text:
    Fanny Bradley, Resp’t, v. Ludwick H. Carter, App’lt.

      (Supreme Court, General Term, Fifth Department;

      Filed April 16, 1891.)

    Damages—Fraudulent representation as to title to land.
    The defendant sold to the plaintiff’s son forty-seven acres of land for $1,645, the son giving back his own mortgage for $1,000 and a mortgage belonging to plaintiff on other premises for $645; and thereupon the son gave plaintiff a mortgage upon the premises in question for $645. The defendant represented the premises as free of incumbrances; in fact it was a part of a farm of 207 acres subject to a recorded mortgage of $4,000; but defendant had sold 160 acres of it to another person who thereupon agreed to pay the $4,000 mortgage to the extent of $3,850. Defendant showed that the 160 acres were worth more than $4,000 but it had not since been sold nor the mortgage foreclosed. It did not appear that the purchaser of the 160 acres was not responsible. Held, in an action for the depreciation of the $645 mortgage to her, that plaintiff’s recovery should have been limited to $150, the difference between $4,000 and $3,850.
    Appeal by the defendant from a judgment entered on the verdict of a jury at the Chautauqua circuit, and from an order denying the defendant’s motion for a new trial on the minutes of the court.

      William H. Henderson, for app’lt; J. G. Record, for resp’t.
   Dwight, P. J.

The action was to recover damages for an alleged fraudulent representation concerning the title to land.

On the 1st day of April, 1885, the defendant sold and conveyed to James Bradley, the son of the plaintiff, by warranty deed, forty-seven acres of land at the price of $1,645, and received in paymenty therefor a mortgage of the purchaser, on the same premises, for $1,000, and a mortgage of the plaintiff, on other premises, for $645; in consideration of which latter mortgage James executed to his mother a second mortgage on the forty-seven acres for the same amount.

There was evidence tending to show, and the jury found, that at the time of the transaction the defendant, stated to the plaintiff that the forty-seven acres was free and ■clear of incumbrance. The proof showed that the forty-seven acres had been part of a farm of 207 acres belonging to the defendant, on which there was an outstanding recorded mortgage of $4,000 held by one Saunders; that in the previous year the defendant had sold 160 acres of the farm to one Mrs. Guy, who, as part consideration of the purchase, had assumed and agreed to pay the mortgage on the whole farm to the extent of $3,850; that during the negotiation with James Bradley and his mother, and before the alleged representation was made, the defendant informed Saundei-s, the holder of the $4,000 mortgage, that he proposed to sell the forty-seven acres, and obtained his promise to release that portion of the farm at any time when the defendant had an opportunity to sell. On the trial the defendant offered in evidence a full release and discharge of the forty-seven acres from the lien of the $4,000 mortgage, duly executed and acknowledged by Saunders on the 2d day of October, 1888," which was a few days before the commencement of this action. The ■evidence, of the release was excluded on the objection of the plaintiff, and the defendant excepted. The evidence was undisputed that the 160 acres was worth from $800 to $1,600 more than the full amount of the $4,000 mortgage.

The court charged the jury that the promise made by Saunders to the defendant to release the forty-seven acres from the lien of the $4,000 mortgage did not operate to discharge that' lien, and that the forty-seven acres was in fact, at the time of its sale by the defendant, subject to such lien and liable to be sold on foreclosure to pay at least the sum of $150, and, in default of realizing $3,850 ■out of the 160 acres, then for an undetermined sum in addition to the $150; also that, in case the plaintiff was entitled to recover, the measure of damage was the difference between the value of the mortgage given to her by her son without the incumbrance of the $4,000 mortgage on the property, and its value with such incumbrance on the property; and the jury found a verdict for the plaintiff for $450.

The only disputed question of fact in the case, aside from the question of damages, was whether the representation was made as charged. Upon that question the verdict of the jury must be conclusive against the defendant. There can hardly be a pretense that such representation was made with any purpose on the part of the defendant to defraud the plaintiff of portion of the value of her security; because, though he had not yet procured a formal release of the forty-seven acres, he had the assurance, that he might have such release at any time when he should effect a sale Besides, he had the covenant of the purchaser of the 160 acres, which not only bound herself personally but constituted the 160 acres the primary fund for the payment of the old mortgage to the extent of $3.850. Russell v. Pistor, 3 Seld., 171; Slauson v. Watkins, 86 N. Y., 597.

This left only $150 chargeable on the forty-seven acres, in any event, unless the 160 acres and the personal covenant of Mrs. Guy were worth less than the former amount, which is contrary to the evidence; while as against the $150, there was the covenant of warranty of the defendant himself, and there is no evidence or intimation that he was not entirely responsible. But the representation being made as found by the jury, and the actual fact being otherwise as known to the defendant, there was an apparent intention to deceive, and at least a technical cause of action was established against the defendant. But we are unable to see. that there was evidence which, in any view, warranted the verdict for $450. The rule of the measure of damages was correctly stated by the court. The amount of the possible recovery by the plaintiff was limited to the amount by which the mortgage of $645, given to the plaintiff by her son, was rendered of less value by the existence of the real or apparent lien of the mortgage of $4,000 on the same premises. This rule, no doubt, entitled the plaintiff to nominal damages, and more if there was evidence to show that the value of her security was actually and appreciably reduced by the existence of the lien in question. How to make such proof in the absence of any attempt to enforce or even to assert that lien against the premises covered by the plaintiff’s mortgage it is not easy to say. The plaintiff’s mortgage was never offered for sale; no depreciation in market value was sought to be shown. The jury, as it seems to us, was permitted to-find a verdict based upon mere conjecture as to what may have been the deterioration in the value of the plaintiff’s security from the cause specified. The language of the instruction to the jury on this question is as follows: after pointing out the possibility of a deficiency in the amount to be realized on the 160 acres the court says: “ So that there would be a contingent liability placed upon this 47 acres to make up something; the evidence does not disclose how much, neither does it disclose any practicable or striking probability as to what that might be, but that there would be something there that this land might be made liable to pay in the first instance for the purpose of extinguishing this mortgage.”

It must have been under the permission given to conjecture by this instruction that a verdict was found for any sum greater than $150, for which sum alone was the forty-seven acres liable until after the exhaustion of the primary fund, furnished by the 160 acres. The language of the instruction recognizes the absence of evidence that there would be, or was likely to be, any deficiency of that fund to pay the $3,850 ; and it permits the jury to in-elude in their verdict a merely possible deficiency which is confessedly undetermined, and practically indeterminate in amount

The particular instruction quoted above was not excepted to by the defendant, and there does not seem to be any exception to the charge, nor any request to charge, which covers the precise question here considered, but we regard the verdict for $450 as unsupported by the evidence, and are of the opinion that the motion for a new trial should have been granted for that reason.

We think the request to charge that the plaintiff could recover no more than nominal damages was properly refused, and that under proper instructions the question might have been submitted to the jury upon the evidence as it stood, whether the plaintiff should recover the sum of $150, the amount for which the forty-seven acres was, in the first instance, subject to the lien of the $4,000 mortgage.

. The exception to the exclusion of evidence of the release of the forty-seven acres, executed three years after the transaction in question, was not well taken. It is conceded by counsel for defendant that such cause of action as the plaintiff had arose immediately on the giving of her mortgage to the defendant, and must be determined upon the facts as they then existed, Northrop v. Hill, 57 N. Y., 360, and it is plain that the fact that the defendant subsequently procured the release to be executed was not (as urged by his counsel) relevant to the question whether the representation was made as alleged by the plaintiff.

Upon the ground formerly considered we think the judgment and order appealed from should be reversed and a new trial granted.

Judgment and order appealed from reversed and a new trial granted, with costs to abide the event

Macomber and Corlett, JJ., concur.


source: Caselaw Access Project

author: Dwight, P. J. Macomber, J. (dissenting).

license: Public Domain

text:
    In the Matter of the Will of Almira Ingersoll, Deceased.

      (Supreme Court, General Term, Fifth Department,

      Filed April 13, 1891.)

    Will—Bequest for charitable uses—When absolute to donee.
    The will of the testatrix stated that she was desirous of leaving some of her estate to aid in carrying on the work of the Christian ministry and that to that end she authorized her executor to expend through the agency of the Baptist church and its various societies, missionary and educational, a sum not to exceed $1,000, and in order that the executor might “do so without hindrance,” she gave and bequeathed to him the said sum “ and the same is to him and his assigns forever for the uses and purposes before stated and I_(she) rely upon him to carry out the wishes and purposes I (she) have hereinbefore indicated.” Held, that the bequest was not void for uncertainty, but was an absolute bequest of the sum to the executor to be used by him for the purposes indicated.
    (Macomber, J., dissents.)
    Appeal by the executor, proponent, from that part of the decree of the surrogate of Cattaraugus county admitting, the will to probate, which adjudged the eighth clause thereof void for uncertainty. The residuary legatees, contestants, are respondents in this appeal.

      W. S. Trasher, for app’lt; F. J. Blackman, for resp’ts.
   Dwight, P. J.

The clause of the will held void by the surrogate is in the following terms:

“ YIIL I am desirous of leaving some of my estate to aid in carrying on the work of the Christian ministry, and to uphold the doctrine and faith of the Bible, and to aid in extending the Christian religion in the world through the instrumentality of the preaching the gospel of Christ; and desirous of promoting these purposes, I do hereby authorize and empower my executor hereinafter named, to expend through the agency of the Baptist church and its various societies, missionary and educational, or in such other way through the said church or its organizations as shall be deemed best likely to promote these purposes, such sum as he may deem best, not to exceed one thousand dollars; and, in order that my executor may be enabled to do so without hindrance, I give and bequeath to him the said sum of one thousand dollars,, and the same is to him and his heirs and assigns forever, for the uses and purposes before stated, and I rely upon him to carry out the wishes and purposes that I have hereinbefore indicated and that those interested in my estate will co-operate in carrying on the work, that I, by this bequest, desire to promote.”

Tlie findings or conclusions of law of the surrogate relating to this provision of the will are as follows:

“I find, hold and decide as conclusions of law :
First. That the said eighth clause of said will above set forth is invalid and void for uncertainty, there being no beneficiary or legatee named who can enforce payment of the bequest.
Second. That the executor named in said will is not entitled to take such bequest or any part thereof as trustee or otherwise, except in his capacity of executor.”

The correctness of these conclusions alone is challenged on this appeal, and the question presented calls for a construction of the provision quoted, with a view, namely, of determining whether its purpose was to create a trust or to make an absolute gift to the person subsequently named as executor. If the former, it was manifestly void for want of beneficiaries designated, or capable of being ascertained; if the latter, it was a valid disposition noth withstanding that with the words of gift is associated a clear expression of the general purpose and intention with which the gift is made. We think the latter is the true interpretation of the provision and that it may be upheld as a valid gift of $1,000 to Norman M. Allen, the person afterwards named as executor' of the will

The fact that the gift is, in form, absolute and not in trust, is not decisive of its character; neither is the use of the words of inheritance, but both are circumstances which may be considered in determining what was the intention of the testatrix. It is true-that words of inheritance are not necessary to an absolute gift, but they are consistent therewith, and when used in that connection" are merely surplusage;. whereas, so far as they go, they contradict the theory of a trust. They are words of limitation used to describe the nature and duration of the estate given. Matter of Wells, 113 N. Y., 396; 22 N. Y. State Rep., 717. In this case they are part of a formula which is employed in every provision of the will which makes an absolute gift of money to a legatee named; the formula is, and the same is to him and his heirs and assigns forever.”

But the question is not to be determined by inquiry of the technical meaning of particular words and phrases, but by a consideration of the provision as a whole, and a deduction therefrom, if possible, of the real intention of the testatrix. Riker v. Cornwell, 113 N. Y., 115; 22 N. Y. State Rep., 151. So considered, it is plain (1), that the primary object in the mind of the testatrix when she made this provision was the promotion of Christianity in the world; (2), that she desired to contribute to the accomplishment of that object through some one or more of the agencies or instrumentalities organized within the Baptist Church; (3), that she chose not to select the particular agency or agencies to be employed, nor the particular object or objects to be aided, nor even to determine, except by a maximum limit, the amount of money to be devoted to any one or all of such objects, but (4), chose to substitute for her own the judgment and discretion of another person, and (5), to give to him the means with which to accomplish the purposes which she had in view. Here the confidence reposed in the donee and the discretion given to him are absolute, and the gift itself is absolute in form, while the words indicating the use to be made of the gift are precatory merely. In Phillips v. Phillips, 20 N. Y. State Rep., 301, Finch, J., recognizes the principle that precatory words may, in some instances, create a trust or impose a charge, but he deduces from all the cases the rule that whether such words have that effect or not depends upon “ whether the alleged bequest is so definite in amount and subject matter as to be capable of execution by the court, or whether it so depends upon the discretion of the general devisee as to be incapable of execution without superseding that discretion.” And special reference is made to the case of Lawrence v. Cooke, 104 N. Y., 632; 6 N. Y. State Rep., 772, where Rapallo, J., says: “ It is not for the courts to repudiate the confidence which the testator-'chose to repose in the defendant, and to assume a power which was not intended to be exercised by them.” It is true that in both of the cases cited the question was between a valid trust and an absolute gift; but this distinction does not defeat the application of the reasoning and conclusion in those cases to the case in hand. If the terms of the bequest were not such as to create a valid trust when the beneficiary was clearly designated, a provision similar in other respects would not be construed as an attempt to create a trust, which must be invalid for- want of a certain beneficiary.

The essential element common to the two cases is the absolute discretion in the use of the gift, vested in the donee, which equally forbids the construction that a trust was created in one case and that a trust was sought to be created in the other. In Foose v. Whitmore, 82 N. Y., 405, it was said by Danforth, J., that “the tendency of modern decision is not to extend the rule or practice which, from words of doubtful meaning, deduces or implies a trust;” and the test prescribed in that case was whether the wish or desire expressed by the testator is meant to control the conduct of the party to whom it is addressed or is merely an indication of a wish, leaving it to the legatee to exercise his own discretion. It is difficult to conceive a case in which the discretion given to the legatee^could be more full and absolute than in the case at bar; and it is in order to enable him to exercise that discretion “ without hindrance ” that the testatrix declares, “ I give and bequeath to him the said sum of one thousand dollars, and the same is to him and his heirs and assigns forever, for the uses and purposes before stated; and I rely upon him to carry out the wishes and purposes that I have hereinbefore indicated.” As was said by Rapallo, J., supra, “it is not for the court to repudiate the confidence thus reposed.” We are bound to assume that it was a well placed confidence, and that the legatee will faithfully observe the wishes and make such use of the fund as will fully satisfy the benevolent intentions of the testatrix.

Upon these principles we think the learned surrogate was in error in the conclusions of law quoted above; that the eighth clause of the will is not invalid, but that Norman M. Allen, the person named as executor, takes the sum of $1,000 individually and absolutely, to be used and employed by him, in his discretion, for the general objects and purposes mentioned in the clause in question.

The decree of the surrogate must be reversed and the proceeding remitted to him with directions to enter the decree indicated by this opinion.

So ordered, with costs of this appeal to the appellant, payable out of the estate.

Corlett, J., concurs.

Macomber, J. (dissenting).

I cannot concur in the conclusion reached-by a majority of the court for a reversal of the decree of the surrogate of Cattaraugus county.

The surrogate admitted the will to probate as a will of personal estate, except as to the 8th clause thereof, and adjudged that clause void for uncertainty.

The 8th item is as follows:

“ I am desirous of leaving some of my estate to aid in carrying on .the work of the Christian ministry, and to uphold the doctrine and faith of the Bible; and to aid in extending the Christian religion in the world through the instrumentality of the preaching of the gospel of Christ; and desirous of promoting these purposes, I do hereby authorize and empower my executor hereinafter " named 'to expend through the agency of the Baptist church and ■its various societies, missionary and educational, or in such other way through the said church or its organizations as shall be deemed best likely to promote these purposes, such sum as he may deem best, not to exceed one thousand dollars; and in order that my executor may be enabled to do so without hindrance, I give and bequeath to him the said sum of one thousand dollars, and the same is to him and his heirs and assigns forever, for the uses and purposes before stated, and I rely on him to carry out the wishes and purposes that I have hereinbefore indicated, and that those interested in my estate might co-operate in carrying on the work that I, by this bequest, desire to promote.”

As was held by the surrogate, it is impossible to determine who or what is the legatee named in this item of the will. The Baptist church is not a corporation; but the religious and charitable purposes expressed by the testatrix were to be accomplished only through the agency of the Baptist church and its various missionary, charitable and educational societies. This provision, in my judgment, falls directly within the condemnation of the decision given in Levy v. Levy, 33 N. Y., 97, and many succeeding cases, particularly in the case of Prichard v. Thompson, 95 N. Y., 76.

It is claimed, however, that the last clauses of this item of the will constitute an absolute gift to the executor, and that consequently the bequest is valid. In my judgment, an answer to this contention is found in the language of the will itself, by which the pervading purpose of the testatrix was to give the sum of $1,000 to benevolent, charitable and missionary purposes, and that the words of the bequest to the executor and his heirs and assigns were used simply to overcome the otherwise legal objection which could be made to any effort to carry out such illegal intention. The language of the testatrix is, “ and in order that my executor may be enabled to do so without hindrance, I give and bequeath to him the said sum of $1,000, and the same is to him and his heirs and assigns forever, for the uses and purposes before stated.” There is in fact no absolute gift to the executor; “ the uses and purposes before stated ” are the uses and purposes which the law uncompromisingly says are not of practical attainment The legatee could not take this bequest honestly without making an effort to carry out the intention of the testatrix. As was said by Judge Finch in Matter of O'Hara, 95 N. Y., 414, “it does not need that the absolute legatees repudiate their promise, for if ever so honorably willing to perform it, they cannot do so without setting at defiance and secretly evading the law and general policy of the state. The alternative is plain, and offers no chance of escape. If the legatees repudiate their obligations, that is a fraud upon the dead woman, who acted upon the faith of their promise. If they are willing to perform they cannot perform, except by a fraud upon the law to which they and the testatrix are equally parties.” “If in the one the fraud grows out of a refusal to perform, which would be the voluntary act of the legatee repudiating his promise, and so an actual fraud; in the other it grows out of the impossibility of performance, except in defiance of the public law, which is legally a fraud. In neither event can the legatee honestly hold. In both either fraud triumphs or equity defeats it through the operation of a trust and protects those justly entitled.’’

Again the learned judge says at page 420: “We have thus an important question squarely presented. If equity will not touch this devise by putting a trust for the heirs at law and next of kin upon the fund in the hands of these legatees, the road to an evasion of our statutes, and to the temptations of necessity or greed will be left wide open.”

In my judgment the case before us is much stronger against the validity of this item of the will than was the case arising under the will of O’Hara.. In the O'Hara case the will upon its face was valid; but the testatrix by a separate writing requested that the legatees should not take in their own right, and she relied upon them to carry out her illegal intentions. In the case before us, the illegality of the bequest, the unlawful intention of the testatrix, is plainly seen by the terms of the will itself. I think the decree was right and that it should be affirmed.

Treating this part of the will as a gift to benevolent, charitable and missionary purposes,' there is another reason why the same must be deemed to be absolutely void, irrespective of the proposition that the beneficiary named therein was not attainable; and that is the fact, that the will was not executed more than two months before the death of the testatrix. She made the will the 30th day of May, 1890; she died in the month of June in that year, the precise date thereof not appearing anywhere in the case ; the surrogate in his decision finding that she died at the time named in the petition for lettera testamentary, and the petition fails to give the day of the month of June in which she died. But it clearly appears that'not two months elapsed between the making of the will and her death. So that under the statute, chap. 319, Laws of 1848, (1 Birdseye’s R. S., 262,) which invalidates bequests and devises to benevolent, charitable, scientific and missionary societies, made within two months before the death of the testator, the attempted bequest became wholly inoperative.

In my judgment, the decree appealed from should be affirmed.

Decree reversed and proceedings remitted to surrogate with directions to enter the decree indicated by the opinion of Dwight, P. J.

       Reversing 34 N. Y. State Rep., 148.


author: Dwight, P. J.

text:
    John J. P. Read, Resp’t, v. The Marine Bank of Buffalo, App’lt.

      (Supreme Court, General Term, Fifth Department,

      Filed April 16, 1891.)

    Bills and notes—Paper negotiable by delivery must be in the possession op one demanding its payment.
    Plaintiff deposited moneys 'witli defendant and received certificates therefor. Subsequently he demanded payment but could not produce the certificates. Upon the trial of an action for the deposit it appeared that said certificates were in possession of the administrator of another person; that they were payable to plaintiff’s order, were not endorsed by him, but that the third person in her lifetime had claimed title to them. Held, that as the certificates were negotiable by delivery and without endorsement, plaintiff must have possession in order to recover; and this, because the defendant is entitled to he insured against liability to pay the certificates a second time.
    Appeal from a judgment in favor of the plaintiff, entered on the verdict of a jury directed by the court, and from an order denying the defendant’s motion for a new trial made on a case and exceptions.

      B. H. Williams, for app’lt; O. O. Cottle, for resp’t.
   Dwight, P. J.

The action was brought to recover the amount of two deposits made by the plaintiff several years before, for which certificates of deposit were issued to him, payable to his order thereon. He demanded payment of his deposits before commencing the action, but without producing the certificates, and representing, in substance, that they were lost. He was informed that in that case he would be paid upon giving a satisfactory bond of indemnity. A bond was tendered, but, pending its acceptance, the defendant was notified by one Rockwell, who exhibited the certificates, that he had them as the executor of the estate of one Elizabeth A. S. Rockwell, deceased, his late wife, and a sister of the plaintiff, who had the certificates in her possession at the time of her death, claiming to own them. Sometime afterwards the plaintiff commenced this action, alleging the deposit of the several sums and the defendant’s promise to repay the same, on demand, but making no mention of the certificates.

The defendant’s answer admitted the fact of the deposits; averred the issuance of the certificates and the terms thereof; that the plaintiff had not presented the certificates and that the samé were not in his possession, but in that of George W. Rockwell, executor of Elizabeth A. S. Rockwell, deceased, who claimed that, as such; he was the owner and holder of the certificates and entitled to the moneys secured thereby. The answer 'further averred that the plaintiff transferred the certificates to Mrs. Rockwell in her lifetime, and also that the sums of money so deposited were at the time of the several deposits the property of Mrs. Rockwell, and that the plaintiff in making such deposits acted as her agent, and afterwards delivered the certificates to her; that she died the owner and holder of the same and that they are now assets of her estate.

On the trial Rockwell was called as a witness for the plaintiff and under a subpoena duces tecurri produced the two certificates. They were found to be payable to the order of the plaintiff thereon, and not to have been endorsed by him. Rockwell testified that he received the certificates from his wife in her lifetime. He was not permitted to answer the question whether she claimed them as her property, but he testified that in an action brought against her by the plaintiff (which the latter testified was an action to recover possession of the certificates) she produced them under a subpoena before a referee and took them away with her again. He also testified that he was the executor named in the will of his wife, which had been admitted to probate, but that the issuance of letters testamentary was suspended pending an appeal from the decree of the surrogate, and that no administrator of her estate had been appointed in the meantime.

The plaintiff testified that he and his sister lived together before her marriage; that during that time he had the certificates in his possession, in his desk in the house, from which they were taken without his knowledge or consent; that after his sister went away he missed them, and on application to her, she admitted having taken them and promised to restore them to him, but that she never did so ; that the action which he commenced against her to recover possession of the certificates was never prosecuted to judgment, and that when, after her death, he asked Eockwell for the certificates, the latter denied that he had them or knew where they were.

This .was, substantially, all the evidence given on the trial. There was no evidence, or offer of evidence, to show that the plaintiff ever transferred the certificates to his sister, nor that the moneys deposited belonged to her. On the contrary, the evidence, as far as it went, tended to show that she obtained possession of the certificates surreptitiously and without claim of right. But it is needless to say that this evidence is not evidence against Mrs. Bockwell’s estate. It has had no day in court, nor had Mrs. Eockwell in her lifetime, to establish her right, if any, to the certificates, and the claim of her estate is necessarily unaffected by any judgment which might be rendered in this action.

The defendant, therefore, relies on this appeal, upon the contention that there can be no recovery in this action, whatever the plaintiff’s evidence tending to establish his title to the certificates, when it appears that the certificates themselves are in the hands of a third person claiming title thereto. The contention is based upon sound general principles, and is sustained by very definite authority.

The case of Crandall v. Schroeppel, 1 Hun, 557, was one very similar to the present. The negotiable paper there in suit was a promissory note, payable to the plaintiff in that action, or bearer, and was held by an administrator of an estate, who claimed to own it as such, and who produced it on the trial under protest This court (in the former fourth department) affirmed the judgment of a county court, which reversed that of a justice, on the precise ground mentioned, citing as authority Bank of Utica v. Smith, 18 Johns., 240; Freeman v. Boynton, 7 Mass., 486, and especially Van Alstyne v. Nat. Commercial Bank of Albany, 7 Trans. App., 241; S. C., 4 Abb. Ct App. Dec., 449. In the latter case, Judge Wood-ruff, writing the opinion of the court, maintains that there is no reported case nor statement of the text books to the contrary; and the case then in hand was a very strong one. The plaintiffs had bought a draft from the defendant, for their own account, payable to their correspondent in West Virginia, who had no interest in it, but was to use it as directed by the plaintiffs. The evidence showed that the draft had fallen into the hands of a brother of the payee, who endorsed it in the name of the latter, obtained the money and absconded. So that the plaintiffs’ draft, as the evidence tended to show, was in the hands of a transferee by a forged endorsement, and in a foreign state. And yet the court held that not even these circumstances were sufficient to excuse the non-production of the draft itself; that satisfactory as the evidence seemed to be that the plaintiffs had never parted with their title to the draft, it was no evidence against the actual holder of the paper, who might make a very different case when he had his day in court; that the draft was not lost paper, though in another jurisdiction, and that the plaintiffs could not recover without the actual production of the draft, with' power to cancel or surrender the same.

There seems to be no material distinction between that case and this arising out of the different character of the paper in the two cases. The essential fact in both is that the paper was negotiable by delivery, and without the endorsement of the payee. Such was the case with the certificates in question so far as to pass all the title which the payee had at the time of the transfer, Briggs v. Dorr, 19 Johns., 95; Freund v. Importers' Bank, 76 N. Y., 352, and this is all the negotiability which is necessary to constitute a reason for the application of the rule under consideration. The reason is that the defendant is entitled to be insured against liability to pay the certificates a second time. And the reason exists whenever the paper is shown to be in the hands of a third person claiming title thereto. In the case of a lost bill the statute provides for a bond of indemnity. But when it appears that the bill is not lost, and it is traced to the hands of one who claims to be the owner, the maker, or party liable to pay it, cannot be required to accept a bond of indemnity. He has a right to insist that the question of ownership shall be first determined between the rival claimants, and that the right of the party to whom he pays the debt shall be evidenced by possession of the paper, with the power to surrender the same on payment being made; otherwise, as was said in the case of Van Alstyne, the party liable on the paper “ may be subjected to the hazard of proving such holding by the third person to be wrongful in any future claim which may be made upon him; in other words * * * may be required to settle the plaintiff’s dispute with an alleged wrong-doer.”

In this case, as the record shows, the court, in directing a verdict for the plaintiff, ordered the certificates which had been produced in evidence by Rockwell to be impounded with the clerk, and an endorsement to be made upon them showing that the same were in judgment in this action. This was done evidently to destroy their future negotiability by the plaintiff, to whose order they were payable, and this effect it undoubtedly had. But it is clear that it had no effect upon any previous negotiation of the paper if such had been made. It did not affect in any degree the right or claim of Mrs. Rockwell’s estate to retain possession of the certificates, or to maintain an action for their collection.

The remedy of the plaintiff, as clearly indicated by the opinion in the Van Alstyne case, was to bring his action to recover possession of the paper from the alleged wrongful holder; and the particular facts of that case afforded ground of dissent by one member of the court, Grover, J., being of the opinion that as the draft was held in a foreign jurisdiction it might be treated as a lost bill. The court held, on the contrary, that the courts of the sister state (and equally, it would seem, of the United States) being open to the plaintiffs’ suit, they were not excused from taking that remedy before attempting to collect the draft from the drawer.

We are unable to see why the case at bar is not within the reason and the rul’e in the case of Van Alsiyne, which seems to be of unquestioned authority, and which has already been implicitly followed by our own court in the case of Crandall v. Schroeppel, supra.

The learned judge at the circuit regarded this case as controlled by the decision in Read v. Bank of Attica, 55 Hun, 154; 28 N. Y. State Rep., 650; but we are not aware that the question here considered was raised at all in that case. It was certainly not considered in the opinion of the court, nor involved in its decision.

For the reason, and on the authority here discussed we think the judgment and order in this case must be reversed.

Judgment and order appealed from reversed and a new trial granted, with costs to abide the event.

Macomber and Corlett, JJ., concur.


author: Macomber, J.

text:
    In the Matter of the Application of Eliza W. Clarke, Adm’rx, to Mortgage Real Estate.

      (Supreme Court, General Term, Fifth Department,

      Filed April 16, 1891.)

    1. Bxecutoes and administbatobs—Application fob peemission to MOBTGAGE TBUST ESTATE.
    Where an application was made, under chap. 357, Laws of 1886, amending § 65, part 3, chap. 1, title 3, art. 3, B. S., for leave to mortgage property held in trust, and it appeared that the moneys realized were to be employed for the uses of the general estate of the testator, in payment of taxes to become due, and an annuity to the widow, alleged to be charged upon the testator’s real estate, Held, that no ground was shown to justify the application.
    3. Same—What estate may be benefited in such a pboceeding.
    The “estate” to benefit which such an application will be granted, under the above statute, is not the general estate of the testator, but the particular estate which is held by the trustee under the provisions of the trust.
    Appeal from an order of the Monroe special term made July 7, 1890, granting leave to the petitioner to mortgage real estate for certain purposes under chap. 257 of the Laws of 1886.

      W. F. Dunmore, for app’lt; C. M. Williams, for resp’t.
   Macomber, J.

This appeal is brought by the heirs-at-law of David Clarke, the testator, from an order of the special term directing a mortgage to he executed in the sum of $5,000 upon the real estate left by the testator, for the purpose of preserving and improving the estate in the manner alleged in the petition, and for the payment of any taxes or assessments due or to become due on the premises, and to redeem the premises from any tax sales, and to pay the attorneys of the petitioner a certain sum for their costs, and also for the payment to-the widow of David Clarke, who is the petitioner, the amount of her annuity of $400 given to her by the will. The order also directed that the administratrix with the will annexed, acting as trustee under the will, should hold the balance of the proceeds of the mortgage upon the same trusts as were created by the last will, and that she pay from the proceeds of the mortgage the interest coming due on the mortgage from time to time, and also her annuity and taxes aforesaid as they respectively mature.

This proceeding is brought under chap. 257 of the Laws of 1886, amending § 65 of part 2nd, of chap. 1, tit. 2, art. 2, of the Devised Statutes-relating - to uses and trusts, for the purposes of paying an annuity given to the widow of the decedent by the will, and for raising money to pay future taxes as well as taxes then assessed, though not due at the time of the beginning of the proceeding.

The will, after making provision of a bequest of $700 to the widow, which is stated to be in lieu of dower, provided, besides the use of the house, for an annuity to her of $400, payable quarterly. The testator died on the 31st day of December, 1874, and hi's will was admitted to probate on the 12th day of March, 1875, and letters testamentary thereon were issued to the executor therein named, who continued in the discharge of his duties until the 28th day of December, 1878, when he was, by a decree of the surrogate of Monroe county, removed, his letters revoked, and the administratrix with the will annexed substituted in his place.

The amount of the personal property left by the testator was $8,423.99 ; the value of the real estate about $10,000. A judicial settlement of the accounts of the former executor and trustee was had on the 30th day of December, 1878, when it was found that the sum of $3,810.91 was in his hands, which subsequently was paid over to the present administratrix. A legacy of $1,000 was paid, together with the interest thereon, to one Lewis Clarke in his lifetime. No accounting has been had by the present administratrix with the will annexed, but it was found by the referee that she had paid out the moneys which she had received in behalf of the estate, but for what particular purpose was not disclosed by the report.

When the petition herein was filed, there were remaining unpaid no taxes or assessments or other liens upon the property unless the annuity of $400 given to the widow was such a lien. But in the view which we take of the case, it is not necessary to determine the latter question. By the amendment of 1886 (chap. 257) it is provided: “ That the supreme court shall have power, upon such terms and conditions as to the court shall seem just and proper in any case, to authorize any such trustee to mortgage or sell any such real estate whenever it shall appear to the satisfaction of said court, or a judge thereof, that it is for the best interest of said estate so to do, and that it is necessary and for the benefit of the estate to raise by mortgage thereon, or by a sale thereof, funds for the purpose of preserving or improving such estate.”

In order to support the petition in this case, it must be shown that the will of David Clarke created a trust in the real estate left by him, and in this respect we think the petitioner has wholly failed to make out a case. The use of the real estate mentioned in the petition, together with the household furniture, was given to the widow during her lifetime unconditionally. She was not to receive the same by the hands of the executor or trustee of the will, but was entitled to the same directly. Ho duty was imposed upon the trustee to collect the rents and profits, and consequently no title to the real estate vested in him. 1 R. S., 727, § 47; id., §§ 58, 59 and 60 ; Clift v. Moses, 116 N. Y., 144; 26 N. Y. State Rep., 405; Chamberlain v. Taylor, 105 N. Y., 185; 7 N. Y. State Rep., 517 ; Cooke v. Platt, 98 N. Y., 35; Robert v. Corning, 89 id., 225 ; Stevenson v. Lesley, 70 id., 512; Embury v. Sheldon, 68 id., 227; Brill v. Wright, 112 N. Y., 129 ; 20 N. Y. State Rep., 305 ; Briggs v. Carroll, 117 N. Y., 288; 27 N. Y. State Rep., 468.

But there is another fatal objection to this proceeding and that is, that the statute under which it is brought does not authorize the sale or mortgaging of lands for the purposes mentioned in the petition and in the order. At the time the petition was filed no taxes or liens by assessments or other liens existed upon the property. It appeared at the time of the hearing that there was due and unpaid to the widow the sum of $600 of annuities. In reality, therefore, the only ground upon which the prayer of the petition was based at the time this proceeding was begun and upon which it has been granted, is this outstanding indebtedness to the widow. It does not appear but that the remaindermen are able to and will pay all taxes and assessments which may be laid upon the property. Ho necessity for making repairs is shown. Even if the annuity was a charge against the real estate under the will, within the decision of Hoyt v. Hoyt, 85 N. Y., 142, cited by the learned judge at the special term, still such charge could not be worked out under the provisions of this act by an application to the court by the so-called trustee. By the amendment introduced by the act of 1886, authorization to the trustee to mortgage or sell the real estate, the title of which he holds, can be made only when it is shown that such sale or mortgage will be for the benefit of the estate and that such funds are necessary for the purpose of preserving or improving the real estate.

The language of the statute is plain and its application certain. In the Matter of Roe, 119 N. Y., 509; 30 N. Y. State Rep., 76, it was held that to justify an order of sale some necessity must be shown to exist for the use of the money in the preservation or improvement of the property, which the estate is not in a condition to supply, and which (could only be supplied by borrowing upon a mortgage or selling a part and using the proceeds, and that a sale could not be ordered for the purpose of re-investment and with a view only to increase the income, even though the real estate be unproductive; that improvements contemplated by the statute were not for the purposes of supplying funds to the trustees, or for the purpose of increasing the trust funds, but for the purpose of improvement of the real estate and saving it.

The estate referred to in the statute is not the general estate of the decedent, but only such as is held by the trustee under the provisions of the trust. When, therefore, the statute speaks of the improvement or preserving of such estate it does not mean the estate at large, but the particular real estate held by the trustee under the statute.

The order appealed from should be reversed, with costs, and the application denied, with costs.

Dwight, P. J., and Corlett, J., concur.


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    Warren Bryant et al., Ex’rs, App’lts, v. Harriet F. T. Thompson, Impleaded, Resp’t.

      (Supreme Court, General Term, Fifth Department,

      Filed April 16, 1891.)

    Will—Condition that a contestant be cut off, valid—Such a condition VOID IN THE CASE OF AN INFANT AS AGAINST PUBLIC POLICY.
    A testator, by a codicil to his will, set apart and placed in the hands of his executors, as trustees, a sum of money, the income of which should be paid to Ms daughter, then an infant, during life. He further provided, by the same codicil, that if any beneficiary contested his will, either in person or by another, the contestant should lose the provision made for him or her; and that if such contestant should be his daughter, then the trust fund created for her should pass to his wife. Upon proof of the will the surrogate, upon his own motion, appointed a guardian ad litem for the daughter, still an infant, and this guardian contested the will. After the daughter became of age she took no steps in the matter, all proceedings and appeals having been endect during her minority. Held, that the contest made must be deemed and taken to have been a contest by the daughter, which, in the case of an adult, would have forfeited the provision in favor of such adult; but that, as the daughter was an infant and courts are bound by law in all eases to protect their rights, the provision in the will, attempting to infringe upon such rights and limit the judicial functions of the court in that regard, was a condition against public policy and, therefore, void.
    Appeal from, a judgment entered in Erie county on the 13th day of September, 1890, on- the decision of the special term, in an action brought for the construction of the last will and testament of Francis W. Tracy, deceased, and for instructions in regard to plaintiffs’ duties in the premises.

      John G. Milburn, for app’lts; John E. Parsons and Charles Robinson Smith, for resp’t.
   Macomber, J.

The plaintiffs with the defendant, Agnes Ethel Tracy, the latter declining for reasons of her own to join with the plaintiffs in this action, are the executors of the last will and testament of Francis W. Tracy, late of the city of Buffalo. Mr. Tracy died on the 15th day of April, 1886, leaving a last will with four codicils thereto. The testator left him surviving, Agnes Ethel Tracy, his widow, and Harriet F. Tracy Thompson, his only child and heir-at-law. The latter was an infant, between eighteen and nineteen years of age, at the time of the death of her father. At his death Mr. Tracy was seized in fee of four valuable parcels of real estate in Buffalo, and of a large amount of personal property. By the terms of the second article of the second codicil the sum of $100,000 was set-apart and placed in the hands of the executors as trustees, the income of which should be paid to the daughter, Harriet F. Tracy Thompson, during her lifetime, the principal to be divided at the time of her death among her issue if any; if none, then to become a part of the residuum otherwise disposed of. Upon the proceedings before the surrogate for the probate of such will, the special guardian, appointed by the surrogate, of the infant Harriet F. Tracy Thompson, interposed an answer putting in issue the mental capacity of the testator to make the will and codicils, but the surrogate finally sustained the will and admitted the same to probate. On appeal, this decree was affirmed by the general term of the supreme court. This. action is brought for the purpose of determining the conflicting claims to this fund of $100,000.

The plaintiffs’ case rests upon the contention that the respondent, by reason of the. contest to the probate of the will which was made before the surrogate and on the appeal to this court, forfeited whatever bequest she would otherwise have received had not such contest been made hv her and that, consequently, under the provisions of the fifth article of the second codicil the income of this trust fund belongs to Agnes Ethel Tracy, the widow.

The fifth paragraph of the second codicil is as follows :

“Fifth. In case any beneficiary named in my will and testament, whether a devisee, legatee or cestui que trust therein named, shall, in person or by another, contest the probate of my said last will and testament, or any codicil thereto, or shall institute any proceedings of any kind with a view to avoid or annul my said last will and testament, or any codicil thereto, or any provision in my said last will and testament, or in any such codicil contained, then, and in either case, I do hereby, revoke all provisions, in my said last will and testament, or in any codicil thereto contained in favor of the person or corporation contesting or seeking to avoid such last will and testament, or codicil, or provision ; and if such contestant shall be my daughter, then I give, devise, and. bequeath to my wife all the property which, under and by such last will and testament and the codicils thereto, is or shall he given to my executors in trust for my said daughter’s benefit. If my wife shall be such contestant, then I give, devise and bequeath to my executrix and executors all the property which is-by my last will and testament, or any codicil thereto, given to my' wife, in trust for my daughter, and upon the same trusts in every particular as are specified in the second article of this-codicil.”

At the time the will was offered for probate, Harriet F. Tracy Thompson was nearly, but not nineteen years of age. She had been separated from her father in early infancy, had taken her mother’s family name of Eobinson and had resided with her mother’s relatives in and near the city of Hew York. The mother, having been estranged and divorced from her father, cherished hitter feelings toward him, which, to a considerable extent had influenced the daughter also. The reasons assigned, however, by the testator for giving no larger portion of his estate to his daughter, reflected in no respect upon her, but they are stated by him to be, that her mother was possessed of an ample fortune, and in addition thereto a handsome provision.had been made for her by the testator’s mother. ■

The respondent, upon the return day of the probate of the will, took no part, either personally or by a general guardian, in the selection of a special guardian who should appear for her in the proceedings in' the surrogate’s court. The surrogate thereupon, of his own motion, in pursuance of § 2530 of the Code of Civil Procedure, appointed a competent and capable member of the bar as special guardian, by an order duly entered May 11, "1886. The guardian consented in writing thus to assume the duties of taking care of the interests of the infant. He took vigilant measures to possess himself of his ward’s case. He conferred, very properly, with her and the counsel who had previously been applied to by her and her maternal relatives, and subsequently filed an answer prepared by such counsel, submitting, in a general way, the rights of the infant to the court. The special guardian employed as counsel the same person that had been consulted by the infant and her relatives. The special guardian acted throughout in good faith and contested the probate of the will vigorously, upon the ground, generally, that the testator had not testamentary capacity at the time of the execution of the instrument, and to that end there were called by the surrogate, at the instance of the special guardian, in behalf of the contestant, thirty-six witnesses. The daughter herself was called as a witness by her special guardian, but not upon any subject material to the contest made to the probate of the will.

The surrogate, as stated above, finally admitted the will to probate and certified, in accordance with § 2623 of the Code of Civil Procedure, that the probate of the will had been contested.

The appeal to the general term was also prosecuted by the same person, who was appointed guardian ad litem of the infant for the purposes of such appeal, and was completed before the ward arrived at the age of twenty-one years. Ho step had been taken in the way of contesting the probate of the will, or in any appeal from such probate or in defeating the testator’s declared intentions, since the daughter became twenty-one years of age.

The second article of the second codicil must be construed in connection with the fifth article of such codicil. Taken together, as the learned justice at special term has decided, they constitute a conditional bequest to the executors, as trustees, determinable in the event that the daughter, in person or by another, contests the probate of such will. This is not an unlawful provision when contained in a last will and testament. The testator, having the right to say to whom his property shall be bequeathed and devised, had the right, also, to make it as a condition of any gift that the recipient thereof shall not contest the probate of the will. Cooke v. Turner, 14 Simons, 493; S. C., 15 M. & W., 727; Evanturel v. Evanturel, 31 Law Times, N. S., 105; L. R., 6 P. C., 1; Hogan v. Ourtin, 88 N. Y., 162 ; 2 Jarman on Wills, 58 ; Schouler on Wills, 605.

Such contest, however, the special term held, was instituted and prosecuted by and in the name of the special guardian, and was not the contest of the daughter, in person or by another, within the fifth article of such second codicil. It seems to me, however, that such contest was the contest of the daughter and not of her special guardian. It is the infant who is always summoned and cited to appear in court, and who is regarded as the real party. It is true that the infant answers in the surrogate’s court by special guardian, in the supreme court by guardian ad litem, but the answer is that of the infant party, and the judgment is in favor of or against the infant party, and not in favor of or against the person who is selected by the court to take care of his interests. Phillips v. Dusenherry, 8 Hun, 348 ; Mutual Life Ins. Co. v. Schwaner, 36 id., 373; Matter of Accounting of Hawley, 100 N. Y., 211.

I cannot regard the contest as made before the surrogate as that of the guardian and not of the daughter. While it is true that the guardian, after his appointment, had substantially full control of all the proceedings in court, yet the contest, as carried on by him, was that of his ward and not of his own.

I see no way, except as hereinafter stated, of relieving the infant from the palpable fact that there was a very serious contest made over her father’s will by another in her behalf. The action taken in such contest bound, so far as any decree of the surrogate could bind parties upon the question of the testamentary capacity of the testator, as completely as though she had been of full age and had the selection of the counsel who should conduct her defense to the probate of the will. Was it the intention of the testator to cover only the case where there was a personal and responsible act taken by one of the legatees against the will ? I think not. He intended to embrace all cases where a contest should be made to the probate of the will where, by the judgment rendered upon such contest, the provisions of the will might be defeated. In such a case it was his obvious purpose to deprive the party of any benefits under the provisions in the will.

It follows, therefore, as it seems to me, that the respondent failed to observe the condition upon which the bequest was made to her, and consequently that she cannot now, having been defeated in the probate, receive anything from the estate, unless the provision in question, when aimed at an infant, is to be deemed void as being against public policy.

It may well be said that the public has no concern with the question whether the will of a certain person shall be denied probate upon the ground of want of testamentary capacity, and that, consequently, a bequest conditioned upon a party of full age not raising such a question may be deemed valid, and may be defeated by the subsequent act of the party in violation of the condition upon which the bequest was made. Any reasonable condition may be contained in a"will, but where the condition is such as to subvert the course of judicial proceeding and to deprive the court of the right and duty imposed upon it by law to institute, of its own motion, proper proceedings for the protection of the infant’s rights, the question immediately becomes one of public policy and brings into the discussion entirely new considerations.

So far as I can ascertain, there has been no decision in the courts of this state directly upon the point. Woodward v. James, 44 Hun, 95, contains a strong intimation, which, if applied to this case, would tend to the conclusion that the respondent has not deprived herself from sharing in the property under her father’s will, because the acts taken by her were done while an infant, yet it can hardly be declared that that decision distinctly so holds. While apparently acquiescing in the view taken by the trial judge in that action, the court proceeds to show that the principle sought to be invoked was not applicable, because that action was brought for the construction of the will, and not for the purpose of defeating any portion qf the intention of the testator. The court there say : Had the action been based upon the allegation of undue influence in procuring the will, or of mental incapacity in the testator, or for duress, and the plaintiff had been defeated upon the issues, a different question would probably arise.”

Any provision in a will which in its application comes in conflict with the organic or statutory law of the state by which it is made the duty of the courts to look after the rights of infants, irrespective of the fact whether they are of tender years or not, must be deemed to be illegal and void, as being against public policy. A testator cannot be permitted thus to obstruct, by any clause in his will, the necessary steps prescribed by law for the conduct of judicial proceedings in the case of infants, where the paramount duty of the court is to act in behalf of its wards and for their best interests. Ho penalty or forfeiture can be worked against such a party who has done nothing more than to submit his rights to the adjudication of the courts. Any other rule as applicable to infants would work serious mischief.

On the one hand the court would be required, through its officers, to examine into and ascertain the rights of the infants and determine whether a contest by the ward should be made, and then, after so deciding, if the contest was had and it proved unsuccessful, by the judgment of the same or another court, the provisions of the will for the infant would become inoperative,, though every step in the contest was taken intelligently and in good faith and without the consent of the infant Ho such restraint upon the independence of officers charged with a duty to their wards can safely be tolerated in last wills. With adults the case is different. They may give away their rights; they may waive the provisions made for them ; they are at liberty to enter upon a contest of a will or not, at their pleasure; but with infants the case is otherwise. They have no voice in the matter. The court acts for them, and it would be against the policy of the state to permit its action to be stayed or trammeled by a testamentary paper imposing a forfeiture upon its ward in case it should exercise its judicial functions in that particular instance.

For this reason I think the judgment appealed from should be affirmed.

Judgment affirmed, with costs to both parties payable out of the estate.

Dwight, P. J., and Corlett, J., concur.


text:
    In the Matter of the Petition of Sarah Kerwin.

      (Supreme Court, General Term, Fifth Department,

      Filed April 16, 1891.)

    Surrogates—Mat hear and decide application for infant’s support, ALTHOUGH THE CLAIM IS DISPUTED.
    Under §§ 2846 and 2472, suM. 7, Code Civ. Pro., a surrogate has jurisdiction to hear and decide an application to require the guardian of the property of an infant to pay a demand for its hoard and clothes, although such guardian contest the matter. The rule prevailing in the court of the surrogate, in certain special accountings, under which, in case the claim is disputed, he is ousted of jurisdiction, has no application.
    Appeal from an order of the surrogate’s court of Miagara county entered December 5, 1890, dismissing the petition of the appellant upon the ground that the surrogate had no jurisdiction to determine the issues raised by the petition and answer.

      W. W. Storrs, for app’lt; Wheadon & Ryan, for resp’t, Cornelius Kerwin, guardian.
   Macomber, J.

The petition of Sarah Kerwin, which was duly verified and filed with the surrogate, alleged that on December, 11, 1888, the respondent, Joseph F. Butler, was appointed by the surrogate of Miagara county general guardian of the person of William Kerwin, an infant, then ten years of age, of Mary Kerwin, an infant of eight years of age, and Phillip Kerwin, an infant of five years of age, and the respondent, Cornelius Kerwin, was duly appointed by such surrogate the guardian of the property of such infants; that the respondents, respectively, qualified as such guardians and entered upon the discharge of their duties. These infants are shown to be the children of the petitioner’s late husband by a former wife, such husband dying on the 30th day of September, 1888.

It is further alleged that on December 19, 1888, an agreement was made between Joseph F. Butler, the guardian of the person of the infants, and the petitioner, that the petitioner should take care of and board and clothe the infants at her home for one year at the rate of $1.50 per week for each child, which sum the said Butler as guardian aforesaid agreed to pay to the petitioner; that the petitioner fulfilled on her part and continued to provide for the children until December 19, 1889; that the guardian of the person gave the petitioner an order in writing upon the guardian of the property of the infants for the payment of $234, the amount so agreed upon, and that shortly thereafter the petitioner presented such order to the guardian of the property for payment, but the latter failed and refused to pay the same, or any part thereof. It is alleged that this contract for compensation for the care and maintenance of the infants was reasonable and just

It is further shown by the petition that the respondent Cornelius Kerwin had sufficient means in his possession and control to pay to the petitioner the amount so agreed upon between the guardian of the person of the infants and the petitioner; that the guardian- of the person, Mr. Butler, has been requested by the petitioner to apply to the surrogate for such sum and for an order requiring payment thereof, but he has refused to do so; that no question was made by him that the sum of money so claimed by the petitioner was justly due her for Such support, care and services.

The prayer of the petitioner was, that an order might be made directing such payment. Upon filing such petition an order was made and citation issued in due form of law requiring the guardians of the person and of the property to appear at the time named and show cause why the prayer of the petitioner should not be granted. Upon the return day or prior thereto Cornelius Kerwin, guardian of the property, filed his answer to such petition in which all the material portions thereof were substantially admitted to be true. Such answer specifically admitted that such guardian had money of the infants to the amount of more than $234, and that he refused to apply the same for their support; that the infants resided with their stepmother, as stated in the petition, and concluded as follows: “ That said Cornelius Kerwin denies that he has knowledge sufficient to form a belief as to the truth of each and every other allegation of said petition contained.”

The second answer denied the authority of the guardian of the person to enter into the contract with the plaintiff. The third defense was that the petitioner was appointed by the surrogate of the county as administratrix of Michael Kerwin’s estate, the latter being the father of the infants; that she filed an inventory containing among other things a list of the articles which were set apart for the use of herself as widow and for the said children pursuant to law, of the value of $275, not including personal apparel; etc.; that the petitioner has had full possession of the property since that time ; that the petitioner elected to care for the infants and furnish them with care, board and clothing ; that by so doing she is estopped to controvert the same or to claim or make any charge whatever in any form for such care, board or clothes as she alleges that she has furnished.

The fourth defense was what is termed a counterclaim, but of no particular importance so far as the legal questions presented by this appeal are involved. The guardian of the person of the infants made no answer to the petition.

The surrogate on the filing of this answer dismissed the proceedings on the ground that he had no jurisdiction to grant the prayer of the petition.. Uo opinion was written by him, but it is probable that such supposed want of jurisdiction is based upon the allegation that the claim here presented was a disputed claim, and that consequently the rule, applicable to surrogates, of want of jurisdiction in preliminary accountings where the claim is disputed, would prevail. It is true, that in certain proceedings under the statute (2 R. S., 220, § 1), for special accountings of an executor at the instance of the legatee to enforce the payment of a legacy, the surrogate has only jurisdiction to decree payment where the legacy is undisputed. Riggs v. Cragg, 89 N. Y., 479. See, also, Hyland v. Baxter, 98 id., 610. But we are of the opinion that § 2846 of the Code of Civil Procedure was designed to give the surrogate jurisdiction in cases where the facts are as disclosed by this petition and this answer.

That section reads as follows: “ Upon the petition of the general guardian of an infant’s person or property; or of the infant; or of any relative or other person in his behalf; the surrogate, upon notice to such persons, if any, as he thinks proper to notify, may make an order, directing the application, by the guardian of the infant’s property, to the support and education of the infant, of such a sum as to the surrogate seems proper, out of the income of the infant’s property; or where the income is inadequate for that purpose, out of the principal.”

By subdivision 7 of § 2472 of the Code of Civil Procedure, the surrogate has power " To appoint and remove guardians for infants; to compel the payment and delivery by them, of money or other property belonging to their wards; and, in the cases specially prescribed by law, to direct and control their conduct, and settle their accounts.

“ This jurisdiction must be exercised in the cases, and in the manner prescribed by statute.”

From these provisions it will be observed that there is no limitation of the power of the surrogate to direct the guardian of the property of an infant to make a suitable and proper application of the income or of the property itself to the support of the infant.

We know of no authority which restricts" the jurisdiction of the surrogate to cases where the demand for the support is undisputed. Indeed the very nature of the claim, as contemplated by § 2846 above quoted, implies that there may be a controversy or dispute over the ajiplication. It was the duty of the surrogate, in our judgment, in this particular instance, to examine into the petition and into those portions of the answer that were material to the petitioner’s application, and to grant or refuse the petitioner’s application upon the merits.

The order appealed from should be reversed, with costs to the appellant.

Dwight, P. J., and Corlett, J., concur.


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    Victor Rider et al., Resp’ts, v. Robert Foggan, App’lt.

      (Supreme Court, General Term, Fifth Department,

      Filed April 16, 1891.)

    Pleading—Reply—When plaintiff may bbcoveb beyond the amount ORIGINALLY DEMANDED IN THE COMPLAINT.
    Plaintiff sued for the price of a sawmill. Defendant answered, set up counterclaims, and as a partnership had existed between the parties, demanded an accounting. Plaintiff replied, and among other things alleged that in regard to the counterclaims for advances, etc., an accounting would show an indebtedness due plaintiff beyond the claim alleged in the complaint and for this he demanded judgment. Upon a trial the plaintiff recovered for the further indebtedness. Held, proper. The defendant by his answer had invited an investigation into the partnership dealings, and upon such an accounting the plaintiff was entitled to prove any claim in his own favor.
    Appeal from a judgment entered in Chautauqua county on the 17th day of December, 1888, on the report of a referee.

      W. S. Thrasher, for app’lt; L. Morris, for resp’ts.
   Macomber, J.

This action is brought to recover the purchase-price of a saw-mill with the logs and timber thereon under a sale by the plaintiffs to the defendant, made on the 25th day of January, 1875, the defendant to pay $1,300 therefor on the 28th day of February, 1875. The demand was for judgment of this sum, with interest The answer of the defendant alleged that the plaintiffs and the defendant. were co-partners at the time of, and prior to, the making of this contract, engaged in a general lumber business, and jointly owned the saw-mill described in the complaint. It admitted the purchase of the plaintiffs’ interest therein at the sum of $1,300 at the time stated. It then proceeded to allege that during the continuance of the co partnership between the plaintiffs and the defendant a large indebtedness had been incurred in the business, and that the defendant had advanced moneys in and about the conduct of the business largely in excess of the sum advanced by the plaintiffs. It also alleged that the plaintiffs had appropriated a large quantity of the lumber and other property belonging jointly to the concern and had cut a certain amount of cord-wood for which they had not accounted to the defendant. All of these matters are set up by way of counterclaims. It was further alleged that the plaintiffs, though often requested, had refused and neglected to account for this property and advance of moneys. The answer then demanded an accounting between the plaintiffs on the one hand and the defendant on the other as such co-partners, andfurtherprayedthatafterrecoupingunder said counterclaims so much as was necessary to extinguish the plaintiffs’ claim on the purchase of the saw mill property judgment would be taken for the balance against the plaintiffs in the sum of $2,000 and interest from April 1, 1875. These allegations of the answer were fully met by a reply interposed by the plaintiffs, which alleged affirmatively that the amount of- money paid out by them in and about the joint business was greatly in excess of the money paid out by the defendant, to wit, in the sum of $800. It contained a denial of any allegations of appropriating lumber, timber .or other property, and alleged that upon such an accounting it would be shown that defendant was indebted to the plaintiffs, besides the claim mentioned in the complaint, at least, in the sum of $830.

The referee has found that the copartnership between the plaintiffs and the defendant was formed on the 1st day of April, 1874, under the firm name of “ Eider Bros. & Fogganthat in the prosecution of the business of such concern they, from time to time, became the owners of real and personal property, exchanged and improved real estate, manufactured lumber, cut and peeled bark, sold wood, etc. The plaintiffs were equally interested with the defendant in this enterprise; that is to say, the plaintiffs were to furnish one-half of the capital,' and were entitled to receive one-half of the profits of the business, and were bound to pay one-half the losses thereof, and the defendant was to furnish the other half of the capital and receive the other part of the profits, or share the other half of the losses. On the 25th day of January, 1875, the defendant purchased of and received from the plaintiffs all their interest in certain property belonging to the firm, being a saw mill and logs and timber situate on the premises-where the mill was erected, and agreed to pay therefor the sum stated in the complaint, with interest.

The referee further finds that before this action was begun all the personal property of the firm had been sold or appropriated to-the individual uses of the several copartners, and that the business of .the firm had terminated; and that since the beginning of this action, but before the trial thereof, all the real estate owned by the firm had been equally divided between the partners upon agreement and by proper conveyances.

It is further found that the plaintiffs in the prosecution of this-enterprise contributed to the business of the concern the sum of 88,988.57 over and above their receipts from such business, and the defendant had so contributed the sum of $2,686.18, thus showing that the plaintiffs’ net credit in the business exceeded the net credit of the defendant by the sum of $1,852.44, the one-half of which, namely, $672.22, he found the plaintiffs were entitled to recover in addition to the cause of action stated in the complaint.

The questions here litigated relate almost exclusively to matters of fact. A perusal of the testimony satisfies us that the referee has made a proper disposition ■ of all the questions presented. The accounts of the several parties were very voluminous, covering many pages in the appeal book. A criticisin has been made by the learned counsel for the appellant that the accounts of the plaintiffs were put in, as he calls it, at wholesale. But an inspection of the record shows that the account, which was but a transcript of the books of the plaintiffs when offered in evidence, was not objected to by the defendant as not being competent, or the best evidence of the claim made by them against the defendant upon the accounting, but the objection was solely directed to that part of the account,which related to the transactions prior to the time when the defendant came into the concern. In the conclusion reached by the learned referee all the matters embraced by that objection were excluded, and no recovery has been had therefor by the plaintiffs. Moreover, the account of the defendant, also running through many printed pages, was likewise put in evidence without any objection by the plaintiffs. These several accounts being before the referee, the oral evidence was directed to an examination thereof, and to- the exclusion of any portion of either to which objection was successfully made. The conclusion to which he has arrived seems to be well supported by the clear preponderance of the evidence.

A legal proposition, however, has been made by the counsel for the appellant, which is to the effect that a new trial must be had because the referee has permitted a recovery by the plaintiffs of the sum of $672.22 more than they claim in the complaint The argument which has been addressed to us upon this subject is in brief that the plaintiffs cannot set up a counterclaim against the counterclaim of the answer; and that under § 514 of the Code, they are .confined to a general or specific denial of any material allegation of the counterclaim, or they may set forth, in ordinary and concise language without repetition, new matter not inconsistent with the complaint constituting a defense to the counterclaim. In a word the argument is, that the new matter in reply can only be used as & defense. But this argument is fallacious. It is true that the complaint set forth a single cause of action relating to a particular subject matter of purchase and sale. Had not the defendant turned the course of judicial inquiry in this action by the several defenses set forth in his answer, the plaintiffs undoubtedly would have been confined in their judgment to the cause of action there ■stated and limited to a recovery according to the facts there alleged, unless an amendment of the complaint had been granted so as to enable them to recover a greater sum. That proposition, however, has no relation to the facts developed in this case. The defendant has opened the door into a full inquiry concerning the partnership dealings with the plaintiffs and the defendant, and has asked an accounting of such matters. The answer has alleged in substance that the partnership between the plaintiffs and the defendant existed; that it had been dissolved; that there were unsettled accounts between the members of the concern, and that there was a balance in favor of the defendant, and that this was accompanied by a demand for a judgment for such balance. Such allegations constitute a good cause of action when in a complaint, and equally in a counterclaim when in an answer. Ludington v. Taft, 10 Barb., 447. These allegations were sufficient to compel the plaintiffs to enter upon an examination of the partnership account Having done so and having refuted the defendant’s allegation that such an accounting would show a balance in favor of the defendant, and having shown, on the contrary, that such balance was in favor of the plaintiffs, the defendant is not in any position to complain of the result of the judicial inquiry, for the beginning of which he was alone responsible. The enhancement of the plaintiff’s claim thus made is not inconsistent with the complaint ” within the terms of § 514 of the Code of ‘Civil Procedure.

Judgment appealed from should be affirmed.

Judgment affirmed, with costs.

Dwight, P. J., and Corlett, J., concur.


author: Corlett, J.

text:
    John P. Magovern et al., Resp’ts, v. Evolin B. Robertson et al., App’lts.

      (Supreme Court, General Term, Fifth Department,

      Filed April 16, 1891.)

    1. Pleading—Amendment—Power of referee.
    Under §§ 723 and 1018, Code Civ. Pro., a referee has power to amend . the summons and complaint by adding a party defendant.
    2. Same—Plea of non-joinder.
    A plea of non-joinder of a defendant is answered by the fact that his name appears in the judgment as entered.

      Appeal by the defendants from a judgment entered upon the report of a referee in Chautauqua county.

      A. C. Pichard, for app’lts; W. H. Henderson, for resp’ts.
   Corlett, J.

About the 3d day of May, 1881, the defendants entered into an agreement in writing of which the following is a copy:

“ Memorandum of an agreement, made and entered into this 30th day of April, 1881, by and between Evolin B. Robertson, of the village of Mayville, Chautauqua county, M. Y., of the first part, and M. Mattison, W. B. Martin, 0. H. Johnson, Oren Stoddard, James Moon, W. Holt, A. C. Pickard, H. D. Stoddard, W. Morthrop, Jr., D. H. Matthews, John Morthrop, A. M. Rinehart, Jackson & Hollenbeck, W. H. White, Mark Jones, J. H. Wood, J. W. Broadhead of the town of Busti, said county, of the second part, Witnesseth :
“That for and in consideration of the covenants hereinafter expressed, the said party of the first part hereby covenants and agrees to and with the said parties of the second part, to put a stock of dry goods, groceries, hats, caps, boots and shoes, etc., in what is known as the John R. Robertson store building, situate in Busti Village ; said stock to be at least of the value of $3,000, to be replenished from time to time as it runs below the amount, said party of the first part to procure the services of John R. Robertson to manage said store and devote his time thereto to the interests of the business. The parties of the second part agree to endorse the paper of the said party of the first part to the amount of $2,000, which sum is to go into the business and the parties of the second part are to have an interest at all times in the goods of said store to the amount of their endorsement, subject, however, to no liability except such endorsement At the end of one year, the party of the first part is to cause an invoice of the goods on hand to be taken in the presence, if required, of two of the parties of the second- part, and the net profits of said business, including all commissions for buying hides, butter, cheese, wool and other products received by said manager, and after deducting insurance on goods, fuel, lights, additional clerk hire, freights, and other necessary expenses of the business, to be divided as follows:
“ Two-thirds of said net profits to belong to the party of the first part in consideration of her capital and management of said business through said John R Robertson and the use of said store building; and the other one-third of said net profits are to be paid to the said parties of the second part pro rata in consideration of their said endorsement and their general interest in the business. It is further stipulated by and between the parties that at any time previous to the expiration of one year, when a majority of the parties of the second part shall make a request in writing to the effect, the party of the first part shall cause an invoice of the stock of goods on hand to be taken in the presence of two of the parties of the second part, and if it be ascertained that the business is sustaining any considerable loss, and the said parties of the second part so demand, the party of the first part shall turn over sufficient amount of said goods to secure said parties of the second part against any liability on account of said endorsement, or relieve said parties of the second part from said endorsement by causing said endorsed papers to be cancelled. And it is further agreed by and between the parties that if, at the end of one year, it is ascertained that there has been a profit in said business, and the party of the first part so require, the provisions of this contract shall extend another year; but if the party of the first part desires to continue said business without the aid •of said endorsement, then this contract from and after that date becomes abrogated. Said parties to this contract are to do what they reasonably can to make said business a success.

In witness whereof, we have hereunto set our hands and seals this 29th day of April, 1881.

“ Evolin B. Robertson, [l. s.]

M. Mattison, [l. s.]

W. B. Martin, [l. s.]

C. H. Johnson, [l. s.]

Oren Stoddard, [l. s.]

James Moon, [l. s.]

W. Holt, [l. s.]

A. 0. Pickard, [l. s.]

R. D. Bush, [l. s.]

H. D. Stoddard, [l. s.]

Wm. Northrop, Jr., [l. a]

D. H. Matthews, [l. a]

John Northrop, [l. a]

(A. A. Stoddard.)

(Mr. Stoddard’s name was not in the body of the agreement, but was at the end. It had been scratched over with a knife, and could be easily read and was very distinct.)

“A. M. Rinehart, [l. s."

Jackson & Hollenbeck, [l. si

Wm. H. White, [l. si

A. W. Smith, [l. s.'

Mark Jones, [l. s."

J. H. Wood, [l. s.

J. W. Broadhead, [l. s."

This áction was commenced, in June, 1882, to recover the balance of a bill of goods. Issue was joined, the action was referred and the referee found for the plaintiffs. It appeared that the above agreement was made for the purpose of establishing and carrying on a store in the village of Busti, Chautauqua county. After considerable litigation the court of appeals decided, 116 N. Y., 61; 26 N. Y. State Rep., 612, that the parties to the agreement were partners, reversing the same case in the 40th of Hun, 166.

The referee’s third finding of fact is as follows:

“ That at the time said written agreement was so drawn and ■prepared, a blank space was left in the body thereof for the purpose of writing therein the names of the parties thereto of the second part. That at the time the said agreement was executed it was understood and assented to by the respective parties thereto, that the said instrument would not be used as a contract until it was signed by at least twenty persons other than Evolin B. Robertson.
“ That thereupon and as hereinbefore stated the twenty persons named in said instrument as parties of the second part thereto, did execute the same under their hands and seals and as hereinbefore found and stated, and thereupon one Thomas Jackson became the custodian thereof on behalf of the said parties thereto, and subsequently the names of the said parties thereto of the second part were written in the body of said instrument in the blank space so left therein for that purpose by the said Alonzo 0. Pickard.”

The seventh finding is:

“ That the names of the persons in the body of the said agreement in writing are the same persons who executed the same and are the same persons named as defendants in - the summons and complaint in this action, except that the signature, ' Jackson & Hollenbeck,’ represents the defendant Jane 0. Jackson and one Abbie E. Hollenbeck. That the correct names of the parties to said instrument in writing hereinbefore fully set out are Evolin B. Robertson, Monroe Mattison, William B. Martin, Charles H. Johnson, Oren Stoddard, James Moon, William Holt, Alonzo 0. Pickard, Russell D. Bush, Hiram D. Stoddard, William Northrop, Jr., Davis H. Matthews, John Northrop, Amos M. Rinehart, Jane 0. Jackson, Abbie E. Hollenbeck, William H. White, Aaron W. Smith, Mark Jones, James H. Wood, James W. Broadhead. That at the time of the execution of said agreement in writing all of said defendants, except James W. Broadhead, lived at Busti, aforesaid; he then resided in the adjacent town of Ellicott.”

Those findings are supported by the evidence, and the defendants took no exception to the seventh finding. The referee found the following conclusions of law:

“ As conclusions of law I find and decide that the said defendants were co-partners in said business so carried on by them under the said name and style of ‘Busti Union Store.’
“ That the name Addison E. Hollenbeck be changed to Abbie E. Hollenbeck. That the said defendants as such co-partners are indebted to the plaintiffs for and on account of said goods, wares and merchandise so sold and delivered to them by the said plaintiffs in the said sum of one thousand, two hundred and eighty-one dollars and fifty-nine cents with interest thereon from January 6th, 1882. The total indebtedness being at this date the sum of one thousand, nine hundred and fifty-foiir dollars and fifteen cents.
“ Judgment is ordered and directed in favor of the plaintiff and against said defendants for said last named sum together 'with the costs of this action to be taxed.”

The only exception to the conclusions of law was as follows:

“The said defendants except to all of the findings of law in said referee’s report.”

Ansel A. Stoddard signed his name to the agreement but a day or two after requested its erasure, and was afterwards informed that it was erased. Stoddard never took part in carrying on the business, and the plaintiffs had no knowledge that he was a member of the firm or had any interest in it. His name was never inserted in the body of the agreement.

It was conceded on the trial that the defendant, Addison E. Hollenbeck was not the Hollenbeck named in the agreement in the signature “ Jackson & Hollenbeck.” That in fact those signatures were made by Jane C. Jackson and Abbie E. Hollenbeck. Addison E. Hollenbeck was never a party to the contract It was also agreed that the summons in this action was never served upon either Addison E. Hollenbeck or Abbie E. Hollenbeck.

The defendants among other things answered that Thomas Jackson, Abbie E. Hollenbeck and Ansel A. Stoddard should be made parties defendant, and claimed non-joinder.

The referee’s ninth finding is as follows:

“ That neither the summons or complaint in this action was served upon any person by the name of Hollenbeck. That Abbie E. Hollenbeck is the correct name of the Hollenbeck mentioned in the agreement herein set out and is made a party thereto.”

In his conclusions of law above quoted, he finds that the name Addison E. Hollenbeck be changed to Abbie E. Hollenbeck. This change was made and- judgment entered in form against her, as well as the other defendants.

The learned counsel for the appellants in his brief reverses the names of Abbie E. Hallenbeclc and Addison E. Hollenbeck. He, therefore, states that Abbie E. Hollenbeck appeared and answered, but Abbie E. did not, so far as the case discloses.

Two questions are presented by this appeal. One as to whether Ansel A Stoddard should have been made a party to the action. The case shows that after he signed the instrument, but before its body was filled with names, he expressed a wish not to become a party, which was so far acquiesced in that the signature was partially scratched out, and his name was never inserted in the body. He never in any of the dealings was treated as a party to-the contract, and was not made defendant. Hpon the facts appearing, no reason is seen why he should have been made a defendant.

The other question is the omission to make Abbie E.Hollenbeclc a party defendant Addison E. Hollenbeck was never a party to the contract. Abbie E. Hollenbeck was, the name used being Jackson & Hollenbeck, but when the action was commenced the pleader mistakenly assumed that the signer was Addison E. Hollenbeck, who was made defendant These facts appeared on the trial, and the referee allowed a correction of the name.

Sections 723 and 1018' of the Code of Civil Procedure confer power upon the court or referee to amend summons or complaint in respect to parties.

In the ease at bar, Abbie E. Hollenbeck was a party to the contract The given name of a person who was not such was used by the plaintiffs. Upon the discovery of the mistake, the referee allowed an amendment. Addison É. Hollenbeck had no concern or interest. He had a right to appear when sued; but in this case he was not served with process, but for some reason (not disclosed) his attorney interposed an answer, in which he pleads, among other things, the non-joinder of Abbie.

Section 1932 of the Code of Civil Procedure, in the case of joint liability, authorizes judgment in form to be entered against all the defendants, although part of them are not served with process. But under the same section an execution could not be collected against the individual property of Abbie, and could only be collected from the joint property.

In the present case, the referee had power to correct the name. It was so corrected. Judgment in form was entered against her, as well as the other defendants. If, for any reason, the judgment against her is improper, she would be the party to seek its correction. The plea of non-joinder is answered by the fact that she is included in the judgment with the rest.

The seventh finding shows that Abbie E. was a party to the instrument. Ho exception was taken to that finding by the defendants. The conclusion of law that the name Addison E. Hollenbeck be changed to Abbie E. Hollenbeck was not excepted to. 'The defendant’s exception to all the findings was not sufficiently specific to raise this point or.any other. Schoonmaker v. Bonnie et al., 119 N. Y., 565; 30 N. Y. State Rep., 113 ; Murray v. Usher, 117 N. Y., 542; 27 N. Y. State Rep., 928; Smedis v. Brooklyn & R. Beach R. R. Co., 88 N. Y., 13; Bosley v. N. M. Co. et al., 123 id., 550; 34 N. Y. State Rep., 277.

It follows that the judgment must be affirmed.

Dwight, P. J., and Macomber, J., concur.