara and Joseph F. Keany for appellant.

      Edward F. Keenan and Herbert A. O’Brien for respondent.
   Per Curiam.

The bridge was constructed by the Long Island Railroad Company pursuant to an order of the Transit Commission issued in accordance with section 91 of the Railroad Law. The plans were approved by the Commission. After the bridge was completed the roadway was maintained by the city of New York. (Railroad Law; Cons. Laws, ch. 49, § 93.) The bridge as constructed by the defendant-appellant was lawful. The bridge itself did not constitute an obstruction maintained by the railroad company in any public street; on the contrary, its purpose was to provide a street for the city of New York. The roadway might become dangerous if not properly maintained and illuminated by the city. The bridge structure erected in accordance with approved plans was not itself dangerous, and no negligence was shown on the part of the railroad company.

The judgment of the Appellate Division should be reversed and that of the Trial Term affirmed, with costs in the Appellate Division and in this court.

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

Judgment accordingly.