author: Dykman, J.:

text:
    FRANCES H. SIMONS, Appellant, v. THE NEW YORK LIFE INSURANCE COMPANY, Respondent.

      Policy of insurance — when the company is not bound by the os'al representations of its agents — Tontine system of insurance — sights of a policyholder prior to the period fixed for distribution — such a policy is not void as a gaming contract— the company is not required to s&parrate Tontine funds from generad funds.

    This action was brought by the plaintiff to recover damages alleged to have been sustained by her by means of false representations made by the defendant, and for a breach of a contract made by it, whereby it insured the life of the plaintiff’s husband for her benefit.' The complaint alleged that the plaintiff had been induced to take out a policy of insurance on the life of her husband on the tontine plan, by means of the representations and statement made to her husband acting as her agent, by the defendant, which representations and statement were false and fraudulent. Upon the trial it appeared that the application was made to the husband of the plaintiff by an agent of the company, who produced a pamphlet issued by the company and read portions thereof to the husband, and also allowed the latter to read it himself.
    The counsel for the plaintiff read from this pamphlet a description of the tontine plan, and an explanation of its peculiarities and advantages substantially as they were set out in the complaint. He then asked the husband, who was a witness, “ what further representations did he (the agent) make to you at the time in regard to the advantages of this tontine investment plan as compared with other plans of insurance.” Upon the defendant’s objecting the witness was not allowed to answer this question. The court also refused to allow the witness to testify that he was induced to accept the policy by representations, other than those contained in the printed pamphlet, made to him as to the advantages of the tontine plan over the others.

      Held, that the evidence was properly rejected for the reasons:

      First. That the policy expressly provided that no representations made by the person procuring the application therefor should be binding on the company, unless the statement was reduced to writing and presented to the officers of the company at the home office.

      Second. That as the pamphlet which contained a full and true description of the tontine plan of insurance was read by the agent of thelplaintiffi, and there was-no concealment or misrepresentation on that subject, any statements made by the agent as to the advantages of that plan over others suggested, amounted simply to recommendations and expressions of his own opinion, and could not be deemed to have deceived or misled the plaintiff or her husband.

      Tim'd. That the representations related only to future and not to past acts.
    By the terms of the policy the life of the husband was insured for $5,000, and provisions were made for the division of the tontine fund among the holders of policies in force at the period fixed for distribution. The policy was issued on February 15,1875, and the tontine dividend period was to be completed on February 11, 1885. The premiums falling due on the policy were paid down to February 11, 1880, when the policy lapsed by reason of the non-payment of subsequently accruing premiums. In this action, commenced in 1882, while the husband was yet alive, the complaint alleged that the defendant did not perform the obligations assumed by the policy, which were specified in the complaint, and that by reason of its failure so to do, the plaintiff had sustained damages.

      Held, that the action was prematurely brought as the plaintiff had no interest in the fund until the tontine period had expired, as it could not before that time be ascertained whether or not her husband would then be alive or the policy be in force.
    That the plaintiff had forfeited all her rights under the policy by a failure to pay the annual' premiums.
    That the defendant was not required to keep the funds arising from the policy, or the class of policies to which it belonged, separate and apart from the other funds of the company, or to separately invest them for the benefit of the persons whe might eventually be entitled to receive them.
    That the contract could not be held to be void as in effect a gambling contract. That even if it were a gambling contract the plaintiff could derive no benefit from that fact, as her action was not based upon the law'against gaming, and she was in pari delicto if the contract were immoral and void.
    Appeal fiom a judgment of tbe Circuit Court, in tbe county of Kings, dismissing tbe complaint herein, on a trial of tbe issues herein before a jury.
    Tbe action was brought by tbe plaintiff to recover of the defendant damages by reason of false representations and breach of contract on a policy of insurance issued by tbe defendant on tbe life of Augustus H. Simons, tbe husband of plaintiff.

      The policy was issued upon what is known as the “Tontine Investment Policy Plan,” February 15, 1875. The complaint alleged that prior to the issuance of said policy the defendant represented to the plaintiff, among other things, that said policy plan “ had many and great advantages over the ordinary form of insurance; that the fund arising from the premiums paid upon policies belonging to said Tontine class were to be kept separate and distinct from premiums paid upon other classes and kinds of policies issued by said defendant, and would be separately kept, invested and accumulated in trust for the benefit of the surviving members of said Tontine class of policies.
    The complaint further shows that all of said representations were false and untrue; that the defendant did not, from the inception of said policy, or of the class of policies to which it belonged, or at any time thereafter, keep the funds arising thereupon separate and apart from other funds of said company, and did not separately handle, invest and accumulate the same for the benefit of the plaintiff and other persons belonging to the same class, but mingled the said fund or funds with the general funds of said company, and subjected said fund to the hazard and expenses attaching to the general funds of said company, so that it became impossible to trace, separate or distinguish the same or to carry out the representations made to, and the contract made with the plaintiff. To this complaint the defendant demurred, and the same having been heard at Special Term, the demurrer was overruled. The defendant thereupon appealed to the General Term, and, after argument, the decision of the Special Term was sustained. The defendant then answered, and in substance denied the allegations of the complaint.
    The cause having come on for trial before Mr. Justice Cullen and a jury, proofs were offered to sustain the allegations of the complaint. At the close of plaintiff’s case the judge, after rejecting most of the evidence offered by the plaintiff in support of the complaint, dismissed the complaint, and from said judgment the plaintiff appealed to this court.

      B. F. Tracey, Wm. Wirt Hewett and Lucius Me Adam, for the appellant.

      W. B. Horiiblower, for the respondent.
   Dykman, J.:

On the 15th day of February, 1875, the plaintiff procured from the defendant a policy of insurance on the life of her husband in the amount of $5,000, on what is called the tontine investment policy plan, which seems to be a plan with a double aspect. In the first place the person was insured in the amount of $5,000 for the term of his natural life with the condition and restrictions usual in an ordinary life policy. Then it was provided that the policy was issued and accepted on certain special agreements and conditions relative tu policies on the tontine investment policy plan, and they were substantially as follows : The policy was issued on the tontine investment policy plan, and the tontine dividend period was to be completed on the 11th day of February, 1885. No dividend was to be allowed or paid upon the policy unless the person whose life was insured should survive until the completion of the tontine dividend period, and unless the policy should then be in force, all surplus or profits from such policies in the tontine investment policy plan, as should cease to be in force before the completion of their respective tontine dividend periods, were to be apportioned equitably among such policies of the same class as should complete their tontine dividend periods in the same year. After the completion of the tontine dividend period on the 11th day of February, 1885, if the policy had not been previously terminated by lapse or death, the accumulation apportioned to this policy secured to the assured, one of the following benefits:

First. To apply the accumulated dividend to the purchase of an annuity during the continuance of the life of the insured payable to the insured or assigns.

Second. To continue the assured for the original amount and withdraw the accumulated dividend upon this policy in cash payable to the insured or assigns.

Third. To withdraw the entire equity in the accumulations that belong to the policy in cash.

Fourth. To convert the entire equity into its equivalent in a paid up policy without participation in profits, on compliance with a proviso not material here.

Fifth. The conversion of the entire equity into an annuity to continue during the life of the insured.

All these benefits were at the option of the insured.

The premiums were paid down to the 11th day of February, 1880, and then the policy lapsed for non-payment of premiums, according to one of its conditions. There was a stipulation in the body of the policy that no representation made by the person procuring the application therefor should be binding on the company unless the statement was reduced to writing and presented to the officers of the company at the home office in the application. There was no such statement in the application for 'this policy.

The plaintiff commenced this action in the year 1882, while her husband was yet alive, setting out in her complaint the substance of the policy, and a description of the tontine principle, and alleging that at the time of the issuance of the policy the defendant represented to the husband of the plaintiff, who was her agent in that behalf, that the policy about to be issued had many and great advantages over the ordinary form of insurance, and among other things, stated the principle of the tontine plan substantially as it was; that the plaintiff relied solely and entirely on the representation so made and accepted the policy on such reliance; that such representations were false and fraudulent, and that the defendant did not perform the obligation assumed by the policy in many respects, which are specified, and that by reason of the violation of the contract by the defendant, the benefits of the same have been lost to the plaintiff to her damage of $2,500 which she seeks to recover in this action. The complaint was dismissed on the trial and the cause comes here on appeal from that judgment.

On the trial it appeared that the application was made to the husband of the plaintiff by an agent of the company who produced a pamphlet issued by the company from which he read portions himself and allowed the husband to read it also. The counsel for the plaintiff read from this pamphlet a description of the tontine principle, and an explanation of its peculiarities and advantages substantially as they were set out in the complaint. The counsel for the plaintiff then asked her husband, who was a witness for her, this question: "What further representations did he (the agent) make to you at the time in regard to the advantages of this tontine investment plan as compared with other plans of insurance ?

This was objected to and excluded and then various other questions were propounded to the witness with a view of presenting .the same question in various aspects, and all the testimony was excluded. The witness then testified that the agent made statement and explanations of the tontine plan in addition to those contained in the pamphlet, and was asked what those statements were. That testimony was also excluded. This question was also asked and rejected : Q. In accepting this policy did you rely upon the representations made to you touching the advantages of this plan over other plans and touching the manner in which the funds or profits accruing to the assured was to be kept and preserved ? The court decided that the counsel inquire as far as the pamphlet was concerned, and that the inquiry must be so limited. In the application one of the questions asked of the plaintiff was whether the tontine plan had been fully explained to her, and whether she authorized the company to retain the dividends on the policy thereby applied for and to place the same in a reserve fund, in which she was to participate in accordance with the provisions made by the company regarding policies in the class she had selected, and not otherwisé, and her answer was in the affirmative. It was the claim of the plaintiff’s counsel on the argument of this appeal that this action was for fraud, and that the exclusion of the representations made by the agent of the defendant when he solicited the application was erroneous, because the fraud was then and there perpetrated by him in that way. The answer to this seems to be that the power and authority of the agent to make representations was limited to statements made in writing and presented to the officers of the company in the application. And the plaintiff was made aware of this restriction because it is contained in the policy itself; more than that, the pamphlet containing a full and true description and representation of the tontine plan of insurance was read by the agent to the plaintiff, and there was no concealment or misrepresentation on that subject. If after that the agent made representations respecting the advantages of the plan over other systems and forms, they were quite immaterial and amounted simply to recommendation and opinion. They had no tendency to deceive or mislead the plaintiff or her husband so long as the plan itself was explained to, and understood by them.

Commendation is not misrepresentation; even exaggeration differs widely from intentional falsehood; general assertions as to value or advantage cannot be made the basis of an action for deceit; an expression of opinion is not a representation of fact upon which a charge of fraud can be predicated. Even assuming that there was misrepresentation by the agent, the plaintiff was not misled, for the whole of the system was laid before her truly by the reading of the pamphlet. These reasons seem to be a sufficient justification of the ruling which rejected the representations of the defendant’s agent beyond the facts embodied in the pamphlet. If there be no proof of the perpetration of a fraud aside from the declaration of the defendant’s agent, not reduced to writing as contemplated by the policy of insurance, then there should be no recovery on that ground. All the representations made by the company were contained in the pamphlet, and that stated the plan of tontine insurance as carried into practice by the defendant with accuracy; and the plaintiff was notified that the agent was not authorized to make any further or other statements except in a particular manner, which was not pursued.

The complaint in the action wears two aspects not entirely consistent with each other. It alleges that at the time of the issuance of the policy certain false and fraudulent representations were made; that the plaintiff relied on them and believed them and accepted the policy. Then it is alleged that such representations were false and fraudulent, 'and that the defendant violated them in several particulars which are specified. Then it is charged as a result of the facts stated, “ that by reason of the violations and breach of contract as aforesaid on the part of the said defendant the benefits of said contract have been lost to the said plaintiff to her damage in the sum of twenty-five hundred dollars,” and judgment is-demanded for that sum. Eviden'ce of the failure of this company after this contract was made to execute and carry it out was inadmissible under the charge of fraud perpetrated as an inducement to its formation before it had its inception, and so conversely testimony to establish fraud perpetrated before the contract was consummated as inducement to make it was not proper or material under the charge of a breach or failure to perform the contract after its execution.

Then in the points submitted by the appellant on this appeal it is stated that the action is brought to recover damages by reason of false representations and breach of contract. It was also claimed by the appellant that the action was for fraud, and therefore she had the right to prove all the representations made by the agent of the defendant when the contract was made. Our examination of the case has thus far proceeded on that theory, and we have so far found nothing for its support.

In the examination of the case on the other theory it is to be remarked at the time of the commencement of this action the ton-tine period of ten years had not expired. So that she had no interest in the tontine fund and it could not appear that she ever would have, for her husband might not survive this tontine period, until the expiration of that period in the lifetime of her husband she had no rights in the funds. Both the expiration of the period and the survival of her husband were conditions precedent to the accruing of any rights to the plaintiff in such fund.

Neither do we find evidence of any breach of the contract by the defendant. The breach alleged is that the defendant did not from, the inception of the policy or of the class of policies to which it j belonged, or at any time, keep the funds arising therefrom separate and apart from other funds of the company, and did not invest the same separately for the benefit of the plaintiff and other persons of the same class but, on the contrary, mingled the same with the general funds of the company. In answer to this it is to be said that there is no proof of any undertaking or agreement on the part of the company to keep such fund separate from the other funds of the company and no reason is disclosed for so doing.

Further it is to be said that the plaintiff has forfeited all her rights under the policy viewed as a contract of insurance by the failure to pay the annual premiums, and so her rights are foreclosed for that reason on this branch of the case. The contract was not rescinded by the plaintiff and she did not refuse to pay the premiums on that ground; neither is the complaint framed on the theory of a rescisión. The action is not for money had and received •or improperly obtained, but for the recovery of damages.

It was claimed by the counsel for the appellant on the argument that this insurance contract was a gambling contract, and that the plaintiff was in effect betting on the chances of the continuance of her husband’s life beyond tbe tontine period of ten years, and that the company had bet against her. We cannot assent to this view. All insurances are based more or less on the doctrine of chances, but they are by no means gambling contracts, unless they are wager policies, and then they are void in law. But this consideration need not be further pursued, for the plaintiff can obtain no advantage from the position even if it be tenable. Her action is not based on the law against gaming, and she is in pari delicto even if the contract was immoral and void.

This policy is a policy of insurance on the life of the plaintiff’s husband, payable at his death if the annual premiums have been paid and the policy is in force at that time. So far as that contract of insurance is concerned there is no claim that the defendant has not fully complied with its undertaking. One part of every premium is set aside to accumulate as a fund toward the payment of the policy when it becomes a claim against the company. That fund is called the reserve fund. Another part of the premium is consumed in paying the costs of insurance and expenses. The remaining third part, augmented by the excess of interest earned upon the reserve of the policy, is surplus. Under an ordinary policy this surplus is annually returned to a policyholder in some way agreed on and is commonly called dividend.

On this policy has been engrafted the system called tontine, under which that surplus, instead of being divided and paid to the policyholder, goes to a fund called the tontine fund, the amount being credited to the particular class to which the policy belongs. When a policy lapses the reserve value becomes profits, and under the scheme such profits are divided among the surviving holders of the various classes. Such in substance is the tontine scheme, and such it was represented to be by the pamphlet issued by the company and read in evidence on the tidal of this action. The annexation of the plan to the policy did not invade nor vary the legal effect of that instrument as a policy of insurance for life. It merely constituted a consent for the retention of the surplus dividend by the company during the tontine period, at the termination of which the accumulations .from all sources are to be divided among the surviving holders of policies of that class in existence. The representations complained of had reference only to the surplus dividends, left with the company by consent of the insured for accumulation during the tontine period. The allegation of the complaint, however, is that the fund arising from premiums paid upon policies belonging to the tontine class were to be kept separate and distinct from premiums paid upon other classes and kinds of policies issued by the defendant, and would be separately kept invested and accumulated in trust for the benefit of the surviving members of the tontine class. If such representations were made by the agent to the plaintiff and her husband, they had full information that the tontine scheme contemplated nothing of that kind.

In the portion of the pamphlet read in evidence on the trial by the counsel for the plaintiff, it was stated distinctly that the annual surplus arising from the policies in each class would be set aside to accumulate for the stipulated number of years; no.t that the fund arising from the premiums were to be set aside, nor that any separate investment was to be made. The representation therefore had reference to a subject which had been fully explained to the husband of the plaintiff from the same pamphlet, and a false guaranty or representation can be founded on nothing that is open and visible and well understood. They only apply to secret defects and unexplained faults.

Again, these representations taken at their worst, related only to the future. No fact was misrepresented, and the sole claim is that in the future the tontine fund was to be invested and handled separately. That at most would constitute a condition subsequent in the contract for the violation of which the plaintiff might obtain appropriate redress. The plaintiff has no interest in the mode of investing and handling these funds. Her interest is subserved if the persons insured on this plan are divided into classes and separate and accurate accounts are kept with each class on the books of the company. It appeared in evidence that this had been done, and that each policy was credited annually with the surplus dividend it would have received each year if had not been a tontine policy. Also that when any policy in the class lapsed for non-payment of premiums or any other cause, or matured by death, the amount of its accrued dividends so credited, augmented by compound interest, was credited to the class. This is in full compliance with the declaration in the pamphlet that the annual surplus arising from the policies in each class will be set aside for accumulation. So it appeared that all the legal rights of the plaintiff were properly guarded and secured.

We cannot discover, what the counsel for the appellant claimed on the argument of this appeal, that the statements of the tontine plan in the policy and in the pamphlet were indefinite or uncertain, for the statement is very plain and very easily understood, and no testimony of experts or witnesses Jof any kind is required for its elucidation or comprehension.

It must be borne in mind after all, that the plaintiff never acquired any vested rights in the tontine fund because she voluntarily ceased the payment of premiums and her policy lapsed for that reason before the expiration of her tontine period.

We can discover no ground upon which a recovery for the plaintiff can be founded. We have examined carefully all the exceptions taken on the trial and find no error, and our conclusion is that the complaint was properly dismissed.

The judgment should be affirmed, with costs.

Present — Barnard, P. J., Dykman and Pratt, JJ.

Judgment affirmed, with costs.


source: Caselaw Access Project

license: Public Domain

text:
       ROBERT FUREY and THOMAS F. WHITE, Respondents, v. THE TOWN OF GRAVESEND and Others, Appellants.

      Letting of town lands — powers of electors at annual town meetings — effect of restrictions upon the power of leasing and sale.

    On April 4,1871, a resolution was adopted by the electors of the town of Graves-end, at the annual town meeting, providing that the common lands of the town should thereafter be let only at public auction, to the highest bidder, after notice given as therein prescribed, and that “ if any lot be so let to any person other than the last lessee owning improvements on said lot, the new lessee shall pay the former lessee for the value of improvements on the property at the expiration of the old lease (provided such improvements were on the property at the time of such public letting), at a rate to be fixed by arbitration between the old and new lessee.” December 20, 1872, the town leased certain lots described as lots Nos. 51 to 56 inclusive, and Coney Island Point to the plaintiff Furey for ten years, by a lease which contained no covenants or reservations in favor of the lessee, and no provision as to improvements. In 1879 the commissioners attempted to extend the term of the lease, but their action was illegal, and after the expiration of the term of the original lease, an action of ejectment was brought by the 'town, in which it recovered a judgment for possession in February, 1884.
    Chapter 458 of 1883 vested the control of the common lands of the town in tho supervisor and five trustees, and provided that they should have no power to sell or give title to any lands of the town, or to release or discharge any title or claim of the town thereto, excepting the lots Nos. 51 to 56 inclusive, and Coney Island Point, but that they might receive propositions in writing for the purchase or release of the title or claim of the town and consider the same, and if they should deem it for the interest of the town to accept the offer they were empowered to call a town meeting and execute a conveyance if authorized by a vote of a majority of the electors. The act further provided: that the said supervisor and trustees should have power to sell the lots Nos. 51 to 56 inclusive and Coney Island Point “ to the present lessees in possession of the same, provided such sale should be ratified and confirmed by resolution duly passed at an annual town meeting, or at a special meeting to be called for the purpose.”
    This action was brought in March, 1885, by the plaintiffs, the persons interested in the lease to Furey, who alleged that the trustees had received a proposition from another person forjthe lands leased to them, which they deemed it best to accept, and had called a town meeting to consider it, and prayed that they might be restrained from holding the meeting or selling or conveying the lands:

      Reid, that the act, chapter 458, of 1883, did not prohibit the sale of lots Nos. 51 to 56 and Coney Island Point to a person other than “ the present lessees in possession of the same.”
    That, assuming that the provision of the resolution of April 4,1871, requiring an incoming tenant to purchase the improvements of an out going tenant at a price to be fixed by arbitration should be treated as incorporated into the lease given to Furey, the obligation imposed upon the town was, if any, not an absolute one, but only that if the lot should be leased to any person other than the last lessee owning improvements then the new lessee should pay the former lessee the value of the improvements.
    That if it could be claimed that the requirement of the resolution was sufficiently comprehensive to include a purchase as well as a lease, then no claim could be made unless the premises had been sold to a person other than the plaintiff.
    That as the contingency upon which alone the liability could attach had not occurred, an action based upon such liability would at this time be prematurely brought.
    Appeal from a judgment in favor of tbe plaintiff, entered upon the trial of this action by the court without a jury.

      Win. J. Gay nor, for the appellants.

      William O. De Witt, for the respondents.

       Decided September, 1885

   Dykman, J.:

The object of this action is to arrest the sale of a part of the public domain of the town of Gravesend, and the proceedings inaugurated preliminary thereto. That town became the owner of all the land within its limits by a grant from the colonial government very early in its history. The original grant was from the sovereign to a corporation to be organized as a town, and was of itself sufficient to endue the body with capacity to hold the land. Independent of this consideration, however, the town when formed would have possessed the capability to hold property. The towns of this State are much more than local subdivisions of territory. They are well recognized legal entities and for many purposes they possess the capacity of corporate bodies. In a general sense they are public political corporations organized for governmental -purposes. They are empowered to hold property and make such orders for the disposition, regulation or use of their corporate property as may be deemed conducive to the interests of their inhabitants. (1 B. S., 33T, § 1, sub. 4.) Where land is owned by a town it belongs to the people in their political capacity as an aggregate community the same as all corporate property owned by a county or a State, and may be controlled, regulated and disposed of by the people in their collective political capacity. The only recognized legal organ through which the people of a town can declare their united will is the town meeting. These meetings are ancient institutions regulated by laws enacted by the representatives of the people, and at them the gathered will of the inhabitants is ascertained by the votes of the electors of the town in the manner prescribed by law. This is all common learning, requiring no citation of authority for its support, and is written down here only to manifest the legality of the procedure in relation to common lands of the town of Gravesend.

Anterior to the legislative action to be hereafter noticed the common lands of the town were under the immediate care and supervision of town commissioners who were guided and controlled by the electors of the town at their town meetings, and the power and a majority of such commissioners had the extent imparted by the resolutions adopted at such meetings and no more.

On the 4th day of April, 1871, a resolution was adopted by the electors of the town at the annual town meeting then held, which reads as follows : “ itesoVoed, That the common lands of the town of Gravesend, on Coney Island, shall hereafter be let only at public auction on the premises to be let, or at the town house in this town, to the highest bidder in parcels of not more than three hundred feet each (excepting Coney Island Point, which may be let in one parcel as at present), on notice specifying the time and place of letting and describing the premises to be let, which said notice shall be published in the Brooklyn Daily Eagle and Union, each once in each week for four weeks immediately prior to each letting. No lot shall he let at a time more than one year prior to the expiration of any lease thereon and no lot for a longer period than ten years. If any lot be so let to any person other than the last lessee owning improvements on said lot, the new lessee shall pay the former lessee for the value of improvements on the property at the expiration of the old lease (provided such improvements were on the property at the time of such public letting), at a rate to be fixed by arbitration between the old and new lessee, each choosing one arbitrator, and which said arbitrators shall on disagreement choose a a third, and the decision of such arbitrators or a majority of whom shall be final, and the above condition shall be specified in the notice above provided for whenever there are improvements on the premises to be so let.”

On the 12th day of April, 1878, it was resolved by the electors of the town at a regular town meeting in the same manner that the resolutions of April 4, 1871, “ be amended by adding thereto the following: The commissioners of common lands are also authorized to renew any existing lease or leases of common lands belonging to said town of Gravesend upon such terms as they may deem most advantageous for said town.”

On the 20th day of December, 1872, the town of Gravesend, through its commissioners, executed and delivered to the plaintiff, Robert Eury, a lease of the parcels of the common lands of the town known as lots Nos. 51, 52, 53, 54, 55, 56, and Coney Island Point, for a term of ten years commencing February 1,1873. The lease contains several reservations in favor of the town, but there is in it neither reservation, condition nor covenant in favor of the lessee. It contains no stipulation respecting improvements, and there is an unconditional covenant that the lessee will quit and surrender the premises demised at the expiration of the term in as good state and •condition as i easonable use and wear thereof will permit, damages by the elements excepted.

The lessee entered into possession under that lease and purchased the improvements then on the premises, and has since increased the betterments by a large outlay. The plaintiff Thomas F. White ■became a joint owner in the lease during the lifetime thereof.

In the year 1879 the commissioners of common lands of the town executed to Francis Swift, who had then become interested in the former lease an instrument in writing dated March 17, 1879, purporting to renew the lease to Furey for twenty-one years from its termination.’ That instrument was without validity and in July, 1883, after the expiration of the lease to Fury an action of ejectment was commenced in favor of the town against these plaintiffs and others for the recovery of these same premises involved in this action. That action came to trial in February, 1884, and the plaintiff obtained a judgment therein for the immediate recovery of the possession of the premises.

On the 22d day of May, 1883, a law was made which superseded a former act in relation to the common lands of the town of Gravesend. (Chapter 458, Laws of 1883.) By this law the control of the common lands of the town was vested in the supervisor, and five trustees to be elected. Nothing in this law requires special notice in this case except portions of section 3, reading as follows : ■“ The said trustees shall not have power to sell or give title to any lands of the town of Gravesend or to release or discharge any title or claim of said town thereto, excepting lots numbers 51, 52, 53, 54, 55, 56 and Coney Island Point, which premises are now in possession of lessees of said town, but they may receive any proposition in writing for the purchase or release of the title or claim of the town, and consider the same; and if they shall deem it for the interest of the town to accept the same they shall publish a notice ” in the manner prescribed, stating the proposition received and calling a town meeting of the electors to accept or reject it. Then follows the regulation for the voting, and if a majority of the ballots cast shall be in favor of accepting the proposition the trustees' and supervisor are authorized to accept the same, and execute the necessary conveyance. Then the section closes with these words : “ But the said supervisor and trustees shall have power and are hereby authorized to sell said lots numbers 51 to 56, inclusive, of said common lands and Coney Island Point to the present lessees in possession of the same, provided such sale be ratified and confirmed by resolutions duly passed at an annual town meeting or at a special meeting to be called for the purpose, such sale to be upon the same terms of payment as herein provided for sale of other lands of said town.”

The plaintiff brought this action in March, 1885, and their principal complaint is that the trustees of the town have received a proposition for the purchase of the premises in question, from William Zeigler, for $183,000, which they have considered and which they deem for the interest of the town to accept, and that they have called a town meeting of the electors of the town to pass on the proposition, and they pray for an injunction restraining the trustees from proceeding with the notice or the town meeting or from selling or conveying the lands. The plaintiff obtained judgment in die trial court, from which the defendants appealed, and we are thus brought in front of the questions to be determined. Independent of the statute of 1883, the rights of all persons to the possession of the premises under the lease to Fury ceased with its expiration in February, 1883. If they continued in possession after that time they were merely holding over without right, and so it was adjudged in the action of ejectment. They were not lessees in possession in the proper sense of that tend. If they had a valid claim for improvements they could pursue any remedy provided by the law to secure compensation therefor. The form of the notice of auction sale under which the premises were let to Fury is not furnished, but we may assume that it responded to the requirements of the town’s resolution. It has been stated that the lease contained no covenant on the part of the town, but assuming that the resolution and notice of the auction are to be considered as component parts of the lease, then they are to be read as such covenants. But what even then is the undertaking of the towh ? not absolutely that the lessees shall be ■compensated for improvements at the expiration of their leases ; not < •even that the town will make payment in any event. The covenant is dependent on a condition precedent. If any lot be leased to any person other than the last lessee owning improvements on the lot, then the new lessee shall pay the former lessee for the value of the improvements on the lot.

Assuming without deciding that this agreement imposed a legal liability on the town, yet it was conditional and the contingency on which the liability was to attach has not occurred. The town has not leased the premises to any person, and there is no proposition ■extant to do so. The legislature has intervened and prescribed a different mode of disposition of tbe public lands of the town, and as the power of that body to enact the law is not questioned, the plaintiffs and all others must abide by the new method.

If it can be claimed that the covenant of the town is sufficiently comprehensive to include a purchaser as well as a lessee, then the plaintiffs must withhold their claim for improvements until the lots in question are sold to a person other than themselves and then arbitrate with such purchaser as they would have done with a lessee. There is no agreement for an arbitration between the town and the plaintiffs, nor that the town shall pay. The agreement is that •the new lessees shall pay, at a rate to be fixed by arbitration between the old and new lessees.

It is not requisite to determine now the legal effect of this covenant ; nothing can be effected under it until there is either a lessee or purchaser of the premises. The impropriety of an injunction to restrain the sale and the production of a purchaser is therefore quite manifest. So it is therefore that these plaintiffs have no interest or right in the premises in question and nothing but an ultimate right to compensation for improvements either from a purchaser or from the town.

The plaintiffs, however, rely much on the statute of 1883. That law was passed May 22, 1883. Their rights to possession had expired with their lease, yet they had not been ejected. Under that statute the trustees had not power to sell the common lands of the town, except the premises in question, but those lands they were empowered to sell to the lessees in possession, meaning these plaintiffs, provided such sale was ratified in the manner prescribed.

The claim of the plaintiff is that the lands in suit were withdrawn, from the mode of sale established by section three of the’ law by the-exception provision contained therein, respecting such lands and the-relation sustained by the plaintiffs thereto. They claim that there-was an exception thrown upon the face of the general power, and that the general power is, therefore, inoperative except in so far as-it may not interfere with the proviso.

The mistake here is in the premises. This statute contains no exception to a given power of sale, for no power of sale was conferred on the contrary, the general provision is that the trustees shall not have power to sell, and the exception is to this general prohibition. There is no restriction of a general power, but an enlargement or removal of a general prohibition in favor of these lands in suit. The general restriction is modified as to them, so as to allow the trastees to sell them to these plaintiffs in their discretion. If they make a written proposition to purchase these lands, and the trustees dedm it for the interest of the town to accept the same, provided such sale shall be ratified and confirmed by the town meeting-resolution.

So far the lands in suit are withdrawn from the general scope- and operation of the statute. But the sale of the property is not restricted nor prohibited. In the beaten way of construction, the statute is plain but it furnishes very small aid to the plaintiffs. It invests the trustees with power to sell these lands to them on condition of the ratification of the sale by the town meeting. But-even that power is discretionary and may or may not be exercised.. If they do not deem the proposition beneficial to the town they are not required to consider it or to make any agreement. There is no coercive power. The sale to the plaintiffs must be the result of a voluntary agreement. It is beyond the competence of the legislature to compel a sale of these lands to the plaintiffs and there-has been no legislative effort in that direction.

The trustees in the exercise of the discretion vested in them may sell to the plaintiffs, but the plaintiffs have manifested no desire to-purchase and certainly it is not given to them to withhold these-lands from the market by pursuing a policy of supine inactivity.

After a full view and a comprehensive examination of all the-facts and circumstances which environ this case, and the law that must control it, the unavoidable conclusion is reached that the. plaintiffs are in no position to invoke the interposition of a court of equity in restraint of th6 consummation of the sale of these _ands by the defendants to Zeigler. This result would be reached with regret if it foreclosed the plaintiffs from their claim to compensation for improvements. It has in fact no such tendency, and it is quite gratifying to know that there is no disposition on the part of the representatives of the town to interpose any obstacle to tbe plaintiffs in that direction.

The conclusion is that the judgment should be reversed and a new trial granted, with costs to abide the event.

There was a motion for a preliminary injunction in this case which was denied and the plaintiffs appealed from the order. The foregoing examination leads to the conclusion that the order was proper and should be affirmed, with costs and disbursements.

Brown, J., concurred 5 Cullen, J., concurred on the ground that the plaintiffs had no standing to maintain the action.

Present— Dykman, Cullen and Brown, J J.

Order granting injunction reversed, with costs and disbursements. Judgment reversed and new trial granted, costs to abide event.


text:
    CHRISTOPHER E. THURSTON, Respondent, v. WALTER B. DUFFY, Appellant.

      Manufacturing corporation — 1848, chap. 40 — liability of one holding stock issued in purchase of property.

    This action was brought to recover of the defendant, a stockholder in a corporation created under the manufacturing act of 1848, a debt due from the corporation. It appeared that the company, upon its organization, purchased from one of its trustees certain patent rights, and in payment thereof issued to him all of its capital stock amounting to 4,000 shares. Upon his surrendering this certificate, new certificates for eighty shares were issued to him, and certificates for 2,920 shares were re-issued to and apportioned among his co-trustees, none of whom paid any money therefor. No estimate as to the value of the patent rights was made, and they were not as a matter of fact worth the par value of the stock issued for their purchase.

      Held, that the defendant, who had received 2,700 of the shares so reissued, was personally liable for the debts of the company.
    Appeal from a judgment in favor of the plaintiff, entered upon the report of a referee.

      Smith & Hulett, for the appellant.

      George H. Hyatt, for the respondent.
   Dykman, J.:

It is the object of this action to charge the defendant as a stockholder with individual liability for a debt of a corporation called the Morgan Sugar Skimming Company, organized under the general manufacturing act of 1848.

The action was tried and decided by a referee, who found in favor of the plaintiff, and judgment has been entered on his report. The appellant has made no case, but founds his appeal on the judgment-roll only, so that the facts found by the referee are to be assumed as true, and their legal effect on the defendant, alone, is to be determined. It is essential to the success of the defendant on this appeal thus made on the record alone, to show that the referee could in no view of the facts, as he has found them, decide in favor of the plaintiff. (Agricultural Ins. Co. v. Barnard, 96 N. Y., 525.)

So far from showing the law to be in his favor it is entirely plain that the facts found lead inevitably to a conclusion against him. It is a fundamental requirement of the general law of 1848 (chap. 40), and the amendatory law of 1853 (chap. 333), that the entire capital stock of corporations organized under those laws shall be paid in money, and the stockholders are individually liable for the debts of the company until that condition is complied with. With an evident intention to soften the rigors of that requirement and permit more freedom of action, it was also provided by the statute of 1853, that the trustees of such corporations might purchase property necessary for their business and issue stock to the amount of the value thereof in payment therefor, and the holders of such stock were exempted from all liability for the debts of the company. Under this last provision the defendant seeks immunity from the claim now presented, and so the question for our determination is presented.

The relevant and decisive facts are these: at the organization of the company a purchase was made from Lawrence, one of the trustees, of certain patents for an invention called the Morgan automatic sugar skimmer, for which a certificate of 4,000 shares of the stock of the company for the entire capital stock of $400,000 was issued. That certificate was delivered to Lawrence in payment for the patent rights.

Immediately thereafter Lawrence surrendered this certificate, and by his direction 2,920 shares of the stock so surrendered by him were reissued and apportioned among his co-trustees no one of whom paid any money therefor. The defendant who was the president of the company received 2,700 shares of the stock so reapportioned of the par value of $270,000 which he has continued to hold and for which he paid nothing. Only eighty shares were taken by Lawrence for the patent rights. The remaining 1,000 shares appear to have been reserved by the company. There was no estimate of the actual value of the patent rights at the time of the purchase, but they were not worth $400,000. A paramount object of this law was to require payment of all the capital stock of these corporations either in money or in property at a fair valuation and immunity to stockholders can be secured in no other manner, and the facts of this case do not place the defendant and his .associates within the protection of the statute.

In the first place no money has has been paid by the defendant or any other person, and no tangible property has been purchased for the company. If the patent rights were useful or necessary for the business to be transacted by this corporation they were no security to the public or any person who should subsequently deal with it, and there was no security for creditors. In the next place they were not appraised, no valuation was placed upon them, and the whole capital stock of the company representing $400,000 was paid for them to one of the trustees who immediatately surrendered the same voluntarily and received back only $80,000 of stock, while the defendant received $270,000 for which he paid nothing.

These facts are sufficient to manifest a deliberate design to perpetrate a fraud on the law by an evasion of its provision and secure personal immunity by an assumed compliance with the statute? which was false and hollow in fact and existed on paper only. The fraud was consummated by tbe issue of tlie stock, as paid up stock, when in fact it had not been paid for either in money or in property of equal value.

The case of Douglass v. Ireland (73 N. Y., 100) is ample authority for the legal propositions we have stated, and is decisive of this case.

We find no way of escape for the defendant and the judgment should be affirmed, with costs.

Barnard, P. J., concurred.

Pratt, J., concurred in the result.

Judgment affirmed, with costs.


author: Pbatt, J.:

text:
    THE PEOPLE’S BANK OF THE CITY OF NEW YORK, Appellant, v. ST. ANTHONY’S ROMAN CATHOLIC CHURCH OF THE CITY OF BROOKLYN, etc., and Others, Respondents.

      Money collected and deposited by a pastor of a church — cannot be reached by a judgment-creditor of the church.

    This action was brought by a judgment-creditor of a Koman Catholic church to secure the payment of his judgment from a fund deposited by the pastor of the church in his own name in a bank. The moneys so deposited were the contributions made by the members of the congregation, on successive Sundays, and were not contributed for any specific purpose.

      Held, that as the plaintiff failed to show a complete gift to the church or that it had a clear title to the fund, the court properly refused to grant a temporary injunction restraining the pastor and bank from interfering with the fund.
    Appeal from an order made at Special Term denying a motion to continue a temporary injunction, by which the defendants-O’Hare and the Mechanics’ and Traders’ Bank were enjoined from interfering with a sum of money on deposit with the defendant bank in the name of the defendant O’Hare, of which fund the plaintiff claims that the defendant, St. Anthony’s Church, is the equitable owner, and which fund the plaintiff, who is a judgment-creditor of the church, with an execution returned unsatisfied, seeks to reach in this action, in satisfaction of the judgment'debt.
    This fund consists of collections taken up during service at St. Anthony’s Church, and was placed in the bank in his own name by the defendant O’Hare who is the pastor and one of the trustees of the church.
    No statement was made at the time of the taking up of these collections, of the purposes to which they were to be devoted; nor were the contributors consulted as to the purposes for which they contributed the money.

      J. Alfred Damenport and Edward 0. Perkins, for the appellant.

      Roger A. Prior, for the respondents.
   Pbatt, J.:

Irrespective of any technical objection raised by the defendants,, we think an injunction was properly refused upon the merits.

The fund in question was deposited in bank, in the name of O’Hare,, and he kept no other bank account.

The church never had the legal title to the fund or possession thereof, neither had the church withdrawn any assets from liability for its debts for the purpose of creating a trust for its benefit. There was certainly no express trust in favor of the church, impressed upon the fund at the time it was contributed and no direction as to how it should be used. It was not given for the purpose of paying the plaintiff so far as appears, but was given to O’Hare, in trust, perhaps, to be used as he saw fit. It was not the property of the church or subject to its control until O’Hare elected to spend it for the benefit of the church.

Under the circumstances disclosed, it rested in the discretion of O’Hare as to what purpose, for the benefit of the church, he should apply the money.

If the money had been contributed with the understanding that it should be devoted to paying the plaintiff’s claim quite another question would be presented, but it seems nothing was said either by O’Hare or the contributors as to how the money should be used, and the presumption and fair inference is that O’Hare should have the power to use it in the manner he should deem best for the church, and until he so used it the same was a fund in the hands of an agent of the contributors and was, therefore, deposited by O’Hare in his own name and not as the funds of the church.

A gift to tlie church was not contemplated until the money was used for the church. In no sense could it be regarded as a completed gift, as the money was never delivered to the church.

A voluntary contributor of money can always direct to what purpose it shall be applied, and no creditor of the beneficiary can complain for the reason that the latter has no claim upon the former for the payment of his debt, and the creditor is not in any manner injured by the transaction as the debtor’s estate is in no wise diminished and he is in no way rendered less capable of paying his debts.

For the reason that plaintiff’s papers failed to show a completed gift to the church, or that it had a clear title to the fund in question, •the relief ashed for was properly denied.

Order should be affirmed, with costs.

Present — Barnard, P. J., Dykman and Pratt, JJ.

Order affirmed, with costs.


author: Pratt, J.:

text:
    THE PEOPLE OF THE STATE OF NEW YORK ex rel. JAMES H. HAIGHT and Others, Respondents, v. THE VILLAGE OF PEEKSKILL, Appellant.

      Power of a hom’d of village trustees to provide for the payment of clams against the village —1883, chops. 113, 117.
    In March, 1885, the relator applied to the trustees of the village of Peeksldll to have inserted in their annual tax levy a claim for damages arising from the alteration of the grade of a street in the village, which had been assessed by the commissioners, appointed under chapter 113 of 1883, and confirmed upon appeal to the General Term. The trustees having refused his application an order directing that a mandamus issue to compel them to comply therewith was granted:

      Held, that this was proper.
    That power to insert the amount of the claim in the tax levy was conferred by chapter 113 of 1883, or if that act should be held to be repealed as regarded the village of Peeksldll, by chapter 117 of 1883, the village charter, then such power was conferred by section 3 of title 9 of the latter act.
    Appeal to General Term from an order dated April 4, 1885, made at Special Term at White Plains, before Mr. Justice Dykman, on an application of the relators, directing a mandamus to issue, directing the trustees of the village to insert in their next annual tax-list and warrant the sum of $1,033.68, and interest, awarded to the relators by commissioners as damages for alteration of grade of Howard street in said village, and the further sum of seventy-seven dollars and ten cents, costs and interest.

      Edward Wells, for the appellant.

      Travis db Smith, for the respondents.
   Pratt, J.:

In the year 1883 commissioners were appointed to assess damages for the relator and others arising from the alteration of the grade of a street in the village of Peekskill, under the provisions of chapter 113, Laws of 1883. The commissioners afterwards made their report by which they assessed such damages at $650. This report was duly confirmed and costs were adjudged at the sum of $388 ; an appeal was taken from that order to the General Term and it was afterwards affirmed.

In March, 1885, the application was made to the trustees of the village, to put this claim in their annual tax levy, which they refused to do. This is an appeal from an order granting a mandamus directing the trustees to put the same in their next tax levy. No question seems to be raised but that mandamus was a proper remedy, but it is claimed that the trustees had no power under the charter of the village to do the act required. In this case the claim which the trustees were required to put in the tax levy has been reduced to a judgment. It seems to be conceded that there is no way by which it can be paid, unless it is done by levy and collection of taxes for that purpose, there being no public property liable to levy and sale under the judgment. "We think the act of 1883 under which the relator claims makes damages and costs for improvements a charge upon the village, and therefore imposes a duty to pay. Section 3 is as follows : “All damages ascertained and determined under the provisions of this act, together with the cost of such proceedings, 'shall be charged upon the village, town or other municipality chargeable with the maintainance of the street, highway or bridge so altered or changed.” It is the general rule of law that whenever a charge is made against a municipal corporation by law, it carries with it an implied power to pay, and as a tax is the only way it can pay it must levy a tax for that purpose. This principle appears decisive ■of this case. If the act passed March 16, 1883, chapter 113, stood .alone no question could be made as to the propriety of granting this mandamus. It is claimed on behalf of the defendant that the village charter of Peekskill, which was passed on the 19th of March, 1883, chapter 117 had the effect to repeal chapter 113, and to ■deprive the trustees of the village of an implied power of raising the money by a levy of a tax except for the purpose specifically ■described in that charter. Ve do not deem it necessary to decide this question. The claim of the relator having passed into a judgment he has the common-law right to have it paid. It is the duty -of the village to pay it, and having no property upon which a levy can be made there is no other method by which it can be paid ■except by having an amount inserted in the tax levy sufficient for that purpose.

The claim having passed into a judgment, it does not lie with the trustees of the village to claim that these damages were not properly assessed or that they were incurred without authority of law or not in accordance with the charter. Assuming, however, that chapter 113 of the Act of 1883 was repealed, we think the trustees have ample power to levy the tax required under section 2 of title .9 of the charter (chap. 117 of 1883), without submitting the same to a vote of the inhabitants of the corporation.

By that section damages occasioned or assessed for laying out or opening streets, alleys or highways or altering or widening the same, can be levied and collected without such vote. Such damages are excepted from the subjects for Avhich a tax cannot be levied without being authorized by a vote of the inhabitants.

These damages that were assessed for altering the highway clearly come Avithin the exception contained in the section referred to. We have examined the various objections raised by the counsel for the trustees and see no valid reason for reversing the order.

Order affirmed, with costs.

Barnard, P. J., concurred; Dykman, J., not sitting.

Order granting memdamus affirmed, with costs.


text:
    JOHN REINERS and WILLIAM H. COLSON, Respondents, v. JOHN M. YOUNG, Appellant.

      Easement — when a person purchasing a house acquires a right to support a wall on adjoining lands of the grantor.

    One North, while the owner of certain premises in the city of Brooklyn, erected a three story brick dwelling-hou ;e upon the easterly part of the said premises. In May, 1888, he conveyed the easterly part of the premises by measurements to the defendant. In the summer of 1884 the plaintiff acquired title to the westerly and unimproved part of the premises. Subsequently, the plaintiff caused a survey to be made, which showed that a portion of the westerly wall of the defendant’s building, and of the fence in the rear thereof, stood upon land which had been conveyed to the plaintiff. In this action of ejectment, brought by the plaintiff, the defendant, while disclaiming any interest in the said strip, claimed to have a right to have his building remain where it was and to have support for his wall upon the land in question.

      Held, that his claim was well founded.

      It seems, that he might have asserted a valid claim to the land itself.
    Appeal from a judgment in favor of tbe plaintiffs, entered upon tbe trial of this action, by tbe court without a jury.
    Tbe action was in ejectment to recover a portion of certain premises wbicb were conveyed to tbe defendant by a deed containing tbe following description of them: All tbat certain lot, piece or parcel of land situated, lying and being in tbe city of Brooklyn, in the county of Kings and State of New York, bounded and described as follows, to wit: Beginning at a point on tbe northerly side of Macon street, distant 536 feet westerly from tbe corner formed by tbe intersection of tbe northerly side of Macon street with tbe westerly side of Lewis avenue, and running thence northerly, parallel with Lewis avenue, and partly through tbe center of a party wall 100 feet; thence westerly, parallel with Macon street, twenty feet; thence southerly, parallel with Lewis avenue 100 feet, to tbe northerly side of Macon street, and thence easterly along the northerly side of Macon street twenty feet to the point or place of beginning. Being the same premises conveyed to the Knickerbocker Life Insurance Company, etc.

      Louis M. Dosoher, for the appellant.

      J. Stewart Ross, for the respondents.
   Pratt, J.:

The plaintiffs and defendant are the owners of adjoining premises-on the east side of Macon street, in the city of Brooklyn, the easterly premises being owned by defendant and the westerly premises-being owned by the plaintiffs. Both premises were at one time-owned by one Curtis L. North, who erected on the premises, now-owned by defendant, a three-story brick dwelling house. Defendant acquired the title to his premises, with the building thereon as erected by North, in May, 1883. Plaintiffs acquired the title to their premises, unimproved, in the summer of 1884. After acquiring the title thereto, plaintiffs commenced the erection of dwellings thereon, and for that purpose had their premises surveyed, and then for the first time ascertained that the westerly wall of defendant’s building and the westerly fence at the rear thereof were on plaintiff’s premises, as shown in the survey.

• The defendant concedes that the title to the premises in dispute is in the plaintiffs, and therefore, disclaims any interest therein except he claims that he has a right to have his building remain where it is and to have support for his wall upon the land in question.

Under these facts we think the defendant was entitled to judg. ment without reference to the question whether defendant might not successfully maintain an 'absolute title to the whole of the land described in the complaint if he had answered setting up title, we think it is clear that he had a right to claim that the wall upon which his house rested should remain where it had been placed by North.

"When the latter built upon the lot now owned by the defendant he made a practical location of the line between the two lots, and having first sold the house and lot whereon It stood, he and all claiming under him, are bound by such location. It .is true North sold by metes and bounds, but he owned upon both sides and he sold a house and lot situated as described, and as the house then stood, not a house and another lot, but the lot upon which the house then stood. If there was any fault or negligence it was upon the part of North, and the defendant was under no obligation to have the premises surveyed to ascertained if North had properly located the house, as North owned the adjoining land and assumed to sell the premises as practically located at the time. It cannot be possible that North could have maintained an action the .day after his sale to defendant’s executor, to make him move the house under the facts here discussed, and if North could not have maintained such an one, surely the plaintiff cannot, for North could not convey any greater right then he held at the time.

The defendant’s claim below was only that he had an easement in the overlapping wall, upon the ground that it was so built by North, he being then the owner of the entire premises and having sold defendant’s lot with the building erected thereon and retained the ownership of the land on the west now owned by plaintiff.

This claim was well founded upon the conceded facts, under the familiar rule that when an owner of an entire estate sells a portion, the purchaser takes the tenement or portion sold with all the benefits and burdens which appear at the time of the sale to belong to it, as between it and the property which the vendor retains. (2 Washburn on Real Property [4th ed.], 316; Simmons v. Cloonan, 83 N. Y., 557; Story v. Odin, 12 Mass., 157.)

The words in the rule which appear at the time ” have been construed to mean open and visible; ” in other words, the marks of tlie burden must be open and visible to be binding under the rule; that this brick wall and house standing thereon were open and visible at the time of sale cannot be questioned.

Upon the.question of good faith it is evident the defendant supposed he was buying the house and lot upon which it stood, and it is quite clear that plaintiff regarded the wall in question as the eastern boundary of his lots as it is only after a careful survey for the purpose of building that he discovers this less than trifling encroachment.

Other questions are raised by the appellant, but we do not deem it' necessary to notice them, as there must be a new trial for the error above stated.

The judgment should be reversed and new trial granted, costs to abide event.

Present — Barnard, P. J., Dvkman and Pratt, JJ.

Judgment reversed and new trial granted, costs to abide event.


author: Dykman, J.: Pratt, J.:

text:
    CHARLES D. SHEPARD, Appellant, v. THE GOLD AND STOCK TELEGRAPH COMPANY, Respondent.

      Contract to furnish stock reports — validity of a rule prohibiting subscribers from furnishing copies.

    In an action to restrain the defendant from removing its gold and stock reporting instruments from the plaintiff’s place of business, it appeared that the contract under which it was placed in the plaintiff’s office provided that “these reports are furnished to subscribers for their private use in their own business exclusively. It is stipulated that such will not sell or give up the copies of the reports, in whole or in part, nor permit any outside party to copy them for use or publication. Under this rule subscription by one party for the benefit of himself and others, at their joint expense, will not be received.”

      Held, that the stipulation was reasonable and did not conflict with any duty owed by the corporation to the public.
    That as it appeared that the plaintiff habitually caused the quo* tions received from the defendant to be transmitted by a private wire to another office, the defendant was entitled to remove the instrument.
    That its right so to do was not affected by the fact that the plaintiff was interested in business with the firm to which the information was given.
    Appeal from an order vacating an injunction restraining the defendant from removing tbe gold and stock reporting instruments from tbe rooms of the plaintiff.

      George F. Ga/rdvner, for tbe appellant.

      G. W. West, for tbe respondent.
   Dykman, J.:

Tbe object of this action is to restrain tbe defendant from removing tbe gold and stock reporting instruments from tbe plaintiff’s place of business, and a preliminary injunction was obtained which did forbid such removal. That order was vacated at Special Term, and we have an appeal from that order. Tbe appeal is without merit. In tbe contract by which tbe plaintiff procured tbe possession of tbe instruments, tbe company reserved tbe unqualified right to discontinue tbe reports and remove tbe instruments without notice when they were used in any way which it considered detrimental to its interests. Tbe injunction prohibited 4b e exercise of the right thus reserved, and was for that reason properly vacated.

The order should be affirmed, with costs and disbursements.

Pratt, J.:

Defendants are a public corporation under obligation to render their services impartially and without discrimination to all persons who comply with their reasonable rules. Yet the contract entered into by the parties is not to be disregarded, and such reasonable stipulations as it contains will be respected and enforced by the court. The contract provides as follows: “ These reports are furnished to subscribers for their private use in their own business, exclusively. It is stipulated that such will not sell or give up the copies of the reports in whole or in part, nor permit any outside party to copy them for use or publication. Under this rule subscription by one party for the benefit of himself and others at their joint expense will not be received.” The stipulation is reasonable and not in conflict with the duty owed by defendants to the public. The proof shows that plaintiff habitually caused the quotations, when received upon defendant’s instrument, to be transmitted by private wire to Lawrence Gross & Go., at 574 Fifth avenue.

Plaintiff seeks to justify this breach of the conditions upon which he received the instrument by alleging that he is interested in business with that firm. We think this affords no justification. If plaintiff, by entering into business relations with another firm, could gain a right to repeat the quotations he might, if diligent, absorb a great share of defendant’s business. Plaintiff’s attempted justification brings out clearly the reasonableness of the clause in the contract to which we have referred. The violation by plaintiff of the stipulation upon which he received the instrument amply sustains the order vacating the injunction.

Order affirmed, with costs.

Present— Pratt and Dykman, J J.; Barnard, P. J'., not sitting.

Order vacating injunction affirmed, with costs.


text:
    GEORGE W. MEAD, Appellant, v. MARY E. JENKINS and Others, Respondents.

      Estoppel — when a pa/riy is not estopped by a statement of the amount due to him made in a decree entered upon a final accounting by executors.

    One Jenkins died March 19, 1871, indebted to one Mead upon a promissory note for $1,000, dated February 11, 1871, and payable on demand. Upon a final accounting had by the administrator of Jenkins, upon the return of citations duly issued, he filed an’ account in which Mead’s claim for $1,000 and interest was distinctly recognized as valid; but which stated that “he (Mead) had some collateral security and has consequently compromised as to his demand against the personal estate at $500, reserving his right to go against the real estate, if his collateral security should fail to pay his demand in full.” A decree of the surrogate was entered settling and allowing the accounts as presented. He adjudged that the claims (stating Mead’s at $500) amounted to $1,421.92 and the assets to $995.36, and directed a pro rata distribution of the latter.
    Pursuant to this decree Mead received $355 on account of his $500 adjudged to be due him, and gave a receipt therefor “for my distributive share of my claim against said estate as decreed by the surrogate’s decree.” The collateral failed to realize enough to pay the amount due to Mead, leaving $1,139.06 still unpaid.

      Held, that neither the decree of the surrogate nor the receipt given by Mead estopped him from resorting to the real estate of the deceased for the collection of the whole amount still remaining due to him.
    Appeal from,part of an order or final decree of the surrogate of "Westchester county, directing tbe salé of certain lands belonging to tbe estate of Jobn Pi Jenkins, deceased, for tbe payment of debt, but further fixing tbe amount due to tbe appellant at $145, and directing that in case that amount was deposited further proceedings should be stayed on payment of tbe expense of tbe proceedings, such latter portion of tbe decree being tbe portion appealed from.

      Sewall Sergeant, for tbe appellant.

      M. L. Cobb, for tbe respondents.
   Pratt, J.:

My conclusion is that tbe judgment or final order in this special proceeding should be reversed. Tbe appeal papers present a long and complicated story, but tbe material facts are few and simple in view of tbe decisions upon former appeals.

The appellant is the petitioner in a special proceeding by a creditor before the surrogate of Westchester, to sell a decedent’s real estate to pay debts. It seems that John P. Jenkins, the intestate, made and delivered his promissory note to the order of George W. Mead, the petitioner, dated February 11, 1871, payable on demand for $1,000, and died on the nineteenth of the following March. On the fourteenth of the next April, letters of administration were issued to Mary E. Jenkins, the widow, and Stephen M. Sherwood, who finally became the sole acting administrator. On ■ the 24th of September, 1877, Sherwood made application for his final accounting. A citation was duly issued, returnable October 17, 1877, and was returned duly served, so that all interested persons were then legally if not actually before the surrogate. In the meantime and in February, 1877, Mead had sued the administrators and that action was still pending on the return day of the citation. The administrator filed his accounts on the 19th of October, 1877, in which Mead’s claim for $1,000 and interest, is distinctly recognized as valid; but the account also states that “ he (Mead) has some collateral security and has consequently compromised as to his demand against the personal estate at $500, reserving Ms right to go against the real estate if his collateral security should fail to pay his demcmd in fullf and this sum ($500) was extended in the schedule as the amount of Mead’s claim. On the same day the surrogate made and entered a final decree settling and allowing these accounts as presented. It contains no intimation of any objection by anybody. He there adjudged that the total net assets applicable to the payment of' debts were $995.36, and that “the following named claims,” which amounted to $1,421.92, including Mead’s at but $500, “ have been proved, admitted and allowed against the estate,” and he thereupon directed the distribution of this $995.36 among those claimants and that Mead, should be paid $355 for his pro rata share which, on that basis, left but $145 out of this $500 unpaid. Afterwards and on the 26th of October, 1877, while Mead’s suit was still pending, the administrators paid him this $355, and he gave them a receipt for that amount “for my distributive share of my claim against said estate as decreed by the subrógateos decree.”

The main question arises just here: The widow and heirs-at-law now claim tliat Mead is barred and estopped by this decree and receipt from asserting any claim against the real estate except for this $145 balance, and the surrogate has adopted that view, and directed a sale of certain real estate unless the heirs, etc., shall pay the $145, etc., into court for Mead’s benefit. He proved that he had exhausted his collateral and obtained but little or nothing, and showed that he had entered judgment against the administrators in his said action for some $1,494.06, which sum less the $355 is $1,139.06 he claims as his unsatisfied debt.

It is obvious at the outset that the intestate was hopelessly insolvent so far as personal estate extended, and, therefore, two plain results would seem to follow: First. That but for the effect of this decree, Mead was entitled to go against the real estate with the other creditors, for the whole balance of his real claim. The-arrangement stated in the account did the other creditors no possible harm — indeed, it benefitted them — because they thereby immediately received a larger dividend from the personal estate-than they otherwise would have received, and ‘their pro rata from the real estate would be correspondingly reduced. Second. It did the widow, heirs-at-law and next of kin no possible harm, because they could get nothing from the personal estate in any event, and the real estate stood in equity bound to pay the balance of the-decedent’s debts. It is, therefore, apparent that the whole effect of this arrangement was to change merely the ratio in which the-creditors should rank against the real and personal estate of their debtor, without affecting the pecuniary rights of these respondents in the slightest degree. It is equally plain, at the same time, that the real intention of Mead and these administrators was to permit and accomplish precisely that result by a frank open statement on the face of the record, where all interested persons might see and object to it if it was not equitable and just, or if there was anything technically wrong about it, and the fact is that nobody objected, and the surrogate approved and allowed this account just as it was presented.

Under these circumstances it will require very plain reasoning to-induce me to frustrate the plain and honest design of these people which was so evidently made in good faith, and permit this widow and these heirs-at-law and next of kin to profit at Mead’s expense to the extent of $l,13y.06 by such a bloodless technicality, which has not even a shadow of equity for its foundation.

We then come to consider the force and effect of this decree. Ordinarily of course, the personal estate is the primary fund for the payment of debts, and all persons interested in that fund must come and assert their rights with respect to it on the accounting. So, also, there is much force in the position that where there are no explanatory circumstances the decree indicates who the creditors are and the amount of their respective claims. But that is not this case. There was some collateral, the nature of which did not appear. Whether it was decedent’s property or somebody’s else, we do not know. Presumptively it was not of the decedent’s estate, otherwise some notice would have been taken of the possible equity in it by the administrators in their schedule of assets. If it was not a part of decedent’s estate the arrangement with the administrator was plainly for the advantage of these respondents; and if it was, it was quite immaterial to their ultimate pecuniary rights whatever the motive was for this arrangement. It is plain that there was nothing unfair or illegal about it, nothing which a court of equity could not and would not ratify and approve. It seems to me that this is precisely what the surrogate did lawfully and properly so. He doubtless possessed the power to do it for he sits as a court of equity upon these matters of account, and possesses all the powers which the chancellor formerly had or which this court has, upon like subject matter. Here then we have an account which stands somewhat in the nature of a pleading — followed by a judgment. That pleading does not state that this claim has been absolutely compromised at $500. Indeed it has not been compromised at all in the proper sense of that term. A bargain has been made in respect to it, the plain effect of which was to recognize the validity of the whole claim, to secure forbearance for a time with respect to a part of it, to give the personal estate the benefit of immediately applying the money in hand in payment of debts, and thus stopping interest pro tanto, and the chance which might result from the proposed experiment with the collateral, but to hold the decedent's property nevertheless, until the whole debt was paid in full. I quite fail to see how these respondents by their failure to object, or the surrogate by his allowcmce of these accounts, could split this obviously fair arrangement in two, taking and ratifying that which made for the respondents, however inequitably, and rejecting and repudiating that which was scant justice to this petitioner. The decree was taken fro confesso upon this antecedent record which stood in the nature of a pleading, and when the surrogate allowed ” this account he acted upon respondents implied assent and allowed it in toto. Hence if this view be correct the estoppel applies in Mead’s favor and not to his prejudice, and this is the manifest common sense and justice of the case. To hold the contrary would be to elevate the mere name “ real estate ” of a decedent to a higher and more sacred position than the rights of parties in it.

Nor can I see anything in the suggestion that there were infant parties to be affected by this arrangement. The answer is two-fold: In the first place they were not vngvtfiously affected by it. On the contrary, there were possible prospective benefits in it. In the next place, they were legally represented before the surrogate who was clothed with power to do what seemed to him to be equity in the premises, and he did it, and in my judgment did it wisely and for their advantage.

I find no difficulty with the receipt in this view. It was the acceptance of the decree, which as we have seen, was a judicial ratification of the arrangement.

A question has been raised respecting the quantity of real estate to be sold. We do not see from this case how we can determine this question. It may have been supposed that the lands which the learned surrogate ordered sold were by him deemed sufficient to pay the small claim of $145, etc., to which he found the petitioner entitled, and perhaps he might determine that it would be necessary to sell more in order to meet the claim as we see it. It is sufficient that we do not think that the court, upon any previous appeal, has finally decided the rights of the petitioner in that regard as against the holders of that real estate. ' We therefore direct that the final order or decree of the surrogate shall be reversed, with costs and disbursements to the appellant, leaving the surrogate to make such order in the premises with respect to the amount of property to be sold and the time and conditions with respect to payment of petitioners claim as to him shall seem just.

Barnard, P. J., concurred; Dykman, J., dissented.

Decree of surrogate reversed, with, costs to appellant, leaving to •the surrogate to make such order with respect to the amount of property to be sold and the times and conditions with respect to payment of petitioner’s claim as shall be just.


author: Barnard, P. J.:

text:
    FREDERICK W. KRAFT, Respondent, v. MONTGOMERY H. DINGEE, Appellant.

      Bid of particulars — when a person adeging the loss of customers must furnish their names and addresses.

    In an action to recover damages to the amount of §10,000, arising upon a purchase of cod oil from the defendant, the plaintiff alleged injuries to-buckskins tanned by him, by reason of the bad quality of the oil, and that he lost customers, “piano manufacturers to whom he had been accustomed to sell said skins, and whb purchased the same to be used in their business of manufacturing pianos.”

      'Held, that it was error to refuse to compel the plaintiff to furnish a bill of particulars stating the names and addresses of the piano manufacturers whose custom had been lost.
    Appeal from a portion of an order made at Special Term, upon a motion for a bill of particulars.
    The plaintiff brought his action against the defendant to recover for damages growing out of the sale of cod oil, which he claims was not pure or as represented, and alleged that by reason thereof the entire stock of buckskins, in the tanning of which said oil was used, was lost by him, and became worthless and of no value whatever.
    In the fifth paragraph of the complaint it is alleged “ that not only was the entire stock of buckskins of the plaintiff, in the tanning of which said oil was used, lost by the plaintiff, but that he was injured in his credit, and by reason thereof was injured by being deprived of his customers, to wit, piano manufacturers, to whom he had been and was accustomed to sell said skins, and who purchased the same to be used in their business of manufacturing pianos; ” and the plaintiff claimed that by reason of the premises he had sustained damage in the amount of $10,000.
    A motion was made for a bill of particulars as to the goods damaged, and also the names and addresses of the piano manufaeturers who were Ms customers and of whom he was deprived, as alleged in the complaint, and for other relief. The motion for the bill of particulars as to tbe extent of the damage to the skins was. granted, but denied as to the portion providing for the names and addresses of the piano manufacturers who were the plaintiff’s, customers, and of whom he was deprived; and from that portion of the order denying the defendant’s motion tMs appeal is taken»

      David McCbwre, for the appellant.

      Close & Robertson, for the respendent.
   Barnard, P. J.:

The defendant asks for nothing unreasonable. He sold some cod' oil to be used in tanning buckskins. The sale price was $550. The plaintiff alleges an injury to the buckskins, by reason of the bad quality of the oil, and that he, among other injuries suffered thereby, lost customers — “piano manufacturers to whom he had been accustomed to sell said skins and who purchased the same to be used in their business of manufacturing pianos.” The damage claimed is very large, $10,000.

Whether the customers left the plaintiff, and whether they did so by reason of the bad leather sold to them by the plaintiff, and whether the leather was tanned by the oil in question will probably all be questions for the jury. The defendant is entitled to this information so as to prepare for trial. If he waits until the names are produced on the trial, it will then be too late to make what might be considered a satisfactory inquiry into the facts. It is easy for the plaintiff to give the particulars asked for. If he has his account of loss made up sufficiently to put in a complaint, he must have the names and residences of the customers lost, through whom the loss was occasioned. When the claim is so lai’ge and it is uncertain how it is made up, it is only fair tfo inform the defendant of the particulars of the claim as asked for by him.

The part of the order appealed from is reversed, with costs and disbursements, and the motion granted.

Pratt, J., concurred; Dvkman, J., not sitting.

Part of order appealed from reversed, with costs and disburse* ments, and motion granted.


text:
    JOHN RANDEL, Respondent, v. ARTHUR DYETT and ABRAHAM R. L. NORTON, Appellants, Impleaded with WILLIAM H. RANDEL.

      Action to recover assets wrongfully converted by an administrator — when it may be brought by one of the heirs-at-law.

    Tie complaint in tiis action alleged tiat tie plaintiff was one of tie seven ieirs-at-law of one Jonai B. Randel, deceased, wio died intestate in Marci, 1879; tiat letters of administration upon bis estate were issued to tie defendant William H. Randel, who duly qualified and entered upon the discharge of tie duties of iis office; tiat tie said administrator assigned assets of tie-estate, which had come into iis hands as administrator, to tie defendants, stockbrokers, as a margin for tie purchase and sale of stock for iis own individual account, tie said brokers having full knowledge of tie character of the security assigned, and tiat it did not belong to Randel individually; tiat tie plaintiff had demanded of Randel that, as sucb administrator, he should cause an action to be brought against the brokers for tie recovery of the security, or its value, and tiat the administrator refused and neglected to-bring such an action.

      Held, that the plaintiff, as one of tie ieirs-at-law of tie deceased, could maintain the action.
    Appeal from an interlocutory judgment, entered upon orders-overruling demurrers interposed to the complaint upon the grounds that the plaintiff had not legal capacity to sue, that the court had not jurisdiction of the subject oí the action, and that the complaint did not state facts sufficient to constitute a cause of action.
    The complaint alleges in substance that the defendants Dyett and Norton were stock brokers, doing business under the firm name of A. Dyett & Co.
    That the defendant William H. Randel is the administrator of the estate of one Jonah B. Randel, who died on the 17th of March» 1879, intestate, leaving as his only heirs-at-law seven children, among-them the plaintiff and the defendant, TV illiam H. Randel.
    That the plaintiff “ is interested in the said estate as one of said-heirs-at-law.”
    That the letters of administration were issued to William H. Randel about the 17th of June, 1879, and that he duly qualified and' entered upon the discharge of his duties.
    That there came into his hands as such administrator a certificate-of indebtedness of tbe city of Brooklyn of the value of $2,'129.92, a copy of which certificate appears in the complaint.
    The complaint further alleges upon information and belief, that the said William H. Randel entered into an agreement with A. Dyett & Co., by which the said certificate was received by them as a margin for the purchase and sale of stocks for the individual account of said William H. Randel; and that with full knowledge of the character of such certificate and that the certificate was not the property of William Ii. Randel individually, but was held in trust by him as the administrator of the estate of Jonah B. Randel, the said A. Dyett & Co., “ did wrongfully, unlawfully and in fraud -of said estate and of the rights of this plaintiff as one of said heirs-at-law, and the other beneficiaries of said estate, convert the same to their own use.”
    That on or about the 20th of March, 188é, the plaintiff as one of said heirs-at-law demanded of said William H. Randel that as such administrator he cause suit to be brought against Dyett & Co., for the recovery of said certificate, or the value thereof; and that should he fail or neglect to bring such suit, then the plaintiff in his own name and right as one of the said heirs-at-law and of the other beneficiaries of the estate would bring said suit.
    That the said defendant Randel, while admitting to the plaintiff his wrongful transfer and delivery of said certificate to said A. Dyett & Co., utterly failed, neglected and refused to bring such suit.
    The complaint demands judgment that Dyett & Co. may be directed to deliver over said certificate to William H. Randel as administrator for the benefit of the plaintiff as one of said heirs, and the other beneficiaries of- the said estate, or in default thereof, be directed to pay to said administrator the sum of $2,729.92, with interest.

      Delos MeCwrdy, for the appellants.

      John I. DLill, for the respondent.
   Barnard, P. J.:

There is no doubt but that a right of action exists somewhere to remedy the admitted wrong by the defendants Dyett and Norton to the estate of Jonah B. Randall. All cases agree that if a vendee takes a title to the goods of a deceased person from his executor or administrator, he takes a good title unless there be fraud or covin.

In this case Dyett and Norton took an assignment of the assets of tbe deceased from his administrator, to be used as a mortgage on stock purchases for the individual benefit of the administrator. The purchaser of the stocks lost, as is usual, tbe property of the estate, and the broker claimed to keep the assigned property. They cannot defend their title against the estate, having taken the property with full knowledge that it was the property of the deceased Jonah JB. Randall. So far the case needs no authority and requires no discussion. The person, however, who represents the estate will no.t defend it. He will not bring an action to set aside the transfer made by himself under these circumstances.

To meet this state of facts it is an acknowledged principle in our law that when a person whose duty it is to act refuses, a party injured by the refusal may act in behalf of the injured estate. Thus a stockholder may sue in behalf of a corporation when the receiver refuses. A guardian may be sued to set aside a transfer made by him in connection with the fraudulent purchase by an interested party. (Field v. Schieffelin, 7 Johns. Ch., 150.)

So in Colt v. Lasnier (9 Cowen, 320), it is held that persons beneficially interested may sue without being substituted to the position of a representative of the estate and simply by reason of their interest in the fund. Again, the same principle is reasserted in Sacia v. Berthoud (17 Barb., 15), where a transfer by an insolvent executor was set aside at the instance of those who were beneficially interested and who were injured by the transfer. The action did not depend on the insolvency of the executor but on the illegal transfer.

In Bate v. Graham (11 N. Y., 237), the Qourt of Appeals held that a creditor of a deceased person could maintain a bill to set aside a fraudulent transfer made by the deceased, in his lifetime.

The claim that the action cannot be maintained under all these authorities except by a creditor or legatee, is not a well drawn conclusion from the cases. The action depends upon the injury to the beneficial interest and upon the refusal of those legally charged ^with the defense of the fund to do so. It may be that a-creditor or legatee who would be paid out of other assets should not bring his action.

An heir-at-law is surely injured by a fraudulent transfer. It should not be permitted that a fraudulent vendee could escape the action of an heir unless he proved that the fund was sufficient to pay all debts, legacies and expenses. The heir has the right to have his father’s property applied as directed by statute.

The judgment should be affirmed, with costs.

Dykman, J., concurred; Pratt, J., not sitting.

Judgment affirmed, with costs.