author: Daniels, J.

text:
    James Abbott, Resp’t, v. The Petersburg Granite Quarrying Co., App’lt.

      (Supreme Court, General Term, First Department,

      Filed December 31, 1891.)

    1. Corporations—Agreement with stockholder as to reduction op CAPITAL STOCK.
    An agreement with a stockholder as to the exchange of his stock for a reduced amount, made by the officers of the company and acted upon by the company in proceedings to reduce the capital stock, is binding upon the company.
    3. Same.
    The stockholder is not precluded from maintaining an action upon such agreement against the company by an agreement of its president, unfulfilled, that he would give certain stock of his own if plaintiff’s claim was confirmed by the person who made the arrangement.
    Appeal from a judgment entered upon a verdict, and from an order denying a motion for a new trial.

      James H. Fay, for app’lt; Christian G. Moritz, for resp’t
   Daniels, J.

The verdict was recovered for the sum of $350 as value, interest, of twenty shares of stock of the defendant, which the plaintiff claimed to be entitled to by an agreement made with him for the surrender of other shares held by him, and the reduction of the capital of the company. At the time of its organization this capital consisted of the sum of $150,000, divided into 15,000 shares, of the par value of ten dollars a share. By the reduction which was contemplated the capital was to be reduced to the sum of $75,000, leaving the par of the shares the same as they previously were. And the tendency of the evidence was very direct to establish the fact that upon the-surrender of the shares owned by the plaintiff in the company he was to receive as his portion of the new stock 1,800 shares.

There is no ground for the objection that the company did not. become bound for the performance of the agreement made with the plaintiff, for it was made by persons interested in the affairs of the company as officers and directors, and was sanctioned and acted upon by the company itself in the proceedings taken for the reduction of its capital. What these persons did received the entire approval of the directors of the company. If, therefore,, the agreement itself was entered into, the company in this manner became bound to the plaintiff for its performance. And the evidence of Mr. Hoyt, who was one of the directors, as well as that, given by the plaintiff in his own behalf, very directly tended to-establish the existence of the agreement as that was alleged to have been made on behalf of the plaintiff. The effect of this testimony was controverted by that which was given by the president of the company, which left the question to be determined by the jury as to which of the witnesses *was correct in the statements made by them.

Beyond that, the president stated further that if the plaintiff was right as -to the claim made by him, Mr. Hoyt was the proper party to settle it, as he was conversant with the affair, and that he would leave it to him if it was agreeable to all parties, and to that, the plaintiff assented, Mr. Dibbell adding, that if Mr. Hoyt decided against him that he would give the plaintiff twenty shares of his own personal stock. Mr. Dibbell, the president of the company, wrote to Mr. Hoyt, stating what had occurred. And he in reply informed Mr. Dibbell that the plaintiff was correct in his. claim, as that fully appeared to be the case by the evidence given by Mr. Hoyt as a witness. And in this state of the evidence the-jury were clearly warranted in concluding that the contract relied upon by the plaintiff as the ground of the action has been established.

The plaintiff was not precluded from maintaining the action by the promise of Mr. Dibbell to give to him twenty shares of his-own stock in case Mr. Hoyt confirmed the claim made by the-plaintiff. For the obligation, resting as it did after the adoption of the arrangement upon the company, was in no manner changed or extinguished by this agreement of the president to deliver these-twenty shares of stock out of those owned by himself. There was no delivery of these shares, and consequently no satisfaction of the plaintiff’s claim, but he was still entitled to resort to the-company for that satisfaction which, by the agreement, he had become entitled to receive.

Exceptions were taken to the exclusion of evidence during the trial upon which reliance has been placed to support the appeal. But the evidence which was excluded related entirely to collateral matters having no direct effect upon the plaintiff’s right, or the,probability of the statements made by hint concerning the agreement which had been entered into. They do not require any specific attention. For it is quite clear that if all the testimony had been received which was rejected by the court, that no difference whatever could have resulted from that in the final' decision of the case by the jury.

The only evidence as to the value of the shares was that they were worth their par value of ten dollars each share. This evidence was given both by Mr. Hoyt and by the plaintiff himself. And there was no such statement or disclosure of the financial situation of the company, or of its property, as would sustain the conclusion that this stock was worth any greater amount than ten dollars a share. For that reason, assuming the contract to have been made, as the jury must have done in the .conclusion reached by them, the plaintiff was entitled to recover no more than the sum of $200, together with interest upon that amount from the time when the officers refused to deliver to him these additional twenty shares. That was less than the amount of the verdict of the jury. And on that account the judgment and.order should be reversed and a new trial ordered, with costs to the defendant to abide the result, upon the payment by the defendant of thé costs and disbursements of the trial and without costs of this appeal, unless within twenty days after the service of the order to be entered upon the decision, the plaintiff shall stipulate to reduce the verdict to the sum of $200, together with interest upon that amount from the time the shares were demanded. And in case the stipulation shall be given, then the judgment as so-modified will be affirmed, without costs of this appeal.

Van' Brttnt, P. J., and Ingraham, J., concur.


source: Caselaw Access Project

author: Barrett, J. Van Brunt, P. J.

license: Public Domain

text:
    Mary A. Manley, Resp’t, v. Francis H. Leggett et al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed December 31, 1891.)

    1. Nuisance—Obstruction of roadway—Injunction.
    A temporary and reasonable use of a roadway, which does not unnecessarily obstruct access to adjoining premises, does not amount to a nuisance which authorizes an injunction to restrain it.
    2. Injunction—Undertaking.
    An injunction need not contain a direction as to the undertaking to be given.
    Appeal from an order of the special term granting an injunction to restrain the defendants from occupying the sidewalks in front of their premises with trucks, wagons, vehicles or other like obstructions, and from unreasonably or unnecessarily obstructing the sidewalks by any plank-way, skid or bridge, and from occupying the roadway in front of plaintiff’s premises, or permitting the same to be occupied by trucks, wagons or other vehicles.

      Noah Davis, for app'lts; Nelson S. Spencer, for resp’t.
   Barrett, J.

No point was made upon the argument of this appeal as to the propriety of the injunction so far as it restrains-the unlawful use of the sidewalk in front of the defendants’ premises. The appellants’ argument was confined to criticism of that part of the injunction which restrains the defendants from •occupying the roadway in front of the plaintiff’s premises.. We think the appellants’ contention on this head is well founded, and that the injunction with regard to the "roadway .■should be modified. The plaintiff has in this particular failed to make out a case for an injunction pendente lite within the principles enunciated in Callanan v. Gilman, 107 N. Y., 360; 12 St. Rep., 31, and the cases there cited.

After reading the affidavits upon both sides, it is impossible to say that the plaintiff has clearly established such a continuous .and extensive use of the roadway in front of the plaintiff’s premises as to constitute a nuisance. Temporary use of the roadway, there as elsewhere, is inevitable, and the question is, was the actual use, under the circumstances, excessive and unreasonable? That ■question is so doubtful, upon the papers, as matter of fact, that the plaintiff should have been remitted for its solution to a trial ■at special term.

A point is made ttiat the injunction was irregular in not requiring an undertaking as prescribed by § 620 of the Code. We have no means of knowing whether this point is well taken as matter of fact. There is nothing in the Code which requires the direction as to the undertaking to be embodied in the injunction order. For aught that appears upon this record, a proper ■undertaking was duly given. But even if failure upon that head affirmatively appeared upon the record, the irregularity could be cured nunc pro tune, and even the general term could provide for the giving of such security upon terms. N. Y. Attrition Co. v. Van Tuyl, 2 Hun, 373; Pratt v. Underwood, 4 Civ. Pro., 167.

The order appealed from should be modified by striking out ■so much of the injunction as relates to the roadway in front of the plaintiff’s premises, and, as modified, affirmed, without costs of this appeal.

Van Brunt, P. J.

I concur. But I do not think that the plaintiff may not be entitled to relief because of the improper use ■of the roadway by the defendant. The plaintiff is entitled to access to her premises, and the defendants cannot be permitted to deprive her of that access under the plea that he is only using the street to receive goods sent or coming to his store. If the goods come faster than his staff of employees can receive, then he must employ a larger staff so that the plaintiff is not interfered with unreasonably in her access to her premises.

Andrews, J., concurs.


author: Van Brunt, P. J.

text:
    The McElwee Manufacturing Co., Resp’t, v. Benjamin Trowbridge, App’lt.

      (Supreme Court, General Term, First Department,

      Filed December 31, 1891.)

    Bills and notes—Bona fide holder—Counterclaim.
    PlaintiS was the successor of a firm to which defendant had given notes. Its officers, with the exception of the president, were members of the former firm. In an action on said notes it was not shown that it paid, the firm any -consideration therefor; but it appeared that it had sold them before maturity, and upon their protest purchased them back. Held, that, plaintiff was not a holder for value before maturity of the paper, but the mere successor to the rights of the firm, and that if there was any defense, or offset as against the firm defendant h'ad a right to establish it.
    Appeal from judgment entered upon the verdict of a jury-directed by the court.

      B. G. GTielwood, for app’lt; J. M Bustis, for resp’t.
   Van Brunt, P. J.

This action was the a foreign corporation, to recover upon two promissory notes made by the defendant, whereby he promised to pay to the order of Don A. Gaylord & Co. the sums in said notes mentioned. The complaint alleged that before maturity, Gaylord & Co. assigned the notes for value to the plaintiff.

The answer admitted the making of the notes, but denied their endorsement to the plaintiff, and alleged want of knowledge or information sufficient to form a belief as to the incorporation of the plaintiff, and set up by way of a separate and distinct defence, an offset against the amount of said notes because of a breach of contract by Gaylord & Co. out of which these notes arose.

It appears from" the evidence that the plaintiff in this action succeeded to the business of Gaylord & Go., and that Mr. Mc-Blwee, of said firm, was the treasurer of the plaintiff, and Mr. Gaylord, also of said firm, was the secretary. It further appeared, that one B. D. Cotter had paid for these notes to the plaintiff, and upon their being protested at maturity they were taken up by the-plaintiff, payment being made to Cotter therefor.

It would thus appear that the plaintiff was not the holder for value before maturity of this paper, but the mere successor to the rights of Gaylord & Co., whatever they were.

Upon the trial the defendant offered to prove the defence set up in the answer. This defence was ruled out, and an exception, taken, and a verdict directed for the plaintiff.

We think this was error. Whether the defendant could or could not establish the defence which he set up as an offset to the note-it is not now necessary to consider. But it is clear that the plaintiff was not the holder of this paper for value, before maturity,, without notice. It was the mere successor of Gaylord & Co. The •whole of the officers, as far as the record shows, with the exception of the president, were members of the firm of Gaylord & Co., and there is no proof that the plaintiff paid any special consideration upon the transfer of the notes to it.

The jury under these circumstances would have had the right to find that plaintiff merely represented Gaylord & Co., and if there was any defense or offset to the notes, had they been sued upon by Gaylord & Co., the defendant had a right to establish it

The claim that there was no evidence to show that the plaintiff had any knowledge of any agreement between the defendant and Gaylord & Co. is not well founded. As already stated, the evidence showed that the plaintiff had full knowledge because it was the mere successor of Gaylord & Co., and the members of that firm were the officers of the plaintiff.

The objection that the incorporation of the plaintiff was not established, would have been well taken had not improper evidence proving the incorporation been admitted without objection.

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

Barrett and Andrews, JJ., concur.


text:
    Johannah Hurley, Resp’t, v. Philip Sehring, App’lt.

      (Supreme Court, General Term, First Department,

      Filed December 31, 1891.)

    .Lease—Surrender—Evidence.
    A lease of premises to defendant contained a covenant that if they should become vacant during the term the lessor might re-enter and relet as agent of the lessee and apply the rent received to the expense of reletting and then on the rent due on the lease. Defendant left while more than one year of the term remained, surrendered the keys which were accepted and the lessor relet the premises. In an action for subsequent rent the court struck out evidence that the lessor told defendant to move out and directed a verdict for plaintiff. Held, error; that notwithstanding the covenant in the lease and the fact that there was more than one year unexpired, an accepted surrender would have exempted defendant from liability for future rent.
    Appeal from judgment entered on verdict and from order denying motion for new trial.

      Ii. G. Henderson, for app’lt; Gitas. F. Bliss, for resp’t
   Van Brunt, P. J.

The complaint sets forth two causes of ■action, the second being the only one which is brought up for «consideration upon this appeal.

In respect to this cause of action the complaint alleges that the •defendant leased certain premises of the plaintiff on the 1st of May, 1886, for the term of three years, and that the defendant abandoned the premises without the knowledge or consent of the plaintiff. The answer admits the making of the lease and alleges that the defendant surrendered the premises to the plaintiff; that the plaintiff consented to the surrender, and accepted said premises so surrendered by the defendant and occupied them by another tenant.

Upon the trial the defendant offered evidence tending to show that after he had been in possession under the lease for some months he had a conversation with the plaintiff and demanded that certain promised repairs and improvements should be made, and the plaintiff said she was too poor to make them. The defendant told the plaintiff he could not live there Junless the repairs were made, and the plaintiff told him to move out; she had another man to take the place. The defendant thereupon told her he would move out about the 1st of January, when he did move out, and the key was delivered to the plaintiff’s agent.

It was admitted upon the trial that the plaintiff rented the premises to another party at a rent of twenty dollars a month, which occupation continued until the commencement of the .action.

The plaintiff denied having told defendant to move out, but .admitted he had talked to her about the repairs and that she told him she was too poor to make the same.

After the evidence was closed and the counsel of the defendant had summed up, all the evidence of defendant and two of his witnesses as to the conversation between the plaintiff and defendant was, on the application of the counsel for the plaintiff, stricken out. to which ruling the counsel for the defendant excepted. The court thereupon directed a verdict for the difference between the rental specified in the lease and that for which the plaintiff let the premises to another tenant, less any sum the jury might find had been paid by the defendant From the judgment •entered upon the verdict thus directed and from the order denying a motion for a new trial this appeal is taken.

The theory upon which the learned court acted in the disposition of the case seems to have been that there being more than •one year unexpired of the term of the lease, there could be no ¡surrender except by a written instrument or an action to annul the lease. It was evidently upon this theory that the court acted in striking out the evidence upon the part of the defendant in regard to the surrender.

We think that the court erred in this regard. It is true that the lease in question contained'a covenant that, if the premises or ■any part thereof should become vacant during the term, the party ■of the first part might re-enter the same, and relet the premises as "the agent of the party of the second part and receive the rent thereof, applying the same first to the payment of such expenses ■as she might be put to in renting the same, and then to the payment of the rent due upon the lease. But the question still remained as to whether there had been an accepted surrender or not Were no covenant of this kind contained in the lease the acceptance of the keys and the renting of the premises would have been presumptive evidence of surrender. But the lease containing this clause, the mere acceptance of the keys and possession -of the premises would not be sufficient to raise such a presumption ; and it was for the jury to determine upon all the facts of the case whether the acceptance of the keys and the subsequent acts done by the plaintiff were in furtherance of the surrender of "the premises and an acceptance of the same or not

A surrender by operation of law takes place where the parties to the lease do acts so inconsistent with the subsisting relations of landlord and tenant as to leave no doubt that the parties intended to terminate the tenancy. And those acts must speak for themselves.

The execution of a new lease during the period of an existing one will effect a surrender of the lease. Within this principle the facts at bar show that there may have been an accepted surrender. There was a lease executed to a different tenant during the period of an existing one; and the question was whether that was in furtherance of a surrender, or because of the stipulation contained in the original lease.

The case of McKenzie v. Harrison, 120 N. Y., 260; 30 St. Rep., 934, shows that a lessor cannot repudiate an agreement respecting the covenants of the lease so far as it has been executed, and so-far it could not be revoked.

So in the case at bar. If there was an executed surrender it could not be revoked. There was evidence from which the jury might determine that there had been an executed surrender, and hence a termination of the liability of the defendant upon the' lease'

It is true that the premises cannot be surrendered, such surrender to take place in futuro. But in the case at bar the premises were not surrendered until the first of January, when the party moved out and the key was accepted and a new tenant, put in.

We are of opinion, therefore, that if there was an accepted surrender the defendant did not continue liable under the lease. The judgment should be reversed and a new trial ordered, with costs to appellant to abide event

Barrett and Andrews, JJ., concur.


text:
    John D. Cutter et al., App’lts, v. Alexander W. Hume et al., Resp’ts.

      (Supreme Court, General Term, First Department,

      Filed December 31, 1891.)

    1. Assignment fob cbeditobs—Independent tbansfebs of fbopebtt.
    In 1878 a mortgage made by a firm without consideration was assigned' to the wives of the firm, and in 1883 a deed of the property was given to-them,but the rents were collected by the firm, which, in 1888, gave a deed of other property to the wives in consideration of such rents. In 1889 the survivor of the firm made an assignment. Held, as all the transactions were a considerable time prior to the assignment and independent, they could have no bearing on the question of-fraud in the assignment.
    2. Same—Cancellation of indebtedness.
    The partners agreed to cancel an indebtedness of $12,000 owing to the-firm by the son of one of them, as a just compensation in addition to his salary. Held, that if it was a reasonable compensation for the young man’s-services it was no fraud for the survivor to make such cancellation.
    3. Same—Schedule.
    Where a creditor has double security, the mere omission of the fact of additional security in the schedule does not necessarily tend to indicate-fraud, but there must be evidence to show that the omission was fraudulent to justify a vacation of the assignment on that account.
    Appeal from judgment of special term dismissing plaintiffs' complaint

      A. Thain, for app’lts; Payson Merrill, for resp’t, Speer; J. L-.. Bishop, for resp’t, Hume.
   Van Brunt, P. J.

This action was brought by the plaintiff" for two inconsistént kinds of relief, one of which was demanded because of fraud in the assignment and the other because of fraud upon the assignment

It is clear that these two kinds of relief could not possibly be granted in the same action; certain defects in allegation being apparent' at the commencement of the trial it appears that the parties stipulated in open court that the complaint should be considered sufficient in its allegations as containing a cause of action to set aside the assignment as fraudulent and void against creditors. And it is this cause of action which the learned court- below tried, refusing to pass upon any of the questions which might be involved in the subject of fraud upon the assignment; it may be basing his decision upon an erroneous ground, but in any event reaching a correct conclusion.. It would be anomalous indeed were a party permitted in the same action to enforce rights conferred by an assignment, and also. claim the right to vacate it upon the ground of fraud.

The defendant Alexander W. Hume, as the surviving member of the firm of A. W. & T. Hume, on the 20th of May, 1889, made a general assignment with preferences. This assignment it is sought to set aside because of' certain alleged frauds of the members of said firm in respect to certain property owned by them and certain credits due to them.

Considerable proof was introduced in respect to the property Ho. 229 Fifth avenue and Ho. 499 Fifth avenue, which were at one time owned by the members of said firm. The premises Ho. 229 Fifth avenue were in April, 1878, mortgaged .without consideration and said mortgage assigned to the wives of the members • of said firm, and in 1883 the members of said firm conveyed said premises to the son of one of the members, who in turn conveyed to the said wives.

These conveyances were duly recorded, but subsequent to that time the firm continued to collect the rents of these premises and pay the expenses thereof and use the proceeds in their business as they had theretofore done.

In 1884 Ho. 499 Fifth avenue was purchased, and in 1888 a deed was executed to the wives of the respective members of the firm, the consideration being the indebtedness of the firm to the wives of the members thereof for the rents collected from Ho. 229 Fifth avenue. This deed was never put upon record, by agreement between the parties, it being the intention of the members of the firm to dispose of the property, and use the proceeds to discharge their obligations. In February, 1889, in consequence of making some change in the mortgages of Ho. 499 Fifth avenue, the deed made in 1888 was destroyed, and a new deed executed, which was not recorded until shortly prior to the time of the making of the assignment above mentioned.

It is claimed upon the part of the appellants that it was evidently the intention o f the parties to keep the deed off the record in order to obtain credit on account of their ownership of the property, and that when their creditors should become pressing to put it on record, and thus give their wives a preference.

It is to be observed that all these transactions were a considerable time prior to the making of the assignment. They do not ■seem to have had any connection whatever with the assignment, •but to have been independent transactions. And whatever may be their legal effect, they being independent can have no bearing-upon the question of fraud in the assignment itself. Even though, they were frauds upon the assignment, they do not by any means-establish fraud in the assignment.

Our attention is also called to the transaction in reference to the indebtedness alleged to be due from Thomas J. Hume, the son of the defendant Alex. W. Hume, a short time prior to the making, of the assignment.

It appears that he was charged with an indebtedness of $12,000' upon the books of the concern, and that he had been in their employ for many years, being credited with a salary of twenty dollars to twenty-five dollars per week upon the books. According-to the testimony of Alex. W. Hume, he and his brother, who had died a short time prior to the making of the assignment, had. talked over the matter of this indebtedness of the son to the firm,, and had concluded to cancel the debt as a just compensation in. addition to the salary. It is urged that no attempt was made to-make this cancellation during the lifetime of Thomas Hume, who died on the 20th of April. But that two days afterwards this-charge was cancelled by charging the same against the interest of A. W. Hume in the copartnership, and by crediting Thomas-Hume with that amount

The defense offered evidence to prove that the reasonable com•pensation of a person employed to perform the duties of Thomas-J. Hume would be $64 a week, and such an amount if it had been paid to him would- have amounted to the total sum with which he was charged upon the books of the firm. It is alleged in answer to this testimony that the books show that his agreed compensation was twenty to twenty-five dollars a week. But the-difficulty, it seems to us, with the position of the appellant is that, the transaction in reference to this $12,000 is assumed to be a-fraud without any proof of that fact. If it was a reasonable compensation for the services which this young man had rendered to-the firm, then it was no fraud upon the part of the surviving member of the firm to give it to him; and if it is claimed that, it was an unreasonable compensation, then the burden of proof was upon the appellants to establish that fact, which they have not. done.

It further appears that although Thomas J. Hume was credited with twenty to twenty-five dollars per week on the books of the-concern, it was not considered by the members - of the firm as the limit of the salary which he was to receive, because it appears that he asked for an advance, and instead of deciding upon the amount of the advance he was told that he might draw certain moneys which he asked for from time to time; and that A. W. and his-brother had intended to have adjusted it before his death.

We then come to the question of alleged fraud in respect to-the mortgage to Mr. Feeter for $7,500.

It is claimed that the schedule contained Mr. Feeter’s name as-an individual creditor of A. W. Hume to the extent of $7,500 for’ money loaned, and although the law required that the schedule-should state the amount of the debt, the circumstances under which. it arose, and the security given therefor, it failed to disclose that the $7,500 covered as well $5,000 of a debt which Feeter claimed as trustee and for which he was already secured upon another piece of property; and that the $7,500 was not for money loaned but for the $5,000 trust fund which he advanced and for $2,500 counsel fees due to him by the firm.

There is no pretence but what the total amount of this money was due to Mr. Feeter either as trustee or individually, and that as to $5,000 he held two securities, and that in the schedule the fact of the additional security is omitted, but such omission did not prove any fraudulent intent. The mere omission of the fact of additional security does not necessarily indicate a fraud, and the evidence must tend to show that the omission was fraudulent in order to justify a vacation of the assignment on that account.

It may be true that, in order to get credit, false representations in regard to their financial condition and their ownership of property were made by the members of the firm. But none of these things had any relation to the assignment, or in any way imputed fraud in its execution.

It is also true that the preferences contained in the assignment seem to be in excess of the amount allowed by statute, but that does not invalidate the assignment. It only invalidates so much of the preferences as are in excess of that permitted by law.

Upon an examination of the whole case, therefore, there seems to be no reason whatever for disturbing the judgment of the court below.

Whether or not frauds were committed upon the assignment is not a question which it is necessary to discuss, because no such question was disposed of in the court below neither could it be in an action in which the assignment itself is attacked.

The judgment should be affirmed, with costs.

Barrett and Andrews, JJ., concur.


text:
    James Moore, Resp’t, v. James N. Robertson et al., Impl’d, App’lts.

      (Supreme Court, General Term, First Department,

      Filed December 31, 1891.)

    1. Parties—Assignee op claim.
    A liability finally to account to the assignor for the proceeds of the litigation does not deprive the assignee of a claim of the right to prosecute and maintain an action thereon.
    2. Corporations—Implied trust—Rescission op sale op stock.
    Plaintiff’s assignors, who were stockholders in a corporation, bought additional stock of defendants, its officers, on the representation that the moneys so obtained would be used only to obtain the disclosure of a secret, process in order to obtain a patent which would increase the value of the stock. The secret being valueless, defendants loaned the money to the company, which it diverted, to other objects. EM, that plaintiff's; assignors were entitled to rescind their purchase of the stock and to recover the money paid therefor.
    Appeal from a judgment recovered on trial before the special term.

      JR. Burnham, Moffat, for app’lts; Everett P. Wheeler, for resp’t.
   Daniels, J.

The assignments severally made to the-plaintiff of the assignors’ respective rights of action are full and complete, and were sufficient for that purpose, although the plaintiff will be liable to account to them for the moneys he may recover in the action. A point quite similar to this arose in the case of Greenwood v. Marvin, 111 N. Y., 423; 19 St. Rep., 612, where it was held very much on the authority of Sheridan v. Mayor, etc., 68 N. Y., 30, that this liability finally to account for the proceeds of the litigation would not deprive the assignee of the right to prosecute and maintain the action. And the English statute declaring such assignments, after express notice of them in writing shall have been given to the debtor, effectual to pass and transfer the legal title to the debt or chose in action from the date of such notice, in no way affects the application of that principle. It does not declare an assignment without being followed by a written notice invalid, and cannot control the law of this state, of which the defendants then were, and since have continued to be, residents, sustaining such assignments when they are 'brought, as these have been, within the scope and effect of this law. The objection taken to the right of the plaintiff to maintain the action was rightly overruled.

There appeared to have been no irregularity or abuse of the proceeding taken to obtain the evidence of the foreign witnesses by commission. And the effect of the depositions was not reduced by anything done in taking them. The case, therefore, differs from and is not affected by anything that was said in Graham v. Carleton, 31 St. Rep., 127, where the deposition was very irregularly taken.

The evidence supplied very ample proof of the fact that the assignors each severally purchased his shares of the stock of the Electric Sugar Befining Company upon the assurances that the defendants, who were the president and treasurer of the company, would use the money paid as its price only to obtain the disclosure of the secret process represented to be used in the refinement of sugar in order that a patent for that process could be obtained for the company, which would have enhanced the value of the company’s shares. They were interested in securing that value, and parted with their money for that object, of which the defendants were well aware, and when the latter could not obtain information of that process, for the reason that it had no existence, but was a groundless fraud, it was their duty to return the money when these assignors elected to rescind their purchases, and demanded it, which they did upon the discovery of the fraud. The fact that there was no such process rendered all the shares of the company entirely worthless, and the offer made in the complaint to return those for which the money had been paid and received complied with all the assignors were legally bound to do to render the rescission of their purchases complete. Each purchased a certain ■ number of the shares for himself, and paid his own money for the purchase, and severally was vested, with this right to rescind.

The defendants, instead of holding the money for the benefit of these assignors, loaned it to the company, which with their concurrence, and in great part for the defendants’ benefit, diverted the money to other objects, and for that it was just and right that they should be, as they were, personally charged with the liability themselves to refund the money which was misappropriated under their authority.

In the disposition of the case at the special term and the decision of the appeal of the plaintiff from so much of the judgment as dismissed the complaint, so far as it included the receiver of the company, several subjects now discussed have been further examined, and what has been there said does not require to be repeated. But it is sufficient to add that the plaintiff’s right to recover against these defendants was well sustained, and the judgment so far as they have.appealed from it should be affirmed, with caste.

Van Brunt, P. J., and Lambert, J., concur.


author: Van Brunt, P. J. Barrett, J.

text:
    Herman Passavant et al., Resp’ts, v. Herman Cantor et al., App’lts.

      (Supreme Court, General Term, First Department,

      Filed December 31, 1891.)

    Assignment fob creditors—Fraudulent withdrawal of assets.
    Nine days prior to making an assignment the assignor invested $7,000 in stock which he did not turn over to the assignee. In an action to set aside the assignment he claimed that such stock was purchased for his wife with money received from her and which had been deposited in his hank account. Defendant’s hooks were missing, and he was unable testate exactly the dates on which he received the moneys or the amounts, could not point out the specific deposits in his bank book or tell what hanks his wife drew the money from. Held, that a finding that there was a fraudulent withdrawal of his property in contemplation of making the assignment was authorzed.
    Appeal from judgment of special term setting aside general assignment executed by the defendant Isaac Sickle to the defendant Herman Cantor.

      A. Blumenstiel, for app’lts; G. M. Pinney, Jr., for resp’ts.
   Van Brunt, P. J.

This action was brought by the plaintiffs, judgment creditors of the defendant Isaac Sickle, to set aside an assignment made by him to the defendant Cantor as having been made with intent to hinder, delay and defraud the creditors of the assignor.

The facts found were to the effect that in contemplation of the execution of the instrument the defendant Sickle had disposed of large amounts of property with the intent to hinder, delay and defraud creditors, and thereupon, the court found that- said instrument was made with a fraudulent intent The assignment in question was executed the 16th of November, 1887, and during the progress of the trial tile court ^ allowed statements made by the defendant Sickle to various persons as to the amount of his assets and liabilities existing in January, J une and July, 1887, to be introduced in evidence. To this the defendant objected and exception was taken, ¿he ground of theobjection being that the declarations of the assignor whether made prior or subsequent to the assignment are inadmissible to affect its validity unless they are part of the res gestee. And our attention is called to the case of Flanders v. Van Tassel, 37 St. Rep., 228; Truax v. Slater, 86 N. Y., 630; Loos v. Wilkinson, 110 id., 210-211; 18 St. Rep., 110, and other cases, to estab-. lish the proposition that, the mere declarations of the assignor of a thing in action, forming no part of the res gestee, are incompetent to prejudice the title of his assignee, whether the assignee be one for value or merely a trustee for creditors, and whether such declarations be antecedent or subsequent to the assignment.

If this proposition correctly stated the law then, undoubtedly, error was committed in the admission of the testimony in question. But we think that upon an examination of the question it will be seen that it contains an erroneous element so far as it applies to an assignment made to a trustee for the benefit of creditors. It is undoubtedly true so far as it relates to an assignee for value, because no fraud upon the part of the assignor can invalidate the assignee’s title unless the assignee has participated in some way or has knowledge of such fraud. But the rule is entirely different in the case of assignments for the benefit of creditors. Here the fraudulent intent of the assignor alone is sufficient to invalidate the assignment. His good faith in the making of the instrument is the primary subject of the investigation, and anything which tends to establish by legal evidence the charge of fraud as against him is admissible, because such fraud will invalidate the assignment although the assignee may not have participated in it Therefore, in case of an investigation of the question as to the fraud of an assignor where an assignment has been made for the benefit of creditors, the declarations of the "assignor seem to be necessarily admissible as against him, and if they establish fraud, form the foundation of a judgment to set aside the assignment

This principle is recognized in the case of Wright v. Nostrand, 94 N. Y., 31, where it was held that it was not error to admit in evidence testimony taken on supplementary proceedings of a grantor in an action to set aside his conveyance as fraudulent

The same principle is recognized in the case of Loos v. Wilkinson, supra, where the plaintiff was permitted, in an action to set aside the conveyance of property as a fraud upon the creditors, against the objection of the defendant, to prove the declarations of the grantors while they were in possession of the property to the effect that they owned the property covered by the deed.

And in the case of Bush v. Roberts, 111 N. Y., 278; 19 St. Rep., 122, the distinction between purchasers for a valuable consideration and those who are not, in reference to the effect of declarations of the grantor, is recognized, where the inadmissibility of the declarations of the grantor is based upon the fact that the grantee was a purchaser for a valuable consideration.

As already intimated, where the conveyance rests upon a valuable consideration, both the grantor and grantee must be affected by the fraud. The fraud of the grantor alone is not sufficient to impair the grantee’s title. But in the case of a conveyance without consideration for the benefit of creditors a different rule obtains, in that the fraud of the grantor alone is sufficient to avoid the act

Therefore, any evidence which would have been admissible as against the assignor if he had been the sole party to the action would be proper in this action upon the question of his good faith.

But we think, however, that the declarations of the assignor in reference to the amount of his assets formed no basis for the conclusion that there had been any secretion of property. They rather tended to show that he had been making false statements in regard to his condition in order to prop up his failing credit His declarations in regard to his liabilities tended, however, to show that suspicion might be cast upon the good faith of the claims which the assignor subsequently provided for in contemplation of his assignment.

It is not necessary to consider all the points which have been raised in respect to the claims which are attacked and which were paid or secured by the assignor prior to the assignment in detail. It is sufficient to refer to but one, and that is the transaction in respect to the Pacific Mail stock alleged by the defendant to have been purchased by him from money received from his wife for her.

The evidence showed that on October 28, 1887, the assignor Sickle ordered certain stockbrokers to purchase for him 200 shares of Pacific Mail; that on the same day he deposited with them a certified check for $5,000, drawn upon his own account in the National Park Bank, and on the 3d of November, 1887, deposited a like check for $2,000; and on the 7th of November he received from said stockbrokers 200 shares of Pacific Mail stock, and also $189.55, being the difference between the purchase price of the stock and the $7,000 deposited, and signed a receipt for the stock in his own name.

This purchase was completed about nine days prior to the assignment, and no part of said stock was turned over to the assignee. The assignor explains this transaction by stating that this stock belonged to his wife; that these moneys were his wife’s earnings, accumulated in a period of twenty-five years in making army officers’ clothing and keeping boarders for twelve years; that his wife gave him the money for the purchase at different times; that she handed him some money in October, 1887, which she drew out of the savings bank, partly in October, may be a little before that, may be in September, part of it; that he thought that in the latter part of October he got the bulk of the money, in three or four different instalments handed by his wife at different times; it may have been five; that he did not get all the money in October; that it had been given at different times by his wife, as she found it convenient, but he did not remember amounts. Subsequently.he stated that it may have been that the first was given in September; that was his best recollection; that he could not be sure about dates, but he knew that the money was given to him two or three months previous to his assignment, and that the money was deposited in the Park Bank. Thereupon, the books of the defendant being missing, the plaintiff offered in evidence a copy of the account of the assignor with the Park Bank from Jan.', 1885, down to Dec.31,1886, on the debit side, arid on the credit side to the 81st October, 1887, and he was asked to look -at the statement of deposits as they appeared in the transcript of his bank account, and point out the..deposits which were made of the moneys received from his wife. He replied that would be a hard matter for him to do, because he had been away a great .deal from his store, and his son had attended principally to the bank business ; that he didn’t bother about that

Being further interrogated, he said his wife drew the money from savings banks; that he did not remember the banks; that his youngest son drew the money, and he got it from his wife; and that the money was given to the witness by his eldest son to deposit, and that he could not point out these amounts in the transcript of the bank account.

For the purpose of discrediting this .story, the plaintiffs offered in evidence testimony which the assignor gave in supplementary proceedings before the beginning of this action, in which he was asked these questions:

Q. Do you remember how much money you took in in October ; the moneys that you deposited in the Park Bank were received from your business, were they not? A. Yes, sir.
“Q. All of them? A. Yes, sir.”

And the witness, having testified to certain transactions with his sister and his brother-in-law, was asked: “Independent of that, the moneys you received and the moneys which you paid were in the course of business transactions? A. They were.” And again he testified that the cash transactions which he had with borrowed money, or money paid to him between June, 1887, and the time of his failure, were the two which he mentioned, and which he psdd back some time before his failure; and that no moneys were left with him other than those which he had stated (no reference whatever being made to this transaction with his wife). And in another place he states that he did not re-call any other cash transactions, any money deposited with him, or any cash loaned to him other than those he mentioned the day before; and that with the exception of the transfers he had mentioned (the one to his wife not being among the number), he had made no other transfers of any other property, outside of his sales, to any person during the two months before his failure.

He was also asked :

“ Q. Did any person have any money on deposit with you to use in the business? A. No, sir.
‘‘Q. Well, you may modify that? A. There was $1,000 of money which I owed to a party which was used in the business.
“ Q. Who was that ? A. My sister.
“ Q. What was her name ? A. King; I owed her $1,000.
“ Q. Did any one else have any sums on deposit with you ? A. None that I remember.
Q. Did any one else place moneys in your hands during the year 1887 ? A. Not that I remember.
“ Q. No large amounts? A. No, sir."

At the time of the trial of this action the wife of the assignor was dead.

It seems to us that but one conclusion can be arrived at from the testimony offered by the defendant in respect to this transaction.

It was certainly within the reach of the defendant, in case his • wife had drawn this money from savings banks to give to him for the purchase of the stock, to have 'established that fact.

If he had received the large amount of money which he says he did in September and October, 1887, he certainly would have recollected it at the time of his supplementary examination ; and there would be some earmarks in the account of the defendant with the Park Bank by which the receipt of such large sums of money might have been traced. The fact of the apparent ignorance of the assignor of this whole transaction in respect to the purchase of this stock for his wife at the time of his supplemental examination not only cast suspicion upon his story of the receipt of this money from his wife, but threw the burden upon him to some extent to establish its good faith by evidence other than the improbable story to which he testifies. It is impossible to believe that the assignor upon the supplementary examination should have so completely ignored this transaction if he had not been actuated by the purpose to deceive and conceal the abstraction of this money from the bank and the purchase of the stock, which would not have been the case had he actually received the money from his wife and invested it as he now claims to have done.

It seems to us that no other conclusion could have been drawn in respect to this transaction than the one arrived at by the court below, and that it was a fraudulent withdrawal of his property by the assignor in contemplation of this assignment We think, therefore, that the judgment should be affirmed.

It is sought to charge the costs of the affirmance personally upon the assignee." There is no evidence in this case to justify any such action against the assignee. It was his duty to defend the assignment to the best of his ability, and it would appear that he had been successful sufficiently often to justify a continuance of such defense.

The judgment should be affirmed, with costs.

Barrett, J.

I concur in the result and unreservedly in all that the presiding justice says with regard to the shares of Pacific Mail stock. But I cannot agree to the proposition that the declarations of the assignor, made prior to the execution of the assignment and forming no part of the res gestee, are admissible as against the assignee. They are undoubtedly admissible as against the assignor, and they are also admissible against the assignee when they form part of the res gestee. Thus the declarations of the assignor with regard to the subject matter of the transfer made while he is in possession, and characterizing such possession, are admissible as part of the res gesta. So, also, the declarations of the assignor made contemporaneously with the assignment, or in immediate contemplation thereof and illustrating its fraudulent character, are admissible as part of the transaction. But the mere naked statements of the assignor, whether made before or after the assignment, not connected with the principal fact, cannot be permitted to destroy the trust title of the assignee. Any other doctrine would put it in the power of a debtor to make or unmake assignments at his pleasure.

The assignee represents the creditors, and these beneficiaries should not be deprived of their vested rights by any loose talk of their debtor. If it be true, as matter of fact, that the assignor’s design in making the assignment was fraudulent, the instrument cannot stand. And so far as the assignor is concerned, his general confessions, whether made long prior or long subsequent to the assignment, are ' evidence of his guilty intent. But as to the assignee and the beneficiaries under the assignment, while the rule of law is the same, namely, that the assignor’s guilty intent is alone sufficient to avoid the instrument, yet the rule of evidence is different, and such guilty intent must be proved as an independent fact by the acts and doings of the assignor, and not by admissions forming no part of the res gestee.

The presiding justice suggests that because the declarations of the assignor are admissible against him, they must, if they establish fraud, form the foundation of a judgment to set aside the assignment, and he thinks that this principle is recognized in Wright v. Nostrand, 94 N. Y., 31. I do not thus read this case. There the fraudulent grantor, ISTostrand, was called as a witness for the grantee to support the conveyance, and the prior declarations were- admitted to affect his credibility. This is apparent from the text of the opinion, which is as follows:

“The defendant ISTostrand had been called as a witness for the defendants on the trial, and had given material evidence for them. The deposition received in evidence was competent not only for a limited purpose as against him, as an admission in the case made by one of the defendants therein, but was also competent at the time it was offered as against all of the defendants for the purpose of affecting the credibility of the testimony given by such witness for them on the trial."

ISTor was the principle recognized in Loos v. Wilkinson, 110 N. Y., 195; 18 St. Rep., 110. There the bill was filed to set aside a deed of real estate executed by the debtors in Majq 1884, and also a general assignment by the same persons executed in the following December. . It was held that the fraudulent transfer, so made in May, might be considered in determining whether there was fraud in the subsequent assignment, and that declarations of the fraudulent grantors and assignors, made while they continued in possession of the estate and exercised acts of ownership oyer it, that is, intermediate the deed and the assignment, were admissible for the purpose of characterizing their possession. It was also held that as the deed was kept from the record and concealed from the public, and as it was part of a fraudulent scheme concocted by the grantors and grantee 'to obtain credit, the declarations were .■admissible as a part of the means used to accomplish the fraud. Earl, J., placed the decision distinctly upon the ground that, under the circumstances of that case, the declarations were in the nature of res gestee. In Bush v. Roberts, 111 N. Y., 284; 19 St. Rep., 122, which is also cited in support of the distinction between an .assignee for value and an assignee in trust for creditors, the doctrine ■of Truax v. Slater, 86 N. Y., 632, was re affirmed, and the following language of Earl, J., in the latter case quoted with evident .approval:

“The mere declarations of an assignor of a chose in action, ■forming no part of any res gestee, are not competent to prejudice the title of his assignee, whether the assignee be one for value or merely a trustee for creditors and whether such declarations be antecedent or subsequent to the assignment.” Clearly there is no distinction in principle between the assignor of a chose in action and the assignor of a chattel, so far as the present question is «concerned.

The case of Truax v. Slater was also cited in support of the •decision in Flannery v. Van Tassel, 37 St. Rep., 228, where the •declarations, held to be inadmissible, were in fact made upon the very date of the transfer. The assignee for the benefit of creditors is not to be treated as a holder of the assignor’s estate by privity of representation or by legal devolution. The distinction contended for might properly be made in such cases. But when it "is considered that, although not a bona fide purchaser for value, the ..assignee is at least a trustee for the assignor’s creditors, and as their representative may himself attack fraudulent transfers made by his assignor, Spring v. Short, 90 N. Y., 538; Crouse v. Frothingham, 97 id., 113: Loos v. Wilkinson, supra, his vested estate .and the creditors’ vested rights therein should clearly not be disturbed without legal evidence of the assignor’s guilty intent.

The effect of denying to a trust assignee the position of a transferee for value is simply that he takes the estate subject to all «existing equities. These equities may, under certain circumstances, be. evidenced by the assignor’s admissions, and his declaration» may then be resorted to, to establish such equities. We must not, however, confuse this principle with that which governs when a direct attack is made upon the assignment itself. In the former case the assignee, seeking to reduce the estate to possession in the ordinary way, stands directly in the shoes of the assignor. But he may also, under the act of 1858 (chap. 314), act in direct hostility to the assignor and may seek to reduce the •estate to possession by avoiding the assignor’s fraudulent transfers. In assuming that attitude he no longer stands in the shoes ■of his assignor. So, also, in defending his estate and the vested rights of his cestuis que trust from attacks upon the assignment itself, he stands i n no one’s shoes but his own; his own as trustee and as legal representative of the creditors. As against such trustee and legal representative of creditors the guilty intent of the assignor should be proved as any other independent fact is ■proved, and the trust assignee should not be bound by declarations jmade in his absence and forming no part of the res gestee.

I think, however, that the assignee in the case at bar was not, prejudiced by the admission of the assignor’s declarations. These-declarations were by no means vital to the conclusions finally reached. Much at least of what such declarations tended to establish was proved by other and entirely competent evidence.. And further, there was abundant evidence without these declarations to sustain the judgment. Indeed, if any other conclusion had been arrived at with regard to the Pacific Mail stock, leaving these admissions entirely out of the case, I should unhesitatingly have voted for a reversal of the judgment upon the facts.

I therefore concur in the affirmance of the judgment.


author: O’Brien, J.

text:
    Cornelius V. Cross et al., Ex’rs, App'lts, v. The United States Trust Co. of New York, Trustee, et al., Resp’ts.

      (Court of Appeals,

      Filed March 1, 1892.)

    1. Will—Tbusts—Suspension op foweb op alienation.
    Testatrix gave to the U. S. Trust Co. $700,000 in railroad bonds, in trust, to receive-the income thereon until the payment oí the principal, and upon such payment to invest the proceeds and apply the income thereon to the execution oí five separate trusts for the benefit of testatrix” husband and four children. The husband’s share was to be given to him. for life, and on his death to her grandchildren in equal shares until the-death of her surviving child; then it was to be divided into as many parts, as there were grandchildren living, and given to them as they reached the-age of twenty-five years. Held, that the will suspended the power of alienation for more than two lives in being.
    2. Same,
    The trustee was directed to pay the income of the part set aside for each child to him or her for life. If either child died without children, then the income upon its share was to be paid to the survivors in equal shares, and to the children of any deceased child. If the deceased child left children, then the trustee was to divide the share equally between^ them,, and deliver to each as they became twenty-five years, paying the income-to them until that time. Held, this was also an alienation for more than two lives in being.
    3. Same—Conflict of law.
    Testatrix and her husband, anterior to the execution of her will and up. to the time of her death, were inhabitants of Rhode Island, where the above trusts were valid. The will was probated, and the executors accounted in that state. The property and trustee are here, as also all the beneficiaries, éxcept one grandchild, who resides in Connecticut. Held,. that although the trusts were invalid under the laws of our state, yet, as. the law of Rhode Island, the domicil of the testatrix, declared these trusts valid, it- is binding upon us by that comity which is part of our municipal law.
    (Eabl, Oh. J., and Peckham, J., dissent.)
    Appeal from a judgment of the supreme court, general term, first department, reversing judgment of special term dismissing complaint.

      Edward G. James, for app’lts; Edward W. Sheldon, Nicholas Quachenbos and Martin T. McMahon, for resp’ts.

       Affirming 40 St. Rep., 744,

   O’Brien, J.

The will of Phoebe Jane Cross, bearing date-May 29, 1877, disposed of a large estate for the benefit of her husband and four children. After making sundry absolute andi .specific bequests she gave to the United States Trust Company, a Uew York corporation, $700,000 in railroad bonds specifically described, to have and to hold in trust for the purpose of collecting and receiving the income thereon until the payment of the principal, and upon such payment to invest and keep invested the proceeds in safe interest paying securities, and to collect and receive the income on the same, and to apply it to- the execution of five ■separate trusts, for the benefit primarily of her husband and each ■of her four children. As none of the estate is involved in this action except the portion embraced in these trusts, and that only in a general sense, it is only necessary to give a brief outline of the scheme of the testatrix, with respect to this part of her property, without any very minute examination of the legal questions which might possibly arise upon the construction of this part of the instrument in some other form of action. The bonds above mentioned were divided into five parts, and the testator directed the trust company, as trustee, to pay the income of one part to her husband during his life, and upon his death to her grandchildren in equal shares until the death of her surviving child, ■and as there were four of the children, the trust was, therefore, to continue during the life of the husband and all of the four ■children respectively. Upon the death of the last surviving child the principal was to be disposed of by the trustee by dividing it into as many parts as there should be grand-children of the testatrix living, and deliver one part to each who had then reached the age of twenty-five years, but if any of them were under that -age, then the trustee was directed to set aside and hold the parts of such grand-children, and pay the income to them until they should reach that age, when they were to receive the principal ■absolutely. The trusts for the benefit of the children were identical as to each, but differed slightly from that for the husband.

The trustee was directed to pay the income of the part set ■•aside for each child to him or her for life. If either of the children died without children, then the income which such deceased child was to receive under the trust, if living, was to be paid to Tfche survivors in equal shares and to the children of any deceased child, the latter to take as a class the share that the deceased parent would have taken, if living. If either of the children of the testatrix should die, leaving children, then the trustee was •directed to divide the principal, or part from which the deceased -parent received the income, into as many parts as there were children of such deceased parent surviving, and deliver one of - such parts to each of said children who had then attained the age of twenty-five years, to hold absolutely. But if any of said children were under that age, then the trustee was to hold the share of such child and pay the income thereof to him until he arrived ■at that age, when he was to receive the principal absolutely. And if any child of such deceased parent should die before reaching the age of twenty-five, then his part was to be paid to her surviving brothers and sisters, and if all the children of such deceased parent should die before arriving at that age, then the ■trustee was to pay the share of the deceased parent, to which. they would have been entitled if living at said age, in equal shares to the children of the testatrix, then living, and if none of the children of the testatrix were then living, the trustee was-directed to pay said sums over to her surviving grandchildren in equal shares, to hold absolutely. Upon the death of the last, surviving child the trustee was directed to divide all the bonds- and securities remaining in its possession, in the manner above described, in which the principal of the fund for the benefit of the husband was to be disposed of. The husband and two of' the sons were appointed executors of the will, and the residuary estate was bequeathed to them in trust to convert into money and to pay certain legacies, and the remainder to the heirs at law of the testatrix “ who, by the laws of the state of Mew York relating-to the distribution of intestate estates, would have been entitled to receive the same ” in case of intestacy.

The husband died on the 9th day of June, 1889, and that part, of the trust intended for his benefit has terminated. Mrs. Cross-left two sons and two daughters. One of the sons is married but. has no children ; the other never married. One of the daughters-is a widow and has three children, one of whom is married. The-other is married but without children. The two sons, as surviving executors and trustees under the will, and individually, with the daughter who is without children, brought this action against the trust company, as trustee, and the widowed daughter and her three children, for the purpose of procuring a judgment, declaring the trusts void after the death of each of the primary beneficiaries, on the ground that they are in contravention of the-statute against perpetuities.

With respect to the provision for the benefit of the husband, the-absolute ownership of the property bequeathed was suspended by the terms of the will for more than two lives in being at the death of" the testatrix. The fund could not be released from the trust till the death of the husband and the last survivor of the four children,, and the case is, therefore, within the statutory prohibition against the suspension of the absolute ownership and power of disposition of personal property. Ward v. Ward, 105 N. Y., 68; 6 St. Rep., 798; Smith v. Edwards, 88 N. Y., 92; Colton v. Fox, 67 id., 348; Schettler v. Smith, 41 id., 328; Knox v. Jones, 47 id., 389; Lorillard v. Coster, 5 Paige, 172; S. C., 14 Wend., 265.

The absolute ownership and-power of disposition was further suspended upon the lives of those grandchildren of the testatrix who were under twenty-five year's of age at the death of her last surviving child, and until such grandchildren, respectively, arrived at that age, as to tire share of each of them in the-personal estate, and this might possibly involve a suspension of the whole, or some part of the property, embraced in the trust upon a life or lives not in being at the death of the testatrix. Van Cott v. Prentice, 104 N. Y., 56; 5 St. Rep., 654; Hawley v. James, 16 Wend., 61; Smith v. Edwards, supra.

The trusts created for the benefit of the children seem to be-open to the same objection. In so far as the duration of the trust, is concerned, it might be held good in the contingency of the death. of the first beneficiaiy leaving children, because in that case the* suspension is only upon-the life of such beneficiary, whose children take absolutely. The difficulty with this feature of the caséis that, as to the children of a deceased parent who are under twenty-five at his death, the absolute ownership is liable to be further suspended upon the life of a child born after the death of the testatrix. Tiers v. Tiers, 98 N. Y., 568.

But the disposition of the bonds, in the event of the death of any of the children without issue, would seem to be clearly against-the terms of our statute, as in that event the absolute ownership would be suspended during the life of such child, then during the successive lives of the other three, or the last survivor of them. Then there was liable to be a further suspension during-the minority, under twenty-five, of any grandchild living at the death of the last surviving child of the testatrix, as to the-share of such grandchild, or for his or her life within twenty-five years. This brief reference to the legal questions involved, in the will, growing out of the bequests in trust under our statute, has been thought necessary only for the reason that one-of the defendants in this action, a grandchild of the testatrix, is an infant. Except for that fact it might be sufficient to say that, upon the argument, there was no attempt made upon the part of any of the learned counsel for the defendants to uphold these provisions of the will as valid under our statute. On the contrary, they must be understood by the course of the argument as admitting that the trusts are not valid under our law, but, notwithstanding this, they strenuously urge that all the provisions of the will are legal, for reasons which must now be noticed. ■ It has been found as a fact, conclusive upon us, that from a time anterior to the execution of the will, up to-the -time of her death on the 29th of June, 1878, the testatrix and her husband were inhabitants of and domiciled in the state of" Bhode Island; and, further, that by the laws of that state, then and now in force, all the provisions, trusts and remainders contained in the will are valid and effectual. The will was admitted to probate, and the executors accounted in that state. They transferred the bonds embraced in the trust to the trustee, and these provisions of the will have been executed and carried out since the death of the testatrix.

The bonds disposed of by the provisions in question were always actually within this state, ana there seems to be no substantial controversy between the counsel with reference to the legal propositions asserted in behalf of the plaintiffs, namely, that all the primary trusts are valid and can be upheld under our law upon the principle that where several trusts are created by a will,, which are independent of each other, and each complete in itself, some of which are legal, and others illegal, and the legal can be separated from the illegal and upheld, without doing injustice or 'defeating what the testator might be presumed to wish, the illegal trusts may be cut off and the legal permitted to stand. Kennedy v. Hoy, 105 N. Y., 134; 6 St. Rep., 787; Manice v. Manice, 43 N. Y., 384: Schettler v. Smith, supra; Savage v. Burnham, 17 N. Y., 561, 576-7; Post v. Hover, 33 id., 593, 598; Harrison v. Harrison, 36 id., 543; Van Schuyver v. Mulford, 59 id., 432; Tiers v. Tiers, supra.

It is not necessary to a decision of this case to point out the precise application of this rule to the trusts in question, and, therefore,we will not stop to consider how far, if at all, the elimination of the subsidiary trusts would interfere with the scheme of the testatrix as a whole, or the precise portion of the disposition that would be permitted to stand under our law.

On this principle the only part of the property in question -yet released from the trust is the share set aside for the benefit of the husband, the trust in his favor having terminated by his death. The controversy is thus reduced, so far as this court is concerned, to a single question, and that is whether this action can be maintained to declare invalid a disposition of personal property by will, ■perfectly lawful and valid at the place of the owner’s domicil when made, but which would be invalid if this were a New York will. . The property and the trustee are here. So are all the ben■eficiaries except one of the grandchildren, who resides in the state -of Connecticut. From the present situation of all parties interested in the property thus disposed of, it may be assumed that the trust is to be administered here.

It is a general and universal rule that personal property has no locality. It is subject to the law of the owner’s domicil as well in respect to a disposition of it by act inter vivas, as to its transmission by last will and testament and by succession upon the owner dying intestate. This is, in substance, the language in which Judge Denio stated the law in this court and which he «concisely and clearly extracted from the authorities cited by him. Parsons v. Lyman, 20 N. Y., 112. The learned judge added that The principle, no doubt, has its foundation in international -comity, but it is equally obligatory, as a rule of decision in the courts, as any legal rule of purely domestic origin. It does not belong to the judges to recognize or to deny the rights which individuals may claim under it at their pleasure or caprice; but it having obtained the force of law by user and acquiescence, it belongs only to the political government of the state to change it whenever a change becomes desirable.” ' We have in this case the grandchildren of the testatrix, who, next after her husband and ■ children, were the objects of her bounty, claiming certain interests in the corpus of the trust estate which vested in them under the terms of the will and the law of the domicil. They say that we have no right to use the law of New York for the purpose of cutting them off from their inheritance lawfully bequeathed to -them by the law of the state where their ancestor was domiciled when she made formal disposition of her property. It is manifest that this presents a question touching the disposition and transmission of personal property by will, which must frequently arise, of the very highest importance. The plaintiffs admit that so far as concerns the formal requisites essential to the validity of -the will, as a testamentary instrument, the capacity of the testatrix and the construction of its provisions,*the law of the domicil must govern, but the validity of the particular trusts attempted to be created depend upon the law of the state, the domicil of the legatee, and the government under which the fund is to be held and administered. In other words it is claimed that this case-forms an exception to the general rule that a disposition of personal property is governed by the law of the domicil of the owner,, and that the trusts must stand or fall, not upon that law, but the law of the domicil of the legatee.

The reason for this exception is said to be that we will not permit a trust to be maintained and administered within the state-which is contrary to its public policy, though valid when created. The mind does not readily accept the assertion that it is, in fact-contrary to the public policy of this state to permit the property embraced in these trusts to be held and used here according to the-terms of the will of the owner and the law of her domicil. Should our legislature deem it for the public good to repeal the.statute relating to wills, and to provide that all property should,, upon the death of the owner, pass under the laws of intestacy, a. disposition, by will, of personal property actually within the territory of the state, but owned by a person domiciled in another state, would still be valid, providing it was valid by the law which governed the owner. When it is urged that we are bound by foreign law as to all the formal requisites of a will as a testamentary instrument, the capacity of the testator to make it and its legal construction, meaning and effect, and not bound by such law with respect to the particular bequests by which the testatrix has distributed her property among her heirs and next of kin, it is not perceived that such a distinction has any sound reason or principle to rest upon. A cause of action or right to property, created by the statute laws of another state, and arising there, is. recognized here, and may be enforced, though our own statutes-on the same subject may be different in details. The two statutes need not be identical in terms or precisely alike. It is enough if they are of similar import and character, founded upon the-same principle and possessing the same general attributes. Wooden v. W. N. Y. & P. R. R. Co., 126 N. Y., 15; 36 St. Rep., 387. It does not follow that a trust created by the laws of another state-is contrary to our public policy with respect to accumulations and. the suspension of the absolute ownership, simply because the law of that- state differs in some respects from -ours. It may be assumed that all of our sister states have enacted laws on this, subject having the same general purpose in view as our own. Some of them permit a longer, and others provide for a shorter period of suspension, but the policy of all is the same.

The state of Rhode Island has a statute on this subject framed to secure the same end as our own. It provides that no person shall have a right to devise any estate in fee tail for a longer time than to the children of the first devisee. The first devisee" to take an estate for life only, the remainder on his decease to vest in his children or issue generally, according to the directions of the will. Laws R. I., chap. 182, § 2; Sutton v. Miles, 10 R. I., 348. While-this statute in terms applies to realty, the principle embodied in it has been extended to bequests of personal property by the decisions of the courts of equity of that state. The testatrix in "the case at bar could, if domiciled here, have created the trusts in question and suspended the absolute ownership of the principal of the fund till the death of the survivor of the two youngest grandchildren living at her death, and yet this disposition might result in keeping the property under the trust for as long a period of years as does the present will. The only material difference in the law of the two states on this subject is that in, each a different rule is adopted for measuring the period within which absolute ownership may lawfully be suspended. Granting that in most cases this period might be longer in Rhode Island than in New York, have we any right for that reason to declare the dispositions of this will void? If so, then a person desiring to make a will must not only know the law of his domicil, but also the law of every other country in which his personal estate may happen to be at his death, and our courts will become the resort of dissatisfied heirs or legatees, seeking to nullify wills valid by the laws of the place where the persons who made them were domiciled. The question is not changed by the circumstance that the trustee and the trust fund is within our jurisdiction and all the beneficiaries but one are now residents of this state. The will was valid or not at the moment of the death of the testatrix, and if it was valid then it is valid now. Nothing that has since transpired can change any right which it confers. Had a trustee been selected at the place of the domicil, instead of here, he would have been entitled to receive the bonds from their custodian in New York, and our courts would have enforced that right, as they have in at least three of the cases which will be noticed hereafter ; and had the trustee afterwards moved into this state and brought the property with him, he could have held it by virtue of his original title under the will.

It would be pushing the doctrine of state policy too far to hold now, after the trusts have been treated as valid by all concerned for twelve years, that they are void. When an instrument affecting the title to personal property, valid in its origin, is -sought to be set aside, upon the ground that it is in some way ■contrary to the policy of our laws, á clear casé must be established. In a recent case in this court its aid was sought to set aside bequests in a will made by a person here to charitable and benevolent corporations in another state within two months prior to his death. Under our statute of 1848, providing for the incorporation of similar institutions, such bequests were prohibited as to such corporations, and the argument in support of the action was that to permit bequests made here to the foreign societies, within two months, to stand, would be against our public policy on this subject; but as it appeared that no such restrictions existed in the state where the legatees were located, the bequests were held to be valid. Hollis v. Drew Theological Sem., 95 N. Y., 166. Judge Earl, in .speaking for the court, employed language, in discussing this question, which seems to be very much in point; “ The courts will not enforce contracts or the payment of legacies which are against public policy. But it is not always easy to determine when contracts and legacies are against public policy. Some cases are plain and have been settled by the repeated decisions of the courts. Contracts tending to undermine public morals, to endanger the public health or the public safety, to prevent competition at judicial sales, to improperly influence legislation or the action of public officers or the administration of justice, and to unreasonably restrain trade or marriage; all these have been condemned as against public policy. In condemning such contracts judges have acted upon what.they deemed sound public policy, and have undoubtedly, in some measure and in a remote sense, assumed legislative functions. It is difficult to define and limit the power thus to enforce public policy which is not found in the statute law, and it should be exercised only in •clear cases, and generally within limits already defined by decisions of acknowledged authority, based upon rules of common law. There is certainly no occasion for stretching the power' so as to apply it to new or doubtful cases in a state where the legislature is in session one-third of the year, and thus competent to indicate the public will as to any line of supposed public policy. -»***«•■»***■»*

“ Contracts which are held to contravene public policy are always essentially vicious or always have evil tendencies. They are not sometimes valid and sometimes invalid, but are always invalid, and the courts will never tolerate or enforce them.”

The learned judge, to fortify his position, • quoted approvingly the language of Judge Story in the Girard Will case, 2 How., U. S., 127: “ Hor are we at liberty to look at general considerations of the supposed public interests and policy of Pennsylvania upon this subject beyond what its constitution and laws and judicial decisions make known to us. The question what is the public policy of a state, and what is contrary to it, if inquired into beyond these limits, will be found to be one of great vagueness and uncertainty, and to involve discussions which scarcely -come within the range of judicial duty and functions, and upon which men may and will complexion ally differ.”

It is certain that there is no statute in this state that in terms ■condemns trusts in foreign wills that would be illegal if made here, and unless our judicial decisions furnish a rule on this subject we are left to these vague, uncertain and conflicting notions in regard to. public policy which Judge Story said, “scarcely come within the range of judicial duty and functions.” It would be difficult to furnish a stronger illustration of the correctness of this remark than is to be found in the very able discussion of the question upon the briefs of counsel in this case. With com men-, dable industry and learning they have explored the whole field of discussion, but the leading cases, supposed to have a bearing on •on the question, are cited on both sides. The question as to what is public policy and what is contrary to it is involved in so much uncertainty and confusion, as it must be from its very nature, that each side has been able to find in the cases of his opponent some expression of opinion favorable to his own views ; and jet. it can be said that all the cases cited from this court, when properly understood and limited as authority to the questions actually passed upon, were correctly decided.

The leading case relied upon by the plaintiffs is Chamberlain v. Chamberlain, 43 N. Y., 424. The question involved in that case was the corporate capacity of a legatee in another state to take a charitable bequest under a will here, and as it appeared that by the law of the state creating the corporation, and in which it was located, that it had power to take bequests- ' by will, it was held that such bequest to it was valid. Judge-Alien, in delivering the opinion of the court, said: “ The law of the testator’s domicil controls as'to the formal requisites essential to the validity of the will' as a means of transmitting property,, the capacity of the testator, and- the construction of the instrument Personal property has no locality, and, therefore, the law of the domicil of the owner governs its transmission, either by last will and testament, or by succession in case of intestacy. But if within the lex domicilii a will has all the forms and requisites to pass the title to personalty, the validity of the particular-bequests will depend upon the law of the domicil of the legatee.- and of the government to which the fund is, by the terms of the-will, to be transmitted for administration and the particular purposes indicated by the testator. Whatever may be the law of Pennsylvania, a testator domiciled in that state cannot establish by bequests of personalty to citizens or corporations of this state-a charity in trust to be administered here inconsistent with the-policy of the laws of this state. * * * So far as the validity of bequests depends upon the general law and policy of the state,, affecting property and its acquisition generally and relating to its accumulation and a suspension of ownership and the power of alienation, each state is sovereign as to all property within its territory, whether real or personal.”

This language is broad enough to cover the plaintiffs’ contention. But the point we are now considering was not in any sense before the court, and the language of the opinion should be limited to the point under discussion and which was decided. When-the learned judge said that the validity of a particular bequest would depend upon the law of the domicil of the legatee, he had reference to the capacity of the legatee to take, and that of course-depended upon the statutes of Pennsylvania. This is entirely evident from what he says in a subsequent part of the opinion (p. 435) : “Ho allusion has been made to the laws of that state-regulating or restraining the accumulation of personal property or the suspension of the ownership and power of alienation of' either real or personal there. The validity of the provision in: favor of this society depends upon its power to take and hold, in-the manner and for the purposes indicated by the testator.” The power to take was no doubt governed by the law of the domicil of' the legatee, as neither the will nor the law of the testator’s domicil could confer this power upon a corporation of another state. The case of Manice v. Manice, 43 N. Y., 387, also cited by both sides, decides nothing so far as this question is concerned, except that a bequest by a citizen of this state in a will here to Yale 'College was valid, it having been shown that the college had capacity to take by the laws of its own state. By what law the validity of a trust is to be determined, was not involved in the case. Indeed it was quite uncertain whether as to that bequest there was any trust at all. It was probably an absolute gift (p. ■388). Despard v. Churchill, 53 N. Y., 192, was the case of a disposition by will in California by a citizen of that state, void under the laws of this state, in its material provisions, of personal prop■erty actually within this state. It was held that the validity of the disposition was to be determined by the law of the testator’s •domicil, and the court remitted the property to California to be ‘there administered in conformity with the provisions of the will •of the owner. The learned judge who delivered the opinion of the court, after making reference to our statute against accumulation, said that: As this sovereignty will not uphold a devise •or bequest by one of its citizens in contravention of that policy, it will not give its direct aid to sustain, enforce or administer here •such a devise or bequest made by a citizen of another sovereignty.”

The authority cited for this proposition was Chamberlain v. Chamberlain. The learned judge added: “Yet it is no part of the policy of this state to interdict perpetuities or accumulations in another state.” It is quite significant, however, after what was .said about directly aiding in carrying out such a bequest, that this court remitted the property to another state, there to be devoted to purposes which would have been unlawful here. This ■course was adopted, not on the ground of policy, but because it was always the law in such cases to remit personal estate to the •domicil of the owner in the exercise of a sound judicial discretion. Parsons v. Lyman, supra; Harvey v. Richards, 1 Mason, 381-407. The plaintiff’s argument, in this case would seem, logically, to require the court to hold, in such a case, that as to the property in this state the owner died intestate, but Judge Folger was careful to state the principle upon which the case really turned, for, after •referring again to his statement in regard to giving any direct aid 'in carrying out here such a bequest, he added: “And yet they may not hold the bequest void when it is valid by the law of the ■state by which the disposition of the property is to be governed.”

It is plain that the question now before us was not involved in these cases, and was not decided. The cases of Draper v. Harvard College, 57 How. Pr., 269; Kennedy v. Town of Palmer, 1 T. & C., 581, and Mapes v. American Home Misssonary Society, 33 Hun, 360, in so far as they decide any principle applicable to this question, rest upon the authority of Chamberlain v. Chamberlain. It can, therefore, be safely asserted that there is no controlling .authority in this state in support of the proposition that the validity of bequests in foreign wills may be tested by some other law than that which governs in other respects, or that requires us to disregard the disposition made of the fund in this case under ‘.the law of another state.

The authorities cited in support of the defendants, or most of them at least, are open to the same criticism as those of the- plaintiffs.. They are not wanting in strong and clear expressions in favor of the rule that the validity for particular bequests in a will is to be determined by the law of the testator’s domicil, but in-many of them the point was not necessarily involved, and the-rule was stated or assumed as the settled law, by way of illustration or for the purpose of re-inforcing some other principle upon which the case turned. White v. Howard, 46 N. Y., 144; Matter of Hughes, 95 id., 55; Hobson v. Hale, id., 588; Bascom v. Albertson 34 id., 584; Whicker v. Hume, 7 H. L. C., 124; 3 Am. & Eng. Cy. Law, 633; Wharton Conflict of Laws; Dicey on Domicile 294.

The rule, however, is well settled in Massachusetts. A citizen of that state made a bequest to a town in Mew York for the benefit of the poor, which bequest would not be valid if made here, but. it was held by the supreme court of that state, upon full consideration, that the bequest was valid and that its validity was to be-determined by the law of the testator’s domicil, and not by the-law of Mew York, where the trust was to be executed. The-doctrine of that case has ever since been followed in that state. Fellows v. Miner, 119 Mass., 541; Sohier v. Burr, 127 id., 221; Sewall v. Wilmer, 132 id., 131. The same rule is laid down by the United States supreme court. Jones v. Habersham, 107 U. S., 174.

The courts of this state have been exceedingly liberal in recognizing and enforcing rights acquired under the laws of other-states and even of foreign countries. Teel v. Yost, 128 N.Y., 394; 40 St. Rep., 110. If there is any one of our statutes that maybe said to represent a distinct policy of the state it is that regulating the rate of interest on money. Usury is a vice that avoids contracts into which it enters, and subjects the party receiving it, to indictment, and yet it is the settled law that a note, made by-citizens of this state here, payable to a citizen of another state, at a rate of interest that would be unlawful here, but is lawful' there, will be enforced by our courts in favor of the holder in another state, and that too though the nóte was payable here, it. having been given in renewal of a note upon which the same-parties were liable, made and payable in the other state. In such ' cases we give effect to the foreign law, though contrary to our own,, because it is the law that governs the contract. Staples v. Nott, 128 N. Y., 403; 40 St. Rep., 416.

A rule which prescribes that the formal requisites and construction of a will, and the testator’s capacity, are to be determined by the laws of one state, and the validity of his dispositions, of personal property by the laws of some other state or country, would be exceedingly inconvenient and uncertain, and no sound' principle or decisive authority requires us to sanction it. All these questions should be determined by the same law. Effect, should be given to this like every other will, if that can be done without disregarding legal rules, and we think it can. Every right that any party acquired under it by the law of the domicil ought in j ustice and by comity to be respected here. That law declares these trusts valid and it is binding upon us by that comity which is part of our municipal law. The other view would not only defeat the intention of the testatrix but would be contrary to justice and sound policy.

Our statute relating to the suspension of the absolute ownership of personal property applies to dispositions made within our own jurisdiction, and when it is deemed wise to extend it to such & case as this, the law-making power, and not the courts, should do it.

It may be doubted whether the corporate powers conferred upon the trustee in this case are broad enough to authorize it to execute a trust created as this was. Laws 1853, chap. 204; Laws 1863, chap. 60. But though that question has come in incidentally on the argument, it is not properly before us. This is not an action to remove the trustee. There is no allegation in the complaint that it is incompetent to act, and no relief is asked on that ground. There is no finding or request to find on that subject. The want .of corporate capacity in the trustee to act would not be fatal to tbe trust. The proper court would not allow the trust to fail because the trustee is disabled, but would appoint a new one. Perry on Trusts, 4th ed., § 38.

While not assenting to all the reasons for the decision contained in the numerous opinions below, our conclusion is that the judgment is right and should be affirmed, with costs.

All concur, except Earl, Oh. J., and Peckham, J., dissenting.