text:
    Charles C. Blair and ano., Resp't, v. Patrick Lynch, App'lt.

      (Court of Appeals,

      Filed April 19, 1887.)

    1- Limitations of actions—Payment.
    Plaintiffs were requested by defendant to purchase a certain mortgage, but the mortgagee refused to sell absolutely, and offered to pledge it as collateral security, and defendant being so informed told one of the plaintiffs to loan mortgagee $3,500, and get an absolute assignment if possible, and when the loan matured he (defendant) would take up the $8,500 and give him $100 commissions. Mortgagee knew nothing of this arrangement, and transferred the mortgage to plaintiffs. The notes on which the loan was made not being paid, plaintiffs obtained a judgment, and on supplementary proceedings collected $450 of the mortgagee. In this action they undertake to make defendant repay on the agreement referred to Held,, that as the statute of limitations was pleaded it barred the right of recovery unless the debt was revived by a payment, and the collection from the mortgagee was not such an act on the part of the defendant.
    2 Same.
    The other payment relied upon was that of $1,800, in exchange for which the plaintiffs executed and delivered to the defendant an assignment of one-lialf of the Slattery mortgage. Held, that the question whether the payment made in form upon the contract of purchase was also made and accepted upon the contract of agency within the intent of the parties was a question which should have gone to the jury, and that the refusal of a request by the defendant to send it to the jury was error
    Appeal from judgment of supreme court, general term, fourth department.

      This is an action by the plaintiffs, as copartners, to recover from defendant a balance claimed to be due upon a loan made to defendant July 19, 1873. Defendant sets up the statute of limitations. In July, 1873, one John O. S. Lynch, was the owner of a bond and mortgage of' $6,000, and he pledged it upon fine salt lot No. 36, of the Salt Springs reservation, to Wilkinson & Co., as collateral security for the payment of a loan of $2,000.
    The plaintiffs claim that about that time they were requested by defendant to purchase this mortgage from John O. S. Lynch, provided they could get it for $4,000, and that he would pay them $100 commission for making the purchase. Shortly thereafter Lynch applied to the plaintiffs for a loan of $3,500, with which he wished to pay the debt which he owed the Wilkinsons and others, and offered to give the plaintiffs an assignment of the mortgage as collateral security. The plaintiffs claim that they informed the defendant of this proposition, and he said that he would take it at $3,500, if plaintiffs could get it at that, and that he would give them a commission of $100. One -of the plaintiffs swears that he informed the defendant that Lynch would not assign the mortgage absolutely; that he thought he would redeem it; that defendant then told him to go on and make the loan, and get an absolut e assignment if he could, and that, at the expiration of the loan, when it matured, he would take up the $3,500, and give him $100 commission for the transaction. The loan was made, and the money paid to ■ John O. S. Lynch. An assignment of the mortgage was executed to the plaintiffs. The loan to John O. S. Lynch became due September 22, 1873, at which time the notes executed by him were protested for non-payment. Plaintiffs sued notes against John O. S. Lynch, and recovered judgment against him December 11, 1873. In their complaint they swear that they were holders and owners of the notes. executed by John O. S. Lynch. Upon this judgment, supplementary proceedings were instituted, and at different times moneys were collected thereon to the amount of about $450.
    Thereafter defendant and plaintiffs executed the follow ing agreement:
    “For and in consideration of the sum of $1,800, this day paid by Patrick Lynch, the receipt of which is hereby acknowledged, we hereby sell and assign one-half of our interest in the above-described bond and mortgage, and hereby agree with the said Patrick Lynch to pay over to him one-half of all the moneys hereafter collected upon said bond and mortgage, and said Patrick Lynch is the owner of a one-half interest in the said bond and mortgage, and hereby agrees to pay one-half of all expenses incurred in the collection of the same.
    “ BLAIR & TRUESDELL.
    “Syracuse, November 25, 1873.”
    Plaintiffs ask that the court direct a verdict, but defendant requested that the court submit “ as questions of fact upon all the evidence in the case such matters as the court thinks the case turns upon; one being the question as to whether the defendant employed the plaintiffs to purchase the mortgage for him, and agreed to pay them for the same if they did; and the second being as to whether the mortgage became the property of the defendant by virtue of plaintiffs’ purchase of the mortgage from John O. S. Lynch.” The plaintiffs insisted upon the direction of a verdict on the ground that there was no question of fact for the jury, as “ there was no dispute upon the evidence upon the main proposition that Blair & Truesdell, as agents for Patrick Lynch, transacted this business, and that he undertook to repay to them the amount of the money.” The motion was granted, and a verdict directed, and the defendant excepted to the ruling, as well as to the refusal of the court to submit the case to the jury, as requested.

      Louis Marshall, for app’lt; Forbes, Brown & Tracy, for resp’ts.

       Reversing 35 Hun, 663, mem.

   Finch, J.

If we assume that the learned trial judge correctly decided that the plaintiffs’ evidence was sufficient to establish the contract pleaded beyond any necessity for submitting that question to the jury, because there was no direct contradiction of the witnesses, and the circumstances tending to raise doubt or suspicion were more than balanced by the silence of the defendant, who might have made an effectual denial,—an assumption not above criticism, and as to which we do not all agree,—there yet remains a material question which, if not decided in favor of the defendant, should at least have been submitted to the jury.

The statute of limitations was pleaded as a defense, and confessedly barred the right of recovery unless the debt was revived by a payment upon it. So far as such payment is sought to be deduced from the collection by plaintiffs of the sums obtained from John 0. S. Lynch through the pressure of an examination and an order of the court, it is quite clear that the effort must fail. The efficacy of a payment to avert the effect of the statute as a bar resides in the conscious and voluntary act of a debtor, explainable only as a recognition and confession of the existing liability. But here there was no act of the defendant. He paid nothing to the plaintiffs. The man who did pay was not his agent, or acting, or authorized to act, in his behalf. The payment which he made was on his own debt to plaintiffs, and not on defendant’s contract with them. The very existence of that contract was unknown to him, and the fact of his payments unknown to defendant until after they were made. The debtor paying did so by compulsion, and not in obedience to any direction or request of the defendant. The money paid never belonged to the latter, but passed from the ownership of John O. S. Lynch to that of the plaintiffs. Its transfer was in no respect the act of the defendant, and could serve to indicate no purpose or intention of his. One must go outside of the act, and busy himself with spoken words and debatable inferences, changing its inherent and obvious character before it can be connected with the defendant, and then it amounts only to a direction that plaintiffs should collect from their debtor a sum due to them, and, when that remedy was exhausted, a promise that the defendant ’ would take the security and pay the balance remaining. If those payments operated to reduce the defendant’s liability, it was not through any act or agency of his, and their existence indicates absolutely nothing as a recognition or admission on his part. They were entirely consistent with a denial by him of any liability whatever, and with an utter repudiation of the alleged contract. They might equally have been made if plaintiffs had held the claim in their own right, having no recourse against the defendant, and so open to a complete explanation in no manner dependent upon any purpose or intention of his. We should infringe a very wise and valuable rule of evidence if we gave to the act of - John 0. S. Lynch a constructive effect amounting to recognition of a contract by the defendant, the existence of which he could nevertheless consistently dispute.

The other payment relied upon was that of $1,800, in exchange for which the plaintiffs executed and delivered to the defendant an assignment of one-half of the Slattery mortgage. The consideration for this payment was expressed in writing by the parties concerned; and the terms of that instrument, so far from purporting a payment upon the contract pleaded, are on their face, and without explanation, "inconsistent with the existence of that contract. The writing expresses that the payment was made upon a contract of purchase, and in full discharge of that contract. It not only fails to admit that something more might be due or become due, but negatives any such inference. It speaks of the mortgage as being the property of the plaintiffs, and involves the concession that only one-half of it became the property of the defendant, and that by a purchase then and there made. Stopping with the written paper, the conclusion is irresistible that the $1,800 was paid upon a contract of purchase made at its date, and not upon a broader one already existing. But the plaintiffs offer . an explanation. Having proved a previous agreement, by the terms of which they were to obtain the mortgage for defendant, and hold and enforce the legal title for his benefit, looking to him for direction and for the reimbursement of their unpaid advances, they further testify that the $1,800 was one-half of the $3,600 which that contract called for, and that after such payment they demanded of defendant the balance remaining due, which he promised to pay. They then argue that the assignment made was a transfer of the legal title pro tanto for the protection of the defendant, and that both the assignment and the payment made were consistent with the contract of agency alleged, and were steps in furtherance and in execution of that principal contract. By that process they seek to show that the payment of $1,800 was made and accepted upon the contract pleaded.

The question is not without its difficulties. It cannot be decided in favor of plaintiffs as a pure question of law. The most that they can reasonably claim is that it raised a question of fact, or a mixed question of law and fact. Adhering to the assumption upon which our reasoning has been founded, that- the contract of agency was proved beyond contradiction, and to be taken as a conceded fact, we have a case in which two contracts have been proved, upon either of which the $1,800 might have been intended to apply, and upon one or both of which it must have been applied. The writing indicates one application; the conversations another. It does not solve this difficulty, to say that the assignment was but an incident in the execution of the principal contract, for the defendant may have intended not to recognize or admit it by a payment upon it, and for that very reason have made a special contract of purchase, upon which alone his money should be applied, and which only he would recognize. The facts proved admit of conflicting inferences; and it seems to us, therefore, that the question whether the payment made in form upon the contract of purchase was also made and accepted upon the contract of agency within the intent of the parties was a question which, under proper directions from the court, should have been submitted to the jury. The defendant asked to go to the jury upon all the evidence in the case as to such matters as the court should direct, but the request was refused; the court holding that there were no questions of fact, and directing a verdict for plaintiffs. To this there was an exception, which we think points out error.

The judgment should be reversed, and a new trial grantd; costs to abide the event.

All concur, except Huger, 0. J., not sitting.


source: Caselaw Access Project

author: Danforth, J.

license: Public Domain

text:
    The Long Island Bank, Resp't, v. George A. Boynton, Appl't.

      (Court of Appeals,

      Filed April 19, 1887.)

    Pleading—Variance—Bills and notes—Usury.
    In an action on a promissory note, defendant set up in his answer that it had an usurious inception, but on the trial offered to prove a conti act totally different from that stated in the answer. But to show that plaintiff was not surprised he offered in evidence papers on which he had unsuccessfully moved for leave to serve a new answer conforming to the proof now offered. Held, that the usurious contract must be proved as laid, and that it was not error to hold that an admission that it has not been and could not be so proved has no tendency to defeat a cause of action which came to the plaintiff for full value, and without notice of any defect.
    The complaint in this action was upon a promissory note made by defendant to his own order, and indorsed by him. One Tuttle was joined as defendant, but did not answer. Boynton, by his answer, denied any knowledge of the Tuttle indorsement, alleging that he had made and delivered the note to one Alonzo Follett, and agreed that Follett should reserve eight per cent interest and a commission of a quarter of one per cent, and that the note was usurious and void, and that all the title plaintiffs had was acquired from Follett. On the trial plaintiffs introduced the note, proved the indorsement of Tuttle and the amount of interest due, and rested.
    Defendant, on his own behalf, testified as to the agreement and swore that the note in question was the same mentioned in exhibit No. 6, which exhibit was offered in evidence and admitted. According to this, Follett, in July, 1882, rendered an account to defendant, showing the receipt of notes amounting to $129,000, less six per cent discount and one quarter of one per cent commission. The other side of the statement set forth notes maturing April 27, $4,523.67; April 29, $47,000; June 9, $30,000; July 13, $45,000, and interest due July 18, $924.24, thus leaving a balance due Follett of $863.07. Defendant also offered in evidence the notes referred to on the credit side of the statement, and a further account showing the payment of the balance due Follett as above, and five other statements of account from Follett, for the purpose of showing that all the notes returned by Follett, for which he received the notes for $129,000, were on eight per cent discount and one quarter of one per cent commission. He also offered to prove that plaintiffs were not surprised as he had made a motion to amend his answer so as to contain a full account of his dealings with Follett, all of which the court excluded and directed a verdict for plaintiff, and judgment was entered against Boynton alone.

      Darlington, for def’t and app’lt; Van Orden, for resp’t.
   Danforth, J.

The action was by the plaintiff as indorsee for value, against Boynton as maker and first indorser of a promissory note payable to his own order, and one Tuttle as second indorser. The complaint alleged the indorsement and delivery of the note by Boynton to Tuttle, and its indorsement and delivery by Tuttle to the plaintiff. The defendant, Boynton, by his answer, put in issue these facts. The burden of proving them was of course on the plaintiff; and the trial court did not err in refusing to give the defendant the affirmative. He, also, set up that the note in suit had its inception in a corrupt and usurious contract with one F. for a loan of money for which F. was to receive eight per cent per annum, besides a commission of one-fourth per cent on the face of the note. The evidence gave no color for the defendant’s contention on this point, and the proof offered by him was of a contract totally different from that stated in the answer. Such was even the defendant’s position on the trial; but, to show that the plaintiff was not surprised at the variance, he offered in evidence papers on which he had on some former occasion unsuccessfully moved at special term for leave to serve a new answer, conforming to the proof now offered, but in no respect like the present pleading. The usurious contract must be proved as laid, and it was not error to hold that an admission that it has not been and could not be so proved has no tendency to defeat a cause of action which came to the plaintiff for full value, and without notice of any defect.

The appellant cites Tyng v. Commercial Warehouse Co. (58 N. Y., 308), as against the ruling of the trial court; but in that case no question was made upon the trial as to the sufficiency of the pleadings, or the relevancy of the proofs, and it was held that it was within neither the authority nor the duty of an appellate court to deprive the successful party of his recovery on the grounds of incompleteness or imperfection of his pleadings. In the case before us, not only was the objection taken on the trial, but the trial judge, to overcome it, was required to disregard the decision of the special and general terms, and grant indireetly a favor which those courts had upon formal application denied. The statute against usury is, like other statutes, to be obeyed; but whoever desires its aid through the interference of a court must make out his title to relief by allegations as well as proof. This the defendant failed to do.

The judgment should be affirmed.

All concur.


author: Prr Curiam.

text:
    Henry Tozer, an Infant, Resp't, v. The New York Central and Hudson River Railroad Company, App'lt.

      (Court of Appeals,

      Filed April 26, 1887.)

    Appeal—General objection to evidence.
    Although the objection to the admission of evidence is general, it will be held sufficient on appeal if the evidence related to speculative and. conjectural possible future consequences which might be apprehended from an injury, and as to how long after the injury such consequences, might be developed.

      George C. Greene, for app’lt Myron H. Peck, Jr., for resp’t.

       See 6 N. Y. State Rep., 447.

   Prr Curiam.

In deciding upon the appeal in this case, it did not escape our attention that the objections to the admission of the evidence which we held to be imcompetent were general. That point was discussed in consultation, but we considered that the evidence was in its nature inadmissible, as it related to speculative and conjectural possible future consequences which might be apprehended from the injury, and how long after the injury such consequences might be developed. The course of the examination shows that the ground of the objections could not have-been misunderstood, and, if it had been specified, the objection could not have been obviated.

Motion denied, with costs.

All concur.


text:
    Abner Buckland, as Adm'r, App'lt, v. William Gallup, Resp't.

      (Court of Appeals,

      Filed April 26, 1887.)

    Executors and administrators—Actions bv—Costs—Code Crv. Pro.. § 1814.
    An action by an administrator with the will annexed, to recover possession of certain notes, bonds and mortgages alleged to belong to the estate, but made payable to a former executrix personally, and delivered by her to defendant for safe keeping, is not an action “ belonging to said administrator in his representative capacity" under Code Civ. Pro., § 1814, and if he fails he is personally liable to pay costs. Rapadlo and Earl, JJ., dissenting.
    Appeal from judgment, supreme court, general term, Fifth department, reversing an order of Monroe special term, amending the judgment against plaintiff personally for costs by making it payable out of the assets in his hands as administrator.

      Geo. H. Humphrey, for app’lt; J. & Q. Van Voorhis, for resp’t.

       Affirming 40 Hun, 61.

   Danforth, J.

The plaintiff, describing himself both in the title and body of the complaint as “administrator,” etc., “of Warren Bucldand, deceased,” demanded judgment against the defendant for the sum of $2,000, and costs of the action. The defendant answered, denying the material allegations of the complaint, and, upon trial before a referee, had judgment dismissing the complaint, with costs against the plaintiff in his individual capacity. Upon the plaintiff’s application, the special term ordered an amendment, so that the judgment should direct the costs of the action “to be paid out of any assets in his hands as administrator.” Upon appeal to the general term, this order was reversed, and from the order of reversal the plaintiff appeals to this court. The special term regarded the question as controlled by section 18M of the Code of Civil Procedure, which declares that an action by an executor or administrator, “upon a cause of action belonging to him in his representative capacity, * * * must be brought by him in his representative capacity;” while the general term, looking at the cause of action as one arising out of a transaction which occurred after the testator’s death, held that, it did not belong to the plaintiff in his representative capacity within the meaning of that section. This difference of opinion necessarily leads to an inquiry whether the. cause action upon which the plaintiff sues is, within the meaning of the Code, one ‘ ‘ belonging to him in his representative capacity.” That capacity was created by statute to carry into effect the wishes of the decedent, and by virtue of it, an executor takes as of the time of the death of the testator, and, as it were, from his hand, his personal property, so that there is no interval of time when it is not the subject of ownership by the testator up to the time of his death, and from that moment by the person named, not as an individual, but as a representative. The statute characterizes the property received as assets, requires it to be inventoried, and for those assets so inventoried, and for any increase, the executor is to account. It includes, among other things, debts secured by mortgage, bonds, notes and things in action. He and his sureties are liable for the full value of all such property of the deceased received by the executor, and not duly administered, and, if the cause of action accrued in the life-time of the testator, any suit respecting it must be in the name of the executor as such, He then sues in the right o£ the testator, and can bring such actions only as the testator himself might have maintained.

On the other hand, if an injury to the property, or its conversion, happens after the death of the decedent, although before letters are actually issued; or if a contract is made with an executor or an administrator personally, in regard to the effects or money belonging to the decedent, received by a third person after the death, the administrator might sue in his own name, and if in any of these cases he may also sue in his representative character he is not required to do so. Valentine v. Jackson, 9 Wend., 302; Merritt v. Seaman, 6 N. Y., 168; Patterson v. Patterson, 59 id., 574; Lyon v. Marshall, 11 Barb., 242. When he sues in the right of the testator, he pays no costs, because the law does not presume him to be sufficiently cognizant of the nature and foundation of the claims he has to assert, and in all these cases it is necessary for him to sue in his representative character, and expressly to name himself executor. Toll. Ex’rs, 438. But, if he may bring the action in his private capacity, then, if he fails, he is liable for costs.

As the statute stood (2 Rev. Stat., 615, § 17) before the Code, costs were not, as of course, given in favor of a successful defendant against “executors or amininistrators necessarily prosecuting in the right of their testator or intestate, ” but it was held that an executor suing upon a cause of action which accrued after the death of his testator, and failing, was personally liable for costs. Burhans v. Blanchard, 1 Denio, 626. In that case the distinction is said to be well settled between cases in which an executor must sue in that character and those in which he may prosecute in his own right, whether the action be in tort or in contract. The final test is whether it accrued before or after the death of the testator. In that case, and in cases there cited, and in many later ones, it is shown, as well upon principle as authority, that only such causes of action as accrued during the life-time of the decedent, or upon contract made by him, were of necessity to be prosecuted by his executors or administrators in their representative capacity.

In Patchen v. Wilson (4 Hill, 57), the contract sued on was by the intestate in his lifetime, and the action was necessarily brought in a representative capacity, and, although it failed, the plaintiff was not charged with costs. The same case shows that an action for the conversion of property after the testator’s death may be brought in the executor’s own name, and that the letters testamentary may be used as a part of his.chain of title. The same rule applies here. The distinction is between a cause of action accruing on a contract made with the representative, as distinguished from one devolving on him in that capacity by the creation of the trust or representative relation. The Code works no change in these respects. On the contrary, the provisions of section 1814 imply that a person while executor may have causes of action of more than one kind; for it declares that those which belong to him in “a representative capacity ” shall be prosecuted in that capacity. They are thus contrasted with all others, and as clearly distinguished as if one class devolved on A. and the other on B. So, in construing the section, it has been held that the phrase ' ‘ representative capacity ” includes only those causes of action which accrued during the lifetime of the decedent. Bingham v. Marine Nat. Bank, 41 Hun, 377. The demand there in suit rose upon a certificate for moneys belonging to the estate, and deposited with the defendant by administrators. The court held that the action could be maintained by the bailors as individuals or as administrators, on the ground that the section did not include a demand accruing to the personal representatives through a disposition of the funds or property of the estate after the decease of the testator or intestate; citing in support of this view Thompson v. Whitmarsh (100 N. Y., 35). In that case it appeared that Thompson, as executor, having received property of the estate, sold it to the defendant, and, afterwards, in his own name, as an individual, sued for the price, and the court held the action to be well brought, and that the defendant could not successfully set up against the demand a debt due to him from the testator. The defendant relied upon section 1814 of the Code, but it was held that the phrase “representative capacity,” as there used, related to debts which belonged to the testator, and came to the executor through his representation of the deceased, rather than as the result of his own action, and therefore required an action for their enforcement to be in his representative name. In each of those cases (Thompson v. Whitmarsh and Bingham v. Marine Nat. Bank) the cause of action never existed in favor of the decedent, but grew out of the contract or dealing of the executor, and it was held that the suit was properly brought in the name of the individual.

The inquiry, then, is as to which of these two classes the cause of action in the present case belongs. As already stated, the action is to recover a sum certain. The right to such or any judgment depended upon the following facts: Warren Buckland died in 1873, leaving real estate worth about $4,000, and a small amount of personal property, all of which he gave by will to his wife, Matilda, and appointed her his executrix. She received letters, reduced the estate to possession, paid the testator’s debts, sold the real estate, taking in payment one bond and mortgage of $1,000, and one of $4,437.50. The $1,000 bond and mortgage she delivered to the defendant about the time it was executed, “in order that he might collect the interest for her, and for safe-keeping.” She sold the other bond and mortgage, and and of its proceeds loaned the firm of William Gallup & Co. $2,600, taking the note of that firm therefor. At the time of Matilda’s death, the note was in the possession of her sister, and she subsequently delivered it to the defendant, Gallup, the brother of Matilda. The bond, mortgage and note were payable by their terms to Matilda Buckland personally and individually. The defendant had no other property in his hands belonging to Matilda, and no property in which the estate of Warren Buckland ever had any interest, unless it was said note and bond and mortgage. These were the plaintiff’s facts. He alleged, however, that the property belonged to the estate of Warren Buckland,, that the legacies remain unpaid, that after the death of Matilda he was appointed administrator de bonis non with the annexed will of Warren Buckland, and demanded the above property of the defendant, who refused to deliver it.

The referee held and decided that the note and bond and mortgage belonged to the estate of Matilda Buckland, and not to the estate of Warren Buckland. If there is disclosed a cause of action belonging to the plaintiff in his representative capacity, then the order below is wrong, for the conditions do ot exist which make him chargeable for mismanagement or bad faith. Code, § 3246. But, on the other hand, merely describing himself as executor either in she summons or complaint, or both, or saying that be sues in that capacity, will not relieve him from costs incident to an unsuccessful litigation. If, on the facts stated in support of the motion, there was anything for him to do in his official capacity, it was because his predecessor, Matilda, left some part of the estate of Warren Buckland unadministered. He succeeded to her power and duties only. The course of administration was merely interrupted by her death, and upon his appointment, while he became the legal representative of Warren Buckland, he could only take the estate in the condition in which the executrix left it. So far as any of the goods or effects of the testator remained in specie, he, as administrator de bonis non, could take them, but this rule applies to such only as are distinguishable. He was bound by her contracts, and if he sues for the proceeds, or upon any promise made to her, he could occupy no different position. She sold the property and loaned a portion of the proceeds, and as to another part she put it in the hands of the defendant as her agent, in each case upon the plaintiff’s construction of the will, necessarily remaining liable to the estate she represented, and liable to account for the whole. I am unable to see that the case differs at all from the one cited. Thompson v. Whitmarsh, supra.

The learned counsel concedes that, had an action been commenced by Matilda, “it must of course have been commenced in her own name; ” but he puts the admission upon the act that she, “in her own right and as an individaal, owned the property.” If she did, and such is, indeed, the plain reading of the will, as well as the judgment of the court, obviously the plaintiff could have no right of action in any capacity. It is only on the supposition that it was part of the estate of Warren Buckland that he has any standing in the litigation. But confessedly the «property, as it came from Buckland’s estate, was changed in form,—• converted into money,—and transferred by the act and agreement of his then executrix, the plaintiff’s predecessor. She converted the assets, and had become (if any liability at all was created) personally liable for them. She stood exactly in Thompson’s position in the case referred to, and reached that position by the same method of business. In no view can the cause of action then created, or as it is stated in the complaint, be said to be one belonging to the plaintiff in his representative capacity. It did not come to him by devolution from the testator.

As the plaintiff, therefore, need not have sued in his representative character, and has failed, as he is personally hable to pay costs. The order appealed from is to that effect, and should be affirmed.

All concur, except Rapallo and Earl. JJ., dissenting.


author: Per Curiam.

text:
    Truman Symson, App'lt, v. Hannibal Selheimer et al., Resp'ts.

      (Court of Appeals,

      Filed April 26, 1887.)

    Practice—Amendment of confession of judgment discretionary.
    A motion for permission to amend statement in a confession of judgment is addressed to the discretion of the court, and where the special term grants the motion unconditionally, this court has no power to exercise its discretion and put in some other condition than that imposed by the supreme court.
    Motion to amend remittitur.
    •
    On motion of plaintiff an order was granted October 26, 1885, by the special term allowing a judgment by confession, in his favor, to be amended, and ‘ ‘ that amendment made as of June 6, 1885.” On appeal the general term modified the order by directing that “the hen of said judgment be, and the same is hereby, deferred to that of the judgment-creditors existing October 5, ,1885, and as to all the real estate embraced in the assignment of December 5, 1884.” The plaintiff appealed from so much of the general term order as modified that of the special term, and defendants appealed from the whole order. The general term order was modified by providing that plaintiff’s motion to amend should be granted upon his consenting, to postpone the lien of his judgment to those existing October 5, 1885, as to all the real estate embraced in the assignment of the judgment-debtors, dated December 15, 1884; otherwise denied.

      Nathaiel Foote, for app’lt; John H. White, for resp’ts.
   Per Curiam.

The motion made by plaintiff at special term, to obtain permission of the court to amend the statement of the confession of judgment, was addressed to the discretion of the supreme court. It was not an amendment which he had the legal right to demand, but was one which the might, in its discretion, refuse, or grant upon such terms as to it might seem to be just. Mitchell v. Van Burén, 27 N. Y., 300. The special term granted the motion to amend unconditionally.

Upon appeal, the general term, while affirming that part of the order of the special term granting leave to amend, coupled it with a provision absolutely postponing the hen of the plaintiff’s judgment, as stated in such order. The effect was that, upon a motion for leave to amend his judgment, the plaintiff found that his motion had been granted, and the lien of his judgment absolutely postponed; instead of which, as he was asking for a favor, the order, should have been in the form of granting the favor upon condition of his assenting to the postponement of his lien; thus giving the option to him of taking his favor upon the condition imposed, or of not taking it, and leaving his judgment in its original state. This court thought that the plaintiff had a right to have this option granted him. We, thereforefore modified the order of the general term in the manner set forth in the remittitur.

The present motion to amend the remittitur, by putting in some other condition than that imposed by the supreme court, is to appeal from the discretion exercised by that court, and to ask us to exercise our own, which we have no power to do. We think, however, that the order, as modified by this court, in case plaintiff accepts the conditions, cannot be construed to postpone the plaintiff’s judgment to the lien of a judgment docketed in form, but which is, as matter of law, void. Where is the lien of a void judgment, or how can it be said to be a judgment at all?

The motion to amend the remittitur must be denied, without costs.

All concur.


author: Rapallo, J.

text:
    Le Dette A. Bostwick, Resp't, v. Emily P. Beach and others, Ex'rs, App'lts.

      (Court of Appeals,

      Filed April 26, 1887.)

    Specific performance—Interest on deposit withdrawn—When offset BY DETERIORATION OF LAND PURCHASED.
    In opposition to the application of the defendants to compel the plaintiffs to pay interest because of having withdrawn a portion of money deposited in bank after tender on contract for sale of real estate, it was shown that by neglect of defendants the value of the property had been depreciated to an amount exceeding the interest. Held, that if the judgment below is modified so as to admit the allowance of interest, it should also be modified so as to admit proof of the damages claimed.
    Application to modify interlocutory judgment.
    This was an action for specific performance against defendants, as executors, upon a contract for the sale of land, made under a power in testator’s will. Plaintiff deposited the unpaid portions of the purchase money in a bank at the time when the conveyance should have been executed. Upon a former appeal (3 N. Y. St. Rep., 659), the interlocutory judgment against the executors was affirmed and plaintiff’s prayer for specific performance was granted, and without interest. The object of this application is to have interest allowed the executors on the money withdrawn.

      Milton A. Fowler, for app’lts; O. D. M. Boker, for resp’t.
   Rapallo, J.

When this case was before us on the appeal from, the interlocutory judgment, it appeared from the findings that the unpaid portion of the purchase money ($10,500) had been tendered to the executors on the first of March, 1882, and that, on their refusal to accept the same, and deliver the deed, that sum had been deposited by the plaintiff in the First National Bank of Lowville to the credit of the executors, to be paid to them on the delivery of the deed. There was nothing to show that after that deposit the plaintiff had derived any benefit from the use of the fund, and presumptively it had lain idle and unproductive. Therefore the purchaser was not charged with interest on the purchase money.

It is now shown, by affidavits, that, shortly after this deposit, the fund was wholly or in part withdrawn from the bank by the plaintiff, and we are now asked to add to the modifications directed in the opinion a further provision charging the plaintiff with interest on the amount so withdrawn. If the fact had appeared in the case when before us on appeal, this modification would doubtless have been proper, and even now we might find means to make it, if no other facts were shown on the part of -the plaintiff raising a counter equity. But, in opposition to the application of the defendants, the plaintiff presents affidavits showing that during the pendency of this action, in consequence of neglect and mismanagement on the part of the defendants, the ditches on the premises have been allowed to. be filled up, the buildings to become dilapidated, the water-works to go to decay, the fences to be destroyed, and the value of the property to be thus depreciated to an amount exceeding the interest on the unpaid purchase money. If these facts had appeared, they undoubtedly would have influenced our judgment in respect to allowing interest upon the purchase money, or making some other provision for compensating the plaintiff for the damages alleged to have been sustained. Where specific performance is decreed, the court will, so far as possible, place the parties in the same situation they would have been if the contract had been performed at the time agreed upon, and by the application of the rule of courts of equity, by which things which ought to have been done are considered as having been done at the proper time, the vendor is regarded as trustee of the land for the benefit of the purchaser, and liable to account to him for the rents and profits, or for the value of the use and occupation, and the purchaser is treated as trustee of the purchase money unpaid, and charged with interest thereon, unless the purchase money has been appropriated, and no benefit has accrued from it to the purchaser.

But this is not the only manner which the court has adopted to adjust the equities of the parties. For instance, where the subject of the purchase was a leasehold estate in a mill, and the delay of performance of the contract was attributable to the vendor for his failure to show good right to assign his lease, and dilapidations had occurred, he was charged with the expenses of repairs required to put the mill in tenantable condition, and of those which had been incurred for keeping up the machinery until the purchaser could prudently take possession. And in Ferguson v. Tadman (1 Sim., 530), where the estate had deteriorated in yalue by reason of mismanagement and neglect, during five years which elapsed between the filing of the bill for specific performance and the decree, the amount of the deterioration, with interest, was ascertained, and allowed to the plaintiff out of the purchase money which had been paid into court. In Worrall v. Munn (38 N. Y., 137), these principles were recognized; and the vendee, having obtained a decree for specific performance, was allowed the damages sustained, during the pendency of the suit, by deterioration from waste committed by the defendant during the pend-ency of the suit.

If the matter should now be opened for the purpose of letting the defendants in to claim interest on the purchase-money, it would be no more than just that the same indulgence should be extended to the plaintiff, to let him in to prove the damages he claims by reason of deteriorations caused by mismanagement and neglect. These points appear to be the only ones as to which the parties have been unable to agree, in settling the form of the judgment. Erom the affidavits presented, it would seem that the damages claimed by the plaintiff would about equal the interest claimed by the defendants; but if the judgment below is modified so as to admit the allowance of interest, it should also be modified so as to admit proof of the damages claimed. If the statements in the affidavits are correct, justice would apparently be done by leaving the matter as it is, and confining the modifications of the interlocutory judgment to those directed in the original opinion of this court, which appear to be substantially contained in the modified judgment as proposed on the part of the plaintiff. The details, however, are subject to settlement in the supreme court. But if the defendants desire to insist upon then claim to be allowed interest, and to contest the amount of damages resulting from deterioration and mismanagement, the modified judgment should contain provisions referring it to the referee to ascertain what amount of the sum deposited in the bank was withdrawn by the plaintiff, or subject to his control, and for what length of time, and charging him with interest thereon during that time. The amount of-deterioration of the property, by reason of mismanagement and neglect, between the 1st of March, 1882, and the time of plaintiff’s obtaining possession, should also be ascertained and charged, either to the defendants, as executors, or to the defendant Emily P. Beach, as the equities may appear. She certainly has no .reason to complain of any loss she may sustain through this litigation, as it appears to have been caused by her persistent refusal to carry out the contract, which, according to the findings of fact, was intelligently entered into by her, and was a fair contract for the full value of the farm, and was beneficial to all concerned in the estate. By this unjustifiable refusal on her part, all parties have been subjected to damages, and there is no reason why the loss should fall upon the' plaintiff, who seems to have been always ready to perform his part of the contract.

It is to be hoped that, upon the principles here indicated, the counsel for the respective parties may be able to agree upon the form of judgment to be entered. Otherwise it may be settled by the supreme court, and the interlocutory judgment may be modified so as to provide for the ascertainment and allowance of the interest claimed by the defendants, and also of the damages claimed by the plaintiff, at the election of the defendants. If the defendant shall not consent to have the damages ascertained and allowed, the application for the allowance of interest is denied.

All concur.


author: Ruger, Ch. J.

text:
    J. D. Kurtz Crook, Resp't, v. Leopold Rindskopf and others, App'lts.

      (Court of Appeals,

      Filed April 26, 1887.)

    1. Assignment fob benefit of creditors—Firm property applied to PAY FIRM DEBTS.
    The assignment in question gave the assignee power after paying partnership debts to pay all the individual and private debts of the parties of the first part if sufficient for that purpose, and if insufficient, then “pro rata share and share alike, to the payment of such debts, and according to their respective amounts.” Held, that an action to set aside the assignment could not be sustained by mere evidence that the individual members of the firm owned individual assets of unequal amounts in value, and were liable iu unequal sums upon their respective accounts also for individual debts.
    2. Same—Burden of proof on plaintiff.
    The burden of proof is upon the plaintiff to show by affirmative evidence that the enforcement of the provisions must necessarily work a fraud upon the creditors of the assignors or one of them, and that it could not be legally carried out without producing such a result.
    8. Same.
    As it is lawful for an insolvent member of a firm to devote his individual property to the payment of firm debts to the exclusion of his individual creditors, so he may also apply it to the payment of any debt owing by him to his partners.
    4. Same.
    The rule requiring that the interpretation which will render an instrument consistent with innocence and the general rules of law, in preference to such as .would impute a fraudulent intent to assignor or defeat the general purpose and intent of the conveyance, should apply to assignments as. .well as to other contracts.
    5. Same.

      Held, that in case a surplus arose, it could not reasonably be said that there is anything in the language of this assignment which precludesRosenthal or his creditors from demanding that his individual property should be applied to the payment of his individual debts.
    Action to set aside an assignment for benefit of creditors.

      Adolph L. Sanger, for app’lts; Edward T. Bartlett, for resp’t.

       Reversing 34 Huu, 457.

   Ruger, Ch. J.

On the 23d of October, 1882, Leopold Rindskopf and Meyer Rosenthal, composing the firm of Rindskopf & Rosenthal, executed an assignment of all their property, both real and personal, in trust to Abraham Rosenthal to convert the same into money, and after paying the lawful expenses of the trust, to pay their partnership debts in the order specified in the instrument. It then provided “that with the remainder and residue of said net proceeds and avails, if any there shall be, the party of the second part shall pay and discharge all the individual and private debts of the parties of the first part, or either of them, whether due or to become due, providing such remainder shall be sufficient for that purpose; and, if insufficient, then the same shall be applied pro rata, share and share alike, to the payment of said debts, and according to their respective amounts.” It was further provided that, if there was any surplus then remaining, it should be repaid to the said assignors, or to their executors, administrators, or assigns. The proof established the facts that the assigned estate amounted in value to the sum of $9,360.87, and the firm indebtedness to $14,667.87, and that the individual assets of the members of the firm amounted to forty dollars, of which Eindskopf owned ten dollars and Eosenthal thirty dollars. Eindskopf’s absolute individual liabilities amounted to $300, and his contingent liabilities to $4,300, and Eosenthal’s absolute individual liabilities to $2,850. The plaintiff, being a judgment creditor of the firm, brought this action to set aside the assignment upon the ground that it was made with intent to hinder, delay and defraud the creditors of said assignors, and have the assets of the assigned estate applied to the payment of his debt. Both the assignors and assignee, respectively, appeared and answered in the action, and the assignee denied all the allegations contained in the complaint imputing fraud to the assignors, which put the plaintiff to the proof of his case. No attempt was made on the trial to show any fraud in the assignment except such as was sought to be inferred from the provision relating to the payment of individual debts, considered in connection with evidence tending to show that the individual members of the firm owned individual assets of unequal amounts in value, and were liable in unequal sums upon their respective partnership accounts, also for individual debts. The trial court found that there was no fraud in fact in the making of the assignment, and as a conclusion of law that the instrument constituted a valid transfer of the property of the assignors to their assignee, and ordered judgment dismissing the complaint. Upon appeal, the general term reversed the judgment, and ordered a new trial. As that court did not assume to reverse the judgment upon the facts, its order can now be sustained only upon the theory that the undisputed evidence furnished conclusive proof of fraudulent intent on the part of the assignors in making their assignment. The conclusion of that court was based wholly upon the ground that the clause of the assignment, providing for the payment of the individual creditors of the respective assignors, considered in connection with the facts of inequality in the amount of individual indebtedness, of value of individual assets, and of the amount of the respective accounts with the partnership firm, operated as a fraud in law upon the individual creditors of the partner having the largest individual estate, and afforded conclusive evidence of a fraudulent intent on the part of the assignors rendering the assignment wholly void.

Passing over the questions as to whether an intended fraud by one member of a firm in transferring his individual assets avoids an assignnment of the firm assets made by the firm, and whether such a fraud, affecting a distinct portion of the assets devoted to a special class, is inseparable, and must, as matter of law, be held to vitiate the entire trust, we will first consider the case upon the theory discussed by the court below. The burden was upon the plaintiff to show by affirmative evidence that the enforcement of the provisions of the assignment must necessarily work a fraud upon the creditors of the assignors, or one of them, and that it could not legally be carried out without producing such a result. It has in some cases been held that assignors for the benefit of creditors, who contemplate and provide in their assignment for an illegal disposition in any respect of their property, are not at liberty, in an action to set it aside, to show, as proof of innocence of fraudulent intent, that the assigned fund was insufficient to satisfy the prior valid provisions of the assignment, and could not, therefore, be affected by the alleged illegal provision, and are estopped from controverting the existence of the conditions which they had provided for. Collomb v. Caldwell, 16 N. Y., 485, and cases there cited. It has, however, been frequently held that it may be shown, in rebuttal of an inference of fraudulent intent arising from provisions for the payment of individual debts, there were in fact no such debts or individual assets to be affected by such provision (Turner v. Jaycox, 40 N. Y., 470; Bogert v. Haight, 9 Paige, 297), or that the property formerly belonging to the firm had become the property of purchaser making the assignment (Dimon v. Hazard, 32 N. Y., 68), and other circumstances showing that no fraud in fact was intended. Dimon v. Hazard, supra; Hurlbert v. Dean, 41* N. Y., 97. The principle that a party may be inquired of as to his intent in doing an act, where such intent is material, tends strongly to confirm the proposition that the presumption of fraud arising from the provisions of an assignment may be repelled by parol evidence. Seymour v. Wilson, 14 N. Y,, 567; Hunt v. Johnson, 44 id., 27.

The plaintiff in this case, anticipating the probable defense, did not rely upon the presumptions of fraud arising from the assignment alone, but undertook to establish the fact affirmatively that, in the actual circumstances of this case, the execution of the provision in question would necessarily operate as a fraud upon creditors. It is unnecessary, therefore, to assail the doctrines enunciated in Collomb v. Caldwell (16 N. Y., 485), Barney v. Griffin (2 N. Y., 365), Goodrich v. Downs (6 Hill, 438), and similar cases; for, conceding them to the fullest extent claimed, the facts of this case do not bring it within their operation.

It is lawful for an insolvent member of a firm to devote his individual property to the payment of firm debts, to the exclusion of his individual creditors. Dimon v. Hazard, 32 N. Y., 65; Saunders v. Reilly, 6 N. Y. State R., 452; Royer Wheel Co. v. Fielding, 101 N. Y., 504; Kirby v. Schoonmaker, 3 Barb. Ch. 46. And it follows from the same principle that he may also apply it to the payment of any debt owing by him to his partners in the firm; and no inference of fraud can legally be derived from such dispositions of his individual property. This case was decided by the general term, as appears from their opinion, solely upon the ground of a fraud alleged to have been intended by Rosenthal upon his individual creditors. The argument of the respondent is, in brief, that Rosenthal having twenty dollars more individual property than Rindskopf, the law will assume that he, by placing that sum in a common fund with other individual assets, and directing the payment of their aggregate individual indebtedness theref orm, intended to commit a fraud upon his individual creditors, because, it is said, if the excess of Rosenthal’s individual assets is distributed pro rata among each and all of the individual creditors of both parties according to the amount of their respective claims, that Rindskopf’s creditors will necessarily receive something to which Rosenthal’s creditors were equitably entitled.

We think this argument, upon une facts of the case, is defective in several particulars. It is not at all certain that such a result would follow in this case; for, if Rindskopf’s contingent liabilities never became fixed, there would be only $300 of his individual debts to be paid as against $2,850 of Rosenthal’s, and in that event private property of Rindkopf’s would be taken to pay Rosenthal’s individual debts. We also think the result claimed does not follow from the premises assumed by the court below, but that it would necessarily be produced only by the existence of exact equality of interest in the firm assets by both members, or a greater interest in Rosenthal combined with equality in individual indebtedness, and inequality in the individual property. If there is simply inequality of interest in the firm assets, and inequality in individual assets, one inequality could be easily compensated by a corresponding inequality in the other, and the evidence does not show but that this state of things in fact existed. It does appear that the assignors were equal partners in their firm business, but there is no evidence as to the amount they each originally contributed to the capital of the firm, except that ° the amounts were about equal. Neither does it appear how much they had respectively drawn from the firm, except that the amounts were nearly equal. As the witness says, one might have contributed “a little more or a little less than the other.” No statement of accounts between the respective partners has been given showing their liabilities to the firm, or the amount of their respective interests in its assets, and, for aught that appears in the case, Rosenthal might, on a settlement of the partnership accounts, have owed Rindskopf the exact sum which it is claimed he diverted from his individual assets to the payment of Rindskopf’s creditors. This, in the absence of a fraudulent intent, he had a perfect right to do, as he could lawfully pay his debt to his partner in preference to that of any other creditor, if done in good- faith, and, if he did so in fact, it would relieve the clause in question from any criticism or objection. Royer Wheel Co. v. Fielding 101 N. Y., 504; Dimon v. Hazard, 32 id., 65.

Assuming that there was a surplus remaining after the payment of firm debts, and the assignment required this residue of forty dollars to be put into a common fund for the payment of the individual debts of both assignors, and that Rindskopf’s contingent liability became fixed, it is evident that about fifteen dollars of his assets would be paid to Rosenthal’s individual creditors, leaving fifteen dollars only subject to be diverted from them to the payment of Rindskopf’s creditors. The insignificance of this sum, as compared with the amount of individual debts to be paid, and the almost infinitesimal amount of the dividend to individual creditors to be derived therefrom, would seem to furnish a conclusive answer to the presumption of fraud sought to be drawn from the obviously tentative provision in question. It would also seem, in view of the large amount of property transferred, and the trivial value of that which might be improperly paid out, that the maxim, de minimis non curat lex, might well have been applied and held to control the determination of the case. U. S. Trust Co. v. U. S. Fire Ins. Co. 18 N. Y., 199; Colman v. Shattuck, 62 id., 363; Ross v Hardin, 79 id., 84, 93. We conclude, therefore, upon this branch of the case, upon a consideration of the whole evidence, that, within the authorities cited below, every inference of fraud derivable from the provisions referred to was effectively answered. Bogert v. Haight, supra; Turner v. Jaycox, supra; Dimon v. Hazard, supra; Hurlbert v. Dean, supra.

We are also of the opinion that the provisions of this assignment, if fairly construed and enforced according to their natural meaning and import, would not occasion an illegal disposition of the individual property of either assignor. While heretofore there has been some diversity .of ■opinion in the courts in respect to the proper rule to be applied in the construction of such instruments, we think the tendency of modern decisions, especially those of most ■approved authority, has been to adopt the same rules which obtain in the interpretation of other contracts. Knapp v. McGowan, 96 N. Y., 87; Rapalee v. Stewart, 27 id., 310; Benedict v. Huntington, 32 id., 219; Townsend v. Stearns, id., 209. Among those rules is that requiring such an interpretation as will render the instrument consistent with innocence and the general rules of law, in preference to such as would impute a fraudulent intent to the assignor, or defeat the general purpose and intent of the conveyance. Ginther v. Richmond, 18 Hun, 234; Rapalee v. Stewart, 27 N. Y., 315; Benedict v. Huntington, 32 id., 219; Townsend v. Stearns, id., 209. Such transfers are sanctioned by law, and are, when made, like other contracts, to be fairly and reasonably construed, with a view of carrying out the intentions of the parties making them. When authority to do an act is conferred in general terms, it will be deemed to be, and to have been intended to be within the limits prescribed bylaw. Kellogg v. Slauson, 11 N. Y., 302. In such cases as in ■others, doubtful and ambiguous phrases admitting of different meanings are, in accordance with the maxim, ut res magis valeat quam pereat, to be so construed as to authorize .a lawful disposition of the property only, although there may be general language in the instrument susceptible of a ■different construction. Townsend v. Stearns, supra.

If the instrument in question be considered in the light of “these rules, we think it is not fairly subject to the criticism which has been made upon it. The insolvenpy of the firm of Rindskopf & Rosenthal necessarily worked its dissolution and a division of the interests of its respective members, except so far as their property was already legally disposed ■of by the assignment. After satisfaction of the firm debts by the assignee, the law would restore each member of the firm to his legal rights in the residue of the property, subject only to the execution of the power conferred upon the assignee to dispose of the same. It is essential to the argument of the respondents to establish that the language of this assignment contains authority to the assignee from each member of the firm to satisfy the individual debts of the other from the combined individual property. We do not think a proper construction of the instrument justifies the inference of such an authority. Certainly no such power is expressly given, and it would be contrary to settled rules to impute such an intention to its respective authors, unless the language of the instrument expressly requires it. The law would require, in the event of an assignment by a firm of two persons, that, after the payment of firm debts, the residue should be divided into two funds for the payment of individual creditors, and the defect, if any, in this assignment, is that it did not expressly recognize the possible existence of the two funds. We think the law will supply this omission, and order a distribution of the fund according to the legal rights of the claimants upon it. It was plainly contemplated in the assignment itself that this division should be made in the eventual surplus, for that is directed to be paid to the parties of the first part, their executors, administrators and assigns. This provision could be carried out only upon the assumption that a division of the residue had been made between the two assignors, and thus reflects strongly upon the intention of the conveyance in the use of the language criticised. A reasonable construction of this provision would seem to require that the language should be distributively applied, and held to mean that each member of the firm transferred such part of the property as he had a lawful right to convey, and subjected the residue of such part to the payment of such debts as he was individually hable for. The assignment purported to deal with all of the property, and its fair import was to distribute it to those who were legally entitled to it, paying the firm creditors first, and then, in case there were assets applicable to that purpose, providing for the respective individual creditors of the members of the firm. There is no language in the clause in question which expressly forbids such a construction, or requires that the property of one should be applied to the payment of the debts of the other, and its whole language would be satisfied by the distribution, of the share of each in payment of his individual debts. Upon the satisfaction of the debts of the firm, it would be the legal duty of the assignee, even in the absence of any express provision requiring it, to determine the interest of the individual partners in the surplus, and devote each share to the interest of its respective owner, in accordance with his legal rights. Eyre v. Beebe, 28 How. Pr., 333; Friend v. Michaelis, 15 Abb. N. C., 354.

While the instrument was necessarily the joint act of the firm so far as their joint property was concerned, it was the individual contract of the respective members so far as they dealt with individual property. When providing for their joint interests and property, which constituted the-main object of the assignment, they spoke their joint interest and purpose; but when dealing with their individual interests, although inaptly continuing the use of the-phraseology applicable to its earlier provisions, their lan-guage must be construed as referring to and expressing only their individual wishes with reference to their individual property and liabilities. In case a surplus arose in the administration of this estate, and it became the subject of judicial controversy among the individual creditors of the members of the firm, it could not reasonably be said that there is anything in the language of the assignment which precluded Rosenthal or his creditors from demanding that his individual property should be applied to the payment of his individual debts.

It may be finally said that the effect of the provision complained of could not in any event have been intended to defraud the creditors of the firm, and until they are aggrieved they have no cause of action. Royer Wheel Co. v. Fielding, 101 N. Y., 510; Dimon v. Hazard, supra.

The order of the general term should be reversed, and that of the special term affirmed.

All concur,—Andrews, J., on the construction of the-instrument,—except Danforth, J., not voting.


text:
    John M. Helck, Adm'r, etc., App'lt, v. Henry Reinheimer and Ano., Resp'ts.

      (Court of Appeals,

      Filed April 26, 1887.)

    Ante-nuptial contract—Construction op.
    As a defense to an action of foreclosure a trust deed was interposed, in. which the mortgagor recited that he had entered into an ante-nuptial contract, agreeing: 1. That, in case he died first, his wife was to have the use of the south half of the property during her natural life, then to re-revert to his heirs. 2. The use of the other half during the minority of his children by a former marriage, and, when they became of age, to be conveyed to them, and if the wife died during the lifetime of husband, all the property to be transferred back to him. 3. He agreed to adopt his wife’s son by a former marriage. The marriage took place, the land was conveyed to a trustee, and the wife died before the husband. Held, that the legal effect of the deed was to vest in the wife, in case she should survive her husband, an estate for her own life in the south half of the land, leaving the remainder in fee to him, and in the same contingency to vest in her an estate during the minorities of his said children in the north half, with remainder to them, at the death of the father in her lifetime, to take no effect on their coming of age, that no estate whatever was vested in the trustee named in the deed, and that, as the wife died before the husband, the deed ceased to operate, the whole title remained in him, and the mortgage was a valid lien.

      John F. Anderson, for app’lt; T. F. Rush, for resp’t.

         Reversing 40 Hun, 637, mem.

   Rapallo, J.

This was an action to foreclose a mortgage on real estate, executed in the year 1873 by Jacob Reinheimer and his wife, Philipena, to the plaintiff’s intestate, •to secure the payment of money lent. None of the defendant’s answered except Henry Reinheimer and Henry Reinheimer, Jr. The execution of the mortgage, and the amount due thereon, were not disputed; but the two defendants who answered set up as a defense that, at the time of the execution of the mortgage, the mortgagor, Jacob Reinheimer, had no title to the mortgaged premises, and had acquired none since; that in 1864 he had conveyed said premises to the defendant, Henry Reinheimer, in trust for the benefit of said Philipena and the heirs of said Jacob; and that said Henry still owned them for the purposes of the trust; and they demanded as relief that the complaint be dismissed, and that the premises be adjudged free from the lien of said mortgage. The plaintiff then amended his complaint, and alleged that the trust set up in the answer had terminated; that the deed was void; and demanded, in addition to the judgment of foreclosure, that the alleged trust deed be adjudged null and void. The same answer was then made to the amended complaint, and the issues were tried before the court.

No question of fact was involved, but only the construction and effect of the deed from Jacob Reinheimer and wife to Henry Reinheimer, given in 1864; the defendants contending that it created a valid trust, and that the mortgage created no lien, and the plaintiff insisting that the deed was of no effect.

Neither of the parties made any objection to the trial of this issue in the foreclosure suit. If the objection had been raised that the defendants claimed under a title paramount to the mortgage, it would, according to some of the cases cited, have been the duty of the court to refuse to try that issue. It is not necessary to decide that question now, but, if that course had been taken, the judgment rendered would have had no effect upon the rights of either party, so far as the question of the validity or affect of the trust deed is concerned. But, instead of taking the objection, both parties submitted their rights, in that regard, to the adjudication of the court. The court, at special term, decided that the deed of September, 1864, to Henry Reinheimer, and the contract therein recited, were intended as a marriage settlement for the benefit of the children of the marriage between said Philipena Reinheimer, as well as for the said Philipena, and created a valid implied trust for the benefit of said children, and a power in trust in favor of said Henry; and that the mortgage to plaintiff’s intestate conveyed no interest in the mortgaged premises; and accordingly rendered judgment dismissing the complaint, with costs. The general term, on appeal from the judgment, decided that the question of the validity and effect of the trust deed should not have been tried in this action, the interests of those claiming under that deed not being subsequent to the mortgage, but being adverse to it; and that the complaint should be dismissed, with costs, as to the two defendants who had answered, but without any decision on the merits; and that as to the other defendants the usual decree of foreclosure should be granted. Judgment was entered in conformity with this decision, containing a provision that the judgment should not prejudice any parties who might be interested under the construction of the trust deed, or involving its validity or effect.

We do not concur in the view taken by the court at general term. If the defendants had claimed that they had been improperly made parties defendant, because their rights were paramount and not subsequent to the mortgage, and could not properly be litigated in this action, it might, as before stated, have been proper to dismiss the complaint with costs, as to them, for that reason. But in this case, instead of taking any such ground, they themselves, in their answer, set up their claims under the trust deed, and asked that they be adjudicated upon, and demanded judgment that the mortgaged premises be freed from the mortgage, and that it be discharged of record; and on the trial both parties litigated the question, and the defendants obtained judgment in their own favor thereon. Under these circumstances, we think that it was too late to take the ground that the dismissal of the complaint, as to them, should be sustained on the ground that the questions could not properly be litigated in this action. Both parties having consented to litigate, and having actually litigated them in this form, we think they would both be bound by the judgment. Jordan v. Van Epps, 85, N. Y., 435, 436; Barnard v. Onderdonk, 98 id., 158, 163.

We must, therefore, consider the case as to the two defendants, who are respondents on this appeal, upon the merits. As to the other defendants, whose interests are alleged in the complaint to be subsequent and subject to the mortgage, and who have not answered, the judgment will not estop them as to any rights which they may have by title paramount to the mortgage. But as to the two respondents, one of whom is the trustee named in the alleged trust deed, and the other one claiming to be a beneficiary thereunder, a valid judgment can be rendered determining the questions which they have voluntarily litigated in this action.

The deed of September, 1864, under which they claim, is, "in substance, to the following effect: It recites an ante nuptial contract between Jacob Reinheimer, then the owner in fee of the mortgaged premises, bearing date the 13th of August, 1863, of the first part, Philipena Winegarth of the second part, and Henry Reinheimer, brother of said Jacob, of the third part; that a marriage is shortly to be solemnized between said Jacob and said Philipena; and therefore it is agreed as follows: First. The said Jacob agrees that, in case the intended marriage is solemnized, he and said Philipena will, by a sufficient conveyance, settle and convey the land in question on and to said Henry, “to the use, benefit, and behoof of the said Philipena, in manner following: ” That, in the event of the decease of the said Jacob Reinheimer during the life-time of the said Philipena, she shall have the use of the south half of the property during her natural life, and, after her decease, the same shall revert to the heirs of said Jacob Reinheimer; and, second, the use of the other half of said premises during the minority of Henry Reinheimer and Mary Reinheimer, two children of said Jacob by a former marriage, and, when they become of age, that they shall have the north half of said property conveyed to them; and, in the event of the decease of the said Philipena without issue during the life-time of the said Jacob, all the property shall be transferred back to said Jacob. Third. The said Jacob agrees to adopt Christ Anton Winegarth, son of his said intended wife, and place him in every respect on equal terms with whatever children may issue from the marriage; and, in case there should be no such issue, that said Christ Anton shall be joint and coheir with said Henry and Mary Reinheimer. After this recital, the deed of September, 1864, proceeds to recite that the marriage has taken place, and, in pursuance of the agreements and covenants contained in the ante-nuptial contract, conveys the land in question to Henry Reinheimer for the use and purpose therein mentioned. The legal effect of this deed was, in our judgment, to vest in Philipena, in case she should survive her husband, an estate for her own life in the south half of the land, leaving the remainder in fee to Jacob; and in the same contingency to vest in her an estate, during the minorities of Henry and Mary, in the north half of the premises, with remainder in. fee to said Henry and Mary, to vest in them on the death of Jacob in the life-time of Philipena, and to take effect in. possession on their coming of age; that no trust-estate, and no estate whatever, was vested in Henry, the grantee named in the deed; but it was a mere conveyance to him to the use of the respective beneficiaries named, which uses would be executed by the statute without any conveyance; and that" those provisions were not to take effect at •all, except in the contingency of Jacob dying during the life-time of Philipena.

The intention clearly was to provide for Philipena in case she should survive Jacob; and, she having died before him, the deed, on her death, ceased to operate, and the whole title remained in him. The purpose of the ante-nuptial agreement, and of the deed, seems to have been only to provide for the case of Jacob dying in the life-time of his wife, leaving him to take care of and provide for his children in case he should survive her. There is no provision in the agreement or in the deed for the issue of the marriage, in any event. An intention to provide for them is sought to be implied from the provision in the agreement that, in the event of the decease of Philipena without issue during the life-time of Jacob, all the property shall be assigned back to the said Jacob; but it is impossible to say that this provision is, of itself, sufficient to create any trust in their favor; for there is nothing in the deed providing that if Philipena should die before Jacob, leaving issue, ■such issue should derive any benefit from the property. The provision for the adoption of Christ Anton Winegarth gave him no greater rights than those of the children of Jacob, born either before or after the marriage. As their interests were subject to the contingency of Philipena surviving Jacob, they were defeated by her death during his life-time. We think the mortgage given to the plaintiff’s intestate was a valid hen upon the mortgaged premises, and that the deed to Henry Reinheimer ceased upon the death of Philipena to have any operation, Jacob Reinheimer being then living.

The judgment of the general and special term should be reversed, and the usual judgment for the foreclosure of the mortgage and sale of the mortgaged premises should be rendered in favor of the plaintiff, with costs.

All concur.