author: Ingalls, P. J.:

text:
    WASHINGTON TOBIAS, Appellant, v. THE MAYOR, ETC., OF THE CITY OF NEW YORK, Respondent, Impleaded with others.

      Assignment of a mortgage, not invalidated by reason of the assignor’s not having been in possession for one year pj'ior thereto — 2 R. 8., 691, § 6 — not applicable to a mortgage assignment.

    March 1, 1871, one Lesser Goldstein, the owner of certain premises in the city of New York, executed a mortgage thereon for 52,000, which, after various assignments, was on February 12,1876, duly transfei'red to the plaintiff. September 10,1870, proceedings had been commenced by the city to open Lexington avenue, within the limits of which the lot in question was situated, and on the 10th day of February, 1874, the reports of the commissioners therein were confirmed.
    In an action to foreclose the mortgage, held, that the assignment to plaintiff was valid, and that the fact that his assignor and those under whom he claimed had not been in possession of the premisos for one year prior to the date thereof, did not render it invalid under 2 R. S., 691, section 6.

      Appeal from a judgment of the Special Term, entered on the 28th day of September, 1877, dismissing the plaintiff’s complaint, with costs.
    The action was brought to foreclose a mortgage.
    The court below found the following among other facts :
    I. That on or about the 1st day of March, 1871, the defendant, Lesser Goldstein, made, executed and delivered to the defendant, Henry Goldstein, the bond and mortgage in the complaint described, which mortgage bore date the said 1st day of March, 1871, and was recorded in the office of the register of the city and county of New York on the 31st day of May, 1871.
    II. That the said bond and mortgage was sold and assigned by the said defendant, Henry Goldstein, to the defendant, Elias Kahn, on or about the 24th day of July, 1873, and by the said Elias Kahn to the defendant, Maria Goldstein, on or about the 18th day of May, 1875, and by the said defendant, Maria Goldstein, to the plaintiff in this action, on or about the 12th day of February, 1876.
    III. That the entire consideration paid by said plaintiff to the said defendant, Maria Goldstein, for said bond and mortgage, was $500, and no more.
    IY. That neither the principal sum nor the interest thereon had ever been paid.
    Y. That on or about the 10th day of February, 1874, an order was made by this court in a proceeding then pending therein, entitled, “in the matter of the application of the mayor, aider-men and commonalty of the city of New York, relative to the opening and extending of Lexington avenue from One Hundred and Second street to Harlem river,” in and by which order the report of the commissioners of estimate and assessment, appointed by the court in said proceeding, was in all things confirmed ; and in and by their said report the commissioners reported, among other things, that all the lands and premises mentioned and described in the complaint herein, and in the said mortgage, would bo required to be taken for the purpose of opening and extending Lexington avenue from One Hundred and Second street to Harlem river, and that the above-named defendant, Salmon S. Stevens, was the owner, and seized in fee of, in and to the said lands and. premises, and that they had estimated the loss and damage of the said Stevens, as owner of said lands and premises, at $4,500, by and in consequence of such opening and such taking, and of said owner relinquishing said lands and premises for the purposes afoi-esaid ; and the said commissioners further fixed the 16th day of February, 1874, as the particular time for the actual and practical opening and extending of the said avenue.
    YI. That the plaintiff’s assignor, Maria Goldstein, was not on the 12th day of February, 1876, in the possession of the said lands in the said mortgage and complaint mentioned, and she and those by whom she claimed had not, nor had any of them, been in possession of the said lands, or any part thereof, or of the reversion or remainder thereof, or taken the rents or profits thereof for the space of one year before the said 12th day of February, 1876, or for any part of such year.
    VII. That the defendants, the mayor aldermen and commonalty of the city of New York, became duly and actually seized and possessed of the lands mentioned in the said mortgage and-the said complaint, for the purposes of a public street, on the 16th day of February, 1874, under and in pursuance of the above-mentioned final order or decree of this court, confirming the report of the commissioners of estimate and assessment in the matter of opening and extending Lexington avenue from One Hundred and Second street to Harlem river, in the city of New Yoi’k ; and the said defendants, the mayor, aldermen and commonalty of the city of New York, have ever since the said 16th day of February, 1874, been seized and possessed of the lands aforesaid as owners thereof, in fee simple, under and by virtue of the said final order, judgment or decree, and of the statute in such case made and provided.
    The court further found as conclusions of law :
    I. That the sale, or pretended sale and assignment of the mortgage in the complaint herein mentioned by the defendant, Maria Goldstein, to the plaintiff in this action, on the 12th day of February, 1876, was void.
    II. That the plaintiff has no right to maintain this action against the defendants, the mayor, aldermen and commonalty of the city of New York, and that as to them his complaint must be dismissed, with costs.

      John G. 8hcvw, for the appellant.

      T. B. Olarkson, for the respondent.
   Ingalls, P. J.:

The action was brought to foreclose a certain mortgage on premises in One Hundred and Eighth street, in the city of New York, between the Third and Fourth avenues, which was executed on the 1st day of March, 1871, by Lesser Golstein to Henry Golstein, to secure the payment of $2,000, on or before the 1st day of October, 1872. This mortgage, by various mesne assignments, came into the hands of the plaintiff on the 12th day of February, 1876, for value.

The defendants, the mayor, etc., were made parties to the action, as claiming some interest in the land in question, under proceedings which had been taken to open Lexington avenue from One Hundred and Second street to the Harlem river, which ivas commenced September 10, 1870, and resulted in an order of confirmation, which was made by the Supreme Court on the 10th day of February, 1874. By these proceedings the lands covered by the mortgage were sought to be condemned for public use, being included within the limits of the proposed avenue.

The complaint is in the usual form, and contains the necessary allegation of a demand upon the comptroller, without which a suit cannot be brought.

The answer admits the making of this demand, and sets up the proceedings under the street opening act, and claims to be seized of the lands in question by force of those statutes, free, clear, and discharged of the lien of the mortgage.

Upon the trial, the defendants were permitted to amend their answer by setting up as a further defence that, for a year prior to the assignment of the mortgage to the plaintiff, the defendants were seized and possessed of the premises in question, and that the plaintiff’s assignors had not been in possession of the premises for such year. The plaintiff put in evidence the bond and mortgage and assignment, and proved the amount due.

The court rendered a decision in favor of the defendant, dismissing the complaint with costs, and filed an opinion in which it put the decision solely upon the ground that the assignment of the mortgage, after the order of confirmation, was prohibited by the Revised Statutes. Findings of fact and conclusions of law were made and filed, and duly excepted to.

The court at Special Term deciding this cause upon one ground only, namely, that the assignment of a mortgage to the plaintiff having been made subsequent to the entry of the order confirming the report of the commissioners laying out Lexington avenue, was prohibited by the Revised Statutes (vol 2, p. 713, § 6 [Edm. ed.]), and therefore void. Our attention has been directed to the following provisions of the Revised Statutes, as bearing -upon this question. The following is section six, above referred to.

“ Section 6. No person shall buy or sell or in any manner procure or make, or take, any promise or covenant to convey any pretended right or title to any lands or tenements, unless the grantor thereof, or the person making such promise or covenant shall have been in possession, or he and those by whom he claims shall have been in possession of the same, or of the reversion or remainder thereof, or have taken the rents and profits thereof for the space of one year before such grant, conveyance, sale, promise, or covenant made;” * * *.

The following is section seven of the same statute :

“ Section 7. The two last preceding sections shall not apply to any mortgage executed by a person not in possession of lands, allowed by the provisions of the first chapter of the second part of the Revised Statutes, nor to any conveyance of lands and tenements to any person in the lawful possession thereof.”

The following are two sections of volume 1, page 690, of the Revised Statutes. (Edm. ed.)

“ (147.) Every grant of lands shall be absolutely void, if at the time of the delivery thereof, such lands shall be in the actual possession of a person claiming under a title adverse to that of the grantor.”

“ (148.) But every person having a just title to lands, of which there shall be an adverse possession, may execute a mortgage on such lands.” * * *

We are convinced that these statutes have no application to the mortgage in question or the assignment thereof — they were intended to prevent the conveyance by deed of land, by a person claiming to be the owner, when another party is in possession claiming adversely to such pretended owner. In this case the mortgagor was the owner of the premises, and in the possession thereof, when the mortgage was executed on the 1st of March, 1871. The order confirming the report of the commissioners opening Lexington avenue was not entered until February 10, 1874. The mortgage was assigned to the plaintiff February 12, 1876, and we are unable to perceive why the mortgage could not be assigned so as to transfer a valid title thereto — it was a valid security, and no part of the principal sum had been paid. It is of frequent occurrence that a mortgage is executed by a party who is the owner and in the possession of land, and who subsequently conveys the mortgaged premises, without any reference in the deed to the mortgage, which is assigned by the mortgagee after such conveyance, and while such grantee is in the actual possession of the land holding the same adversely to the whole world. Yet we have never known the validity of such an assignment questioned, on the ground that it was contrary to the provisions of the statute before referred to. If the defendant’s theory is sound, the practicable effort must be to invalidate all the assignments of mortgages which are executed after the mortgagor has conveyed the premises. Such a result could not have been intended by the Legislature in enacting such statutes, which is apparent from the fact that in such statutes the right to mortgage land held adversely is expressly declared, and the assignment of such mortgage is not in terms prohibited. We cannot doubt but that the plaintiff acquired a valid title to the bond and mortgage by the assignment to him, and that the same is in no manner obnoxious to the provisions of such statute.

The judgment must be reversed and a new trial ordered, with costs to abide the event.

Potter, J., concurred.

Present — Ingalls, P. J., and Potter, J.

Judgment reversed, new trial ordered, costs to abide event.


source: Caselaw Access Project

author: Ingalls, J.:

license: Public Domain

text:
    JOHN JOHNSTON and CHARLES JOHNSTON, Appellants, v. CLARA M. PEUGNET, Respondent.

      Mamed woman — when her separate estate is not charged with the payment of goods purchased by he>\

    The plaintiffs, dry good merchants, sold to the defendant, a married woman residing with and supported by her husband, goods which were used in the family, and on account of which her husband paid some §150. The defendant had a separate estate, and so informed the plaintiffs, who sold the goods relying thereon; after the sale she promised to pay therefor. The referee found that she did not charge her separate estate with the payment of the bill.

      Held, that an action would not lie against her to recover the balance unpaid.
    Appeal from a judgment in favor of the defendant, entered upon the report of a referee.

      John McKeon,- for the appellants.

      P. L. McOlellan, for the respondent.
   Ingalls, J.:

This action was brought against the defendant to recover • $605.88 and interest, for merchandise which the plaintiffs’ claim they sold to the defendant, relying upon her separate property as security for payment. The defendant was at the time of the sale a married woman, residing with and being supported by her husband, and the goods so purchased were intended for and actually used in the family ; and Eugene Peugnet, the husband, paid upon the account $150. The referee finds the following conclusions :

NEW YORK SUPREME COURT.

John Johnston and Charles Johnston v. Clara M. Peugnet.

Referee's R&port.

I, the undersigned, to whom this action was referred by an order of this court, to hoar and determine, do report that I have been attended by the parties and their counsel, and have heard the proofs and allegations presented, and having considered the same, do find the following facts :

First. That at divers times between the 26th day of May, A. D. 1874, and the 31st day of May, A. D. 1875, the plaintifis, then co-partners, sold and delivered to the defendant merchandise, consisting of dry goods of the value and at the price in the aggregate of $755.88.

Second. At the time of said sale, the plaintiffs knew from statements of the defendant to them, that she had a separate estate, consisting of real estate left to her by her father, and gave credit to her for said merchandise for that reason.

Third. After the purchase of said merchandise the defendant promised to pay the indebtedness therefor to the plaintiffs.

Fourth. On or about the 13th day of September, 1876, Eugene Peugnet, the husband of defendant, paid to the plaintifis, on account of said indebtedness for said merchandise, the sum of $150, which sum he had earned and received for his services as a physician.

Fifth. That at the time of the sale and delivery of said merchandise, and the incurring of said indebtedness, tire said defendant was, and ever since has been, and now is, a married woman, being the wife of Eugene Peugnet, living with her said husband, who has provided for and taken care of said defendant and their children.

Sixth. The said defendant, since her marriage, has never been engaged in or carried on any trade, profession or business.

Seventh. The said defendant, at the time of the sale and delivery of said merchandise, had and now has a separate estate.

Eighth. The indebtedness incurred for said mercandise was not incurred or created for the benefit of said separate estate of said defendant.

Ninth. At time of the sale and delivery of said mercandise, and the incurring of said indebtedness therefor, the said defendant did not charge her separate estate with the payment of such indebtedness.

And I do find and report the following conclusions of law :

First. That the plaintiffs have not established and have not any cause of action against the defendant.

Second. That the defendant is entitled to judgment against the plaintiffs in this action, with costs.

All which is respectfully submitted.

Dated New York, September 4, 1878.

NATI-I’L B. HOXIE,

Referee.

Upon the trial the plaintiffs relied for a recovery upon the assumption that the defendant created a charge upon her separate property, as security for the payment of the price of the goods sold. The referee has decided, as matter of fact, that no such charge was created, and his decision should not be reversed, unless the facts show that the conclusion which he has drawn from the evidence is clearly erroneous. It is not sufficient lor us to be satisfied that the defendant promised to pay for the goods, and that she made representations in regard to her separate property, and the rents which she expected to receive therefrom. All this may have influenced the plaintiffs in making the sale, yet it does not follow that a charge upon her separate estate has been thereby created. We are referred to the case of Conlin v. Cantrell (64 N. Y., 217), with apparent confidence, on the part of the appellants. Some of the features of that case are similar to those of the one we are considering; but others, which were mainly relied upon in deciding the case referred to, are found directly the reverse in this: In that case the wife lived separate and apart from her husband, and supported herself and children, and the work was done for her and the children, under a promise to pay therefor when rents were received from a separate estate ; but in this case, as has been before remarked, the defendant lived with and was supported by her husband. Although a charge may be created by a married woman upon her separate estate without a writing (Maxon v. Scott, 55 N. Y., 247), yet the evidence should be very clear and explicit, showing an intention to create the same by parol, before it should be declared by the court. A married woman might talk very freely about her separate estate, and of her intention to see that a debt should be paid, yet not have the remotest idea that she was creating an incumbrance upon her separate property. In this case the referee, from all the facts and circumstances, has determined that no such charge was created, and we think his conclusion is justified by the evidence, and should be sustained. (Eisenlord v. Snyder, 71 N. Y., 45; Weir v. Groat, 4 Hun, 193; Baker v. Lamb, 11 id., 520.)

We have examined the exceptions taken to the findings, and the refusals to find certain facts, and discover no error which could materially prejudice the plaintiffs’ case.

The judgment should be affirmed, with costs.

Beady, P. J., concurred.

' Present — Beady, P. J., and Ingalls, J.

Judgment affirmed, with costs.


text:
    ELIZABETH S. W. FREUND and others, infants, by PETER B. OLNEY, their Guardian ad litem, Respondents, v. WILLIAM T. WASHBURN, Appellant.

      Appointment of a guardian ad litem — application for, may he made by a general guardian appointed in another State

    The infant plaintiffs in this action were, at the time of its commencement, infants under the age of fourteen years, and resided with their father, their general guardian, at Breslau, in the kingdom of Prussia. April 2, 1877, one Grinnell was appointed their general guardian by the Probate Court of Suffolk county, Mass., and he thereafter applied for, and procured, the appointment of Peter B. Olney, as guardian ad litem, for said infants to bring this action.

      Meld, that the application to appoint the guardian ad litem was properly granted, and that it was not necessary that a general guardian should have been appointed in this State for the purpose of making such application.
    Appeal from an order of the Special Term denying a motion to set aside the summons and complaint in the above entitled action, on the ground that the appointment of the guardian ad litem was irregular.

      George Bell, for the appellant.
    Before a foreign guardian can exercise any rights, powers or functions virtute officii in this State, he must take out ancillary letters of guardianship in this State. (Story on Conflict of Law [6th ed.], 504«; Cooley’s Constitutional Limitations, 420-421; Schouler’s Domestic Relations [2d eel.], 442, 444; Leonard s. Putnam, 12 Am. R., 106; Morrell s. Dickey, 1 Johns. Ch., 133; Williams v. Storrs, 6 Am. R., 353; McLoskey s. Reid, 4 Braclf., 334; Parsons s. Lyman, 20 N. Y., 108; Doolittles. Lewis, 7 Johns Ch., 45; Vrooms. Van Horn, 10 Paige, 544; Vermilyea s. Beatty, 6 Barb., 429; Smiths. Webb, 1 id., 231; Story on Conflict of Law, sec. 512.)

      Edward, D. Bettens, for the respondents.
    The right of a foreign guardian to petition a New York court for the appointment of a guardian ad litem, after a full and careful examination, has been established. (Rogers s. McLean, 10 Abb., 306, Special Term; Rogers s. McLean, 11 id., 440, General Term; Rogers s. McLean, 34 N. Y., 536, Court of Appeals.)
   Ingalls, J.:

When this action was commenced the infants were under the age of fourteen years, and resided with their father who is their general guardian, and resides at Breslau, in the kingdom of Prussia. The note upon which this action is brought is the property of such infants. On the 2d day of April, 1877, Charles E. Grinnell was appointed by the Probate Court of Suffolk county, Massachusetts, the general guardian of these infants ; and in that capacity applied for, and procured the appointment of the said Peter B. Olney as guardian ad litem of said infants to bring this action, on their account, to collect the note. A motion was made at Special Term to set aside the summons and complaint, on the ground that the guardian ad litem could not be appointed on the application of Grinnell, who resided in the State of Massachusetts.

The motion was denied and the defendant has appealed to this court. There can be no doubt but that the Supreme Court has jurisdiction to entertain the action and to render a judgment which will bind the parties, and will be a complete protection to the defendant if he is compelled to pay the note. At most, a question of regularity in commencing the action is presented by this appeal, and we think the application to set aside the proceedings was purely technical and without merit. (Wolford v. Oakley, 43 How., 118; Parks v. Parks, 19 Abb., 161; Barnard v. Heydrick, 49 Barb., 63; Croghan v. Livingston, 17 N. Y., 218.)

In regard to the manner a guardian ad litem is to be appointed, the Code of Civil Procedure provides as follows : “ Section 470. The guardian must be appointed upon the application of the infant if he is of the age of fourteen years or upwards ; or, if he is under that age, upon the application of his general or testamentary guardian, if he has one, or of a relative or friend. If the application is made by a relative or friend notice thereof must be given to his general or testamentary guardian if he has one ; or, if he has none, to the person with whom the infant resides.” In this case the application was made by a person who combined the two relations to the infants, that of guardian and friend, and had charge of at least a portion of their property, including the note in question, and we must assume that he was capable and responsible. Notice of the application for the appointment of such guardian ad litem certainly was not required to be given to the father, who is a citizen of a foreign government. We are satisfied that the application was properly made by Grinnell, the guardian and friend of the infants, and that the requirement of the Code, in this respect, has been substantially complied with.

We cannot regard it indispensable that a general guardian should have been appointed in this State, for the purpose of applying for the appointment of a guardian ad litem to bring this action on • behalf of the infants. Such a proceeding would have added nothing to the security of the infants, but would have increased the expense and caused delay.

The defendant can suffer no possible injury from the manner the action has been commenced, and if his purpose is to create delay and to embarrass the plaintiff in the collection of the note, he should not be unnecessarily gratified.

We conclude that the plaintiff’s practice is defensible, and the order of Special Term should be affirmed, with costs and disbursements.

Beady, P. J., concurred.

Present — Beady, P. J., and Ingalls, J.

Order affirmed, with costs and disbursements.


author: Per Curiam:

text:
    ISAAC V. FRENCH, as Receiver of the Peoples’ Savings Bank of the City of New York, Respondent, v. JOHN W. SALTER, Appellant.

      Joinder of causes of action — what not allowed — Code of Civil Procedure, § 484, sub. 8 — what cannot be joined under.

    A cause of action against the trustee of an insolvent sa-vings bank, to recover the damages occasioned by unauthorized and illegal investments made by him, cannot be joined with a cause of action upon a bond given by him to assist in making up a deficiency in the assets of the bank.
    Appeal from an. order of the Special Term, overruling a demurrer to the complaint herein.

      George H. Foster, for the appellant.

      Francis O. Barlow, for the respondent.
   Per Curiam:

The complaint contains five causes of action. The first is to recover the money lost or wasted by the defendant, as trustee, by the investment of the funds of the bank in certain North Carolina bonds, which investment is claimed to have been illegal under the statute. The second and third causes of action are like the first, except that they relate to other purchases of North Carolina bonds. The fourth and fifth causes of action rest on two bonds given by the defendant to assist in making up a deficiency in the assets of the^bank. The defendant demurred, because the first, second and third causes of action, arising out of what was claimed to be the infidelity of trustees to their trust, were improperly united to the fourth and fifth causes of action. He demurred to these causes of action for other reasons, which it is not necessary to consider. He demurred to the fourth and fifth causes of action, because it appeared on the face thereof that the complaint did not state facts sufficient to constitute a cause of action.

It is conceded by tbe learned counsel for the plaintiffs in this case that the first, second and third causes of action are in tort founded upon an alleged violation of duty on the part of the defendant as one of the trustees of the bank. There can be no doubt upon this proposition. The gravamen of the action against the defendant in regard to these causes being his violation of duty, the action in respect of them is necessarily against him as a trustee.

The fourth and fifth causes of action are necessarily against him as an individual executing the bond in reference to a condition of affairs resulting from his conduct as a trustee. There is no provision of the Code under which, in our judgment, these causes of action can be united.

The learned counsel for the plaintiff insists that, under either the eighth or ninth subdivision of section 484 of the Code of Civil Procedure, these different claims may be joined. We have examined the section, and are obliged to differ from him in his view.

Subdivision eight authorizes a union upon claims against the trustee by virtue of a contract, or by operation of law. The liability of a trustee to respond to a claim of this character results from facts and circumstances to be established by evidence. For example, that an investment was made in a manner not permitted by law, and that a depreciation of the thing purchased occurred occasioning the loss to the stockholders. His responsibility does not arise by operation of law within the meaning of subdivision eight. To bring this case within that subdivision, there must be a liability which arises simply from the trustee occupying that position. „In this case it arises not only from the fact that the defendant held such a position, but that in holding it he did, or omitted to do, certain things which the law required him to do, and which made him liable. • His liability, therefore, is by operation of law and fact.

The union of claims, authorized by subdivision nine, relates to claims arising out of the same transaction, connected with the same subject of action, and not included within one of the previous subdivisions of the section.

The claim upon the bonds does not arise out of the same transaction or transactions referred to in first, second and third causes of action, and is not connected with the same subject, because, as we have suggested, the claim upon the bonds is against the defendant as an individual, whilst the claim for improper investments is against him as a trustee. (Mappier v. Mortimer, 11 Abb. [N. S.], 458; Clark v. Coles, 50 How., 178; Wiles v. Suydam, 64 N. Y., 173, and cases cited.)

For these reasons we think that the demurrer to,the first, second and third causes of action ivas improperly overruled, and that the order made in relation to them should be reversed.

In regard, however, to the demurrers to the fourth and fifth causes of action, we deem it only necessary to say that we think they were not well interposed, and cannot be sustained. We entertain no doubt that the complaint in that respect contains abundant facts sufficient to constitute a cause of action.

Ordered accordingly, without costs to either party on this appeal.

Present — Brady, P. J., and Potter, J.

Order overruling demurrer to the first, second and third causes of action reversed. Order affirmed as to fourth and fifth causes of action. No costs of appeal to either party.


text:
    THE GOLD AND STOCK TELEGRAPH COMPANY, Respondent, v. ELLIOTT W. TODD AND LOUIS L. TODD, Appellants.

      Contract of a telegraph company with its subscriber — when a prohibition therein against the publication by the subscriber of information obtained thereby, will be enforced by injunction.

    The plaintiff was incorporated under the act of 1848, providing for the incorporation of telegraph companies; its business being to procure each day, from the various exchanges in the city of New York, the prices and quotations of the various articles there sold, and transmit them to customers agreeing to receive and pay therefor. The subscription agreement provided, that no subscriber should sell or give away copies of the reports, in whole or in part, nor permit any outside party to copy them for use or publication.

      In an action brought against a subscriber, for having violated this provision by-furnishing such quotations, for publication, and by allowing others to use the same, held, that an injunction restraining him from mailing such use of the quotations so furnished was properly granted.
    Appeal from an order continuing an injunction restraining the defendants from using certain quotations, furnished to them by the plaintiff, in violation of the terms of a contract between the parties.

      Luther R. Marsh <& James Thompson, for the appellants.

      G. W. Boren, for the respondent.'
   Per Curiam:

The plaintiff is a corporation created and existing under and by virtue of an act of the Legislature of the State of New York, entitled “an act to provide for the incorporation and regulation of telegraph companies,” passed April 12, 1848 (chap. 265), and of the several acts additional thereto, and amendatory thereof.

The business of the plaintiff consists in procuring each day from the gold, cotton, stock and produce exchanges, in the city of New York, the prices and quotations of the articles respectively sold at said exchanges and transmitting them by means of instruments, which are patented inventions belonging to the plaintiff, immediately and simultaneously to customers with whom they have entered into contracts for that special purpose, and who are principally and almost exclusively members of said exchanges.

The defendants made application to the plaintiffs to secure the transmission of such messages in which they succeeded, axid upoxx stipulatioxxs contained ixx the agreement, of which the following is a copy:

Form 118. No.

The Gold and Stock Telegraph Company, > General Opeices, Western Union Building, N. Y. \

CONDITIONS.

This company will furnish to its subscribers as correct gold, stock, cotton and produce quotations and general commercial news reports, as it can obtain by the employment of experienced reporters, but it will not bo pecuniarily responsible for the accuracy of the same, nor for omissions in the service.

These reports are furnished to subscribers for their private use in their own business exclusively. It is expressly stipulated that such subscribers will not sell nor give away copies of the reports, in whole or in part, nor permit any outside party to copy them for use or publication; under this rule the subscription by one party, for the benefit of himself and others, at their joint expense, will not be received. The company reserves the right to discontinue the delivery of the reports to any party taking them for any public or outside use, or when they are made use of in any manner detrimental to its interests.

It is understood that the service terminates only at the expiration of any calendar month. If discontinued during the month for the convenience of the applicant, the full month’s charges will be payable by him.

-, 187 .

To “ The Qolcl and Stoclc Telegraph Company

You will please connect office No. in telegraphic circuit, by one of the reporting instruments of your company hereby agree to pay dollars per calendar month, for use of instruments and reports under the company’s conditions.

This agreement to be binding months from the date hereof and thereafter, until canceled by one month’s notice, unless by special agreement indorsed hereon.

Accepted.

Secretary.

Progressive No.

The plaintiffs charge the defendants with having violated the conditions and stipulations contained in the application and agreement, by not limiting the use of the reports and messages to their own business exclusively, and by exposing and giving them away to large numbers of persons not subscribers of the 'plaintiff, and by selling and giving away copies of the reports, and permitting outside parties to copy them for use and publication, and in various ways applying them to public and outside uses. The plaintiffs also charge substantially that the use made of these quotations was for gambling purposes, the details of which it is not necessary to consider in disposing of this appeal.

Various litigations and controversies have sprung up in reference to this subject, and it appears that, in the case of Kelly v. The Gold and Stock Telegraph Co., the right of the plaintiffs to prevent such violation was passed upon and determined in their favor by Donohue, J., and in the action which the defendants brought against the plaintiff, in reference to the subject, this right was again maintained by the decision of Justice Lawrence.

The counsel for the appellants have presented, in a very-elaborate brief, their views upon the numerous questions which they deemed it necessary to consider as bearing upon the main question involved in this controversy. We have examined it with great care, but we think that the right of the plaintiff to maintain this action and the injunction is determined by the character of the agreement, under which it stipulated to furnish and the defendants agreed to receive the messages contemplated by its provisions.

The organization of the company was for the private transmission of messages to subscribers only, and that object was kept in view in making the contract which was made and existed between it and the defendants. It may not be improper hero to observe that if the defendants were allowed to make public use of the messages received by them, notwithstanding the provisions of the contract mentioned, the object and design of the company might be destroyed, because the defendants might establish a system by which, having received the messages, they could transmit them to various parts of the city of New York. Without reference to that, however, and regarding the question as one resting upon contract, we think that the injunction was properly granted and justly continued.

We do not think that under the statute of 1848, to which reference has been made, there rests upon the plaintiffs any public obligation to transmit, under their organization for public purposes, the information which they contemplated sending to their subscribers. They were organized for private transmissions; in other words, for sending to persons, with whom they contracted tor that purpose, messages and reports, and not for the transmission of messages for the public in general.

For these reasons, and without any more extended observations, we think the order appealed from must be affirmed.

Present — Beady, P. J., and Pottek, J.

Order affirmed.


text:
    GRAND RAPIDS AND INDIANA RAILROAD COMPANY, Respondent, v. JOSHUA C. SANDERS, Appellant.

      Bona fide vurehaser of negotiable bonds — may collect the whole amount secured thereby — not limited to the amount paid by him.

    A bona fide Folder for value of neg-otiable bonds, wrongfully put in circulation, is entitled to enforce payment of the whole amount secured thereby, and is not limited to the amount paid by him upon their purchase.
    Appeal from a judgment entered upon the trial of this action by the court without a jury.

      Charles Tracy, for the appellant.

      B. F. Dunning, for the respondent.
   Per Curiam:

This is a suit in equity, brought by the plaintiff to compel the surrender for cancellation of thirty-one of the bonds issued by the plaintiff for $1,000 each, held by the defendant.

The plaintiff is a corporation created under the laws of Michigan and Indiana, and was authorized to make and issue the bonds, with others of the same series, amounting in all to $4,500,000. When made they were placed in the hands of the president of the company with full power and authority to dispose of, and to negotiate the sale of them.

The complaint alleges that the defendant’s bonds were fraudulently, and without the consent of the plaintiff, obtained from King, Sutton & Co. ; and that the plaintiff received no value or consideration for them ; and, further, that the defendant obtained possession of the bonds with knowledge that the same had been fraudulently, and without any value or consideration, obtained from thé plaintiff.

The defendant denied the allegations of fraud and knowledge, and alleged that he purchased them for a valuable consideration. It appears that the president deposited the bonds in controversy with King, Sutton & Co., as collateral security for loans made to him, and that King, Sutton & Co. sold them to David S. Duncan, and that the latter sold them to the defendant.

The learned justice presiding in the court below found that King, Sutton & Co. were duly authorized to act as agents for the plaintiff for the sale of these bonds in the city of New York, and that they and other pledgees had full power and authority to sell, transfer or hypothecate the bonds pledged with them, and that by virtue of such authority they could give a good and absolute title to said bonds to a bona fide purchaser. That Duncan, by his purchase of the bonds from King, Sutton & Co., acquired and could give a good and valid title to them, and was a purchaser and holder of the same in good faith and for a valuable consideration.

He further held that the defendant was a bona fide holder for value, but inasmuch as in his judgment the original hypothecation of them by the president was not within the authority conferred upon him, he arrived at the conclusion that the defendant was not entitled, upon their surrender to the' plaintiffs, to any more than he actually paid for the bonds, which was less than their par value, and this view seems to have been predicated of the proposition that, so far as the defendant’s rights were concerned, equity and good conscience would be satisfied if he were allowed to receive the full indemnity for his expenditure out of the bonds. The learned justice also declares these instruments to bo negotiable in his opinion, citing several authorities to sustain the proposition thus announced.

This case is presented- to us on the findings of the court at Special Term and the pleadings, and not upon the evidence, and they are controlling in the consideration of the rights of the respective parties to this controversy.

We are at a loss to understand why the defendant, being a bona fide purchaser without notice of any existing equities and for value, the bonds being negotiable instruments, passing by delivery, is not entitled to recover their full value. It has been declared in a series of cases that bonds similar to those in controversy, are negotiable and subject to the same rule as commercial paper, are transferable by delivery, and when bought in the ordinary course of business and for value, without notice, cannot be assailed by any equities existing between prior parties to the instrument. Indeed it has been held that a bona fide purchaser for value is protected in' his possession and title, even although the purchase was made from a person by whom they had been stolen. (Story on Agency, sec. 228 and cases cited; Brainerd v. The Harlem R. R., 25 N. Y., 498; White v. The Vt. and Mass. R. R., 21 How. [U. S.], 575; Gould v. Sterling, 23 N. Y., 464; Commissioners v. Aspinwall, 21 How. [U. S.] R., 539; Sabriskie v. C. C., etc., R. R. Co., 23 id., 381; Mercer v. Hacket, 1 Wall., 83; Birdsall v. Russell, 29 N. Y., 220-250; 1 Parsons on Bills, 278; Force v. Elizabeth, 27 N. J. Eq., 403; Consolidated Association of Planters v. Avegno, 23 La. Ann., 552; Com. of Marion Co. v. Clark, 94 U. S. [4 Otto], 278.)

When we have ascertained the negotiable character of the bonds, the bona fide character of the purchase, and of the possession acqurcd in the usual course of business and for value, the duty incumbent upon us seems to be very plain; and that is to declare that the holder, the defendant in this case, is entitled to the benefit and advantage arising from his possession, of the bonds and is entitled to full protection in that respect, without any reference to the amount that he paid for them. It may bo that there existed in the findings of the court sufficient facts to warrant the application of the doctrine of estoppel in pais, on account of the information given to the president of the company by Duncan of his possession of the bonds, and of the declaration of the former that they were valid and would be paid. Bub wo do not deem it necessary to consider this element of the case, preferring to rest our judgment upon the ground that the defendant being a bona fide holder for value of a negotiable instrument, without notice, is entitled to all the benefit arising from his purchase.

We do not feel called upon in this case to modify the judgment by increasing it as suggested by the counsel for the appellant; wo think it more in • consonance with our duty to direct a now trial, and to leave the judgment to be rendered to the further consideration of the case upon such evidence and such developments, as may be made on another trial.

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

Present — Beady, P. J., and Pottee, J.

Juclment reveled, new trial ordered, costs to abide event.


author: Per Curiam :

text:
    J. MARCUS BOORMAN, Appellant, v. THE ATLANTIC AND PACIFIC RAILROAD COMPANY, Respondent. SAME v. SAME.

      Section, 870 of the Code of Civil Procedure — does not authorize the examination of the directors of a defendant corporation.

    The directors of a defendant corporation are not parties to the action, and an order requiring them to appeal- for examination and to produce books and papers is not authorized by section 870 of the Code of Civil Procedure.
    Appeal from order made by the chief justice of the Court of Common Pleas, sitting as county judge, vacating an order made by'him under section 870 of the Code of Civil Procedure, requiring certain of the directors of the defendant corporation to appear and testify, and to produce certain books and papers for inspection, so as to enable plaintiff to take copies thereof.

      J. M. Boorman, for the appellant.

      John E. Burrill, for the respondent.
   Per Curiam :

The examination of the directors named in this proceeding was not authorized, unless within the purview of section 870 of the Code of Civil Procedure. As they are not parties the statue does not apply to them. (The People v. The Mutual Gas-light Co., W’kly Dig. [September 24, 1878], p. 204.) The production of the books and papers was a part of the proceeding to examine, and in the nature of a subpoena duces tecum, and fails therefore, inasmuch as the order was made without authority. The learned judge properly vacated it.

Order affirmed, with ten dollars costs and disbursements of the appeal.

Present — Brady, P. J., and Potter, J.

Order affirmed, with ten dollars costs and disbursements.


text:
    KATE L. HITCHCOCK, Appellant, v. JOHN H. LINSLY sole Executor, etc., of JOHN C. HITCHCOCK, and Trustee Under the Same, Respondent.

      Right of a cestui que trust to sue for his share of an estate, without joining others entitled to similar shares.

    In Mai'ch, 1873, the accounts of the defendant, as executor of John C. Hitchcock, deceased, were passed by the surrogate, and it was adjudged that he then had $14,538.33, invested for the benefit of the plaintiff and her two sisters. In this action brought by the plaintiff alone, the complaint alleged that she was twenty-one years of age; that she had demanded payment to her of one-third of the investment; that the defendant refused to pay it, and that he threatened to bring an action for the construction of the will, though the will was plain and no construction of it was necessary,

      Held, that the action could be maintained without making the infant sisters parties thereto.
    Appeal from a judgment- sustaining a demurrer to the complaint.

      A. B. Crane and 8. O. Lockwood, for the appellant.
    The settlement of the estate before the surrogate was a final accounting, and determined the precise amount of each child’s share. The defendant from that time became trustee for each child severally. The rule is well established that where there are several legacies, each may sue for his own, excepting residuary legatees. (Kettle v. Gravy, 1 Paige Ch., 417, see p. 270, also; Ualleit v. Hallett, 2 id., 16; 1 Dan. Ch. Pr. [4th ed.], 211; Haycock v. Haycock, 2 Ch. Cas., 124; Oromer v. Pinckey, 3 Barb. Ch., 466.) The reason why a residuary legatee could not sustain an action without joining the others was because the amount could only be determined by determining the amounts of all, and to protect the executor from a multiplicity of suits, all were required to be made parties. (Brown v. Pickets, 3 John. Ch., 553; 1 Dan. Ch. Pr., 238.) But this rule was one of convenience. And if the legatees were non-residents, it was dispensed with. (Barb, on Parties, 418-419; Parsons v. Neville, 3 Bro. C. C., 365; Springy. Jenkins, 1 Ired. Ch., 126; Harvey v. Harvey, 4 Beav., 215-220.) The non-resident infants are not necessary parties. (Newbold v. Warren, 14 Abb., 80; Hillman v. Hillman, 14 How. Pr., 456; Wallace v. Eaton, 5 How., 99; Story Eq. PL, § 150; 1 Dan. Ch. Pr., 212; Western P. R. Go. v. Nolan, 48 N. Y., 513; Story Eq. PL, §§ 207-212; 1 Dan. Ch. Pr., 219; Smith v. Snow, 3 Mad. Ch., 10; Hare y. Stringer, 15 Beav., 206; Lenaghan v. Smith, 2 Phillips, 301; Hutchinson v. Townsend, 2 Keen, 675; Hughson v. Gookson, 3 Young & Collyer Exchq. B., 578; Perry v. Knott, 5 Beav., 293.)

      S. B. Brownell, for the respondent.
    The cestuis que trust must be made parties in a suit to take the property out of the hands of the trustees and bring it into court. (Calvert on Parties, 211; Manning v. Thesiger, 1 S. & S., 116; Wilkinson v. Pansy, 4 Buss, 273; Calvert on Parties, 218; approved, Sherman v. Burn-ham, 6 Barb., 404.)
   Per Curiam:

This action is brought against the defendant, as executor and . trustee under the will of John C. Hitchcock, deceased, to recover one-third of that part of the estate given by the will to the plaintiff and her two infant sisters.

The complaint sets out the will in extenso, and alleges, amongst other things, that the defendant has filed and passed his final accounts as executor, and that by the surrogate’s decree, made March 17, 1873, the trust estate iu the defendant’s hands, for the benefit of the plaintiff and her sisters, was adjudged to be $14,538.33 on the 1st day of March, 1869, and was invested; and, further, that she is twenty-one years of age ; that she has demanded an account of one-third of the investment; that the defendant has refused to pay the same, and threatens to bring an action for the construction of the will and directions as to his rights and duties. She also alleges that she is informed and believes that the duties of the defendant as trustee are plain and direct, and that no judicial construction of the will is required for his instruction.

The defendant demurred, upon the ground that there was a defect of parties plaintiff or defendant, and insisted that the infant sisters alluded to should have been made parties to the action. This view of the case was adopted by the justice presiding at the Special Term, but no opinion ivas expressed, as appears from the papers. An examination of the authorities leads us to the conclusion (although, perhaps, there may be some conflict in them) that the action may be maintained in its present form, and that the infant sisters are not necessary parties to the action.

The following authorities sustain the proposition: Hughson v. Cookson (3 Young & Collier Ex., 578); Hutchinson v. Townsend (2 Keen, 675); Lenaghan v. Smith (2 Phillips, 301); Hares v. Stringer (15 Beav., 206); Story’s Equity (8th ed., §§ 207, 212)

The judgment should be reversed.

Present — Beady, P. J., and Pottee, J.

Judgmeut reversed.


text:
    In the Matter of the Petition of MARSHALL O. ROBERTS to Vacate certain Assessments.

      Chap. 86 of 1813 and chap. 302 of 1859, seating assessors in New York city — are constitutional —■ Chap. 308 of 1861 —• is not an unlawful delegation of the taxing powen\

    Chapter 86 of 1813 and chapter 302 of 1859, providing for the appointment of assessors, charged with the duty of making the estimates and assessments for local improvements in the city of New York, are constitutional and valid.
    Chapter 308 of 1861, creating the board of revision and correction is not unconstitutional, because it delegates the taxing power to persons not elected by or responsible to the people.
    Appeal from an order made at Special Term, denying the petitioner’s application to vacate certain assessments.

      John J. Townsend, for the petitioner, appellant.

      J. A. Beall, for the City of New York, respondent.
   Per Curiam:

An examination of the proceedings in this matter fails to reveal any ground for vacating the assessment, complained of, and we might, perhaps, with propriety, rest our decision upon the brief opinion expressed by Mr. Justice Lawrence on denying the petitioner's application. But we think it bettor to elaborate the views expressed by him. The act of 1813 (chap. 86) directs the mode in which the expenses of local improvements shall be ascertained and assessed. It provides that the mayor, etc., shall appoint such skillful and disinterested persons as they may think proper, to make the estimate and assessment of the expenses. In 1859 (Laws of 1859, chap. 302, sec. 15) the Legislature provided for the appointment of a permanent board of assessors, charged with the duty of making the estimates and assessments for local improvements required by law. The proceedings herein were in conformity to these statutes. The assessors, however, acted, not only under the act of 1859 (supra), but were specially directed and appointcd.to do so by the mayor, etc., by ordinance; They had power to declare the expenses of the improvement, and to make the assessment and distribution of such expenses among the owners of the property benefited in proportion to the benefit. They aver that they have discharged this duty, and it appears that it was done in the usual way in which such estimates and assessments are made. The exorcise of this power was long since sustained, and has not been heretofore questioned that we are aware of. (Manice v. Mayor, etc., 8 N. Y., 120; Wetmore v. Campbell, 2 Sandf., 341.)

The assessment made was confirmed by the board of revision and correction of assessments, and they had full and exclusive authority in the premises. (See Laws of 1861, chap. 308, § 1; Laws of 1872, chap. 580, § 6; In re Tappen, 36 How., 390; In re Mayer, 50 N. Y., 507, 508.)

The learned counsel for the appellant, in an elaborate brief, has presented his points upon the questions involved in this appeal, and among others urges the unconstitutionality of the act by which the board of revision and correction of assessments was created. But we regard his argument as an assault upon the system of taxation now existing in this municipality, which may, probably, from the views expressed by him, require some interference on the pail; of the Legislature. We are not authorized to interfere with this system, whatever we may think about it. It is enough lor our disposition of the appeal to know that the laws have been observed, and that they are not, nor is any of them unconstitutional.

The proposition that the creation of the board of revision and correction, under theactof 1861 ('sujpra), is unconstitutional, because it purports to delegate the taxing power to persons who are not the chosen representatives of the people, nor responsible; and because it confides to them a political power, cannot be sustained.

We regard the decision In re Zborowsky (68 N. Y., 91, 92), as conclusive upon this question. In that case it appeared that power to construct sewers was taken away from the common council and vested in the Croton aqueduct board by chapter 381 of the Laws of 1865 ; and it was claimed that the act was unconstitutional as taking the power away from the municipality ; yet the court held that the power was still continued in the corporation, but was exercised through the Croton aqueduct board. The sixth section of the act of 1861 provided that the expense incurred by the Croton aqueduct board in pursuance of the act, including the cost of the land, should be assessed upon the property benefited by the improvement made; and that such assessment should be laid, confirmed and collected in accordance with the law relative to assessments then in force in this city; and this conferred upon that board a quad taxing power. They were, however, the mere agents or representatives of the municipality in the exercise of this authority.

In conclusion it may be said that whatever is done by the respective persons or departments, called into requisition in the perfection of such a proceeding as this, is done by persons acting on behalf of the municipality, and under a system established by law, the value and propriety of which, though it may be subject to criticism, is not illegal.

The order should be affirmed.

Present — Brady, P. J., and Ingalls, J.

Order affirmed.


text:
    In the Matter of the Petition of CHARLES A. CHEESBROUGH to Vacate an Assessment.

      Ghajp. 566 of 1871 — constitutionality of— a S/rain cannot be built on a private lot ' without compensation to the owner.

    Chapter 566 of 1871, authorizing the draining of private lots in the city of New York, by blind drains, to be constructed underground by the department of public works, upon the certificate of the board of health, that the drainage thereof is necessary for the protection of the public health, and providing for the collection of the expense thereof by an assessment on the property benefited, is unconstitutional and void, because no provision is made for compensation to the owner of the lands under which suph drains are to be constructed.

      People ex rel. Williams v. Haines (49 N. Y., 587), followed.
    Appeal from an order made at Special Term, vacating an assessment.

      J. A. Beall, for the City of New York, appellant.

      Alexander B. Johnson, for the petitioner, respondent.

      See Matter of Van Buren, ante, p. 527.

   Per Curiam :

The petitioner is the owner of certain premises in the Twelfth ward, in the city of New York, assessed for the building of underground drains between the Kingsbridge road and the Harlem river on One Hundred and Seventy-third. and One Hundred and Eighty-third streets. The board of health, by a resolution passed on the 17th of March, 1874, directed the commissioner of public works to cause the plots or parcels mentioned to be drained by other means than by sewers, under and by virtue of the provisions of chapter 566 of the Laws of 1871. The contract for the drain was made on the 25th of April, 1874, and the assessment confirmed on December 1, 1876. In June, 1878, the petitioner commenced this proceeding, alleging a number of reasons why the assessment should be vacated.

The learned justice, to whom the consideration of this case was presented, granted the order vacating the assessment, upon the ground that an easement could not be acquired in the petitioner’s land, without making compensation, under the provisions of the Constitution of the State. The learned justice declared in his opinion that he would have been inclined to uphold the assessment, on the ground that the act of 1871 was a proper exercise of the sanitary powers of the State for the protection of the health and lives of its citizens, if he had not deemed himself controlled by the decision in the case of the People ex rel. Williams v. Haines (49 N. Y., 587), and the Matter of Rhinelander (68 N. Y., 105). And this inclination was doubtless founded upon the exclusive powers conferred upon the board of health of the city of New York, by the acts of the Legislature, from a very early period in the history of the State, down to tho time that the last act of the Legislature on the subject was passed. There is Some analogy between the quasi appropriation of the petitioner’s property, and the use of the property of the relators in the case of the People ex rel. Williams v. Haines, inasmuch as the act of 1867, chapter 774, under which the commissioners acted in reference to the low lands of the town of Royaltou, in Niagara county, declared that in the judgment of the Legislature it was needful for the public health of the people ■livins: about such lands, that the lands should be drained and reclaimed. The act, therefore, was an exercise of the power of the State upon a subject affecting the public health.

It appears, however, in that case, that the commissioners made open ditches or canals, and to accomplish the purpose for which the act was intended, the right of entry was necessarily to be continued so long as the ditches or canals should exist. In this case the drains are blind or underground drains, and except so far as they occupy a portion of the earth beneath the surface cannot, in any way, interfere with the property, rights or interests of the owners. On the contrary, it may be said that they are a benefit to these interests. We think that this establishes an essential difference between the two cases, but do not feel disposed to assume the responsibility of declaring that the case of the People ex rel. Williams v. Haines is not controlling upon the disposition which should be made of this appeal.

There is no doubt that from the year 1796, the board of health of this city has possessed very large supervisory powers iir reference to the streets, and to all matters pertaining to the health of the inhabitants, and many of these extraordinary powers have been sustained by the decisions of this court, and the constitutionality of them declared by the court of last resort.

The following cases, we think, illustrate the accuracy of these propositions : (Met. B’d of Health v. Heister, 37 N. Y., 661; People ex rel. Cox v. Special Sessions, 7 Hun, 214; Health Department v. Knoll, 70 N. Y., 531; Gregory v. City of New York, 40 id., 273; see, also, Blazier v. Miller, 10 Hun, 435.)

As we have suggested many of these powers are of very ancient date. (See Greenleaf’s Laws of New York, vol. 3, p. 305, act of 1st of April, 1796.)

And it has been supposed that to respond to the exigencies which call into active exercise the authority of the board of health, the powers conferred upon it were frequently such as would be objectionable, if not unconstitutional, if exorcised by any other department of the city of New York. (See Laws 1866, chaps. 74, 686.) And this extraordinary gift of authority was predicated of the proposition, that the board of health was in the nature of a police department, charged especially with duties and responsibilities with regard to an important subject affecting not only the interests, but the lives of the inhabitants of the city of New York. As remarked by Woodruff, J., in the case of Gregory v. The City of New York (supra) : “ The importance of sustaining that board in all lawful measures, tending to secure or promote the health of the city, should make us cautious in declaring any curtailment of their authority except upon clear grounds. On the contrary, powers conferred for so greatly needed and most useful purposes should receive a liberal construction for the advancement of the ends for which they were bestowed.”

Although we entertain great doubt of the applicability to this proceeding of the rule declared in the People ex rel. Williams v. Haines, nevertheless we think it better to concur with the learned judge at Special Term in declaring the assessment to be void for the reasons given by him, leaving it for the court of last resort to say whether the case referred to settles the law by which the power of the board of health is to be exercised in this and kindred cases.

The order should be affirmed, with ten dollars costs and disbursements.

Present — Brady, P. J., and Ingalls, J.

Ordered accordingly.


author: Potter, J.: Brady, J. :

text:
    HENRY D. DONNELLY, as Sequestrator of the Property of WILLIAM WEST, Appellant, v. WILLIAM WEST AND EMMA L. SHAW, Respondents.

      Sequestrator appointed aftei’judgment in an action for a limited divorce — power of, to sue to set aside a fraudmlent conveyance.

    The complaint herein alleged that in an action for separation, brought by a wife against her husband, a judgment was entered in her favor, by which he was required to pay certain sums of money to her, and to give security therefor. That he had failed to comply therewith; that he had left the State to avoid personal service of the summons, and had transferred his real and personal estate, without consideration, to his daughter, with intent to defeat the judgment to he entered in such action ; and that the daughter received the same, with knowledge of such intent; that the plaintiff had been appointed, by the court, sequestrator or' receiver of the personal property, and the rents and profits of the real estate; that he was unable to obtain any personal property, or to collect any of the rents or profits, by reason of such conveyance, and the refusal of the tenants to attorn to him, and that he was directed by the court to bring this action to set aside such conveyance as fraudulent and void as against the plaintiff in the first action.

      Held, that a demurrer to the complaint, on the ground that the plaintiff had not legal capacity to sue, and that the complaint did not state facts sufficient to constitute a cause of action, should be overruled.
    Appeal from an order sustaining a demurrer to the complaint, and directing the dismissal thereof.

      E. II. Berm, for the appellant.

      D. McLecm Shaw, for the respondent, Emma L. Shaw.

      J. B. GlarJe, for the respondent, William West.
   Potter, J.:

This is an appeal from an order sustaining a demurrer to the complaint. The complaint sets forth that Emma E. West, wife of defendant William West, recovered a judgment in an action against him for a separation, and a sum of money, and requiring him to pay her said sum, and to give security therefor. That he had failed to perform or comply with said judgment; that in anticipation of said action he had departed from the State to avoid personal service of the process, and removed beyond the jurisdiction of this court ever since, and had conveyed and transferred to the defendant Emma L. Shaw (his daughter by a former wile), his real estate, of great value, and his personal property, without consideration, and with the intent of defeating any judgment that might be recovered in said action,aud that said defendant, Emma, accepted such conveyance and transfer with knowledge of such intent, etc. That an order was made by the court, in said action, sequestrating the personal property, and the rents, issues anxl profits of the real estate, and appointing plaintiff the sequestrator, or receiver ; that a writ of sequestration was duly issued to the plaintiff, and that he failed to obtain any personal property, or to collect any rents or profits thereunder, by reason of said transfer and conveyance to said Emma, who received all the rents, etc., of the tenants, and the latter refused to pay or attorn to the plaintiff; that thereupon the court dii’ccted the plaintiff to bring this action to set aside said conveyance, and to have it adjudged fraudulent and void as against the plaintiff in the first action.

The defendants demurred to the complaint upon two grounds : First. The plaintiff has not the legal capacity to sue. Second. The complaint does not state facts sufficient to constitute a cause of action.

The court sustained the demurrer upon the first ground, and from that decision the plaintiff appeals.

Notwithstanding the decision was placed upon the first ground of the demurrer alone, the respondents were allowed (and, we think, properly, anomalous as it may seem,) to contend upon the appeal that the demurrer was sustainable upon either ground, though but one ground had been adjudicated by the court below.

Notwithstanding the able arguments and research of the counsel for respondents, and the views of the learned court below, we must hold that the demurrer should have been overruled.

The judgment for separation and for a sum of money to be paid and secured by defendant fo the plaintiff, and in case of neglect to do so, the power and duty of the court to sequester the defendant’s personal estate, and the rents and profits of his real estate, and to appoint a receiver thereof, are fully authorized and provided for by section 60 of the Eevised Statutes (vol. 2, page 148 [Edm. ed., p. 154]).

It is, therefore, simply a question whether the mode of enforcing this judgment, resorted to in this case, is authorized. We think. the action well brought in the name of the receiver or sequestrator. The plaintiff, though called a sequestrator in the complaint, is a receiver in law and in fact. His functions, powers and duties are substantially the same.

In the statute above referred to, it is provided that upon the defendant’s neglect or refusal to give the security, the court may sequester his personal estate, and the rents and profits of his real estate, and appoint a receiver thereof. The court, in this case, has sequestered the personal property and rents and profits, and appointed plaintiff sequestrator or receiver, with direction to take possession and collect and receive the rents and profits.

The plaintiff, in attempting to execute this mandate of the court, is met by the refusal of the defendant and her tenants to allow him to proceed in the execution of the order of the court, upon the grounds that she acquired the title to the real estate of the defendant, and the right to receive its rents and profits before the plaintiff was appointed receiver, and before the commence.ment of the action in which he was appointed receiver. In the language of vice-chancellor Wigean, cited by appellant’s counsel: “ The court sees what is necessary to be done in order to try the question of right, and puts it in the way of trial. If the court could not thus assert its jurisdiction, a sequestration would be a mere form.” ' The court will, at such juncture, exercise its discretion in regard to the mode of trying the question. In two classes of cases the court grants, ordinarily, to the persons for whose benefit the sequestration is directed an order to examine the adverse claimant pro inter esse sua, but in this class of cases, where the claim or right is based upon a conveyance or transfer, antecedent to the order of sequestration and the appointment of the receiver, the court usually directs the receiver to bring an action to try the right. (Lord Pelham v. Duchess of Newcastle, 3 Swans., 289 n; Simmonds v. Lord Kinnaird, 4 Vesey, 735; see, also, the opinion of Ch. J. Daly, and cases cited in Foster v. Townshend, reported at pages 32-34 of the second vol. Abbott’s N. C.)

It was the common practice in chancery for the court to direct the action, to try the question, to be brought in the name of the plaintiff, or of the receiver, as called by the Revised Statutes (supra), or by the receiver .or sequestrator, as the appointee is indifferently mentioned in the English chancery and ecclesiastical cases. The cases cited by the appellant fully sustain these views. (Parker v. Browning, 8 Paige, 391; Green v. Bostwick, 1 Sandf. Ch., 185; Winfeld v. Bacon, 24 Barb., 154; 2 Barb. Ch. Pr., 381.)

But there are additional, if not absolutely controlling, reasons under the present system why the action, when brought to try the question, should be brought in the name of the receiver. The statute of 1845 (ch. 112) expressly authorizes the receiver to bring actions in his own name. The plaintiff is moreover a trustee of an express trust. (Porter v. Williams, 5 Seld, 150.) And as such trustee is required by section 449 of the Code of Civil Procedure to bring all actions for the benefit of the cestui que trust in the name of the trustee.

But we think, without further discussion, the case of Foster v. Townshend (2 Abb. [N. C.], 29), and the notes entirely decisive of this case. That action, like this, was brought in the name of the receiver or sequestrator, and the facts set forth in the complaint wore in all respects like the facts in this case, save one. In that case the right of the third person was subsequent and subordinate to the right of the receiver, and was never in fact opposed to the possession and proceedings of the receiver. Upon this ground, that there was no occasion to bring the action, the Court of Appeals reversed the decision of the court below. But the right of the receiver to bring the action, where the adverse right was obtained before the appointment of the receiver, and was set up to prevent the proceeding of the receiver in the execution of the mandate of the court was fully recognized, if not conceded. The case of Foster v. Townshend also presents a complete answer to the respondent’s contention, that the complaint does not state facts sufficient to constitute a cause of action. As before stated, the facts of the two cases were alike, except in one particular, and that action failed solely for that difference.

We cannot discover any essential fact wanting in the complaint to constitute a good cause of action if true, and its truth is admitted by the demurrer.

The order sustaining the demurrer should be reversed, and judgment be given for the plaintiff, unless the defendant shall answer over, within twenty days after service of a copy of this order, and pay the costs of the trial of the demurrer and of this appeal.

Brady, J. :

In this case I concur with justice Potter, although I have some doubt whether it was not necessary to perfect the complaint to allego a demand of the rents from Emma Shaw, the alleged grantee, as well as a demand, from her tenants. Doubtless, taking the title and leasing the premises was a sufficient interference with the plaintiff to perfect the right of action, without any other circumstance. The right to bring the action, under the order of the court, cannot well be questioned, and this gave the plaintiff capacity to sue. The Court of Appeals, in Foster v. Townshend, referred to by justice Potter, have substantially so declared, and on principle there is no reason to assail the correctness of such a rule.

Present — Brady, P. J., and Potter, J.

Order reversed and judgment given for plaintiff, unless defendant shall answer over within twenty days, and pay costs of the trial of the demurrer, and of this appeal.


author: Daniels, J.:

text:
    ASA D. DICKINSON, Appellant, v. JUDSON H. DUDLEY, Respondent.

      Conversion — what u/naubhorieed acts of agents do not amount to.

    One Page delivered certain stock to the defendant, and authorized him to borrow thereon the sum of §3,000. The defendant borrowed the §3,000 thereon, and agreed at the same time that the lender should also hold it' to secure some §500 or §600 then due from himself.
    In an action of trover brought against the defendant by the assignee of Page, held, that these acts did not amount to a conversion, and that the action could not be maintained.
    Appeal from a judgment entered upon the dismissal of the complaint at the circuit.

      W. S. Palmer, for the appellant.

      Robert Sewell, for the respondent.
   Daniels, J.:

This action was brought to recover the value of fifty shares of United States Watch Company stock, delivered to the defendant by L. N. Page, upon which, he was authorized to borrow for the use of the owner the sum of $3,000. He obtained the loan of $3,000 upon the stock, in conformity with the authority which he had received, for the purpose of making this disposition of the property, but in an arrangement with the lender, he stipulated for the further pledge of the stock to the lender as security for the payment of the sum of $500 or $600 owed by himself to the lender. On this account an action of trover was brought by the plaintiff, as the assignee of Page, against him for the conversion of the stock. It was held on the trial that the assignment made by Page to the plaintiff was insufficient to transfer a right of action of this description. The objection was taken upon the form of the instrument delivered by Page to the plaintiff. That consisted of a bill running to Page, in which he was charged the sum of $5,000 for this stock, and in addition to that the interest and dividends upon it, amounting in the aggregate to the sum of $9,036.87. Upon the back of this bill an indorsement was made by Page, which in form declared that for value received he transferred to the plaintiff all his right, title and interest to the within claim. It may well be doubted whether the assignment made upon the bill, in this form, in neither of which was there any allusion made to the conversion of the property by the defendant, would operate as a transfer of anything more than the simple matter of account arising out ol' the transaction upon the basis of this stock. But without definitely deciding this point the case was properly dismissed at the circuit. Page authorized the defendant to pledge this stock as a security for the loan of the sum of. $3,000, and to that extent ho acted within the limit of the authority conferred upon him. lie did pledge it as a security for the loan of that sum, which was borrowed upon the faith of the stock. He, accordingly, acted within the line of his authority to that 'extent, and disposed of the stock by delivering it over to the lender, as he was authorized to do, but I think he exceeded his authority, by the further agreement that the lender should hold the stock as a security for his own debt duo to the lender. That excess of authority, so long as he was authorized to dispose of the stock as a security for the loan, did not under the law', as it has boqn settled in this Stale, amount to a conversion of the property. Upon this subjec,t it has been held that where an agent disposes of the property of his principal for a less sum than that provided for in his instructions, trover will not lie, and where, as in this case, he disposes of the property for a larger sum, the-case would seem to be within the principle of the rule. Upon this subject, in the case of Sarjeant v. Blunt (16 Johns., 74-76), it was said by Spencer, C. J., “that if every departure from instructions is to expose a party to an action of trover, I should consider it as introducing a new rule, which might operate injuriously. There is no need of this refinement; an action on the case is well calculated to redress any injury arising from a breach of instructions.”

In that case the defendant was authorized to sell a chronometer for a particular price. Tho complaint was not that he sold the chronometer, but that he sold it for a less sum, and thus violated his orders. The selling was not a conversion, but selling for a less price was a breach of duty.

To the same effect is the case of McMorris v. Simpson (21 Wend, 610-614), where it was held by Bronson, J.: That trover wilj not lie, where the agent, though wanting in good faith, has acted within the scope of his powers. “ There must, I think,” he says “ be an entire departure from his authority before this action for the conversion of the goods can be maintained.”

There was clearly no such departure in this case, for to the extent of the loan made upon the stock, the agent acted strictly ■within the line of his authority. His departure consisted in making the additional stipulation with the lender, that the stock might be held as security for the payment of a debt that ho owed to the lender. This was not a conversion of the property, but it was, at most, only a breach of an obligation which the defendant owed to his principal, under the instructions which had been given to him for the disposition of the stock.

The case in this respect is not like those referred to by the counsel for the appellant, where the party, in violation of the entire authority conferred upon him, disposed of the property intrusted to his use, and where the disposition was such as to bring a charge upon the owner of the property. In those cases it was held that, the circumstances that the property was subjected to the charge, and it was disposed of without authority from the owner, were sufficient to constitute a conversion:

In this case, however, it is to be observed that no charge was imposed upon this property, by the conduct and act of the agent, beyond that authorized by the principal. As to the agreement that the lender should hold the property as a further security for the sum owed by the agent to him, as nothing was advanced under the agreement, it imposed no charge upon the property. Notwithstanding the existence of such a stipulation, made on the part of the defendant, the lender had no right to hold the property for anything beyond the sum of $3,000, which the defendant was authorized to borrow for the use of the owner upon it. For the rule is well settled that the agent having authority to dispose of the property of his principal, for his principal's benefit solely, cannot subject it to a lien for the payment of a pre-existing debt owing from himself.

The person receiving the property as security for such a debt advances nothing upon it, and is consequently no worse off if he is unable to hold the property, than he was before the arrangement was made. Nothing was advanced by the lender to the debtor beyond this sum of $3,000, and the result was that the owner of the property was at liberty to redeem it, and recover it from the lender upon refunding the amount loaned upon it, together with the interest which was to be paid. In no view was there any legal charge made upon this property for the debt of the lender against the agent. There was, consequently, no conversion of the property, and as the case proceeded solely upon the ground that the defendant had converted it, which was not established by the evidence given at the trial, the complaint was properly dismissed, and the judgment should be affirmed.

Brady, P. J., and INGALLS, J., concurred.

Judgment affirmed.


author: DANIELS, J. :

text:
    ROBERT L. CUTTING, Jr., as Receiver of the Bankers and Brokers’ Association, Appellant, v. THOMAS S. MARLOR, Respondent.
    Bank— liability offo-r stock, deposited as collateral and fraudulently used by one of its officers.

    The defendant 'borrowed some $6,000 from The Bankers and Brokers’ Association, of which one Bonner was president, depositing- certain bonds and stocks to secure the repayment of that amount. Bonner fraudulently converted the collaterals to his own use.
    It appeared that the trustees of the association had been guilty of negligence in not exercising proper vigilance in the inspection of the securities and the management of its affairs.
    In an action brought by the receiver of the association to recover the amount of th'e loan, held, that he could not recover without allowing the defendant for the -value of his bonds and stock.
    Appeal from a judgment in favor of the defendant, entered upon the trial of this action by the court without a jury.
    This action was brought by the plaintiff, as receiver of the Bankers and Brokers’ Association, to recover a loan made by it to the defendant. The defence was that certain stocks and bonds belonging to him had been deposited with the association to secure the loan, and that they had been converted by its president, oiio' Bonner. The justice, before whom the action was tried, found that the trustees of the association had been guilty of negligence in failing to hold meetings, as required by its by-laws, and in neglecting to inspect the affairs and securities of the association, and in failing to exercise proper vigilance over the management of its affair's, and held that this negligence in the trustees rendered the association liable for the conversion of the defendant’s securities, and gave judgment for the defendant for the value of the stock and bonds, after deducting therefrom the amount of his indebtedness to the Association.

      John Clinton Gray and John Me If eon, for the appellant.

      Stewart L. Woodford and William Henry Amoux, for the respondent.
   DANIELS, J. :

This case is undoubtedly on its way to the Court of Appeals, by whose decision alone it will bo finely determined. An early disposition of it by this court will facilitate its progress in that direction, and enable the parties to speedily secure a definite settlement of the controversy existing between them. The transaction, out of which it has arisen, appears to have been within the corporate authority of the corporation, whoso effects have passed into the hands of the plaintiff' as receiver. It was a loan of money for the repayment of which securities were placed in the custody of the corporation. It had the power to make the loan, and receive, and obligate itself to return the collaterals, when the borrower should repay the money loaned, and such an obligation, though not in terms expressed, was implied by law from what transpired between the borrower and the lender. The securities received were under the control of the president of the corporation. He fraudulently abstracted and disposed of them, and deprived the corporation in that way of the power of performing its obligation. Its contract was broken because of the misconduct of its own officer and agent, in the exercise of the authority which it had conferred upon him. In the possession and exorcise of corporate authority he had, in fact, become the general agent or manager of the corporate affairs. And that had been permitted to be extended so far as to involve the practical omission of oversight of his acts and conduct, on the part of the trustees or directors, as legally amounted to carelessness. He had thereby become invested with unrestrained authority in the conduct of the corporate business. And no adjudication has gone so far as to exonerate the corporation from liability for the misconduct of such an officer, when it has been so extended as to create a failure on its own part, as it did in this case, to perform a legal and binding obligation resting upon the corporation itself. The cases relied upon, as sustaining a different view, are those of robberies and thefts involving no fault whatever on the part of the corporation ; or of mere gratuitous bailments, imposing no such obligation for the return of the property as existed in this case. For that reason they cannot be considered as controlling the disposition which should be made of the present controversy.

By the judgment which has been recovered the liability of the corporation for the misappropriation of the defendant’s collaterals has been established. And the principles upon which it rests seem to be consonant to -those usually requiring parties to perform their lawful obligations. When they have been regularly entered into the fact that one of the parties by the misconduct of his, or its c servants, or agents, has become involved in a breach of the terms of the expressed or implied-agreement made, has not been held to be sufficient to entitle the defaulting party to immunity from liability. (Blackstock v. N. Y. and Erie R. R. Co., 20 N. Y., 48, 51, 52.) The principle on the other hand, which has been repeatedly sanctioned and usually followed has been, that where one of two innocent persons must sustain a loss, in consequence of the misconduct of another, it shall be borne by him who has placed it in the power of the wrong-doer to' perform the wrongful act. (Rawls v. Deshler, 3 Keyes, 572.) And it seems to be peculiarly apposite in its application to' this case, and, without considering it further, to require an affirmance of this judgment. That, therefore, should be the disposition now to bo made of this appeal.

Brady, P. J., and Ingalls, J., concurred.

Judgment affirmed.


author: Daniels, J.: Beady, P. J.:

text:
    EDWARD S. JAFFRAY and others, Respondents, v. MARIA BROWN, Appellant, Impleaded, etc.

      Notice of pendency of action — when a nullity — An cn'der not affecting a substantial right, not appealable.

    A notice of the pendency of an action, in which an attachment has been issued, describing the property attached,simply, as “ all the real property of the defendant Brown, or in which she may have an interest, situat in Chenango county,” is a mere nullity, and an order denying a motion to vacate the same does not affect a substantial right of the defeated party and is not appealable. (Brady, J., dissenting-.)

      Appeal from an order denying a motion to vacate a notice of the pendency of this action, and to stay proceedings on an execution issued to the sheriff of Chenango county.
    A warrant of attachment was issued in this action, and a notice of the pendency of the action was filed in Chenango county on September 23, 1874. Judgment having been entered in favor of the plaintiff, an execution was issued to the sheriff of that county,0 requiring him to sell the interest of the defendant Brown at the time of the filing of the Us pendens.

      Samuel J. Crooks, for the appellant.

      Isaac L. Miller, for the respondents.
   Daniels, J.:

The notice in this case was filed in the office of the clerk of Chenango county, for the reason that an attachment was issued in the action in favor of the plaintiffs and against this defendant.

It is stated in the affidavits, made on behalf of the defendant, that the attachment was not delivered to the sheriff or levied upon any real estate in the county of Chenango, and that is not denied in the affidavit made on behalf of the plaintiff; but it is stated, in general terms simply, that -an attachment had been issued in the case.

How it was issued, or whether it was in fact delivered to the sheriff of that county, was not affirmatively made to appear ; and, on that account, it may be inferred, as the opposing affidavits tended to establish the contrary, that no such delivery and seizure of this real estate was ever made by the sheriff under the attachment which had been allowed.

But it does not follow, because the attachment was not delivered to the sheriff or served upon the property, now proposed to be sold by means of the execution, that the notice should have been set aside upon the motion. The notice, in order to be effectual for any purpose in the plaintiffs’ favor, was required to contain a description of the defendant’s property in that county, which it was proposed to affect by mcaiis of the action. (Code of Procedure, § 132.) No such notice as that was filed in this case. The only description which was given in the notice was as follows: “All the real property of the defendant Brown, or in which she may have an .interest, situate in Chenango county, New York.” This notice described nothing, and consequently was not a compliance with what was required on this subject by section 132 of the Code.

It was, consequently, a nullity for that reason, as well as for the additional fact, probably existing in the case, that no seizure of any real estate in the county of Chenango was ever made by the sheriff under the attachment issued in the case, but never actually delivered to the sheriff for service ; and, being a nullity, it was-not necessary that a motion should be made to sot it aside, and its denial could not affect any substantial right of the defeated party. The notice was inoperative and ineffectual in and of itself. Upon that subject, it has been held that, where a notice is filed that is not authorized by the statute, it is a nullity, and being a nullity, it can affect no substantial right of the defendant in the case. It was too general in this case to comply with what had been required, and as the attachment had probably not been delivered for service, no necessity existed for setting the notice aside. On the contrary, under the authority of Mills v. Bliss (55 N. Y., 139), the defendant was wholly unaffected by it. There was no necessity for this motion, for the defendant could not be injured by a notice of that irregular description standing upon the files of the clerk’s office of the county of Chenango. The motion was, therefore, properly denied, and the order in this case should be affirmed, without costs to either party.

Ingalls, J., concurred.

Beady, P. J.:

I think the motion should have been granted. The lis pendens operated as a quasi lien or cloud upon the title ; and, although it may be valueless for either purpose, it was improperly put upon the files, and should have been removed by order. It is enough that it is wrongfully there. I therefore dissent

Order affirmed, without costs.


text:
    ANDREAS H. GOURAUD, Appellant, v. PERCEY B. S. TRUST and others, Respondents.
    Where an order discontinuing an appeal is made on an exparte application, upon an affidavit which omits to state, as required by rule 25, that no other application for the same order has been made, such order will be vacated, if a motion therefor be made on that ground.

      Supreme Court rule XJo. 25 — order vacated for non-compliance with.

    Appeal from an order made at a Special Term, granting a motion to vacate an ex parte order discontinuing an appeal, on the ground that the affidavit, on which said ex parte order was entered, did not comply with rule 25 of the General Rules of Practice, in that it omitted to state that no other application for the same order had been made. No other application had in fact been made, and it was claimed that the omission of that statement from the affidavit resulted solely from haste and inadvertence.
    The appeal was taken in April, 1878, from a decree of the surrogate of New York county, admitting a will to probate ; the ex parte order, discontinuing said appeal, was entered February 14, 1879, and the order vacating said ex parte order was entered March 1, 1879. From the last-mentioned order this appeal is taken.

      Francis Howland, for the appellant.

      W. II. Waring, for the respondent, Martha B. T. Gouraud.
   Daniels, J.:

The order discontinuing this appeal was entered ex parte, upon an affidavit which omitted to state that no other application for the same order had been previously made by the appellant. For that reason this motion was made to vacate the order, and an order to that effect was accordingly made in the case. This last order was sanctioned by the plain terms of rule 25, and consequently it was regularly made.

It should therefore be affirmed, with ten dollars costs and disbursements.

Brady, P. J., and Ingalls, J., concurred.

Order affirmed, with ten dollars costs and disbursements.