text:
    Susan F. Platt v. Annie R. Platt et al.

    I (Supreme Court, General Term, First Department,

      Filed December 30, 1886.)

    Interest—Distribution op estate—When advances on account op SHARE IN ESTATE DO NOT DRAW INTEREST.
    Where prior to the final distribution of an estate in accordance with the terms of a certain will, money had been paid to different persons entitled to a share in said estate on account of said share. But the moneys received by each of the individuals were less in amount than their distributive shares of the proceeds of the testator’s property. On a reference to find and state the amount due the several parties, after charging against each one of the shares the amount received by the person charged, the referee proceeded to add to it interest down to the time of the date of his report. Held, error, that there was no basis upon which either of these persons should be charged with interest.
    2. Executors and administrators—When may pay debts oe testator OUT OE PROCEEDS OE REAL ESTATE.
    Where a judgment had been recovered upon a debt owing by the testator himself, and there was no personal estate in the hands of the executor out of which the judgment could be paid: Held, that it was equitably a lien upon his real estate, and would be ordered paid out of the proceeds of property sold by the order of the court in proceeding for distribution of the assess of the estate.
    3. Practice—Affidavit for order to hear proof of claim—When DEFECTIVE.
    Where the affidavit on which an order was asked to direct the referee (in certain proceedings on the distribution of an estate) to take proof of any liens that might be presented to him did not particularize or describe any pariicular liens, and did not disclose facts indicating the existence of any claim: Held, that the order was properly denied.
    Appeal by the defendant Annie R. Platt from two orders made on the 29th day of May, 1886, denying an application for an order directing the referee to take proof of any hens that might be presented to him, and directing the referee to take proof of judgments, and from an order confirming the report of the referee for the distribution of the proceeds of lands sold in three actions of partition.

      A. J. Vanderpoel, for app’lt; Marsh, Wilson & Wallace and Edward S. Clinch, for resp’ts.
   Daniels, J.

The parties more especially affected by the order denying the application for an order to direct the referee to take proof of any liens that might be presented to him are William R. Martin and his assignee, Edwin N. Martin. No such direction as was desired by these persons was contained in the order of reference made for the purpose of ascertaining and determining the mode in which the moneys should be distributed, which had arisen from the sale of the property affected by the actions in partition. The application for this order to extend the reference to any liens which might be presented to the referee was made upon an affidavit of William R. Martin, which failed to authenticate or establish the existence of any lien whatever in his favor, or that of any other person. It was stated in this affidavit that the reference was proceeding to report upon the distributive shares of the parties in the proceeds of the sales of the land, and that there were liens that it was desirable and advantageous should be proved and brought before the court. No lien was particularized or described, neither were any facts disclosed indicating the existence of any claim whatever of such a description in favor of any person, or which should justly be included in the hearing before the referee to determine the rights of the parties to the proceeds of the property. It was on this defective affidavit that the motion was made, and the court was entirely right in denying the order which was applied for because of this condition of the papers.

The other order of the 29th of May was made upon an affidavit showing that judgments had been recovered which should be considered by the referee in ascertaining the disposition which should be made of the funds arising out of the sale of the property. And the order of reference on that affidavit was so far enlarged as to empower the referee to inquire into the existence of such judgments. This order was sufficiently supported by the affidavit produced on the application for it as to render it regular and proper, and the direction which was made by it entered into the hearing before the referee. This order, like the preceding order, should, therefore, be affirmed.

The order confirming the report of the referee and directing the distribution which should be made of the funds in court presents the more important subjects of inquiry arising in this controversy. The fund to be distributed with interest upon it amounted to the gross sum of $237,-366.07. It consisted of the proceeds of the sale of real estate in three different actions of partition and as all the parties entitled to participate in the funds were the same in each case, they were properly aggregated into one gross amount. The property which had been sold to produce this fund was lands owned in his lifetime by Nathan 0. Platt, and the persons entitled as devisees under his will, and under the will of one of his sons, to the proceeds of this property were four in number. These persons including two others, under whom two of the parties claimed, had received amounts of money from the estate previous to the time of the reference and the order made confirming the report of the referee. The amounts which had been so received were added by the referee to the aggregate amount already mentioned which still remained to be distributed. And in making such additions he seems to have proceeded with accuracy and as he was directed by the judgment for what had previously been received was a part of the testator’s estate consisting of so much of the share, as each party remained entitled still to receive. The other three parties do not contend that the referee erred in this respect. Neither has such a contention been presented in behalf of the appellant Annie R. Platt, so far as these amounts were brought into consideration to determine the distribution which should be made. The several amounts which had been distributed were ascertained and settled by a judgment in the superior court of the city of New York,-wherein Catherine W. Cooke, one of the devisees of Nathan C. Platt was plaintiff, and the other parties in interest and the claimants were defendants, and to that extent this judgment appears to have settled the rights and obligations of the parties. But after charging against each one of the shares the amount received by the person charged, the referee proceeded to add to it interest down to the time of the date of his report. The aggregate sum so charged for interest against each of the shares very materially differed according to the amounts which had been received by the person charged, and that charged against the appealing defendant was about three times the amount of interest charged against either one of the other persons entitled to share in the division of these proceeds. This charge of interest was made on the sum of $60,830.90, which had been received by her husband William H. Platt, in his lifetime, and under whose will she became entitled to his fourth of the proceeds of the property to be divided.

The judgment settling the amounts which had been received by each of the claimants did not provide for the addition of interest upon the amounts which had been so received, neither could it have properly contained a direction of that description for no indebtedness was created against either of these persons as the estate has turned out, and no obligation whatever existed to refund any portion of the. moneys which had been received.

These moneys represented so much of the property of Nathan 0. Platt, which these persons were entitled legally to receive, and they were paid to the different individuals as so much of the share which he or she was entitled to in this estate. And being payments made in that manner they presented no legal grounds upon which interest should be computed or charged. The moneys were to no extent to be returned either at that time or "at any time in the future by either of these persons. They may have been subject to the contingency that portions might be recalled if they proved to exceed the shares of the persons receiving the moneys, but no such contingency has appeared. _ On the other hand, the moneys received by each of the individuals were less in amount than their distributive shares of the proceeds of the testator’s property. There was accordingly no basis upon which either " of these persons should be charged with interest in this manner. And as the interest charged against the appealing defendant Annie R. Platt so largely exceeded the interest charged against either of the other persons, this addition of interest secured to them advantages over her which they were not entitled to enjoy in the distribution of these proceeds. To the extent of about $10,000, the three other persons were benefited by this computation, which led to a charge against the appealing defendant to about that amount over and above what should have been made against her. This will become more obvious by adding the several amounts which had been received upon the four shares in the estate to the proceeds of the property now to be distributed, and dividing that into four equal parts. These parts will represent the extent of the interest of each of the four parties in this estate, securing to the appealing defendant nearly $10,000 over and above the amount awarded as her share. And to this extent the order confirming the referee’s report and directing a distribution upon the basis of his computation, including these several interest charges, is erroneous, and it should be modified accordingly. This modification can well be made by adding the several amounts necessary to show the principal of the estate to the sum now to be distributed, and then dividing that sum into four equal parts, and from the part devised to William H. Platt deducting the charges made against his widow, Annie E. Platt, after excluding this interest charge of $15,270.81 contained in the referee’s statement of account, and the order should be so modified.

Under the direction given to the referee to inquire as to judgments against the property, it was proved before him that a judgment had been recovered by Aaron J. De Grauw against the executors of Nathan O. Platt upon an indebtedness owing by him in his lifetime. They were removed from their offices by a judgment or proceeding taken partly for that purpose, and James M. Smith was appointed the receiver of the estate, and upon the judgment recovered against the executors another judgment was recovered against him as receiver. This was for the sum of $24, - 414.02, from which by the application of another demand the sum of $11,858.28 was deducted, leaving unpaid upon the judgment the sum of $15,651.33. One-quarter of this judgment was charged against the share of Annie E. Platt in the proceeds of this property, and that has been complained of as an erroneous direction sanctioned by the referee and approved by the final order. The correctness of this determination has been questioned, upon the ground that the judgment could not be made a charge upon the proceeds of the estate otherwise than by proceeding against the persons receiving such proceeds as devisees. But this objection does not seem to be entitled to be sustained, for it was one of the objects of the court to determine what judgments existed which should be paid out of the fund before it was distributed. And while it has been suggested that the appealing defendant might have legal grounds for contesting the right of the judgment creditor to payment, no such proof was either given or offered upon the hearing before the referee. If there were any legal objections to the payment of the judgment, there was not the' slightest obstacle in the way of presenting them upon the hearing before the referee. But no effort was made on that hearing to impeach the judgment or to show that the claimant of the balance remaining unpaid upon it was not entitled to the money.

It was not made to appear that any personal estate of the testator Nathan 0. Platt remained undistributed, and the facts appearing are such as to justify the conclusion that no such estate did remain, for the fund now hr court appears to have been assumed to be all that was left to dispose of in this proceeding. And as there is no personal estate out of which the judgment could be paid, and it has been recovered upon .a debt owing by the testator Nathan 0. Platt himself, it was equitably a hen upon his real estate and the fund now before the court representing it. A point of this nature was considered in Hyde v. Tanner (1 Barb., 75), where the right of a creditor having such a demand to follow the real estate of the testator was maintained by the court. And that case does not seem to have been questioned or impaired in its authority by any determination since made upon this subject. Under the rule which it maintains the creditor had the right to apply for payment of the judgment out of the proceeds of this property, even though the judgment itself might not, under the statutes of this state, have become a hen upon the testator’s real estate. The debt itself was so chargeable without reference to the provisions of the statute cited in support of this part of the appeal; and the court was right, having equitable authority in the action, in providing for its payment as that was done by the order. Scott v. Guernsey, 48 N. Y., 106.

It was proposed to be proved upon the hearing before the referee that William R. Martin, as attorney in the action brought for the recovery of the property, had become entitled to one-half of the amount to be distributed. The referee rejected this proof, and in that he seems to have been justified by the refusal of the court in one of the orders now appealed from to direct the referee to inquire into the existence of any such lien. Beyond that the judgment in the case 'of Cooke v. Platt and others was produced and proved before the referee. In that action this claim of William R. Martin,was considered, and it was determined by the court to have no legal existence, and for. that reason likewise the referee was right in rejecting the proof offered to maintain the existence of this asserted lien or agreement. Neither in this respect, nor in any other except that which has already been considered, does the referee appear to have erred in the conclusions arrived at by him. The final order should be modified by directing the shares of the appealing defendant to be ascertained by excluding the interest charges made and contained in the referee’s report against the amounts received by each of the four persons interested in this estate. And her share should be ascertained and declared according to the amount chargeable against herself and her husband, excluding this item of interest. And as so modified, this order should be affirmed without costs; but as to the other two orders from which appeals have been taken, they should be affirmed, with the usual costs and disbursements.

Davis and Brady, JJ., concur.


source: Caselaw Access Project

author: Davis, P. J.

license: Public Domain

text:
    Charles S. Stearns, Resp’t, v. Jacob A. Sherman et al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed December 30, 1886.)

    Injunction—Eight to in action on contract.
    In an action upon a contract defendant alleged a breach on plaintiff’s part in such form and of such extent as to justify defendants in refusing to permit plaintiff to proceed under the contract. Held, that if established on the trial it might affect seriously plaintiff’s rights under the contract, and would defeat his right to an injunction restraining defendant with regard to the subject of the contract in such manner as materially to arrest its business, but that it might properly be restrained from making such sale or disposition of the subject of the contract as would terminate the business of the company.
    Appeal from an order granting a motion to continue an injunction.

      S. H. Randall, for app’lt; Douglas Campbell, for resp’t.
   Davis, P. J.

It was stated on the argument of this appeal that the issues of the case have been tried at special term and viere then under advisement in that court. Under these circumstances it is not advisable that this court should pass upon the question whether or not the contract between the plaintiff and the defendants created a copartnership between them. What additional facts may have been shown bearing upon that question which do not appear to us on this appeal we are not able to see.

One defense to the action set up in the answers of the defendants is that the plaintiff himself was guilty of a breach of the contract in such form and to such an extent as to justify the defendants in refusing to permit him to proceed any further under the contract. If this defense has been established on the trial it may seriously affect the plaintiff’s rights and remedies under the contract, and certainly would show that he had no right to any such injunction order as was given to him by the order now appealed from.

From the papers before us we are satisfied that the injunction order should be modified by striking out that portion of it which enjoins and restrains the defendants from using or “ disposing of the proceeds of sale or consignments of the publications known as the Pictorial Battles of the Civil War and the Naval History of the Civil War, by Admiral Porter, or of the proceeds of any contracts made by the said defendants, or either of them, with agents or canvassers for the sale or disposition of said books, or of the subscriptions taken for said publications, or any part thereof, during the pendency of this action.”

The effect of this part of the order is substantially to arrest the business of the alleged corporation and prevent the defendants from using its proceeds in such business pending this litigation. This goes further than was necessary to protect any of the asserted rights of the plaintiff, and its effect, if enforced, would be to destroy, temporarily at least, the business of the concern, greatly and unnecessarily to the injury of the defendants as well as of the plaintiff himself.

The other portion of the injunction restrains the defendant “from assigning, transferring, selling or disposing of the plates, illustrations and material used for and in the publication of the books, and all the property, assets, books and accounts of the Sherman Publishing Company, and from removing the said plates, illustrations, material, property, assets, books and accounts from the office of the company in the city of New York during the pendency of this action.”

Construing this to mean a sale or disposition of such a character as would terminate the business of the company' by disposing of the means for carrying ifc on, we think that portion of the injunction should be continued until the rights of the respective parties shall‘be determined upon the trial. This would not have the effect to interfere with the business of the company so that it could not proceed to manufacture the books and sell the same and receive the proceeds in the course of such business, and in that view we think it would be correct, and should tie sustained.

The order should be modified as suggested in this opinion, and, as modified, affirmed, without costs to either party.

Brady, J., concurs.


author: Daniels, J.

text:
    Paul Bauer, Resp’t, v. S. E. Schevitch et al., Appl’ts.

      (Supreme Court, General Term, First Department,

      Filed December 30, 1886.)

    1. Undertaking—Order of arrest—Amount of undertaking given BY PARTY PROCURING—CODE ClV. PRO,, § 559.
    An. order was obtained directing the arrest of the three defendants in this action, and directing that they and each of them be held to bail in the sum of $2,000. An undertaking was given for the payment of such costs and damages as the defendants, or either of them, might sustain by reason of the arrest, not exceeding $500. Ileld, that the undertaking was insufficient in amount, that by Code Civil Procedure, section 559, the undertaking was required to be at least equal to one-tenth of the amount of bail required by the order.
    2. Same—Form of undertaking.
    The undertaking obligated the persons executing it to pay the damages mentioned to the defendants or either of them. Held, that under the obligation created by it they all could secure protection only in case judgment was rendered in favor of three, that it should have provided for the payment of damages which each might recover by reason of the arrest.
    8. Same—Informal and insufficient undertaking may be amended.

      Held, that the undertaking might be amended by the substitution of such an undertaking as the nature of the case and the provisions of the Code might require.
    Appeal from an order denying a motion to vacate an order of arrest.

      Simon Sultan and Theodore Sutro, for app’lts; Benjamin Patterson, for resp’t.
   Daniels, J.

The application to set aside and vacate the order proceeded upon the insufficiency of the undertaking given on the part of the plaintiff. There are three defendants in the action, and the order directed the sheriff to arrest them and to hold them, and each of them, to bail in the sum of $2,000. The undertaking was given for the payment of such costs and damages as the defendants or either of them "might sustain by reason of the arrest, not exceeding the sum of $500. To obtain this order of arrest, section 559 of the Code of Civil Procedure required the undertaking to be at least equal to one-tenth of the amount of bail required by the order. And as this order directed each of the defendants to be held to bail in the sum of $2,000, it is very clear that this undertaking was not one-tenth of that amount. By section 575 of the same Code, it has also been provided that the defendant when arrested shall be discharged on bail, consisting of an undertaking that the defendant to be discharged will at all times render himself amenable to any mandate which may be issued to enforce a final judgment against him in the action. And this undertaking to comply with the order of arrest would necessarily be given in the sum of $2,000. The undertaking given by and on behalf of the plaintiff obligated the persons executing it to pay the damages mentioned in it to the defendants, or either of them. And under the obligation created by it they all could only secure protection in case judgment was rendered in favor of the three, for if judgment was recovered against one, and in favor of the others, the undertaking would protect but one of the two. What it should have provided for was for the payment of the damages which each of the defendants might recover by reason of the arrest, which would be a protection if judgment proceeded in favor of two and against the other. Neither in form nor amount was it such an undertaking as the law required to be given to entitle the plaintiff to the order which was made.

But defective as it is it may still be amended by the substitution of such an undertaking as the nature of the case and these provisions of the Code require should be given. Erwin v. Judd, 20 Hun, 562.

The order to show cause upon which the motion was made did not specify the defects in the undertaking as it should have done, but it does not appear that any objection was taken to it on this account on the hearing of the motion, and from the order afterwards entered it is to be presumed that it was heard and disposed of without reference to this omission in the order to show cause. The order appealed from should be reversed and an order made setting aside the order of arrest, unless within ten days after notice of the decision the plaintiff shall obtain and file, as the practice requires that to be done, a further undertaking in the sum of $1,000, conditioned to pay to the defendants and to each of them the damages sustained by reason of the arrest if judgment shall be recovered by them or either of them in the action, or it should be decided that the plaintiff was not entitled to the order. And upon such an undertaking being given and the payment of the costs of opposing the motion, and the appeal, within the time already mentioned, the order should be affirmed. But in case of a failure to comply with these conditions, the ■ order should be reversed and the order of arrest vacated with like costs.

Davis, P. J., and Brady, J., concur.


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    People, App’lts, v. The Universal Life Insurance Company, Resp’t.

      (Supreme Court, General Term, First Department,

      Filed December 30, 1886.)

    Insurance company (life)—Dissolution—Distribution of assets—Who ENTITLED TO DIVIDENDS—CODE ClV. PRO., § .1793.
    Certain residents of the state of Virginia were policy holders of the defendant Life Ins. Co.; after proceedings to dissolve said company had been instituted, they by means of proper proceedings, appropriated toward the payment of then- policies, securities which had been deposited in said state for that purpose, and succeeded in having the fund under control of the authorities of said state distributed between the parties. Afterward an adjustment of the affairs of the company was made in such a manner as to result in the discontinuance of the proceedings taken previous to that time for a dissolution of the corporation, etc. About a year after the distribution of the funds as aforesaid by the state of Virginia, afier the company had again become insolvent, and by distinct and independent proceedings in a new action, a receiver of the company was appointed, and these residents of Virginia presented their policies to the receiver for allowance and claimed a dividend. Held, that these policies were legal and existing claims against the company for the amounts to which they had been reduced, by the payment by the state of Virginia, and were entitled to receive the same proportionate part of the proceeds of the assets, upon the balance, as should be paid other policy holders, without deducting therefrom the amount received from the state of Virgina. Hunt v. Knickerbocker Life Ins. Oo., 101 N. V., 636, distinguished.

    Appeal from an order overruling an exception to the report of a referee and affirming his report.

      Raphael J. Moses, Jr., for app’lt; Charles J. Everett, for resp’t.
   Daniels, J.

In this action a receiver was appointed on the 17th of December, 1881, of the property and effects of the defendant as an insolvent insurance corporation.

The appellants were insured by policies issued by the company in various amounts. They were residents of the state of Virginia, and after similar proceedings had been previously instituted against the company, they proceeded as they were authorized to do by its laws, to appropriate towards the payment of their policies securities which had been deposited in that state for that purpose, and their proceedings resulted in the distribution of the fund under the control of the authorities of the state of Virginia, between these parties on the 21st of December, 1880, about one year previous to the appointment of this receiver. An adjustment of the affairs of the company was made in such a manner as to result in the discontinuance of the proceedings taken previous to that time for a dissolution of the corporation and the settlement of its affairs. And the action in which the receiver was appointed was a distinct and independent proceeding from that after the company-had again become insolvent. These policies were presented for allowance to the receiver, and a dividend claimed upon them in the same proportion as should be payable on other demands against the company. But the referee disallowed the claim so far as to deduct from this proportion the amount which had been paid upon these policies under the proceedings in the state of Virginia, and the court affirmed his report so far as it in that manner qualified or reduced the claims of the applicants.

This ruling seems to have proceeded upon the decision made in the case of The People v. Knickerbocker Life Ins. Company, where it was held by the general term and affirmed by the court of appeals in 101 N. Y., 636, that the amount in that case obtained by the policy holders under similar proceedings in the state of Virginia should be deducted from his proportionate amount of the other assets of the corporation. But in that case the proceedings in the state of Virginia through which the money was realized were commenced and terminated after the appointment of the receiver, and resulted in appropriating to the payment of the holder of the policy a part of the assets owned by the company at the time of his appointment, while here the securities out of which the payments were made upon the Virginia policies were no part of the assets of the company at the time of its second insolvency, or when the receiver was appointed by the court. Before either of these events arose these securities had been disposed of, and the moneys had been applied upon the Virginia policies, and they remained as legal demands against the company for the residue of their amounts at the time the proceedings were instituted in which the receiver was appointed.

At that time consequently the policies were legal and existing claims against the company for the amounts to which they had in this manner been reduced.

By section 1793 of the Code of Civil Procedure it has been declared that the final judgment for the dissolution of a corporation, “must provide for a just and fair distribution of the property of the corporation, and of the proceeds thereof, among its fair and honest creditors, in the order and in the proportions prescribed by law, in case of 'the voluntary dissolution of a corporation.”

When the judgment was obtained in this action the applicants were fair and honest creditors of the corporation for the amounts unpaid upon their respective policies, and by the statute to which reference has been made in this section of the Code, declaring the order in which the debts shall be paid, the receiver has been directed after the payment of debts entitled to preference under the laws of the United States, and judgments against the corporation to the extent in which they should be hens upon its real estate, to pay “all other creditors of such corporation in proportion to their respective demands,” etc. R. S. [7th ed.], 2401, § 79, subd. 3. And by this direction it became the duty of the receiver to apply the assets, or their proceeds, remaining in his hands after the payment of debts entitled to a preference under the laws of the United States, and judgments, so far as they were liens upon the real estate of the corporation, equally among all its other creditors as their demands existed at the time of his appointment.

The provisions of the statute are such as to place the assets of the company in the charge of the receiver for distribution in the maimer specified by its directions, and no authority has been given to him, or to the courts regulating his proceedings, by which one class of creditors shall be wholly or partially excluded from their proportionate part of the assets of the company by reason of previous payments made upon their debts before the appointment of the receiver. Under these provisions, if the company had issued its obligation for a sum of money, upon which in the course of its business it had made payments and thereby reduced the amount of the indebtedness, the holder would surely be entitled to have the balance remaining allowed as his debt against the company, and to receive his proportionate part of the proceeds of the assets upon the balance. That would be the debt or demand existing against the company, both at the time of its insolvency and at the time of the appointment of the receiver. But still it would be no more so than were the amounts of these respective policies after deducting what had been received upon them under the proceedings in the state of Virginia. After the amounts had been received, the' policies still remained demands against the company for the residue, and they were in that condition when the receiver was appointed and the assets of the company passed into his hands. And it follows that in the distribution of such assets, there should be paid on the policies the same proportionate amounts as are payable upon all other simple contract debts existing against the corporation at the time of the receiver’s appointment. The object of the statute was to place creditors of the same class upon the like footing, entitled to have the assets or their proceeds applicable to their debts distributed equally among them in proportion to their respective demands. These applicants were entitled to the application of this rule, to ascertain the amounts they were respectively entitled to upon their policies, without deducting from these amounts what had been received in the proceedings against the company, previous to its final insolvency, and the appointment of the receiver of its property.

What the receiver obtained was the property of the company, subject to its debts as they were when he was appointed, and not as they were by transposing preceding dealings down to or subsequent to the time of his appointment. As those policies were legal demands against the company for their balances remaining unpaid and unadjusted when the receiver was appointed, those balances were the demands against the company, and it was upon such demands that the law has provided payments should be made in proportion to their respective amounts.

The order, therefore, from which the appeal has been taken should be reversed, and an order entered sustaining the exceptions taken to the referee’s report, and directing the allowance of the policies for the balances for which they were valid claims against the company at the time the receiver was appointed, but as the controversy presents a point not heretofore determined it should be without costs.

Davis and Brady, JJ., concur.


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    Philip Deobold, Resp’t, v. Frederick Oppermann et al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed December 30, 1886.)

    1. Executors and administrators—Must retain control of funds of estate—Aqreement to give control to another void.
    In an action to recover on the bonds of an administratrix, it appeared that the bondsmen were induced to become sureties by an agreement with the administratrix that the moneys of the estate should be passed into their possession, and that upon the cancellation of the bonds these moneys were restored to her. This arrangement was not known to the other parties ■ interested in the estate. Held, that neither the agreement nor what afterwards took place imder it could in any manner affect the rights of the parties interested; that the arrangement was void and inoperative, being against the policy of the law requiring the administratrix to keep the property and funds of the estate under her control.
    2. Same—Agreement obtained by fraud may be annulled even WHEN ALLOWED BY A DECREE.
    An agreement, although allowed by an order or decree, obtained by fraud, is not obligatory upon the party defrauded, but may be annulled in a proper action by a court of justice.
    Appeal from a judgment recovered on the verdict of a jury-and an order'denying a motion for a new trial.

      Ashbel P. Fitch, for app’lts/ George F. Langbein, for resp’t.
   Daniels, J.

The verdict was recovered for the amount decreed in the plaintiff’s favor as one of the next of kin of Henry Deobold, deceased, by a decree of the surrogate of the county of New York. As it was not paid, liberty was secured to prosecute the bond executed by the defendants as sureties for the administratrix of the estate. They resisted their liability under an order which, had been made upon the settlement of the accounts of the administratrix, cancelling the bond. But this order or decree was after-wards vacated upon the ground that the stipulation on which it proceeded had been fraudulently obtained.

That such was'thefact was proved by the evidence to the satisfaction of the court in an action to vacate it, and that entitled the parties complaining of the order or decree, to the order obtained annulling it. For an agreement although allowed by an order or decree, obtained by fraud, is not obligatory upon the party defrauded, but may be annulled in a proper action by a court of justice. Gottsberger v. Taylor, 19 N. Y., 150; Lowman v. Yates, 37 id., 601; Casoni v. Jerome, 58 id., 315; Annett v. Ferry, 35 id., 256.

The defendants were not parties to the agreement, or to the order or decree of the surrogate following it, and for that reason were not entitled to be made parties in the proceedings brought to annul the agreement or to obtain the order or decree following it. As the order or decree was fraudulently obtained relieving them from liability on the bond,- it in judgment of law could not be attended with that result. And the interference of the court setting aside the agreement, and of the surrogate vacating the order or decree, merely gave effect to this legal principle, without subjecting the defendants to any further liabihty than that which followed from their executing the bond of the administratrix as her sureties.

It appeared that they were induced to become sureties by an agreement with the administratrix that the moneys of the estate should be passed into their possession, and that upon the cancellation of the bond, these moneys were restored to her. But this agreement or arrangement was not known to the other parties interested in the estate, and neither the agreement itself, nor what afterwards took place under it, could in any manner affect their rights for that reason. Besides that, under the authorities considering agreements quite analogous to this, the agreement or arrangement made by the administratrix with the defendants was void and inoperative, for the reason that it was against the policy of the law requiring the administratrix to keep the property and funds of the estate under her own control. Poultney v. Randall, 9 Bosw., 232; Wilder v. Butterfield, 50 How., 386.

Upon the evidence produced at the trial the plaintiff was entitled to recover, and both the judgment and the order from which the appeals have been taken should be affirmed.

The case of Philip Deobold, as executor of the estate of Maria Deobold, deceased, respondent, against Frederick Oppermann, jr., and another, appellants, depends upon the same state of facts so far as the question of liability is involved. And as the defendants were liable for the amount of the verdict directed against them, if upon the facts already considered they were liable at all, the judgment and order from which they have appealed, are also right and should be affirmed.

Davis and Brady, JJ., concur.


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    Electrical Supply Company, Resp’t, v. Jersey City Electric Light Company, App’lt.

      (Supreme Court, General Term, First Department,

      Filed December 30, 1886.)

    Principal and agent—When agency implied.
    Where, in an action brought to recover the value of goods alleged to have been furnished defendant, the evidence showed that one B who ordered them was a director of the defendant company, and a contractor with said company to do certain work at a stipulated price; that the account was opened in the name of the defendant company by B, and the goods sent from day to day to the place of business of said company, and B was found at said place of business apparently acting as agent for the company; that the goods were billed to the company, and on each sale bills were mailed to the company at its place of business; that payments were made on the monthly statements apparently in the name of the company; that afterward one II, who was concededly the agent of the company, called upon plaintiff and said he was now manager of the company, and that he "would in future attend to the ordering of goods and carrying on the business,” and no new account was opened, and payments subsequently made were credited generally on the account, and were not directed to be applied specifically to the goods purchased on H's order. Held, that there was evidence of an implied agency in B which the company was estopped from disputing.
    Appeal from judgment entered on report of referee.

      J. B. Hayward, for app’lt; Eugene Smith, for resp’t.
   Davis, P. J.

This action was brought to recover for goods and merchandise alleged to have been sold and delivered by the plaintiff to the defendant.

It is easy to see from the evidence that the learned referee might have found that the goods were not. sold and delivered to the defendant, and if he had so found his conclusions would not have been disturbed. One Baxter opened the account with plaintiff in the name of the defendant. He represented that he had authority so to do, but in fact he had no such authority. He occupied a double relation to the defendant—he was one of its directors. He was also' a contractor with defendant to construct at a stipulated price an electric plant for lighting certain streets of Jersey ; City. Neither of these relations gave him authority to contract debts or purchase goods in the name of the defendant. As director he had no agency for such purpose. As contractor he was bound to furnish at his own expense all the articles used in constructing the jilant. The articles he bought in the name of the defendant were all used in such construction. If the case stood on these facts alone .there would be no ground upon which the judgment could stand. But there are some other elements in the case which the referee was bound, or had the right to consider. The account was not only opened in defendant’s name on Baxter’s misrepresentation, but the goods were ordered to be sent to the defendant at 218 Bay street, Jersey City. The plaintiff on receiving the first order sent over to Jersey-City to make inquiries about the defendant and its response bility. Its messenger found at 218 Bay street an office apparently occupied by the defendant company, and across the front of the building a sign in large letters bearing the name of that company. He learned that this was the place of business of the company and that it was about constructing the plant above mentioned for lighting a portion of Jersey City, and he found Baxter at said office apparently acting as the agent for the company. The plaintiff was not informed of the contract of Baxter with defendant, and had no reason to suppose that Baxter was not what he represented himself to be and appeared to be. The plaintiff then opened the account and received orders from Baxter in defendant’s name from day to day for several months. Each of these orders was filled and the items were charged to defendant’s account. The goods were billed to defendant, and on each sale the bills were mailed to defendant at its place of business (218 Bay street) in Jersey City, and the goods were sent to and delivered by carriers at that place. This continued to be the course of business through several months, and at the close of each month monthly statements were rendered showing the whole amount of purchases during the preceding month. Payments were made apparently in the name of the defendant. The goods sold were used in the construction of the defendant’s plant. In January, 1883, one R. J. House called upon plaintiff and said he was now the manager of defendant, and that he-‘'would in the future attend to the ordering of goods and carrying on the business.” Ho new account was opened. The old account was continued, and the accounts were rendered as they previously had been, and no change in the mode of dealing was made. House was concededly the agent of the defendant. After he took charge of the ordering of the goods payments were made which were credited generally on the account, and were not directed to be applied specifically to the goods purchased on House’s orders.

These several circumstances, with some of the disputed evidence touching alleged conversations with the officers of the defendant, were relied upon as ratifying the assumed agency of Baxter to order the goods in the name of the defendant The referee held there was an implied agency in Baxter which, under the circumstances, the defendant was estopped from disputing. We are not prepared to say that this finding is not correct. Baxter was deceased, and his version of the facts is not in the case; but, considering the length of time the accident was running, the numerous items ordered and delivered from day to day, the plan and manner of their delivery by carriers in Jersey City, the daily and monthly presentation of bills all charging the goods to the defendant, the payments made, the monthly statements, the continuation of the account by House, an acknowledged agent, by whom the plaintiff was informed that he was the successor of Baxter, the payments made by him which were applied without apparent objection to the running account, the failure of the defendant to give any notice of the real relations between it and Baxter, it seems almost inconceivable that the defendant did not know that plaintiff was dealing in the belief that Baxter was the agent authorized to open the account and make the purchases in its name. The finding of the referee on this question cannot be disturbed, and the judgment must, therefore, be affirmed.

Daniels and Brady, JJ., concur.


text:
    People of the State of New York, Resp’t, v. Charles J. Everhardt, App’lt.

      (Supreme Court, General Term, First Department,

      Filed December 30, 1886.)

    1. Criminal trial—Form op oath op jurors and. witnesses—Aliases— When may be omitted in swearing jurors and witnesses.
    At the trial of the defendant, indicted under another name and four aliases, his true name was given, and the indictment was amended by the insertion of that name w tn reference to the aliases, under which he was originally indicted, and after this was done the court permitted the swearing of jurors and witnesses, using the true name and five al oses in the form of the oath, which was excepted to. It eld, that the excip ion was not well taken; that although thure was no legal necessity for calling off the aliases, and it would be better practice not to co it when the pri oner had given his true name, it is not an error to allow it to be done, of which a prisoner can avail himself by exception.
    3. Same—Evidence op accomplice—How par must be corroborated.
    It is not necessary that the corroboration of the testimony of an accomplice should be full and complete to an extent that would itself warrant conviction. It ia enough that it corroborates material parts of the testi- • many relating to the cm'pus of the offense in such a way that the jury are justified thereby in accepting the evidence of the accomplice as true.
    3. Same—Jurisdiction—When not lost by adjournment sine die by COURT OF SESSIONS.
    Where before the adjournment of the court of sessions, the prisoner’s counsel made a motion for a new trial and for arrest of judgment, which motion was pending when the adjournment was made, and this motion was made and denied at the next term, and therea ter sentence was pro- . bounced. Held, the court had not lost jurisdiction. Whether the teim of the court of sessions a continuous one, Querm.

    Appeal from judgment of the sessions.

      A'. Stiydam, for app’lt; McKenzie Semple, for resp’ts.
   Davis, P. J.

The prisoner was indicted by the name of George Hartman and four aliases. At the trial his counsel gave the name Charles J. Everhardt as the genuine name of the prisoner. The court then directed the indictment minutes so to be amended by the insertion of that name with reference to the aliases under which he was originally indicted. After this had been done the court permitted the swearing of jurors and witnesses by using the name Everhardt and the five abases in the form of the oath. This was objected to by the prisoner’s counsel on the ground that it tended to prejudice him in the minds of the jury to have so many abases called off in their hearing whenever a juror or witness was sworn.

Some persons cabed as jurors said that they were prejudiced by the calbng of the abases. Those persons were not abowed to sit on the trial of the case.

The exception was not web taken. There was no legal necessity for calbng off the abases, and it would we think be better practice not to do it when a prisoner has given his true name and the record has been amended accordingly; but stib the calbng off of ab the abases is simply a recital of the record as it stands before the court and it is not an error to abow it to be done, of which a prisoner can avail himself by exception. If a juror had sworn that he could not fairly and impartially try the case by reason of a prejudice from hearing ,the numerous abases, and had .been abowed to sit against the prisoner’s objection, or challenge, that would present a very different question.

None, however, is presented by the present condition of the case which demands interference with the conviction and judgment.

It is urged that there was not sufficient corroboration of the testimony of the accompbce pointing to the gubt of the accused to justify a conviction. It is not necessary that such corroboration should be full and complete to an extent that would itself warrant conviction. It is enough that it corroborates material parts of the testimony relating to the corpus of the offence in such a way that the jury are justified thereby in accepting the evidence of the accompbce as true. That kind of corroboration was given in this case. Proof was given of visits by the prisoner to the office of the parties on whom the forgery was committed, under a false pretence, and the obtaining of an opportunity to look at these cancelled checks and the disappearance of a portion of such checks simultaneously with that of the prisoner. The testimony of the wife of the accompbce showing several incidents tending to connect the prisoner with the act of presenting the check for the joint benefit of himself and the accompbce was reasonably corroborative of the testimony of the accompbce, which connected the prisoner with the criminal transaction. There was enough on that subject to go to the jury.

It is urged "also that the court had lost jurisdiction by adjourning the term sine die before pronouncing sentence. But when the adjournment took place there was a motion pending on the part of the prisoner for a new trial and for arrest of judgment. This motion was made by the prisoners counsel at the next term and after its denial sentence was pronounced. This fact is an answer to the point, even if the court of sessions is not to be deemed a continuous one. The act of the prisoner caused the delay. It was a favor to him granted at his request to postpone sentence in order that he might move for new trial. Having availed himself of the favor it does not He in his mouth to urge the delay as a loss of jurisdiction to pronounce sentence.

The judgment should be affirmed.

Brady, J., concurs.


text:
    Benjamin F. Smith, App’lt, v. Alice R. Baker, Impl’d, etc., Resp’t.

      (Supreme Court, General Term, First Department,

      Filed December 30, 1886.)

    1. Infancy—An infant is not bound by her signature to a transfer OF STOCK IN THE ABSENCE OF REPRESENTATIONS.
    Defendant J. H. R. made a promissory note, and assigned as collateral security sixteen shares of a certain stock; in an action brought iipon the note and for the value of the stock and the appropriation of the proceeds to the payment of the debt, the liability of J. H. R. upon the note was established, but it was shown that the stock did not belong to him but to A. R. B., for whom he acted as guardian during her minority. Held, that so long as she made no actual representation concerning her signature she could avoid its effect on account of her infancy.
    2. Same—Not bound after attaining her majority in the absence OF RATIFICATION BY HER.

      Held, that not having in any manner approved, confirmed or ratified the disposition of her property since her majority, she was not bound by it
    3. Allowance—Code Civ. Pro., §3253, sued. 2—What erroneous.

      Held, that it not being proved that the shares of stock were worth more than their face value, an allowance based upon a greater valuation was erroneous.
    4. Same—Proper basis for—Presumption in favor of legality of act.

      Held, the stock being represented of a certain value on its face, and I he bank issuing it being presumed to have complied with the law, allowance might be made upon that basis.
    Appeal from a judgment recovered at the special term. Birdseye, Cloyd & Bayliss, for appl’t; Wm. F. McRae, for resp’i.
   Daniels, J.

The object of the action was the recovery of a debt against the defendant, James H. Redfield, amounting to the sum of $2,000 and interest upon a promissory note made by him on the 24th of May, 1878, and the sale of sixteen shares of stock of the National Broadway Bank and the appropriation of the proceeds towards the payment of the debt. The fact that the debt was contracted and the plaintiff was entitled to recover the amount of it were proved beyond dispute upon the trial. But the shares of stock assigned as collateral security for the loan were not the property of Redfield, the debtor, but they belonged to the defendant, Alice R. Baker, for whom Redfield acted as guardian during her minority. She was under his charge after the decease of her mother, and from the time she was about nine years of age until she attained the age of twenty-one years, in October, 1877. These shares of stock were part of her estate, and while she was under the age of twenty-one years, and in or about the year 1872, at his request she appears to have written her name upon the back of the certificate. This was done under no arrangement that the shares should be transferred to him, or that he should be at liberty to sell or dispose of them, and she was not given to understand what his purpose was in desiring her signature or that it was to be placed, or was in fact, placed upon the certificate of these shares. There was accordingly no intention on her part to supply him with the evidence of ownership of these shares, "without which in no event could he have used or disposed of the shares themselves. Weaver v. Barden, 49 N. Y., 286; McNeill v. Tenth National Bank, 46 id., 325. And it is quite evident that the assignor of the plaintiff received the shares upon no such understanding, for under her own name, as she had written it, her name was again written by the defendant Redfield as attorney, and upon that signature the shares were probably transferred as security for this loan.

But even if the shares had been received by the assignor of the plaintiff, or the plaintiff himself, in reliance upon the signature of the ward, as she was an infant at the time, she would not legally be bound by this as her act. The law would still permit her, as long as she made no actual representations concerning her signature or her age, to avoid its effect on the ground of her infancy. This is a general legal principle too well settled to require any support by way of citing authorities, and being an infant she could not be estopped by the simple circumstance of her name being placed upon the certificate of these shares of stock. Ackley v. Dygert, 33 Barb., 176; Brown v. McCune, 5 Sandf., 224.

These cases proceed upon the legal principle that a person under the age of twenty-one years will not be estopped from asserting the truth, by the mere circumstance appearing to have transpired,in this case. And the latter authority has not otherwise been disapproved of, except so far as it has a tendency to exonerate an infant from liabihty to arrest on account of fraudulent representations actually made by such person. Schunemann v. Paradise, 46 How., 426; Eckstein v. Frank, 1 Daly, 334; Wallace v. Morss, 5 Hill, 391.

The dealings through which the right is insisted upon, of appropriating these shares of stock to the payment of this indebtedness, took place exclusively between the plaintiff’s assignor and the acting guardian of this infant, and in no manner precluded her from asserting her right to the shares, and repudiating the act and conduct of the person under whose charge she had been during the greater period of her minority. No act upon her part either before or after she attained her majority, in any manner approved, confirmed, or ratified, this illegal disposition of her property, but she herself continued to receive the dividends upon it near to the time when this suit was commenced. Upon the facts as they were proven the judgment denying the right of the plaintiff to appropriate this stock to the payment of this indebtedness was legal and proper. To that extent the case seems to be free from substantial ground for doubt. But in determining the action without any proof as to the actual value of the shares, the court made an allowance in favor of this defendant amounting to the sum of eighty dollars. The shares themselves were for the sum of twenty-five dollars each, and as there was no evidence that they exceeded in value the amount for which they were issued, this allowance was unauthorized. It may probably in the absence of any proof, be presumed that the shares were of their face value, for they would ordinarily represent that amount of the capital stock of the bank issuing them, which, if it complied with the law, as it is to be presumed it had, would give them this extent of value. But the court could not presume them to be worth more than that sum. In making the allowance such a presumption seems to have been indulged, in favor of this defendant, and upon the strength and effect of it, at least sixty dollars more was allowed to her by way of additional costs, than was permitted by subd. 2 of sec. 3253 of the Code Civil Procedure. This allowance should be reduced to the sum of twenty dollars and with that modification the judgment should be affirmed, without costs to either party.

Davis, P. J., and Brady, J., concur.


text:
    Francis J. Byrnes v. Maria L. Labagh et al.

      (Supreme Court, General Term, First Department,

      Filed December 30, 1886.)

    Usury—Payment of bonus by agent to lender unlawful.
    M. and L, applied to C. & H. (lawyers) to procure for them two loans of $5,000 each, to be secured by their respective bonds and mortgages, and an oral agreement, afterwards reduced to writing, was made that the mortgagors should pay C. & H. $1500 for procuring the loan, “to pay expenses, etc.” O. & H., acting under this arrangement, applied to R, the mortgagee, to make the loan of $5,000 each, and it was agreed between them and P. as a condition of making the loans, that the same shou d be secured by the two bonds and mortgages for that sum and six per cent interest, and that he P. should receive one-half of the $1,500, less the expenses of C. & H. for making the loan, which arrangement was afterward consummated, and P. received $695 from C. & H. as the bonus for making the loan. Held, that the loan was usurious; that the bonus paid by C. & H. to P. was in legal effect paid by the principal. (Gases distinguished.)

    Appeal from order of the special term confirming the referee’s report in proceedings to ascertain the right to surplus moneys arising in the above entitled action upon the sale of certain real estate in partition.

      John H. Hull, for app’lts; Stimson & Williams, for resp’ts.
   Davis, P. J.

The claimant Mathias Plum, who is the respondent on this appeal, held two mortgages on separate parcels of land sold in the partition suit, one of which was executed by John B. and Maria H. Lugar to said Plum to secure the payment of $5,000, and the other by the appellants William G. and Ella L. Mulock also to secure $5,000. Both of these mortgages were dated,the 17th of Juné, 1885, and were given to secure the payment of moneys loaned by Plum to the several mortgagors at or about that time with interest.

The mortgagors resisted the payment of the whole of the amount of said mortgages out of the surplus moneys in court on the ground of usury, claiming in substance that under the laws of the state of New Jersey, where the loans were made and the mortgages made payable, the claimant was entitled to receive no more upon his mortgages than the sum actually loaned, -without interest or costs of suit, after deducting the alleged usurious premium or interest.

The statute of New Jersey, as was proved on the hearing before the referee under which the claim of the mortgagors was made, is as follows:

“ Section 1. That no person or corporation shall, upon any contract, take directly or indirectly for loan of any money, wares, merchandise, goods or chattels above the value of six dollars, for the forbearance of $100 for a year, and after that rate for a greater or less sum, or for a longer or shorter time.

“Section 2. In all cases of suits at law or in equity to enforce any note, bill, bond, mortgage, contract, covenant, conveyance or assurance, which shall be hereafter made for the payment or delivery of any money, wares, merchandise, goods or chattels lent, and on which a higher rate of interest shall be reserved or taken than was or is allowed by the law of the place where the contract was made or is to be performed, the amount or value actually lent, without interest or cost of suit, may be recovered, and no more; and if any premium or illegal interest shall have been paid to the lender, the sum or sums so paid shall be deducted from the amount that may be due as aforesaid, and recovery had for the balance only.”

The referee found that there was no usurious agreement and that the claimant was entitled to receive out of the surplus moneys the full amount of the mortgages, with interest. Due exceptions were taken to the report of the referee and to several of his findings of fact and refusals to find, as requested, and the special term having overruled such exceptions and confirmed the report, the mortgagors have taken this appeal.

The. facts of the case, as appears from the evidence before the referee, are substantially as follows: On or about the 28th of April, 1885, an application was made by Mrs. Mulock, one of the mortgagors, on behalf of herself and of Mrs. Lugar, to the firm of Coult & Howell, who were lawyers practicing at Newark, in the state of New Jersey, to procure for them two loans of $5,000, each to be secured by their. respective bonds and mortgages; and an oral arrangement seems to have been made that the mortgagors should pay Coult & Howell $1,500 for procuring the loan, and services and expenses attending the same. Subsequently the mortgagors executed and delivered to Coult & Howell an agreement in writing in the words and figures following:

We hereby agree to accept a loan of $10,000, on our share in the property willed by John Gilbert to our mother, Maria Mulock ($5,000 to each), agreeing also to pay Coult & Howell $1,500 to pay expenses, etc., therefor. The loan is to be ready by the 13th inst. Dated June 5, 1885.

Coult & Howell, acting under this arrangement, applied to Plum the mortgagee to make the loans of $5,000 each, and it was agreed between them and Plum, as a condition of making the loans, that the same should be secured by the two bonds and mortgages for that sum and six per cent interest, and that he should receive one-half of the $1,500, less the expenses of Coult & Howell, for making this loan, which arrangement was afterwards consummated by the execution of the mortgages'to Plum and.the delivery by him to Coult & Howell of two checks for $5,000 each, payable to the mortgagors respectively, who endorsed the same to Coult & Howell, by whom the money was obtained from bank, and $1,500 deducted therefrom by them, from which again $110 were deducted for the expenses of making searches and travelling to and from New York; and of the residue $1,390, one-half, to wit., $695," was paid to Plum the mortgagee as the bonus for making the loan. The referee found that Plum knew of the agreement in writing between the mortgagors and Coult & Howell, and “that in pursuance thereof the said Plum did loan the said $10,000 to said defendants.” And he found also “that it was agreed by said Plum with Coult & Howell, or one of them, that he would loan $10,000 on the bonds and mortgages to defendants in two sums of $5,000, and that the said Coult & Howell were to receive $1,500 therefor from said defendants, out of which they would pay the expenses of the loan and then divide the balance with Plum, and that in pursuance thereof they did pay Plum $695.”

There was a conflict of evidence whether the mortgagors knew of the arrangements made with Plum by Coult & Howell before the mortgage was made and the money received. The referee found that they did not have knowledge of the fact of the arrangement. But this finding was against the clear weight of evidence, for it was distinctly testified by Mrs. Mulock that Coult said to her “ that he would get the money for me from Mr. Plum. Mr. Plum at the time would not let us have it as quick as we wanted it without selling out some securities or bonds, or something he called them ; he would not be willing to do that unless he could make something out of it; that is about all there is to it. Q. Was anything said as to the amount to be charged ? A. Yes, $750. Q. To be paid by. whom ? A. To be paid by Mr. Lugar and I apiece; Mr. Lugar was to pay $750 and I was to pay $750; * * * he said that Mr. Plum on account of that would have to sell out his securities or something or other, and he would let us have the money immediately; he would be willing to do that provided he was paid that price for it. Q. What price ? A. $750 a piece. Q. You mean Mr. Plum was to pay that price for it ? A. Mr. Plum was to be paid that price for it; * * * Q. Do you know whether this interview was before or after the talking over of the contracts signed by you? A. It was before.”

William Gr. Mulock testified that Coult said he could get the money if we would pay for it; that he had a gentleman by the name of Plum that would advance the money if we would pay $750. “Q. And you agreed to that. A. Yes, sir.”

And John B. Lugar also testified as follows : “Q. Were you present when it (the agreement) was made ? A. Yes, sir. Q. With whom was it made ? A. With me and Mr. Coult. Q. State what occurred in that conversation ? A. I objected at the time and told Mr. Coult I thought it was a very large price to pay. Q. What was a large price to pay? A. $1,500 for the two mortgages of $5,000 each; he said his chent would not dispose of bonds and securities to make a loan unless he was well paid for it. Q. Did he mention the name of the client ? A. I don’t think he did. Q. Who was present at that time ? A. Mrs. Mulock, myself and Mr. Coult. Q. Was the name of Mr. Plum mentioned in any conversation you ever had with Coult and Howell ? A. I wouldn’t be positive; I understood that Mr. Plum was the party; that whether I derived it from Mrs. Mulock or Mr. Coult or Mr. Howell I would not be sure. ”

This testimony was contradicted by Mr. Coult, but not with positiveness. He was asked: “Q. Did you ever mention Mr. Plum’s name to any of these parties do you think —do you remember on that point whether you ever mentioned the name of Mr. Plum to any of these parties ? A. Not to my recollection; his name might possibly have been mentioned at the time when they closed the transaction. Q. But not until then ? A. I do not think so; I am quite positive.” He also stated that he had no conversation with any of the parties but Mrs. Mulock. The testimony on this question was substantially as three witnesses to one, and a finding that it was known to the mortgagors of whom the loan was to be obtained certainly would have been better supported by testimony than the contrary finding. The referee erred, we think, in not so finding, and the court below should have sustained the exception to his refusal so to find.

But in the view we take of this case this question is not a very material one. Coult & Howell were the agents of the mortgagors. They were employed by them to procure a loan under an agreement which provided that they should be paid $1,500 “to pay expenses, etc.” Their employment was to procure a loan and the “etc.” was to include the cost, whatever it might be, of procuring such loan. They made known to Plum the fact of their employment and offered him as a bonus half of the $1,500, less certain actual expenses which they might incur. Plum knew that they were acting as agents of the borrowers for the purpose of procuring a loan, and he must be held to have known that what the authorized agent does in the business of his principal is done by the principal. His agreement as to the terms of the loan was with the agents it is true, but it was an agreement to make the loan to the borrowers and not to Coult & Howell and to be paid a bonus as it turned out of $695 for making such loan to the borrowers. To such a transaction the law against usury clearly attaches for it is a necessary consequence that the bonus paid to the lender by the agent for the loan to the borrowers is in legal effect paid by the principal as a bonus or excessive interest for the use of the money beyond the six per cent reserved in the mortgages. None of the cases go so far as to uphold such a transaction as this, although some of them, it must be conceded go very far to overthrow the statute against usury. The cases that hold that the exaction from the borrower by the agent of the lender of a bonus for his own benefit unbeknown to the lender, and in which the latter does not participate is not usury, have no application to this case. Condit v. Baldwin, 21 N. Y., 219; Bell v. Day, 32 id., 165.

In Guggenheimer v. Geiszler (81 N. Y., 293) there was no agreement or contract for a usurious bonus, but the attorney wrongfully withheld $150 out of the loan for his own personal benefit, which the court held could have been recovered from the attorney by the borrower or deducted from the- amount recoverable in the action by the lender.

In the case of Madison University v. White (25 Hun, 490) a third party had paid the lender a sum of money to induce him to make the loan, but the borrower had no connection with the transaction whatever; and there was no illegal or corrupt agreement between the borrower and the lender either in fact or in law.

In Estevez v. Purdy (66 N. Y., 446) the agent of the lender extorted a bonus from the borrower on the false pretence that it was for the lender when in fact it was wholly for himself and the lender had no knowledge that it was received and had not authorized it to be taken.

The distinction between these cases and the one at bar is substantially that in them the lender received nothing from the borrower as a bonus for the loan above legal interest. In this he received by express agreement between himself and the agents of the borrower a sum of money which his principal had paid into the agent’s hands for the express purpose in part of procuring the loan. The principals, the borrowers authorized their agent in legal effect to pay whatever bonus was necessary in order to get the loan, and the agent under that authority and for the purpose of getting the loan for the principals had paid a large excess beyond legal interest to obtain the loan.

It is no answer to say that if the loan had been in fact obtained without any bonus, the agents could have kept the whole amomit thus paid into their hands. Whether they could or could not have done so without affecting the validity of the loan is not a question in this case, for the fact here is that they paid the sum of $695 which they were authorized by their principals to use for that purpose, if necessary, as a bonus to secure the loan to a party who made the loan on the condition that that bonus should be paid. He knew that a bonus-in excess of legal interest was to be paid, and he received it as such, knowing that it was part of the sum to be paid to the agents of the borrowers for procuring the loan. The legal consequences of that knowledge attach to him precisely as though he had made his contract with the parties themselves. To hold that this is not within the statute against usury is virtually to abrogate the statute.

The case of Wheaton v. Voorhis, much relied on by the respondents seems to have turned upon the fact as stated 0by the learned judge that “the evidence seems to show beyond dispute, that at the time of agreeing to make the loan, the plaintiff was not in any manner influenced in the making thereof by the promise of Willett to divide any commission which he might make on the loan. At the" |ime, the plaintiff had no knowledge what commission Wnlett was to receive from Voorhis, or whether he was to receive any commission, and his desire seems to have been to invest his money on some good security, at a legal rate of interest.” In this case, as already seen, it distinctly appears that the lender of the money knew of the bonus, and was influenced to make the loan by the promise to divide the bonus or commission, and the loan was expressly made on the condition that he should receive half the sum as a bonus for making the same.

The result is, that the order should be reversed and an order entered, directing that the amount to be paid upon the mortgage shall be ascertained as provided for by the statute of New Jersey, above cited, so that the mortgagee will receive back the money actually loaned after deducting the usurious bonus and without interest.

In the appellant’s points, it is asserted that the borrowers offered to allow that sum to be paid out of the surplus with simple interest. If that be so, the costs of the proceedings below, should also be recovered by them.

Daniels and Brady, JJ., concur.


author: Daniels, J. Brady, J. Davis, P. J.

text:
    Samuel Bingham et al., adm'r, etc., Resp’t, v. Marine National Bank of the City of New York and Walter S. Johnston, receiver, etc., Appl’ts.

      (Supreme Court, General Term, First Department,

      Filed December 30, 1886.)

    Practice—Judgment—Executors and administrators—Action by— When may be maintained in their representative capacity or AS INDIVIDUALS—CODE ClV. PRO., § 1207.
    Where an action was brought by certain persons, administrators, etc., and an endeavor was made to have "the judgment reversed on the ground that the action should have been brought by said persons individually: Held, that where the facts are clearly set forth in the pleadings and disclose a legal right of action in the plaintiff, it is not the practice to dismiss the action and require another more strictly and accurately formal to be brought for the recovery of the money. See Code Civ. Pro.; § 1207.

      Motion by defendants for a reargument.

      Charles E. Miller, for app’lts; John B. Eos Passos and Bobert Sewell, for resp’ts.
   Daniels, J.

The grounds upon which the motion has been made for a reargument are very much the same as those relied upon in support of the appeal, and which have already been considered. It is now again urged that the plaintiffs, as administrators under letters issued to them by the surrogate of the county of New York, are not entitled to maintain this action, which is for moneys deposited by them on the 14th of November, 1883, in the Marine National Bank. But if that point could be maintained it would not result in reversing the judgment or directing a new trial of the action, for all the facts attendant upon the transaction were set forth in the complaint. And if the plaintiffs were not at liberty to recover as such administrators, these facts presented a right of action upon which they could recover as individuals, they would still be entitled to judgment upon proof establishing the truth of these allegations. For where the facts are clearly set forth in the pleading, as they are in this complaint, and they disclose a legal right of action in the plaintiffs, it has not been the practice to dismiss the action and require another more strictly and accurately formal, to be brought for the recovery of the money.

This was considered to be the rule in Biddle v. Wilkins (1 Peters, 686), where it was said in the course of the opinion of the court: “That it is not necessary in cases like the present, for the plaintiff to name himself as administrator, follows as a matter of course, from his not being bound to make proferí of his letters of administration. And that when he does so name himself it may be rejected as surplusage is well settled by numerous authorities.” And the case of Talmage v. Chapel (16 Mass., 71), was approvingly cited as supporting this view. And it was followed in Ducker v. Rapp (67 N. Y., 464), where the plaintiffs described themselves as executors and it appeared they should have claimed to recover as trustees, but upon the facts appearing their action was not deemed to be defective on this account. And a somewhat similar view was taken by the court in Davis v. Garr (2 Seld., 124). The Code of Procedure by section 1207, also requires this rule to be followed, where an issue of fact has been joined by the pleadings. For that has provided “where there is an answer the court may permit the plaintiff to take any judgment consistent with the case made by the complaint and embraced within the issue.” If the plaintiffs were not entitled to recover as administrators appointed by the surrogate of the county of New York, it was still consistent with the case, that they should be permitted to recover as individuals upon the facts, set forth in the complaint.

They were not precluded from doing so by what took place at the commencement of or during the trial, for what then transpired in the disposition of the defendants’ motion to dismiss did not confine or restrict the plaintiffs to the right to maintain the action solely as administrators. That it should be so maintained was the view of the action expressed by the counsel for the plaintiffs, but it did not conclude them, or operate to the prejudice or injury of the defendants in such a manner as to render this principle inapplicable to the controversy.

The instrument upon which the action was brought, stated the money to have been deposited with the bank, and the evidence of Mr. Fish, the president, supported the allegagation that it was so deposited. The difference between the parties and the point on which the controversy hinged at the trial, was whether the deposit was so made to remain with the bank subject to its own disposition, or whether it was simply an artifice by which the money deposited should be placed under the control of the president of the bank to be used for speculative purposes by him, for his benefit and the benefit of the plaintiff Samuel Bingham, or of his son W. H. Bingham, and whether under that authority it was so used. The evidence of the president of the bank had a direct tendency to establish this to have been the object and understanding for making the deposit. But the testimony of the plaintiff Bingham, was directly in conflict with this view, tending to establish the fact that this money was not to be so used, or imperiled, as the fact afterwards proved to be, if it had been invested in the notes of Grant & Ward. As has already been stated, it is quite probable that this deposit was made with the bank to be held for the benefit of the estate of which the plaintiffs were administrators, and in that manner permit other funds of the bank to an equal amount to be employed in the speculative business carried on by Mr. Fish. The execution and delivery of the certificate of deposit, tended to maintain that view, for the money was stated to have been deposited in the bank, and to be payable only on the surrender of the certificate. And as the certificate was not surrendered at any time, there was no actual or technical payment of the money, within the terms of the agreement, by Fish drawing a similar amount from the bank and using it in the paper of Grant & Ward. The letter written by Mr. Fish on the 9th of November, 1883, is affirmed to be so inconsistent with the evidence of Bingham on this subject, as to entitle it to be followed as controlling in the disposition of the appeal. But such is not regarded as its proper construction. It is true that it provides for the payment to Bingham of two and one-half per cent per month on the sum of $50,000, and three per cent of such further sum or sums as he might furnish from time to time, payable at the time the discounts are made. And if Bingham deposited $50,000 more, that there should be given to him a Marine bank certificate of deposit bearing four per cent interest, and that Mr. Fish should pay to Bingham one and three-fourths per cent per month on such $50,000, payable on the first of each month. But this letter does not prove the fact to be that the money deposited or evidenced by the certificate should be used or employed in discounting the notes of Grant & Ward, or any other person or persons. But it expresses an undertaking on the part of Mr. Fish to pay these sums to Bingham in case such deposits should be made, and is entirely consistent with the view already expressed that the money evidenced by the certificates themselves, was not to be removed from the bank, or the certificates themselves, discharged or paid by the money which might be used in making discounts and supplying Fish with the ability of paying these sums. This letter, as well as the one written on the 14th of November, is consistent with the form of the transaction as that has already been mentioned. And that is that the business between Bingham and the bank wás that of a deposit of this sum of money to be repaid to the plaintiffs only on the surrender of the certificate, and that the bank being supplied with so much money in this manner, placed Mr. Fish in the position where he could use a corresponding amount of its funds in the speculations stated by him to have been carried on, and out of which the large percentages were expected to be realized.

It is true that the evidence given by Bingham, one of the plaintiffs, was not free from criticism or suspicion, but it was nevertheless for the jury to determine what was its appropriate weight and effect. And in determining that, both the certificate and the letters were further additional evidence to be considered, not free from ambiguity, but still capable of being so understood and applied as to maintain the right of the plaintiffs to recover this money.

The money deposited was so much of the estate of a deceased person committed to the custody of the plaintiffs as administrators. They held it not for their own benefit, but in trust, and had no lawful power or authority to appropriate it to the speculations in which Mr. Fish, according to his evidence, appears to have been engaged. And before the right of the estate to recover it could be forfeited, the fact was required, to be substantiated by reliable proof that the money itself evidenced by the certificate had been taken from the bank and misappropriated in the manner in which it has been alleged, it was by way of defense. The jury did not consider the fact to have been so proven, and as the case is presented it cannot be held that they have erred in the application which they made of the evidence to the disposition of the controversy.

The motion for a reargument should, therefore, be denied.

Brady, J.

The issue in this case was whetner an agreement, such as was stated by the witness Fish to have been • made with the plaintiffs, was in fact made, and it was submitted to the jury in an elaborate charge, to which no exception was taken by either side, and in reference to' which no requests were submitted on the part of the appellants. The verdict of the jury determined as a question of fact the non-existence of the alleged agreement; and although the issue on the evidence as appears in the record is sustained and assailed by testimony for and against it, the credibility of the witnesses called upon the subject' was necessarily considered and disposed of by the jury. It consequently cannot with propriety be said that the preponderance of evidence' is decidedly in favor of the defendant. The presiding justice suggests in his dissenting opinion that everybody is bound to know that the president of a bank has no power to make such an arrangement as was : presented by the issue and against the existence of which the jury by their verdict have pronounced. Assuming this • proposition to be correct, it has its counterpart in the proposition that the president of the bank, or the bank itself, through its board of directors, had full notice that the plaintiff, acting as a trustee, had no authority to make any such arrangement as was said to have been made with regard to the funds deposited. Duncan v. Jaudon, 15 Wall., 165; Jaudon v. Nat. City Bank, 8 Blatch., 430; Pannell v. Hurley, 2 Coll., 241; Lowry v. Commercial Bank, Taney’s Decis., 310.

For these reasons it is thought the re-argument ought not to be granted. I therefore concur with Justice Daniels.

Davis, P. J.

(dissenting).—Although present at the original argument of this case, my illness prevented my participating in its decision. I was strongly impressed on the argument that the verdict and judgment were erroneous and ought to be set aside. I am still of that opinion, for it seems to me impossible correctly to come to any other conclusion than that the arrangement between the plaintiff and Pish was one perfectly understood between themselves, and in which Fish, as president, had no right or authority to involve the bank. The effort to use the formality of a deposit of money to be used in a fraudulent speculation for their benefit, and which was so used is chargeable upon plaintiff and Fish as a wrong against the bank, out of which neither should be permitted to reap any benefits.

Everybody is bound to know that the president of a bank has no power to make such arrangements, and when Fish undertook to give the security of a corporate obligation to plaintiff for the money, the latter put into the Grant & Ward scheme, and out of which he expected to get such enormous return, the plaintiff was chargeable with knowledge that Fish could not, by that sort of legerdemain, impose any obligation whatever upon the bank.

I think on the reargument the judgment should be reversed and a new trial granted.

         Former opinion reported 2 N. Y. State Rep., 638


text:
    Matter of Susan A. Place, deceased.

      (Supreme Court, General Term, First Department,

      Filed December 30, 1886.)

    1. Executors and administrators—Who entitled to appointment op ADMINISTRATOR WITH WILL ANNEXED—WHEN RESIDUARY LEGATEE MUST be appointed—Code Civil Pro., §§ 2643 and 2693.
    Letters testamentary issued under the will of the testatrix had been revoked, and only two of the residuary legatees were qualified to act as administrators with will annexe.!, and one of said two declined to take out letters. Held, that the surrogate must appoint the remaining residuary legatee administratrix with will annexed, under Code Civil Procedure, section 2643, which is not qualified Dy section 2693.
    2. Same—Presumption as to performance op duty.
    Where the appointment of said residuary legatee as administratrix, etc., was resisted because of the fact that the remaining asset of the estate unadministered consisted of a large demand against her husband, which demand had been put in suit and resulted in a judgment in his favor from which an appeal had been taken. Held, that the presumption is that she will discharge the duties which the law enjoins upon her as administratrix of the estate. That without proof that she will disregard her duty to employ competent counsel to prosecute the appeal, it is not to be inferred that any danger exists of the least neglect or dereliction on her part.
    3. Same—When may be removed—Code Civil Pro., § 2685.
    In case as a matter of fact she should fail to discharge her duty then under subdivision 2 of section 2685 of the Code of Civil Procedure the surrogate has authority to remove her from office.
    Appeal by James K. Place from an order appointing Emiline Place Hayward administratrix with the will amiexed of the estate of Susan A. Place, deceased.

      Charles F. Wells, for app’lt; Thomas Parish Sherman, for resp’t.
   Daniels, J.

Letters testamentary had been issued to Barker Place under the will of the testatrix, which were afterwards revoked, and he was removed from his office as executor by a decree of the surrogate. The appellant then applied by petition to the surrogate to be appointed administrator of the estate with the will annexed, upon the ground that it was still unsettled, and he was entitled to the appointment as- the husband of the deceased testatrix. Strenuous opposition was made to this application, and the surrogate, upon a hearing of the parties, finally appointed the respondent who is a residuary legatee under the will of the testratrix. Isabella Place Sullivan was another of the residuary legatees, but she declined to take out letters upon the estate and as Barker Place had been removed, the only remaining eligible person sustaining that relation to the estate, was the appointee of the surrogate under the order from which the appeal has been taken. Her appointment was resisted because of the fact that the remaining asset of the estate unadministered consisted of a large demand against her husband.. This demand had been put in suit and resulted in a judgment in his favor, from which an appeal had been taken, and it has been urged in support of the present appeal, that, her selection should not have been made on account of the improbability of her prosecuting the appeal diligently and vigorously against her husband. But that she will omit the discharge of the duty legally resting upon her to proceed with the prosecution of the appeal, is not upon a simple conjecture to be assumed.

The presumption on the other hand, is that she will discharge the duties which the law enjoins upon her as the administratrix of the estate. This will not require her personal services beyond the employment of skilful and competent counsel, who will be able to understand and present the case, for the decision of the appellate tribunal. And without proof that she will disregard this duty, it is not to be inferred that any danger exists of the least neglect or dereliction on her part. But if as a matter of fact she should fail to discharge this duty, then under subdivision 2 of section 2685 of the Code of Civil Procedure, the surrogate has been authorized to remove her from her office. For wherever an executor, or administrator, shall improvidently manage the estate, or property, committed to his, or her, charge, there the surrogate has been empowered to remove the delinquent person from the office to which he or she may have been appointed.

_ By subdivision 1 of section 2643 it was made the imperative duty of the surrogate to make the appointment as he did. For that has provided in the contingency arising in this case that the surrogate shall appoint one or more of the residuary legatees who are qualified to act as administrators. The only persons not competent or qualified to act as such are those which have been mentioned in the Revised Statutes, and the case of this appointee is within neither of the classes there described. 3 R. S. (7th ed.), 2289, § 3.

She was, therefore, qualified to act as administratrix of the estate. And as one of the other residuary legatees was not so qualified, and the other declined to act, the surrogate had no discretion to exercise, but he was bound to take the respondent in the appeal as the only individual he was at liberty to accept.

The mandatory effect of section 2643 is not qualified or changed by section 2693 of the Code of Civil Procedure. The object of the latter enactment was to provide for a class of cases not included in the preceding section.

Its effect is, where appointments cannot be made under section 2643, to invest the surrogate with the authority, still to grant letters of administration in the same manner as if no preceding letters had been, or could, under the other provisions, be issued upon the estate. And, by the latter branch of the section, the appointment is to be secured through the like proceedings as are provided for in a case of intestacy. As the application and affidavits connected with it were presented to the surrogate, he exercised the authority conferred upon him, as that was directed by section 2643 of the Code. And the order or decree from which the appeal has been taken should be affirmed, without costs.

Davis and Brady, JJ„ concur.