author: Bradley, J.

text:
    Commercial Bank of Rochester et al., Resp’ts, v. Thomas Bolton et al., Impleaded, etc., App’lts.

      (Supreme Court, General Term, Fifth Department,

      Filed June 21, 1895)

    1. Fraudulent conveyance—Payment oe debt.
    A debtor has the lawful right to transfer property to any, and less than all, of his creditors in payment of his debts owing to them, and they to-accept it in payment, to the exclusion of other of his creditors, provided it is done in good faith for such purpose and has a reasonably adequate consideration in the amount of the debts, for the payment of which the transfer of the property is made.

      2. Same—Intent—Evidence. /

    Where, in an action to set aside a conveyance as fraudulent, the question of the value of the property is material, entries in the books of the grantor, while admissible against him, are not admissible against the grantee, in order to establish a fraudulent intent in making the conveyance.
    Appeal from a judgment in favor of the plaintiffs.
    The plaintiffs are judgment creditors of the defendant Thomas Bolton. The Commercial Bank recovered judgments against him September 13, 1893, for $2,115.40 ; September 20, 1893, for $3,032.30: October 7, 1893, for 4,035.23 ; and October 30, 1893, $583.75. The plaintiff Menzo Yan Yoorhis recovered judgment against him October 21, 1893, for $5,185.74. Those judgments remain unpaid, except the sum of $2,863.66, which was realized by the Commercial Bank October 30, 1893, from collaterals. The Union Bank of Rochester recovered judgments against Thomas-Bolton September 21,1893, for $2,033.61; same day for $3,033.71. Frederick B. Hall recovered judgments against him November 1, 1893, for $1,025.48; same day for $4,048.64. Those judgments were assigned by Hall to the Union Bank. After executions against the property of Thomas Bolton issued upon all of those judgments were returned unsatisfied, these actions were brought to set aside a sale of property made by Thomas Bolton to the defendants Catherine Bolton and Sherwood, on the alleged ground that it was made in fraud of the creditors of the vendor; and Hermann Behn, to whom the defendant ' Sherwood sold his interest in the same property, was made a defendant- in both actions, and in the complaint it was charged that he purchased with notice of the alleged fraud, and that he was not a purchaser in good .faith. The complaints were dismissed as to Behn. As against the other defendants it was determined that the transfer of the property by Thomas Bolton to Catherine Bolton and Sherwood was in fraud of the creditors of the vendor, and subject to the right of such creditors to have the property applied to the payment of their debts; that the Commercial Bank was entitled to recover against Catherine Bolton and Sherwood $7,283.45, the amount of its judgements; that the plaintiff Van Voorhis was entitled to recover against them $5,439.55, the amount of his judgments ; and that the Union Bank of Rochester was entitled to recover against them $12,765.51, the amount of its judgments. Judgments were perfected accordingly. The property in question consisted of machinery, materials, stock, etc., in an establishment for the manufacture of shoes in the City of Rochester, in which business the defendant Thomas Bolton had for several years been there engaged.

      William F. Cogswell, for app’lts ; Walter 8. Hubbell and John Van Voorhis, for resp’ts.
   Bradley, J.

The alleged defense, and that which the defendants gave evidence tending to prove, in answer to the charge of fraud, was that the sale and purchase were made in good faith and for a consideration existing in the indebtedness of Thomas Bolton to the defendants Mrs. Bolton and Sherwood, respectively, and in payment of such indebtedness to them. It appears that Thomas-Bolton commenced the business in or about the year 1872, and continued until early in the year 1883, when, by reason of a personal injury received by him, he was advised to discontinue his-business, for a time at least. He then sold out to Gloodger and Hay lor for the consideration of $33,000. They paid him cash $14,000, and the residue by their notes on time. This,$14,000 lie-let his wife (the defendant Catherine Bolton) have, and it was deposited in bank and in securities in her name, and by them the fund, however invested, was then apparently treated as belonging to her. In the fall of 1883 he repurchased the business, and thereafter carried it on until the sale to the other defendants on the 2d day of August, 1893. This sale was evidenced by a written bill of sale made by the seller, accompanied by an agreement, in writing, of the parties to the sale, stating, among other things, that the consideration was an indebtedness to Sherwood of $11,744.56, all represented by promissory notes, except$1,492.42 in open account, and indebtedness to Catherine Bolton of $8,200, in two promissory notes, and a further indebtedness to her in a large amount of moneys loaned by her to him, and that he sold the property to her and Sherwood, and they purchased it in payment and satisfaction of his indebtedness to them. After Bolton repurchased the property, and in 1884, the plaintiff, Van Voorhis became his accommodation indorser, and continued to indorse his paper up to near the time of his sale in 1893, and the judgments recovered by the bank plaintiffs were upon notes so indorsed by him. And in the meantime Bolton obtained from his wife, for use in his business, her moneys and securities in which investments had been made by her. By written memorandum, of date January 31,1893, by them subscribed, they made what purported to be a statement and settlement of matters between them, the result of which, as there represented, was an indebtedness of Bolton to his wife of $18,196.96, which they adjusted at $18,000, and he agreed to and did convey to her some property, and transfer to her certain claims, amounting together to $4,166,79, thus leaving a balance of $13,833.21 due her. This constituted the apparent consideration of the sale to her of the undivided half of the property in question. A debtor has the lawful right to transfer property to any, and less than all, his creditors in payment of his debts owing to them, and they to accept it in payment, to the exclusion of other of his creditors, provided it is done in good faith for such purpose, and has a reasonably adequate consideration in the amount of the debts for the payment of which the transfer of the property is made. Wilder v. Winne, 6 Cow. 284; Bank v. Fitch, 48 Barb. 344; Loeschigk v. Hatfield, 5 Rob. (N. Y.) 26; 51 N. Y. 660; Hale v. Stewart, 7 Hun, 591; Murphy v Briggs, 80 id. 446. The fact and amount of the liability of Bolton to Sherwood are not seriously questioned.

The trial justice did not deem it necessary to find, and therefore -did not consider the question, whether or not the amount before mentioned as per their adjustment, due from Bolton to Bis wife, was a subsisting indebtedness to her. He did find that the amount of the debts which Bolton owed to Mrs. Bolton and Sherwood was very much less than the value of the property transferred to them. He also found that the transfer was made to hinder, delay, •and defraud the plaintiffs in the collection of their debts, and that Mrs. Bolton and Sherwood were aware of such fraudulent intent, participated in it, and accepted the transfer to enable him to consummate such fraudulent purpose. If this conclusion was without reference to the question of the amount of the consideration, and had the support of evidence, the latter question was unimportant for the purposes of the relief sought by the action. Billings v. Russell, 101 N. Y. 226; Baldwin v. Short, 125 N. Y. 553; 36 St. Rep. 138. In 1883, when Bolton gave his wife the $14,000, and it was placed to her credit in the bank, he was solvent, and at liberty to vest title in her to the fund. She evidently, in lending him her money, and the securities in which some of it was invested, was governed by his desire in that respect, and it may, in view of his relation to her, be assumed that she acted on his advice in taking the transfer of the property. For some years prior to the time of his transfer in question of the property, Bolton's indebtedness from time to time increased, and was represented largely by his notes, indorsed by Yan Yoorhis, to whom he transferred accounts of his customers as collateral. The customers were not advised of the transfers of the accounts, and Bolton was permitted by Yan Yoorhis to collect them and make use of the proceeds in his business. At length, and shortly before August, 1893, Yan Yoorhis advised Bolton that he had concluded to have the accounts ■which were and should be taken as collateral paid to him or to the banks where the notes were held. This it seems was deemed by Bolton embarrassing to him, as he depended much upon collections for current expenses. The depression in trade for some time had been and was such that he deemed it necessary to have all the resources of his business to maintain it. He thereupon consulted the defendant Sherwood, who was also his creditor, and stated to him that unless Yan Yoorhis permitted him to collect the accounts as he had done he should sell out the property and business, and proposed to make the sale in that event to him and Mrs. Bolton. His consultations with Van Voorhis finally, as evidence tends to prove, resulted in the requirement of the latter that the accounts should be paid to him or into the banks, and applied upon the notes indorsed by him. This precipitated the sale which was made August 2,1893. While Sherwood was not pressing Bolton, he evidently had become somewhat anxious about his own matter, and his leading object in becoming the purchaser was to get payment of BoltoiVs liabilities to him. There was, however, a state of facts and circumstances disclosed by the evidence which permitted the inference that the sale to Mrs. Bolton and Sherwood was contemplated and made with a view to some ultimate benefit to the seller in relation to the plant and business, and that of such expectation on his part the purchasers were advised before and when the sale was made by him to them. Such relation of confidence with a view to some future advantage to Bolton, if such was contemplated, was prejudicial to the legal rig 1 its of the plaintiffs as his creditors, and, as such, fraudulent as against them, although the main purpose of the purchasers was to secure or obtain the payment of the debts due them.

The view here taken is that whether or not the sale was made with intent to defraud the other creditors, and whether the act of purchase was infected with a like imputation, were questions of fact, within the province of the trial justice to determine, and his conclusion in that respect was permitted and supported by the evidence and the inferences legitimately derivable from it. This may have been founded somewhat upon the fact, as found, that the debts which Bolton owed the purchasers were much less in amount than the value of the property. He had annually for some years furnished to Van Voorhis statements of his assets and liabilities. hile the later ones had shown much less balances in his favor than the earlier ones, that of June, 1893, showed a balance of resources over liabilities of $25,550.46. There was some evidence on the part of the defendants tending to prove that such statement was incorrect, and that his resources were much less than his liabilities, and not equal in arnount to the indebtedness, béfore mentioned, to Mrs. Bolton and Sherwood. The trial justice, however, found that the value of the property was $35,000. He also found that the consideration, which was $13,952.01, of the sale made by Sherwood to Behn on August 15, 1893, was not inadequate, that the sale was of all of Sherwood’s interest in the property which had been transferred to him by Bolton except certain accounts, which before then had been collected, and a considerable amount of the stock which had by Sherwood been made up and sold. By reference to his opinion it seems that the trial justice, in the process by which he illustrated that the value of the property was considerably reduced when Sherwood sold to Behn, assumed that Sherwood had received payment for the $7,400 of manufactured goods he had shipped to customers before the sale to Behn, and winch, less the expense to him incurred, amounted to $5,400, and that he also had the benefit of $4,000 of accounts transferred by Bolton, thus reducing the property $9,500' in value during the time intermediate the two sales, and giving adequacy to the consideration of the sale by Sherwood of his-interest to Behn. The evidence does not seem to warrant the conclusion that the value of the property was in that manner, to such extent, reduced within that time. The evidence on the subject is to the effect that the bills for goods shipped during the time between the two sales, and the accounts transferred by Bolton to his wife and Sherwood, remained unpaid, less about $300, at the time of the sale to Behn, that Sherwood’s interest in them, as in the other property, was transferred in that sale to him, and that during that time Sherwood paid out in and about the business $2,698, and received $444,18, leaving a balance of $2,253.80 to his credit. These facts are mainly represented by the evidence given by Sherwood, and are to some extent corroborated by the evidence of the bookkeeper. While their relation to the action and to the business was such as to put their credibility in question, we find no evidence to the contrary in the record. But error cannot properly be predicated upon incorrect statements in the opinion, appearing to have been made in the process of deduction of facts. Reference must be had to the facts as found in the decision, and if those which are material to the result have the support of evidence the conclusion may in that respect be sustained.

It is true that exception was taken to the finding on the subject of the receipts from goods shipped and from accounts transferred to Mrs. Bolton and Sherwood; but that finding has no essential bearing upon the issues between the parties to this controversy. The misapprehended fact, that the value of the property had been reduced by taking out of it $9,500 before the sale to Behn. may have led to the conclusion that the consideration of the sale to him. was not inadequate. This was the only material or available-bearing of that fact, and it does not concern the remaining parties to the record.

The more serious qnestion arises upon exceptions taken to the reception of evidence which may have led to the conclusion that the property transferred to Mrs. Bolton and Sherwood had the value of $35,000, and that the consideration of the sale was inadequate. A witness on the part of the plaintiffs went to the-factory in September or October, 1893, with a view of ascertaining the value of the property transferred by Bolton to the other-defendants on August 2, 1893. He there found the book containing the statement called “inventory,” made by Bolton or by his direction June 15, 1893, before mentioned. The book was offered and received in evidence for the purpose of proving that the value of the merchandise as there represented was at that time $8,934*09. The sales book, cash book, and ledger of Bolton were also offered and received in evidence, and from those books .the witness stated or read, as it there appeared, that after June 15, 1893, and prior to the 2d day of August following, the amount of merchandise purchased was $11,400.' the amount of cash paid for labor, $5,100, and the amount of new accounts charged, $8,500,. making together $33,934.09, which, with the estimated value of the machinery, fixtures, furniture, lasts, dies, and patterns, made $43,354.22, from which he deducted the amount of the accounts which had been transferred to Van Voorhis, $5,003.62, leaving a balance of $38,350.60, thus represented as the value of the property sold and transferred by Thomas Bolton to Mrs. Bolton and Sherwood. The fact, so assumed, that the merchandise on hand June 15th may not have been reduced by the sales during that time is not very apparent. That, however, is not important for the purposes of the questions here presented. When those books were severally offered in evidence, objections were taken by the defendants Mrs. Bolton and Sherwood to the reception of them as evidence against them, on the ground that the entries contained in the books were hearsay evidence, and, as against them, incompetent. The objections were severally overruled, the books received in evidence, and those two defendants excepted. Those entries in the books were in their nature the declarations of Thomas Bolton, made or caused to be made by him before (so far as appears) any sale to the other defendants was contemplated. They were admissible against him as bearing upon the question of his intent to defraud his creditors other than those to whom he made the sale. Fraudulent intent on the part of a vendor is sufficient to render the sale ineffectual as against his creditors, unless the vendee is a purchaser for value, and when the fraudulent intent of the vendor is shown the burden is cast upon his vendee to prove that he is a purchaser for a valuable consideration. 2 Rev. St. p. 137, §§ 1, 5; Stavin v. Kelly, 88 N. Y. 418. But the declarations of the vendor which may merely tend to impute such intent to him are not admissible as against his vendee. The intent alone of the former, in fraud of his creditors, is effectual to invalidate his sale as against them, when it does not appear that the sale was for a valuable consideration. The entries in question, as they appeared in Bolton’s books, were his ex parte declarations, and were in no sense competent as evidence against the other défendants, and their exceptions to the reception of the entries as evidence against them were well taken. Truax v. Slater, 86 N. Y. 630; Bush v. Roberts, 111 N. Y. 278; 19 St. Rep. 122; Baldwin v. Short, 125 N. Y. 553; 36 St. Rep. 138; Flannery v. Van Tassel, 127 N. Y. 631; 37 St. Rep. 228; Flagler v. Wheeler, 40 Hun, 125; Flagler v. Schoeffel, id. 178. The rule which gives admissibility to the declarations of one of several persons as evidence against all of them is applicable when they are united in a conspiracy, and the declarations are made in aid of the common purpose. Apthorpe v. Comstock, 2 Paige, 482; Dewey v. Moyer, 72 N. Y. 70. Such was the case of Loos v. Wilkenson, 110 N.Y. 195; 18 St. Rep. 110, where it was held that the declarations of one of the defendants were admissible against all of them, because they were in part the means used to accomplish the fraudulent scheme then in progress, and in which all of the defendants were united. The reason of that rule has no application to the question in the present cases, in relation to the declarations of Bolton as represented by the entries made in his books when they appear to have been made. In Brisbane v. Pratt, 4 Denio, 63, the declarations of the former holder of a promissory note were treated as admissible against the plaintiff, because it was held that the latter, as such party, represented the interest of the person whose declarations were in question, and therefore it was against the party in interest that the evidence was offered. That case in some of its features was questioned and practically overruled in Janes v. Chalmers, 6 N. Y. 209. In Van Sachs v. Kretz, 72 N. Y. 548, it was held that the declarations of a bankrupt, made before his bankruptcy, were admissible in support of a claim against his.estate, for the reason that the relation of the assignee in bankruptcy was that of representative of the bankrupt. And in Kennedy v. Wood, 52 Hun, 46; 22 St. Rep. 132, that doctrine was applied to an assignee of a voluntary assignment for the benefit of creditors of the assignor. It is unnecessary, for the purposes of the present case, to inquire whether or not the rule in such cases should be analogous. Vidvard v. Powers, 34 Hun, 221; Bullis v. Montgomery, 50 N.Y. 352. There is no opportunity, upon the evidence, to bring those entries in the book within any purpose common to the defendants, or to apply to them the rule of res gestee. They were made before the sale and purchase appear to have been had in view by the parties. The question, therefore, is whether it is reasonable to assume that the purchasers may have been prejudiced by the introduction of such evidence against them.

As has already been observed, there was evidence tending to prove that the sale was made,'and the property taken in payment of debts owing by the vendor to the purchasers. That being so, the purchase was for a valuable consideration, within the meaning of the statute. Murphy v. Briggs, 89 N. Y. 446. The value of the property was a legitimate fact bearing upon the main issue ; and those entries in the books apparently constituted the evidence upon which it was found by the court, as against the purchasers, that the consideration was inadequate. It is true that in respect to the items of amount of cash paid for labor and salaries ($5,100), and of new accounts charged ($8,500), there was some other evidence to. the same effect. But no other evidence in the record tends to prove anything like the amount of merchandise on hand between June 15, and August 2, 1893, as that indicated by the entries in the books. And, in view of the fact which that evidence tended to prove, it cannot be seen that the result reached by the trial court, as against Mrs. Bolton and Sherwood, may not have been and was not in some sense attributable to it, although it possibly may have been controlled wholly by other considerations. The exceptions to reception of such evidence against those two defendants were well taken, and the error such as to require the direction of a new trial as to them.

The further question, relating to the nature and form of the judgments directed against those defendants, is not considered on this review. If that question had been reached, and any correction found to be necessary, it could have been accomplished by modification.

There was no error as against the defendant Thomas Bolton. The judgments against the defendant Thomas Bolton should 'be affirmed, and as to the other defendants reversed, and new trials granted, costs to abide the final award of costs.

All concur.


source: Caselaw Access Project

author: Hardin, P. J.

license: Public Domain

text:
    William Youmans, Resp’t, v. George H. Paine et al., App’lts.

      (Supreme Court, General Term, Second Department,

      Filed July 26, 1895.)

    1. Trial—Motion to dismiss.
    In the absence of a demurrer, all the pleadings may, upon a motion to dismiss the complaint for insufficiency, be looked into and examined for the purpose of seeing whether a cause of action has been set forth in the complaint, or whether any indefinite allegation of the complaint has been supplied or admitted by the answer.
    2. Pleading—Libel.
    An answer, in an action for libel, which alleges that the publication was privileged, admits that it refers to plaintiff.
    3. Same—Innuendo.
    An averment of the application of the words to the plaintiff needs words of innuendo, only when the words themselves are harmless and innocent until coupled with the plaintiff, in some manner, to his injury.
    4. Libel—Agent’s acts.
    Where a foreman prints and delivers libelous matter in the form of a list of questions, knowing that they are to be circulated for illegitimate purposes among persons to be called as witnesses on a trial, his employer, if he had knowledge of the publication, is liable.
    5. Same—Presumption.
    The presumption of law is that the publication, if false and libelous, is-malicious.
    6. Same—Privilege—Question for jury.
    Where the publication is libelous, the disputed questions of fact as to whether there has been an abuse of privilege and whether the justification of the article in the answer was set up in good faith, are for the jury to determine.
    1. Same—Malice—Burden of proof.
    It is only in case where the defamatory article is proven to have been privileged that the burden of showing actual malice is cast upon the-plaintiff.
    Appeal from a judgment entered on a verdict in favor of plaintiff, and from an order, denying a motion for a new trial made on a case and exceptions.

      0. W. Smith and M D. Wagner, for app’lts; W. & G. W. Youmansfor resp’t.
   Hardin, P. J.

Upon a former appeal from a nonsuit granted in this case, this court granted a reversal of the judgment then entered upon the nonsuit, and ordered a new trial. Youmans v. Smith, 69 Hun, 613; 52 St. Rep. 935. Since the trial, the learned judge who presided at the circuit, upon hearing a motion for a new trial on the case and exceptions, delivered an elaborate opinion discussing the various questions arising in the case, and I am inclined to advise an affirmance, upon the opinion so delivered bj the trial judge. See, also, Griebel v. Rochester Printing Co., 60 Hun, 319; 38 St. Rep. 788.

Judgment and order affirmed, with costs, upon the opinion delivered by the trial judge.

Martin and Merwin, JJ., concur.

The opinion of Mr. Justice Forbes denying the motion for a new trial is as follows:

This is an action to recover damages for libel. The case was tried at the Delaware circuit September 6, 1893, before a jury, and a verdict was rendered for the plaintiff for $1,000. A motion was made for anew trial upon the minutes, and the argument was heard upon a case and exceptions made upon an order and settled by the judge presiding at the circuit. There are two questions presented upon this motion : The first is that the complaint does not state facts sufficient to constitute a cause of.action; the second, that there was no proof upon the trial, as shown by the record, that the defendants printed or published the alleged libel. The libelous article is set out in the complaint in full. A motion was made, at the opening of the trial, and also at the close of plaintiff’s case, to dismiss the complaint, upon the ground that the complaint does not state facts sufficient to constitute a cause of action, and assigning, as a reason therefor, that there is no allegation in the complaint showing that the article published refers to the plaintiff in this action.

The complaint was not demurred to, and, for that reason, upon the trial, all of the pleadings may be looked into and examined for the purpose of seeing whether a cause of action has been set forth in the complaint, or whether any indefinite allegation of the complaint has been supplied or admitted by the answer. In other words, “the pleadings are always before the court upon the trial, and are particularly in evidence, whether introduced in form or not.” Holmes v. Jones, 121 N. Y. 461; 31 St. Rep. 379. In the case at bar, the complaint fully sets forth, by a direct averment, that the article was printed and published by the defendants, of and concerning the plaintiff, and that this was done maliciously, for the purpose and with the intent to injure the plaintiff. The answer expressly admits the printing of the article by the defendants ; but they deny that it was printed or published by them with malice, or with an intent to injure the plaintiff. The answer also sets forth in detail all of the facts and circumstances relied upon by the defendants to show a want of malice on their part, for the purpose of showing that the publication is privileged, in effect admitting that it was published of and concerning the plaintiff. If it were any longer necessary, under section 535 of the Code of Civil Proceedure, to plead by innuendo the application of the language used, the complaint and answer taken together leave no doubt as to the character of the issue framed. Fairchild v. Lynch, 9 Wkly. Dig. 181. It was there held, “ When the facts upon which a defense rests appear in the complaint, it is not necessary that they should be pleaded in an answer in order to entitle the defendant to the benefit of them.” A portion of section 535 of the Code of Civil Procedure reads as follows : “ It is not necessary, in an action for libel or slander, to state in the complaint any extrinsic fact, for the purpose of showing the application to the plaintiff of the defamatory matter; but the plaintiff may slate generally that it was published or spoken concerning him, and, if that allegation is controverted, the plaintiff must establish it upon the trial.” Palmer v. Bennett, 83 Hun, 220; 64 St. Rep. 167. This fact was not controverted, but was admitted by the answer. This is not a case in which it may be ■assumed that the words, if published by the defendants, are harmless. The case of Hemmens v. Neleon, 138 N. Y. 517; 53 St. Rep. 94, does not apply to the proposition made by the defendants’ counsel upon the motion made to dismiss the complaint.

An averment of the application of the words to the plaintiff needs words of innuendo only when the words themselves are harmless and innocent until coupled with the plaintiff, in some manner, to his injury. In such a case, the court still holds that innuendoes are necessary. See 138 N. Y. 517; 53 St. Rep. 94.

The second proposition submitted upon the argument is equally difficult to sustain in favor of the defendants. The defendants, by their answer, practically, specifically admit the publication of the alleged libel, and in their answer, as a separate defense to the publication, reiterate a portion, of the libelous article, and justify its publication by them; and they cannot be heard, upon this motion, nor could they have been heard upon the trial of the case, to deny the admission made by the answer. Getty v. Town of Hamlin, 46 Hun, 1; 11 St. Rep. 96; Ferris v. Hard, 135 N. Y. 354; 48 St. Rep. 518. There was evidence upon the trial to show that Bell and both of the defendants, as well as the plaintiff, lived, at the time of the publication of this article, in the village of Delhi, and, from the evidence upon the trial, the jury had the right to infer that the defendants had knowledge of the unfriendly relations existing between Bell and the plaintiff. Notwithstanding the fact of this knowledge, more or less made public by the proceedings to disbar Youinans, the defendants’ agent and foreman printed and placed in Bell’s possession the alleged libelous article, with full knowledge, at the time, that the printed slips were to be used by Bell for illegitimate purposes. He swears that he was told by Bell, at the time they were printed, that they were tobe furnished to witnesses to be produced upon the trial before the referee. And, while it may be said that Mr. Bell had the right to employ the defendants to print certain questions which he desired to use professionally upon the trial, it cannot be assumed that the spreading broadcast, among witnesses to be called, of questions of the character of those printed and published, is the circulation of privileged communications, or that conduct of that character, “ horse-shedding the witnesses,” is either professional or innocent. The evidence shows that the defendants admitted to the witness Youmans knowledge of this publication. It is claimed, on the part of the defendant, that at least one of the defendants had, for a long time prior to the publicatian of this article, been unfriendly to him, so that the manner of its publication, and all of the facts concerning the printing and delivery to Bell, for the purpose for which the article was to be used, were all questions for the jury in determining bow far the defendants had knowledge and were actuated by malice.

The presumption of law is that the publication, if false and libelous, was malicious. Warner v. Press Publishing Co., 132 N. Y. 181; 43 St. Rep. 633. That presumption was sought to be rebutted by the defendants, upon the trial of the case, by showing that they had no personal knowledge of the publication, and, in fact, that whatever was done was done by their agent. It must be assumed, under the answer, and from the fact of the justification therein, that they became liable for the act of their agent, and stood upon that justification as a defense. The agent was acting in the course of his employment. Fogg v. Corporation, 148 Mass. 513; Id. 12 Am. St. Rep. 583, and note.

The case was fairly submitted to the jury, in all of its bearings, as a question of fact. 132 N. Y. 181; 43 St. Rep. 633. The court having held that the publication was libelous, the disputed question of fact as to whether there had been an abuse of privilege was one for the jury to determine. Id. The jury also had the right to determine, as a question of fact, whether the justification of the article by the answer was set up in good faith. Marx v. Press Publishing Co., 134 N. Y. 561; 47 St. Rep. 775. It is only in case where the defamatory article is shown to have been privileged that the burden of showing actual malice is cast upon the plaintiff. Hemmens v. Nelson, 138 N. Y. 517; 53 St. Rep. 94. It is true that the jury had the opporeunity to say, under proper instructions by the court, upon the disputed evidence, that the communication was privileged; that the article was published in good faith; and that the defendants were not actuated by malice. This they refused to find, and it cannot now be said that they disregarded the instructions of the court upon that subject, and found contrary to those instructions. Sweetman v. Prince, 62 Barb. 256. The motion for a new trial must, therefore, be denied, with costs to abide the event of the action. 6


author: Brown, P. J.

text:
    Eliza W. Randall, Resp’t, v. Arington H. Carman, as Assignee, etc., App’lt.

      (Supreme Court, General Term, Second Department,

      Filed July 26, 1895.)

    Mortgage—Chattel—Fraudulent.
    A chattel mortgage, which permits the mortgagor to sell the stock of a retail store in the usual manner and, out of the profits of the business, pay a certain sum to the mortgagee monthly, or more or less according to the profits, is in fraud of the mortgagor’s creditors.
    Appeal from a judumenfc in favor of plaintiff.
    This action was brought to foreclose a chattel mortgage bearing date June 20,1892, given by one Seward S. Smith to the plaintiff’s assignor, one Henry L. Randall, to secure the payment of a part of the purchase price of a stock of goods sold by said Randall to said Smith. The condition of the mortgage was to pay $2,300, ‘ according to the terms of a promissory note executed simultaneously therewith, and by its terms it covered the stock of goods in the store leased by Smith from Randall, and “all such goods and merchandise as said Seward S. Smith may hereafter acquire and put into said store to enable him to continue his said business.” It also provided that, until default, the mortgagor should continue “in the quiet and peaceable possession of the said goods and chattels, and the full and free enjoyment of the same.” The following is a copy of the promissory note referred to in the mortgage: “ $2,300. Port Jefferson, N. Y., June 20, 1892. For value received I promise to pay to the order of Henry L. Randall, the sum of twenty-three hundred dollars in manner following, to wit, the sum of fifty dollars during each and every month until said principal sum shall be paid, or as near said sum monthly as the profits of his store business will warrant, the whole sum to be paid not later than the 1st day of July, 1897.” The note and mortgage were executed and delivered pursuant to a written agreement for the sale of the stock of goods, and which provided among other things that the balance of the purchase money was “to be secured by a chattel mortgage to cover said stock of goods, and all after-acquired goods for sale in said store, and said debt to be paid in installments of $50 per month, or as near said sum as the profits of the business will warrant. The said Seward S. Smith agrees to keep said stock up to its present variety and amount, and, in case of failure to do so, said Henry L. Randall may exercise his rights under the chattel mortgage to be executed. Said chattel mortgage shall bear the date of this agreement, and said lease shall bear date the 1st day of September, 1892.” On August 3, 1892, Smith executed to the defendant, Carman, a general assignment for the benefit of creditors. During the time he was in business he kept the stock up in variety and amount to what it was at the time of the sale. His sales during that period amounted to upward of $24,000, and he paid upon the note apd mortgage the sum of $437. It was the claim of the assignee that the mortgage was void as against the creditors of the mortgagor, but the court held that it was a valid lien upon such part of the original stock of goods as was transferred to the assignee.

      T. M. Griffing, for app’lt; Thomas J. Bitch, Jr., for resp’t 1
   Brown, P. J.

The trial court decided that the provision in the mortgage relating to after-acquired property rendered it, as to such property, void against the assignee. He found, however, that the execution and delivery of the mortgage was an honest transaction, and held the mortgage to be a valid lien upon such of the mortgaged property as was transferred to the assignee; and the question presented upon this appeal is whether this latter ruling can be sustained, in view of the undisputed agreement between the parties relating to the mortgagor’s power to sell the property. The rule has been settled by numerous authorities that an agreement between the mortgagee and mortgagor that the latter may sell the mortgaged property for his own benefit will render the mortgage void as to the mortgagor’s creditors, and it is immaterial whether the agreement is expressed in the mortgage itself or exists by tacit understanding and arrangement between the parties. Mandeville v. Avery, 124 N. Y. 376; 36 St. Rep. 338; Reynolds v. Ellis, 103 N. Y. 115; Potts v. Hart, 99 id. 168; Southard v. Benner, 72 id. 424; Robinson v. Elliott, 22 Wall. 524. There is nothing in Brackett v. Harvey, 91 id. 214, which is in conflict with this rule. That case decided that a chattel mortgage was not rendered void by an agreement by which the mortgagor was permitted to sell the mortgaged property and apply the proceeds to the payment of the mortgage debt, and, as subsidiary thereto, an agreement by the mortgagee to take and apply on the debt good business paper given to the mortgagor on sales made on credit, and that the mortgagors might use a part of the avails of such sales to relinquish their stock, the substituted property being placed under the lien of the mortgage by monthly renewals thereof. The rule that agreements which permit a mortgagor to sell for his own benefit are necessarily fraudulent was distinctly recognized by the court. Such agreements, it was said, “strip the mortgage of its whole force as a security to the holder, and made it merely a shield to the debtor.” In this case it is a necessary conclusion from the provision of the mortgage, the note, and the written agreement between the parties for the purchase and sale of the store, that the mortgagor was to sell the stock in the usual way of a retail store, and out of the profits of the business pay to the mortgagee $50 a month, or more or less, according as the profits warranted a larger or smaller payment. Such an agreement we think was necessarily fraudulent. The provision for the payment of $50 from “ the profits” implies an agreement that the mortgagor may, out of the proceeds of the sale of the mortgaged property, pay the rent of the store and the expenses of the business. This was a provision for him to use the property for his own benefit. However, there was no restriction as to sales on credit, and bad debts contracted from sales so made would necessarily be considered at some time before the maturity of the mortgage in determining the profits of the business. The mortgagor was at liberty to have sold out thé whole of the mortgaged property on credit. The accounts of such sales would not, under the agreement between the parties, be transferred to the mortgagee and applied upon his debt, but would be collected by the mortgagor and paid over to the mortgagee only in case the “profits” of the whole business warranted it. That an agreement which would permit such results is fraudulent as to creditors of the mortgagor is beyond question. Jones, Chat. Mortg. (4th ed.) § 401; Bank v. Westbury, 16 Hun, 458. It tends to mislead, delay, and hinder creditors in collecting their debts, and, as was said in Brackett v. Harvey, supra, “opens the door to fraud and permits the mortgagor to use the property for his own benefit, utilizing the mortgage as a shield against creditors.”

The judgment must be reversed, and, as a new trial would be useless, the complaint is dismissed, with costs.

All concur.


author: Pratt, J. Dykman, J.

text:
    James A. Baker, Resp’t, v. Albert B. Byrn et al., App’lts.

      (Supreme Court, General Term, Second Department,

      Filed July 26, 1895.)

    Judgment—Fraudulent—Vacation.
    Where a mortgagor pays the amount of the mortgage to an assignee, but does not have either the assignment or satisfaction of the mortgage recorded, and another party, with knowledge of these facts and intent to defraud the mortgagor, subsequently procures an assignment of the mortgage and forecloses it by publication, the mortgagor, in case he had no knowledge of the foreclosure action, can maintain an action to set aside the foreclosure judgment as against a purchaser at such sale, who bought with knowledge of all the facts.
    Appeal from art interlocutory judgment, overruling a demurrer to the complaint.

      George W. Stevens, for app’lts; H. M. & D. P. Hall (Howland M. Hall, of counsel), for resp’t.
   Pratt, J.

We think that this demurrer was properly overruled. This disposition of the case does not militate against the application of the general rule that a judgment between the same parties cannot be attacked collaterally. The precise point here is that this judgment is not between the same parties, and this is not a collateral attack. The purchaser, Marcus L. Byrn, who is now in possession of the land which plaintiff claims to own, and which he undoubtedly at one time did own, was not a party to the foreclosure suit. He bought at the foreclosure sale with notice, as plaintiff alleges, of the fraud of which plaintiff complains. Plaintiff alleges that he bought the premises in question subject to a mortgage held by Bowne, which Bowne subsequently assigned to Reid, and that he paid off the mortgage debt, principal and interest, to Reid or his representatives; that Reid did not record his assignment, nor did plaintiff, and the satisfaction piece was not filed; that in 1887, nearly twenty years later, defendant Albert Byrn, with intent to cheat plaintiff, procured an assigment of the mortgage from Bowne, which he recorded, and thereupon began the foreclosure suit, making plaintiff a party defendant and proceeding by publication ; that plaintiff was never served with process, and heard nothing of this suit until long after the foreclosure judgment and sale,—indeed, until just prior to the commencement of the present action; that the premises were sold, and were purchased by defendant Marcus L. Byrn, who was not a party to the foreclosure suit, but who purchased with knowledge of the facts on which plaintiff relies, etc. Of course, plaintiff might have appeared in the foreclosure suit, if he had known of it, and, on proof of his present allegations, would have beaten that plaintiff. But he did not know of that suit. On his allegations the institution of the suit—indeed, the procurement of the assignment from Bowne on which it was based—-was a fraud upon him. The entry of the judgment in his absence and without his knowledge was no less a fraud, and still operated as a fraud. True, as against that plaintiff, he might obtain relief by motion in that suit. But the purchaser under that judgment is now entitled to be heard, not simply on affidavits and in the usual haste of a motion, but deliberately, with that care and consideration which we give to trials, especially trials involving allegations of fraud. If plaintiff had sued Marcus L. Byrn in ejectment very likely he would have been estopped by this judgment in foreclosure. He is bound to take no such risk. He by this action attacks this judgment and proceedings thereunder directly. They give color of title to his property, and, if valid, one of these defendants may deprive him of his property. We feel clear that such an action is proper, both in principle and authority.

Judgment affirmed, with costs, but with leave to answer within twenty days on payment of costs.

Brown, P. J., concurs.

Dykman, J.

(concurring)—This is an appeal from a judgment entered upon an order overruling a demurrer interposed by. the defendants to the amended complaint of the plaintiff. The demurrer was for insufficiency. The action was brought to set aside as fraudulent a judgment of foreclosure and sale entered in the supreme court in the county of Queens on the 6th day of February, 1888, by the defendant Albert B. Bryn, under which the land of the plaintiff was sold, and the defendant Marcus L. Byrn became the purchaser. The complaint states, substantially, that the plaintiff purchased the lots in 1862, at which time they were subject to a mortgage made by one Warner to one Yan Mater, dated March 31, 1857, and due by its terms March 31,1862. This bond and mortgage was assigned to one James Bowne, July 3,1857, and was assigned by Bowne to one Reid, April 1, 1858. On July 20, 1868, the plaintiff paid the bond to Reid’s representatives, and took up the bond and mortgage, and has had them in his possession since that time. On the 24th day of August, 1887, the defendant Albert B. Byrn, finding the record of the mortgage uncan- ' celed, procured an assignment from James Bowne of all his right, title and interest in the bond and mortgage in question, and thereupon proceeded to foreclose the mortgage. An order for publication of the summons was obtained dispensing with depositing the same in the post office, and the summons was served by publication. Upon the reference to a referee to take proof of the facts and circumstances stated in the complaint, the plaintiff herein being an absent defendant in that action, peroof of the mortgage and assignment thereof was made by reference to the records of Queens county, and of the bond by reference to the record of the mortgage which recited a bond. The plaintiff had removed <to' the. state of New Jersey in 1864, and was wholly ignorant of the proceedings taken to deprive him of his property. The plaintiff alleges that the assignment of the mortgage from James Bowne was procured with the intent to cheat and defraud him out of his property by a fraudulent and pretended foreclosure of the mortgage which, though uncanceled, was then paid.

It is further alleged that, in pursuance of that intent to cheat and defraud the plaintiff, the action to foreclose the mortgage was commenced by the defendant Albert A. Baker, and all persons or owners unknown claiming an interest in the premises sought to be foreclosed in that action. It is further alleged in the complaint that the plaintiff was ignorant of the several attempts taken for a foreclosure of the mortgage until very recently. It is further stated that the plaintiff is informed and believes that the attempted assignment of the bond and mortgage by James Bowne to the defendant Albert B. Byrn, unaccompanied by the bond and mortgage, was wholly null and void, and of no effect, and that the judgment and decree for the foreclosure of mortgage was obtained by fraud, and in pursuance of an intent to cheat and defraud the plaintiff out of his property, and by a series of gross impositions upon this court, of which the defendant Marcus L. Byrn had full notice and knowledge. The principal insistance on the part of the defendant in favor of the demurrer is that relief should have been sought in the foreclosure suit, and he cites a class of cases in which the courts have refused to entertain an action to nullify a judgment when the relief sought would require a retrial of the case already tried in the original suit. Such was the case of Railroad Co v. Harrold, 65 How. Prac. 89. But such cases have no application here.

The trial of this action requires proof of an original fraud, concocted and perpetrated against the plaintiff and upon the court. Chancellor Kent, in the case of Foster v. Wood, 6 Johns. Ch. 87, states the rule and its application as follows:

“ The rule is that chancery will not relieve against a judgment at law on account of its being contrary to equity unless the defendant in the judgment was ignorant of the fact in question pending the suit, or it could not have been received as a defense, or unless he was prevented from availing himself of the defense by fraud or accident or the act of the opposite party, unmixed with negligence or fault on his part.”

Again, it is said in Ross v. Wood, 70 N. Y. 10:

“ The fraud which will justify equitable interference in setting aside judgments and decrees must be actual and positive, and not merely constructive. It must be that which occurs in the very concoction of procuring of the judgment or decree,—something not known to the opposite party at the time, and for not knowing which he is not chargeable with negligence.”

It is said in the case of Whittlesey v. Delaney, 73 N. Y. 571, that: “ Whenever a party, liable to be injured by a judgment tainted by fraud, has had an opportunity to protect himself, a court of equity is open to him.”

In the case of Michigan v. Phoenix Bank, 33 N. Y. 26, it is said: “ It is needless to multiply cases showing that the courts, upon bill filed, will set aside as nullity a judgment, decree, or award obtained by fraud.”

In the case of U. S. v. Throckmorton, 98 U. S. 67, it is said: “When an unsuccessful party has been prevented from exhibiting fully his case by fraud or deception practiced upon him by his opponent, as by keeping him away from court, by false promise of a compromise, or where the defendant never had knowledge of the suit, or when the attorney corruptly sells out his client’s interest to the other side,—these and similar cases, which show there has never been a real contest or hearing of the case, are reasons for which a new suit may be sustained to set aside and annul a former judgment.”

This case falls within the authorities cited, and the complaint states a cause of action. The appellant insists that the judgment is conclusive, but it is to be observed that nothing is conclusive in law which is procured by fraud, for fraud vitiates everything into which it enters. The fraudulent manufacture of a claim, and of evidence to secure a judgment upon it, cannot escape the vigilant eye of a court of equity, which is always open to a party injured by a judgment obtained by fraud. Our conclusion, therefore, is that the judgment should be affirmed, with costs.


author: Rumsey, J.

text:
    Catharine Ann Brisay, Plaintiff, v. Star Company, Defendant.

      (Supreme Court, Kings Special Term,

      Filed June, 1895.)

    1. Corporation—Ultra vires.
    Under § 3 of 1 R. S. 600, a contract by a corporation, organized to publish a newspaper, to pay a certain sum to the heirs of any person killed, on whose body a coupon from its newspaper is found, is ultra vires.

    3. Same.
    An act ultra vires cannot be made the basis of any claim against the corporation.
    3. Same—Ratification.
    No ratification can make good such act.
    4 Same—Defense.
    The rule that a corporation cannot avail itself of the defense of ultra vires when the contract has been in good faith fully performed by the other parly and the corporation has had full benefit of the performance and of the contract, has no application where such other party has not parted with anything on the faith of the contract or the corporation received any benefit therefrom.
    Motion for a new trial.

      L. J. Morrison, for pl’ff; Edward Kent, for deft.
   Rumsey, J.

The defendant is a corporation of this state, organized under chapter 40 of the laws of 1848, for the printing, publishing and selling of a newspaper. It was engaged in publishing a newspaper in the city of New York known as the Morning Advertiser. At several times in the month of May, 1892, the defendant caused to be published in the Morning Advertiser a notice, of the essential parts of which the following is á copy :

“$500.00 Free Insurance.
Friday, May 16th, 1892,
The Morning Advertiser

Will pay $500 to the legal heir or next of kin of any person who meets death by accident while in the pursuit of ordinary vocation, provided that at the time the person so dying has upon his- or her body this.coupon, dated as above, or a copy of the Morning Advertiser of current date. This coupon holds good for twenty-four hours, or from. 3 A. M. of the date named to 3 A. u. of the following day. Satisfactory proofs of each claim must be-presented within forty-eight hours at the business office of the Morning Advertiser. This insurance holds good to out of town purchasers and subscribers twenty-four hours after the arrival of the paper at their post office, in due course, by mail or express.”'

On the 16th of May, 1892, the plaintiff’s son, Thomas Brisay, while engaged in his vocation of driver of a mineral wagon, fell from the wagon, dead. In his pocket was one of these notices, which had been cut from the Morning Advertiser of that day, and bore upon its face the date, Friday, May 16, 1892. In due time, as required by the notice, Mrs. Brisay caused to be served upon some official connected with the Morning Advertiser, at its office,, satisfactory proofs of her claim for the death of her son, and demanded the payment of the $500, which was refused, and thereupon she brings this action. Upon the trial, various objections were taken to the maintenance of the action by the plaintiff, but there was no disputed question of fact. A verdict was therefore ordered for the plaintiff, and, upon the direction of the court, the defendant makes this motion for a new trial upon the minutes, that the questions presented may more conveniently be considered.

The principal objection made by the defendant to the plaintiff’s-recovery is that the contract is ultra vires. If this objection is well taken, and because of it the plaintiff is not entitled to recover, it disposes of the whole case, and none of the other objections need be considered. As is stated, the defendant is a corporation organized under chapter 40 of the Law's of 1848, providing for the-organization of business corporations in general. It was organized In 1888, and the death of Thomas Brisay, by virtue of which the-plaintiff’s right of action acciued, if she has any, took place on the 16th day of May, 1892. The rights of the parties are to be controlled by the statutes as they existed at that day, and are not governed by the general corporation law or the business corporation law, passed in 1892, but which became laws on the 18th day of May. The statute under which the defendant is organized provides that the objects for which the company is created shall be stated in the certificate which is filed in the office of the secretary of state. That certificate provides that the objects for which the defendant is formed are the printing, publishing and selling of newspapers. The law of 1848 prescribes, also, that every corporation created under it shall possess the general powers and privileges, and be subject to the liabilities and restrictions, contained in the Revised Statutes with regard to the powers, privileges and liabilities of corporations. The first section of that statute prescribes that no corporation shall possess or exercise any corporate powers, except such as shall be necessary to the exercise of the powers given to it by its charter. 1 Rev. St. 600, § 3. The charter of this corporation is, of course, the certificate filed in the office of the secretary of state; and the powers given to it are such as-are necessarily incident to the printing, publishing and selling o£ newspapers, and it has no other powers, except such as are incident to that occupation. The notice which was published in the Morning Advertiser, and which is set out in the former part of this opinion, was, as it states, .a proposition to give $500 insurance to every person who performed the conditions prescribed in the offer. If this offer was so accepted as to ripen into a contract, as the plaintiff claims that it was, it amounted to a contract on the part of the Morning Advertiser to insure the life of Thomas Brisay for $500, for the benefit of his next of kin. It cannot be said that any such contract as that was a necessary incident to the power of printing or publishing or selling a newspaper, but it was something entirely outside of the business which is usually conducted by such publishers. The right of corporations to make contracts is confined to such contracts as are incident to the objects for which the are organized. This special limitation is not only created by the statute which has been cited above, but it was the rule of the common law, and it was well settled in both this country and in England, that contracts of corporations are ultra vires when they involve adventures or undertakings outside, and not within, the scope or power given by their charters. As artificial creations, corporations possess only the powers with which they are endowed. Jemison v. Citizens' Sav. Bank, 122 N. Y. 135; 33 St. Rep. 335. To make the act of a corporation ultra vires, it is not necessary that it should be prohibited by the charter from performing the act. If the act is one which is outside of the objects for which the corporation is created, and cannot be said to be incident in some way to the execution of its powers, the act is nevertheless void, although it may not have been, in terms, forbidden by the statute. 2 Kent, Comm. (13th ed.) 300, note 1. It is no matter if the act done may be said to be, in some sense, a benefit to the corporation. It is, nevertheless, void, unless it is within the power of the corporation to perform it. Davis v. Railroad Co., 131 Mass. 258. The makjng of this contract, being thus outside of the objects for which this defendant corporation was organized, was clearly beyond its power, and is, therefore, void. As such, it cannot be enforced by the plaintiff unless some principle of law can be invoked, by means of which the corporation can be charged with the burdens of this contract, although it was beyond its power to make it in the first instance. There are many cases in the books in which a corporation has been charged upon a contract which Was held to be ultra vires. But this has been done, usually, upon the principle of estoppel. The leading case upon that subject in this state is Whitney Arms Co. v. Barlow, 63 N. Y. 62. In that case the defendants were sued, as trustees of a corporation, because of a failure to make, publish and file the annual report. The plaintiff claimed to be creditor of the corporation, under contract, by which'it had made and delivered to the defendant 10,000 locks. The defense was, among other things, that the plaintiff was not a creditor, because the making' of the locks was not one of those things for which the plaintiff company was incorporated, and, therefore, was ultra vires. For that reason it was claimed that no contract liability arose between the plaintiff and the company of which the defendants were trustees.' The court held that' the making of locks was not within the purposes for which the plaintiff was incorporated, nor incidental to those purposes, and. therefore, was beyond its powers, but that as the locks had been made and delivered to the defendant’s corporation, and, therefore, the contract had been fully performed by the plaintiff, the defendants, who had received from the corporation the full benefit of the performance of the contract, could not avail themselves of the plea that the objects of the "contract were beyond the power of the plaintiff. It was said there that the rule was well settled that a corporation could not avail itself of the defense of ultra vires when the contract has been in good faith fully performed by the other party, and the corporation has had the full benefit of the performance and of the contract. But that is not this case. There was no allegation, nor was there any proof, that either Thomas Brisay or the plaintiff had parted with anything on the faith of this offer, or that the corporation had received any benefit which would make it inequitable for the corporation to insist that the supposed contract was beyond its powers. But, even if that were mot so, it is very doubtful whether there are not some contracts of a corporation which are so far beyond its powers to make that the doctrine of estoppel cannot be revoked to make them good. The term “ ultra vires ” is used in more than one sense. In the first place, an act of a corporation is said to be ultra vires when it is not within the scope of the powers of the corporation to perform it under any circumstances, or for any purpose. An act is also said to be ultra vires, with reference to the rights of certain parties, when the corporation is not authorized to do the act without their consent. And the third, with reference to some specific purpose, when the corporation is not authorized to perform- the act for that particular purpose, although the act itself may be, for some purposes, fully within the scope of the general powers of the corporation. In the last two cases, one who deals in good faith with a corporation having the apparent right to do the act, and who parts with anything of value to the corporation, as a consideration for its promise, is permitted to say that the corporation is estopped from insisting that the act which was done for its benefit was beyond its power, and he will be at liberty to recover the value of the articles furnished or the work done for the corporation. Tracy v. Talmage, 14 N. Y. 162; Whitney Arms Co. v. Barlow, supra; Farmers' Nat. Bank v. Sutton Mfg. Co., 6 U. S. App. 312; 3 C. C. A. 1; 52 Fed. 191. But every one who deals with a corporation is bound to take notice of its corporate powers, and, if a reference to its charter shows that the act is not within the scope of its corporate authority, he must know that such act is void, and that it cannot be made the basis of any claim against the corporation; Jemison v. Citizens' Sav. Bank. 122 N. Y. 135; 33 St. Rep. 335; Davis v. Railroad Co., 131 Mass. 258; for, as is said by the court in Peterson v. Mayor, etc., 17 N. Y. 449, 454, no sort of a ratification can make-good the act which is without the scope of corporate authority. "The authorities on this subject have been so thoroughly examined, and the questions are so fully settled, that it is hardly necessary to pursue the discussion. Davis v. Railroad Co., 131 Mass. 258; Iron Co. v. Riche, L. R. 7 H. L. 653. The two cases-just cited have been followed in this state in the case of Jemison v. Bank, supra. Within the cases above cited, and many others which are referred to by them, there can be no doubt that this-contract was entirely outside of the corporate powers of this corporation. For that reason, without considering any other of the numerous questions presented, it must be held that the plaintiffs cannot recover in this action. A new trial must therefore be-granted.

Ordered accordingly.


author: Bartlett, J.

text:
    Frederick Erbe, Pl’ff, v. William T. Monteverde, as Police Justice, etc., Def't.

      (Supreme Court, Kings Special Term,

      Filed October, 1895.)

    1. Police justice— Jurisdiction—Sabbath.
    A police justice has jurisdiction to try in a summary manner one-charged, under section 295 of the Penal Code, with Sabbath breaking.
    2. Same—Newtown.
    A person tried before a police justice of Newtown, for Sabbath breaking, is entitled to a jury trial if he elects to be tried by a jury.
    Original application for writ of prohibition to the police justice of Newtown.

      Clarence Edwards, for motion; George C. Moore, opposed.
   Bartlett, J.

This application presents the question whether magistrates in this state still possess the power to proceed summarily upon complaints against persons charged with a violation of the laws relative to the observance of Sunday. Summary proceedings against such offenders are expressly authorized by the Revised Statutes. The eighth article of title 8 of chapter 20 of part-1 of the Revised Statutes related to the observance of Sunday. It was repealed in 1886. The ninth article, however, was left in force, and provides, in section 73, as follows:

“ Whenever complaint shall be made to any justice of the peace, mayor, recorder or alderman, of a violation of either of the provisions contained in the three last articles relative to profane swearing, the disturbance of religious meetings or the observance of Sunday, or when any of such violations shall happen in the presence of such officer, he shall cause the offender to be brought before him, and shall proceed summarily to inquire into the facts; and if the person charged be found guilty, a record of his conviction shall be made and signed by such officer^ before issuing any process to enforce the same; which conviction shall be final and shall not be re-examined upon the merits in any court.” 3 Rev.. St. (Banks’ 8th ed.) 2225.

The offense of Sabbath breaking is now defined in the Penal Code, and the penalties for Sabbath breaking are prescribed therein. The petitioner is charged with having violated section 265 of that Code, which prohibits all shooting, hunting, fishing, playing, horse racing, gambling, or other public sport, exercises, or shows upon the first day of the week. The jurisdiction of the police justice of the town of Newtown to try him in a summary manner for this crime is sought to be sustained in the first place by reference to the section which I have quoted from the Revised Statutes. That section authorized the summary conviction of offenders against the provisions of a preceding article concerning Sunday observance. The preceding article has been repealed, but the argument is that we should now construe the section relative to summary jurisdiction as applying to the provisions of the Penal Code concerning Sabbath breaking, which have replaced those of the Revised Statutes on the same subject. This argument finds support, in the second place, in an existing provision of the Penal Code. The penalties for Sabbath breaking are prescribed by section 269 of the Penal Code, which declares the offense to be a misdemeanor punishable by a fine of from five to ten dollars, or imprisonment in the county jail for not more than five days, or by both such fine and imprisonment. The next section (270) is in these words :

“In addition to the penalty imposed by the last section, all property and commodities exposed for sale on the first day of the week in violation of the provisions of this chapter shall be forfeited. Upon conviction of the offender by a justice of the peace of a county, or by any police justice or magistrate, or by a mayor, recorder or alderman of a city such officer shall issue a warrant for the seizure of the forfeited articles, which when seized shall be sold on one day’s notice and the proceeds paid to the overseers of the poor, for the use of the poor of the town or city.”

The words which I have underlined distinctly assume the existence of the power on the part of the magistrates named to try and convict persons accused of Sabbath breaking. I can find no warrant for holding that the jurisdiction to proceed summarily in such cases still belongs to these officers, unless the provisions of the Revised Statutes quoted at the beginning of this opinion, and applicable in terms to violations of an article which has been repealed, are to be deemed applicable to violations of the sections of the Penal Code in respect to the observance of Sunday. With some hesitation,-1 have reached the conclusion that they are thus applicable. The legislature must have intended section 73 in the Revised Statutes to have some effect, or it would not have left that section in force in 1.886, when it repealed the preceding article concerning Sunday observance. No effect can be given to the section now, so far as it relates to this subject, unless it is read in connection with those portions of the Penal Code which deal with Sabbath breaking. In the Penal Code itself is language which assumes the continued existence of the summary jurisdiction of magistrates in this class of cases. Such jurisdiction seems to have been exercised in one case, at all events, since 1886, where the conviction was sustained in the court of appeals. People v. Moses, 140 N. Y. 214; 55 St. Rep. 403. I have examined the appeal book in that case. It states that the defendant was convicted by a justice of the peace holding a court of special sessions. I do not find Sabbath breaking, however, enumerated among the offenses of which a court of special sessions, outside of New York and Albany, has jurisdiction. Code Cr. Proc. §§ 56, 59. It would appear, therefore, that the conviction must be deemed to have-been a summary conviction by a magistrate, proceeding under the Revised Statutes for the punishment of Sabbath breaking under the Penal Code. Otherwise, I do n'ot see how the justice of the peace could lawfully have tried the case at all.

While it is true that the statutory jurisdiction to punish for crime must be plain, and not left to doubtful inference, yet the rule that statutes in pari materia are to be construed together, so as to harmonize, if possible, and give effect to the intent of the legislature, applies to statutes concerning crimes and criminal procedure as well as to other statutes; and in the light of this rule, and for the reasons given, I think that justices of the peace generally may entertain summary proceedings for the punishment of Sabbath breaking, as defined in the Penal Code. But the act under which the respondent was elected police justice of Newtown is peculiar. While it allows him to try all criminal cases that may, by law, be tried by a justice of the peace, it authorizes him to do this only “as a court of special sessions.” Laws 1873, chap. 159, § 2. Hence the provisions of the Code of Criminal Procedure apply which regulate-proceedings in courts of special sessions, and the relator, having duly elected to be tried by a jury, is entitled to a jury trial.

Writ of prohibition granted, so far as to forbid the respondent to proceed, except as a court of special sessions, allowing the relator a trial by jury. Ordered accordingly.


author: Garretson, J.

text:
    The People, Resp’t, v. Henry Daufkirch, App’lt.

      (Court of Sessions, Queens County,

      Filed June, 1895.)

      Clarence Edwards, for app’lt; Daniel Noble, List. Atty., for People.'
   Garretson, J.

Under the authority of Erbe v. Monteverde (decided by Bartlett, J., at Kings county special term, Oct. 31, 1894) 69 St, Rep. 476, the police justice erred in refusing to allow the defendant a trial by jury, and the judgment upon conviction, appealed from, should be reversed.

Judgment reversed.


author: Arnold, S.

text:
    In the Matter of Application of Jeanne Marie Nellie Genin Gregory to Vacate a Decree Admitting to Probate Will of Nelson Gregory, Deceased.

      (Surrogate’s Court, Otsego County,

      Filed June, 1895.)

    1. Will—Probate—Citation of adopted child.
    Where proceedings for the adoption of an illegitimate child have been taken by the testator to the knowledge of the petitioner or his attorney, they have no right to pass upon the adoption papers and hold that she was not a legally adopted child, but she is entitled to be cited in the proceeding for the probate of the alleged will.
    2. Same—Waiver of issuance and service of citation.
    On a proceeding to probate a will, jurisdiction of a party cannot be acquired by his written waiver of the issuance and service of a citation, with a consent that the will be probated without further notice to him.
    Proceeding to vacate a decree, admitting a will to probate.

      Charles T. Brewer, as special guardian and attorney (E. R. 01-coit, of counsel), for petitioner; D. P. Loomis (E. B. Wagner, of counsel), for resp’ts.
   Arnold, S.

This is a proceeding to open, vacate, and set aside a decree of the Otsego county surrogate’s court, entered October 16, 1894, admitting to probate as the last will and testament of Nelson B. Gregory, deceased, a paper writing, dated June 27, 1889, on the ground that the only heir at law and next of kin of said Nelson B. Gregory, deceased, was not cited in the proceedings for probate. Nelson B. Gregory was never married. For a number of years he lived in France. While a resident of France he lived and cohabited with a woman by whom he had six children, among them the petitioner in this proceeding. About 1878, he returned to the United States, and became a resident of the town of Unadilla, county of Otsego, N. Y., of which place he remained a resident down to the time of his death. The petitioner herein claims to be the legally adopted daughter of said Nelson B. Gregory, and, as such adopted daughter, that she is his only heir at law and next of kin. Respondents claim that she was never legally adopted. They base this claim on the fact that it does not appear in the adoption papers that said Jeanne Marie Genin Gregory was the illegitimate child of said Nelson B. Gregory. I do not think the point is well taken. Nelson B. Gregory was the natural father of the child he was seeking to adopt. He was never married. Jeanne Marie Geo in’ was the mother of this child. She resided in Lyons, France. The mother was never married. The child was- illegimate, and upwards of the age of twelve years. She had no general guardian, and was living with said Nelson B. Gregory at the time of the adoption. All that was necessary for adoption, under these circumstances, was (1) the consent of the child ; (2) the consent of the mother, signed, duly acknowledged, and certified in the manner required for conveyance of real estate to entitle it to record; (8) the appearance of Nelson B. Gregory and the child before the county judge of Otsego county for the execution of the agreement to adopt, and for the examination of the said Nelson B, Gregory and the child separately; (4) if satisfied that the moral and temporal interests of the child, would be promoted by adoption, the making of the order by the county judge, directing that said child should thenceforth be treated and regarded in all respects as the child of said Nelson B. Gregory. All of this was duly done, and on his examination said Nelson B. Gregory stated that this child was his natural daughter. It .was not necessary that it should appear upon the face of the adoption papers that she was an illegitimate child. I take it that all of these requirements of the statute were intended for the protection of the child, and of the persons sustaining to the child the legal relations of parent, guardian, or protector.

In this proceeding it is the duty of the court to place the petitioner in the same position, and give her the same rights, as those to which she was entitled before the petition for the probate of this alleged last will and testament was presented to the court. At the time the petition for probate was presented, the petitioner had full knowledge of the adoption proceedings, and it was his duty and the duty of the attorney who prepared the petition, and who also had knowledge of the facts, to have set forth in the petition that this child was alleged to be the adopted daughter'of the decedent. They had no right to pass upon these adoption papers judicially, and hold, for the purpose of subserving their own ends, that she was not a legally adopted child, and was, therefore, not entitled to be cited in the proceedings for the alleged will. That was a matter for the court to determine in a proper proceeding. The statute relating to the adoption of children provides that'the child, when adopted, shall take the name of the person adopting, and the two thenceforth shall sustain towards each other the relation of parent and child, and have all the rights, and be subject to all the duties, of that relation. Laws 1887, chap. 703, § 10. The Code of Civil Procedure provides that upon the presentation for the probate of a will the surrogate must issue a citation, if the will relates to both real and personal property to the husband or wife, if any, and to the heirs and all the next of kin of the testator.. At the time this petition was presented to the surrogate this child was, apparently, the only heir at law and next of loin of the testator, and the only person required under the Code to be cited in that proceeding. While she may not have any' rights in the property of the testator, she is entitled to her day in court for the purpose of cross-examining the subscribing witnesses to the will, and for the purpose of having her rights judicially determined.

It is further claimed by the respondents that, if this decree is to be opened, it should be opened only as to the petitioner, and should stand so far as it relates to the other parties, and that the letters issued on said will should remain in full force and effect, pending further proceedings. The petition for the probate of the will named the brothers and sisters and some nephews and nieces as ths only heirs at law and next of kin of the decedent. A citation was issued thereupon to these persons, but this citation was never served. Before the return day thereof the petitioner appeared in surrogate’s court with written waivers from all persons named in the citation, whereby they waived the issuance and service of a citation, and whereby they attempted personally to appear in the surrogate’s court, and consented that said will be admitted to probate, and letters issued thereon without further notice to them. Four of the persons executing these waivers were nonresidents. If the view taken above is correct, none of them were necessary parties in proceedings to probate the will, and the décree should be wholly set aside. But, supposing them to be necessary parties, should the decree as to them be allowed to stand ? Section 2516 of the Code of Civil Procedure provides :

“ Except in a case where it is otherwise specially prescribed by law, a special proceeding in a surrogate’s court must be com«meuced by the service of a citation, issued upon the presentation of a petition.”

Section 2614 provides that:

“ A person designated in a will as executor, devisee or legatee, or any other person interested in the estate, or a creditor of the decedent, may present to the surrogate’s court having jurisdiction a written petition, duly verified, describing the will, setting forth the facts upon which the jurisdiction of the court to grant probate depends, and praying that the will may be proved, and that the persons specified in the next section may be cited to attend the probate thereof. Upon the presentation of such a petition the surrogate must issue a citation accordingly.”

Section 2615 provides that :

“ The following persons must be cited upon a petition presented as prescribed in the last section : (1) IE the will relates exclusively to real property, the husband or wife, if any, and all the heirs of the testator; (2) if the will relates exclusively to personal property, the husband or wife, if any, and all the next of kin of the testator; (B) if the will relates to both real and personal property, the husband or wife, and all the heirs and next of kin of the testator.”

Section 2517 provides that:

“ The presentation of a petition is deemed, the commencement of a special proceeding within the meaning of any provision of this act which limits the time for the comihencement thereof. But in order to entitle the petitioner to benefit of this section a citation issued upon the presentation of the petition must, within sixty days thereafter, be served as prescribed in section two thousand five hundred and twenty of this act.”

Section 2520 provides how a citation must be served within the state, and it also provides that, in case the person to be served is an adult, and is not incompetent, he may assent in writing to the service within a shorter ti me than that fixed by the section. Sections 2522, 2524 and 2525 provide for service without the state. Section 2528 provides that the appearance of a party against whom a citation has been issued has the same effect as the appearance of a party in an action brought in the supreme court. Section 2532 provides how proof of a citation may be made. It must be made in the manner prescribed by law for proof of service of a summons issued out of the- supreme court, or proof of service must be made by affidavit, or, where the person served is of full age, and not incompetent, by a written admission signed by him, accompanied with proof by affidavit or otherwise of the genuineness of his signature. These are the steps necessary to be taken in order for the surrogate to acquire jurisdiction of the persons of the necessary parties to the proceeding. In proceedings for probate it is nowhere “ otherwise especially prescribed bylaw" that the-surrogate may obtain jurisdiction in any other way. There are certain proceedings in the surrogate’s court in which other methods are especially prescribed bylaw. For instance, in proceedings for administration. And although, prior to January 1, 1895, it had always been the practice in this county to accept the waivers in lieu of the issuance and service of a citation, I think the practice was wholly unwarranted. In proceedings affecting the title to real estate I think the practice was dangerous. While a party has the undoubted right to waive any of his rights, there is a broad distinction, it seems to me, between his power to waive his rights and his power to waive the express provisions of a statute as to how a court shall obtain jurisdiction of a proceeding and of the persons of necessary parties thereto.

It follows from these views that the decree heretofore entered-on the 16th of October, 1894, admitting to probate the paper writing purporting to be the last will and testament of Nelson ]^. Gregory, should be opened, vacated, and set aside. Decreed accordingly.


author: Davie, S.

text:
    In the Matter of the Judicial Settlement of the Accounts of John F. Maack, as Administrator, etc., of John C. Maack, Deceased.

      (Surrogate's Court, Cattaraugus County,

      Filed June, 1895).

    1. Will—Construction.
    Where the testator gives his wife a life estate in his property, and directs her to maintain the estate in as good condition as possible, her income is not charged with the payment of his debts.
    2. Same.
    A widow, who has a life estate in a farm which is used for dairy purposes, may use the crops on hand at the testator’s death, so far as it is-necessary to carry on the farm.
    3. Executors—Accounting—Inventory.
    The failure of the appraisers, in preparing the inventory, to set apart to the widow the $150 in money or other property to which she is entitled under the statute does not divest her of her rights. It is not necessary to make an application to have the inventory amended, but the decree upon the judicial settlement may award to the widow the same relief which she-may be afforded in a proceeding instituted under § 2720 of the Code.
    Proceedings for the judicial settlement of the accounts of an administrator with the will annexed.

      John Mosher, for administrator ; Hudson Ansley. for administrator of Mary Maack estate.
   Davie, S.

John CG. Maack died at the town of Little Valley on the 25th of July, 1888, leaving a will dated December 17, 1885, which was admitted to probate November 11, 1888. The executor named in the will having renounced, proceedings were institued which resulted in the appointment of Mary Maack, the widow, and John H. Merrow, as administrators with the will annexed. Merrew died M.ay 6, 1890, and Mary Maack April 23, 1893. John F. Maack was appointed administrator de bonis non with the will annexed July 3, 1893. Mary Maack died intestate, and letters of administration upon her estate were issued to John Pus-back May 29, 1893. Subsequently Pusback filed a petition asking that the administrator, John F. Maack, show cause why he should not judicially settle his accounts; and upon the return of the citation issued thereon the said John F. Maack filed his petition for such judicial settlement, and subsequently his account, showing total receipts by him as such administrator of §1,858 and total disbursements of $1,041.51, leaving in his hands for distribution the sum of $816.49. Mary Maack, during her administration upon the estate of the testator, paid out, upon his debts, a considerable amount over and above the moneys coming into her hands from the assets of the estate, and it is claimed by her representative that such overpayment should be determined upon this settlement, and allowed out of the balance in the hands of the administrator with the will annexed before distribution among the legatees. JSTo judicial settlement of the accounts of Merrow and Mary Maack, as administrators, was ever had. It would have been much more satisfactory and methodical had such settlement been made, and the rights of Mary Maack thereby definitely determined, instead of adjusting such rights upon this accounting; but inasmuch as no question of" jurisdiction is raised, and all parties interested are before the court, it is proper to dispose of this claim at this time. There is no controversy over the amount paid out by Mary Maack as such administrator, but it is asserted that a portion of the money so expended by her was derived from a disposition of the assests of the estate, and, further, that under the provisions of the will, and the terms of the bequest to her therein contained, it was her duty to make these payments out of her individual estate.

The testator died possessed of a farm in the town of Little Valley, incumbered to some extent, and of personal property to the amount of about $1,700. The first item of the will is as follows :

“ I grant, devise and bequeath unto my wife, Mary Maack, all my property, of every kind and nature, both real and personal, wherever the same may be, for and during the balance and remainder of her natural life.”

After various other bequests, the testator, by the fourth item of his will, devised and bequeathed all the remainder of the estate, both real and personal, to his son, John H. Maack. The fifth item of the will is as follows:

“ And I hereby direct and require my said wife, Mary Maackj at all times during her natural life to fully pay and satisfy all interest which may accrue upon any incumbrance that may exist ■upon my estate at the time of my decease, so that said incumbrance may not increase on account of said interest accumulating; ;and she shall also keep the buildings upon the real estate owned ■by me at the time of my decease insured fully, in a good and reliable insurance company, and kepp the premiums duly paid, and shall keep and maintain my said estate in as good condition as possible, during the continuance of her natural life, consistent with her full enjoyment of the use of the same.”

It is conceded that Mary Maack complied with all the requirements of the will relating to the payment of interest and insurance. But it is urged, in opposition of her claim, that, under the statement in the fifth item of the will to the effect that she should keep and maintain the estate in as good a condition as possible during the continuance of her life estate, it was her duty to pay the debts of the testator, and that the same were a charge upon the estate or interest devised to her. This claim is not tenable. The phraseology of the portion of the will referred to by no means expressly charges the payment of debts upon the widow’s legacy, nor do the attendant facts and circumstances indicate any such design on the part of the testator. By the first item of the will the widow is given a clearly-defined interest, viz. a life estate in all the testator’s property. An interest given in one clause of a will cannot be affected by raising doubts from other clauses, but only by express words or undoubted implication. Freeman v. Coit, 96 N. Y. 63. Where an estate is given in one part of a will in clear and decisive terms, such an estate cannot be taken away or cut down by any subsequent words that are not as clear and decisive as the words of the clause giving the estate. Roseboom v. Roseboom, 81 N. Y. 356; Clarke v. Leupp, 88 N. Y. 228. The provisions of a will for the support and maintenance of a wife will receive the most liberal construction. Thurber v. Chambers, 66 N. Y. 42-48_

_ After the appointment of Mary Maack and Mr. Merrow as administrators with the will annexed, they caused an inventory to be prepared and filed. Among the effects inventoried are thirty-eight dairy cows, forty tons of hay, two tons of straw, one hundred and fifty bushels of oats, thirty bushels of barley, and various other articles of farm produce upon the farm owned by the testator at the time of his death. This produce was consumed by the widow and her tenant in the occupancy of the real estate. It is asserted on behalf of the administrator, John F. Maack, that the widow should be charged with the value of the articles so consumed. This claim presents an issue very similar to that determined in Re Yates, 99 N. Y. 95. In that case the testator gave to his widow all of his “ estate, both real and personal, she to have and to hold the same and to receive and enjoy as her own property the rents, issues and profits therefrom during life.” The testator was seized at the time of his death of two adjoining farms, used together as a dairy farm, and the personal property consisted of live stock upon the°farms, and a quantity of hay, oats, corn, wheat and potatoes. The widow used and disposed of this farm produce, and, upon the settlement of the accounts of the executor, it was sought to charge him with the value of the articles so consumed, upon the ground that they belonged to the estate. In determining this question the court of appeals says (page 99, 99 N. Y., of opinion):

“In giving to the widow this real and personal property for her enjoyment during life, we think it was his intention that she should possess and use it in specie. It cannot be presumed that the testator expected these perishable articles would be preserved for the remainderman, or taken from her by the executor for sale, and the interest or income only applied to her use. They were essential to the support of the stock and the Carrying on of the farm, from which only the widow’s maintenance was to come. * * * It cannot be implied that the testator wished his executor, at the moment of his death, to sell all the personal property and pay over to the wife only the interest which might accrue upon the proceeds, or that he intended to bestow upon her a farm without the means of making it useful, and so, in effect, break up her home, while in words he was securing its continued enjoyment.”

The rule seems well established that when the articles in question, the use of which are bequeathed for life, are of a wasting character, “ qua ipso usu consumuntur,” which might be exhausted in the lifetime of the tenant for life, the gift to the remainder-man must be taken subject to such possibility. Then, again, the evidence affords a complete answer to this objection urged against the claim. For some time prior to the death of the testator, the farm owned by him, and upon which the personal property in question was produced, had been managed and occupied under an agreement that such produce should be consumed upon the farm. This farm was used for darying purposes, and the raising of hay and grain thereon was merely incidental to the prosperous prosecution of the principal enterprise. The consumption of such produce upon the farm was essential to maintain the soil in proper condition. So that, by the terms of the agreement under which the property in question was produced, and which agreement was made by the testator, and remained in force until after this produce was consumed, the articles referred to were expressly required to be used upon the farm. Mo suggestion is made that any portion of this produce was sold or removed from the farm by the widow. Mo claim is made but what at the death of Mary Maack there were the same number of cows remaining upon the place as at the death of the testator. The evidence indicates an increase rather than a diminution in the extent and value of the live stock. The various articles of farming tools and implements were also left in as good condition as could be expected in consequence of their use upon the place. So that it is entirely plain that nothing can be deducted from the claim of Mary Maack in consequence of the use or consumption of any of the articles above referred to. The inventory filed contains the following items: Cash on hand in bank, $296.86; note of 0. H. Davis, $80.14; cash from Lambert Peterson, $59.76. These items constitute substantially all of the effects inventoried, aside from the stock, fanning implements and produce. The inventory was not completed until the 12th day of December, 1889. The appraisers who made such inventory testified: That they had no personal knowledge of the existence of any money or "funds in the bank. That their only information upon that subject was heresay in its character. That their understanding was,that this money, where-ever it might be, was the fund which had accumulated from the dairy-productions between the death of the testator and the making of the inventory; in other words, it was the use or income derived from the estate, and under the will belonged to the widow.

It does not appear that the-testator had any ready money at the date of his death. On the contrary, the opposite inferentially appears from the fact that, shortly before his death, testator borrowed money with which to pay small bills. Some evidence is also given to the effect that the item of cash from Peterson is erroneous; that in fact this demand against Peterson had been paid to the testator before his death, excepting the snm of $15, and that there was only that amount due thereon. The statements in the inventory are only presumptive evidence against the person filing it. They are simple prima facie evidence of the value of the assets. The statute expressly provides that such presumption may be overcome, .and the statements in the inventory explained, Code Civ. Proc. § 1832, and it is entirely apparent that the inventory filed in the case is erroneous so far as it related to the item of cash in the bank and cash from Peterson. Moreover, it appears from an inspection of the inventory that the appraisers, in preparing the same, neglected to set apart to the widow the $150 in money or other property to which she was entitled under the statute. The failure of the appraisers in this particular did' not divest the widow of her rights, nor was it necessary to make an application to have such inventory amended. Such correction may and should be made upon the accounting, if not before. The statute provides a method of securing the correction of an inventory defective in this particular (Code Civ. Proa § 2720), and it is expressly provided that the decree upon judicial settlement may award to the widow the same relief which might be afforded in a proceeding instituted under the section above cited. Id. § 2721. While the exact amount of money received by Mary Maack in her administration of the testator’s estate is not definitely disclosed, yet it conclusively appears that the funeral expenses paid by her, in connection with the $150, by far exceeded her receipts. A careful consideration of the entire evidence in the case fails to disclose any valid reason why the representative of Mary Maack, deceased, should not be fully reimbursed for all moneys advanced by her in payment of debts of testator. A decree will accordingly be entered herein judicially settling the accounts of the administrator, John F. Maack, as filed, and directing that the balance remaining in his hands after payment of commission and expenses of this settlement, he pay to John Pusback, as administrator of the estate of Mary Maack, deceased, on the amount due on her claim as determined by the findings filed herewith. Ordered accordingly.