author: O’Brien, J. Ingraham, J. Van Brunt, P. J. (dissenting)

text:
    The People ex rel. John Collins, Ex’r, Resp’t, v. Charles Donohue, Impl’d, App’lt.

      (Supreme Court, General Term, First Department,

      Filed July 30, 1893.)

    1. Principal and surety—Liability or surety on trustee’s bond.
    A bond of a trustee contained the obligation that if he should “ well and faithfully perform and discharge his duties as such trustee, as named in said order, then this obligation shall be void, else to be and remain in full force and virtue.” Held, that a surety thereon was not concluded by a judgment obtained against the representatives of the deceased principal in an action to which the surety was not a party.
    8. Same.
    A recovery, however, is justified by a finding, based upon sufficient evidence^ that the trustee had received the principal of the trust fund and had failed to turn over the same, having converted it to his own use.

      3. Same-Interest.
    In an action against the surety of a deceased trustee, brought by a successor of the latter appointed by-the court, Reid, that the principal of the trust fund could be recovered, but not interest from the date of the former trustee's appointment, because the evidence did not affirmatively show that interest had been collected or received by said former trustee, and because such interest, in any event, could not have been recovered by a. trustee as such, but only by the beneficiary of the fund.
    4. Same—Laches.
    The beneficiary of a trust fund who, during nineteen years, allows the trustee to retain any interest that may have been earned, without insisting on her rights and calling the trustee to account, is guilty of a violation of the duty owed by the beneficiary to the surety, and shoul 1 not, after such laches, be permitted to charge the surety with liabiliiy for the aggregated interest. , =.
    5. Trust—Appointment oe. beneficiary as substituted trustee.
    Although the attempt to appoint the beneficiary also the trustee would prevent the creation of a valid trust, yet, where a valid trust has been created, and, after the death of the trustee, the court by order appoints as his successor the life beneficiary, such order is not void or a nullity, and in the trial of an action brought by such succeeding trustee against a surety upon the bond of the former trustee, the surety cannot collaterally assail the validity of the appointment.
    (Van Brunt, P. J., dissents.)
    Appeal from judgment in favor of plaintiff entered upon a trial at circuit without a jury.

      Abram Kling, for app’lt; A. M. Card, for resp’t.
   O’Brien, J.

This action was brought against the defendant as surety upon a bond dated October 6, 1865, conditioned for the faithful performance and discharge by one Welcome R. Beebe of his duties as trustee, in pursuance of an order of the supreme court appointing said Beebe trustee to receive and hold, for the use and benefit of Maria Louisa Collins, a certain fund of money which had been left by her mother by last will and testament. Subsequent to the death of the trustee Beebe, which occurred in 1884, Maria Collins, who was the life beneficiary of the trust fund, upon her application was appointed trustee under an order which directed her to apply the use, interest and income of the fund, as directed by her mother’s will, to her own use, and the principal to the person or persons to whom the same should be determined to belong. She, having made a demand upon the executors of the former trustee and failing to obtain the fund, commenced an action against such executors, which was referred to a referee, who subsequently reported that said Beebe, as trustee, was chargeable with the principal and interest upon the fund. Upon such report of the referee a judgment for the sum of $12,357.67 was entered, that being the amount as found by the referee for which said Beebe, as trustee, was chargeable. Having failed to obtain payment of this judgment or the satisfaction of an execution issued thereon, this action was commenced to enforce the liability of the sureties.

Upon the trial, evidence was presented that a check for the amount of the trust fund was delivered to Beebe subsequent to his appointment as trustee. Such evidence, supplemented by the judgment entered upon the report of the referee, was relied upon as establishing the defendant and appellant’s liability. This liability was resisted upon two principal grounds; the first, that the judgment entered against the executors of the trustee, fixing the amount for which the trustee Beebe was chargeable, was not binding upon the surety.

In Black on Judgments, § 586, page 698, it is said that “ the general tendency of the English and American jurisprudence is to hold, in ordinary cases of suretyship, that a judgment against the principal is not conclusive upon the surety, unless the latter was made defendant to the action. * * * On the whole, the best rule which can be deduced from the authorities is, that the judgment is conclusive upon the surety only in cases where the principal may be considered as the former’s agent in the particular transaction and where, upon a fair construction of the contract of indemnity, it may be construed as binding the surety to a responsibility for the conduct or result of the suit in which the judgment is rendered ; otherwise, the judgment proves only the fact of its own existence.” And in the next section this author states that “ where the obligation of thb surety is simply to pay money if the principal fails'to do so, there is no such privity between them as will make a judgment against the principal evidence against the surety. But the case is different with regard to sureties on bonds given in the course of a suit or other proceeding, for in the latter instance the surety submits himself to the acts of the principal and to the judgment as itself a legal consequence falling within the suretyship.”

In the American and English Encyclopædia of Law, vol. 12, page 93, the rule is thus stated: “ Where a surety has contracted with reference to the action of his principal in some judicial proceeding, he is bound by a judgment against the latter. It would seem by the weight of authority in all other cases of suretyship, judgment against the principal is at least prima facie. evidence against the surety. But a surety may show that a judgment against his principal was obtained by fraud or collusion, or that the court had no jurisdiction to render the judgment.”

With respect to bonds given by administrators, it has been held in this state, Casoni v. Jerome, 58 N. Y., 316, that sureties are bound by the decree of the surrogate, “ because by their contract they have made themselves privy to the proceedings against their principal, and when the principal is concluded the surety, in the absence of fraud or collusion, is concluded also ” (citing cases).

In Harrison v. Clark, 87 N. Y., 576, Casoni v. Jerome was cited and approved, and, therefore, the law may be regarded as settled that, with respect to sureties upon an ordinary administration bond, they are bound by the decree of the surrogate or by a judgment against their principal, in the absence of fraud or collusion.

The surety’s obligation upon such bonds is to be responsible for the faithful discharge of the administrator’s duties, and the binding force of a decree, as stated in the authorities, results from the nature of the contract or obligation which the surety assumes.

The inconsistency that upon a first glance would seemingly be present in the authorities will be dissipated if we bear iu mind that there is. no fixed or rigid rule which under all circumstances would make a surety bound by an order or judgment against his principal, but the question as to whether or not he is so bound is to be determined by the nature of his obligation and the language and terms of the bond itself. Thus in Thomson v. MacGregor, 81 N. Y., 593, which was a case of a receiver's bond, the surety upon which was sued after the principal was ordered to pay over a sum adjudged to be the balance of the trust funds in such principal’s hands, which order was not obeyed, and where it was claimed that such order was conclusive upon the surety, it was held that the surety was not bound by the order, “ and in the absence of express terms in the bond binding him to submit to the judgment of the court, such a liability could not be imposed upon him.”

To determine a surety’s liability and the extent to which he is bound by the judgment against his principal in the case at bar, resort must be had to the bond itself, which provides as follows: ‘.‘Now the condition of this obligation is such that if the above bo miden Welcome R. Beebe shall and will well and faithfully perform and discharge his duties as trustee, as named in said order, then this obligation shall be void, else to be and remain in full force and virtue.”

We here find that neither by the nature of the contract nor the express terms of the bond does the surety obligate himself to be bound by the judgment of the court; and when it is sought to charge him, after the death of the principal, with the latter’s unfaithfulness, he should not be precluded by a judgment obtained against the representatives of the deceased principal in an action to which he was not a party and of which he had no notice.

But, assuming that the judgment was not binding upon the surety, there was, nevertheless, evidence presented showing that the former trustee had received the principal of the fund and had failed to turn over the same, having converted it to his own use. The finding to this effect, therefore, was based on sufficient evidence, and, nothing to the contrary being shown, it would justify a recovery against the surety for such principal sum.

In regard to the interest, it seems to me there are two grounds opposed to the recovery thereof.

In the first place, no evidence has been given that interest was ever received by the trustee, and in the absence of such evidence the surety has a right to invoke the rule that a trustee is not liable to pay interest upon a fund to a greater extent than interest has been received, which rule would prevent the trustee’s being chargeable with, interest in a case where no interest was obtained by him upon a trust fund.

Secondly, even though it had been shown that interest had been earned, it could not have been recovered by this trustee, because it was moneys that belonged, not to the trustee, hut the beneficiary, to whom it should from time to time have been paid, and as to her right to recovery, in view of the laches here appearing, there would be serious question. For with respect to the interest on the trust fund, which could have been demanded yearly, there is much force in the suggestion that the failure of the beneficiary, through the trustee or otherwise, to enforce her claim to the income that may have been earned by the trust fund for nineteen years was such laches as to preclude the trustee for her benefit enforcing such a liability against the sureties. This would not affect the surety’s liability for the fund, because as to such trust, fund Beebe was entitled to hold the same during the life of the beneficiary, and it was only upon his death and the appointment of another trustee that the right to demand it existed. It should be remembered in regard to the interest, however, that the beneficiary was of full age and in a position to enforce her claims against the trustee ; and the evidence shows that during all these years she had other business transactions with the trustee, and that, as appears from the judgment roll, payments had been made to her “ aggregating large sums of money far exceeding the trust fund or interest thereon.” The referee held, upon the testimony before him, that these moneys so paid by Beebe had reference to other claims held by the beneficiary against him, and were properly applied to discharge such claims, leaving Beebe still chargeable with the trust fund and interest thereon. This conduct of the beneficiary, in permitting during nineteen years the trustee to retain the principal and any interest that may have been earned on the fund, seems to us to have been a violation of that duty which the beneficiary owed to the sureties. Such interest, if earned yearly, could have been obtained in a proper proceeding, and it was unquestionably laches for the beneficiary to suffer all these years to pass by and pile up a liability against the sureties, which she could have prevented by insisting upon her rights, and thus she would have discharged the duty which in all fairness she owed to the sureties upon the bond. We do not think, after such conduct, that she should be allowed to profit thereby at the expense of the sureties. In view of the grave question presented as to whether the trustee ever received any interest on the trust fund,—the claim being that he had mixed such trust funds with his own money and had never had the same out at interest, which could have been prevented by the slightest effort or diligence being exercised to ascertain the condition of the fund by the beneficiary at any time during these nineteen years,—no hardship or injustice results to the beneficiary or those succeeding to her interests by preventing her from profiting by her own laches.

Although the case of Toles v. Adee, 91 N. Y., 562, is not similar to the one at bar in any way, the general statement of the law therein contained is applicable to the question we are here discussing. As therein said: “Where the contract of a surety is not an absolute guaranty of payment of a debt of his principal, but simply an undertaking of such a pature that proceedings must be taken- against the debtor before the obligation of the surety to pay arises, the law implies a condition on the' part of the creditor that due diligence shall be used in proceedings against the principal; and to establish a defense based on a breach of this condition it is not necessary for the surety to show a request on his part to the creditor to proceed, and damage resulting to him from a failure to comply. The law presumes injury, and it is not incumbent upon the surety to establish it as a matter of fact.”

But, apart from all this, the beneficiary, and not the trustee, could alone recover such interest.

Another and a serious question is as to the validity of the order appointing Maria Collins trustee in the place and stead of Beebe, deceased. She was the life beneficiary, and the result was to vest in her as trustee the legal title to a fund, the use, interest and income of which was bequeathed to her during life. In Greene v. Greene, 125 N. Y., 506 ; 36 St. Rep., 30, it is said: “ To the constitution of every express trust there are essential three elements, viz.: a trustee, an estate devised to him and a beneficiary. The trustee and the beneficiary must be distinct personalities; or otherwise there could be no trust, and the merger of interests in the same person would effect a legal estate in him of the same duration as the • beneficial interest designed. That the legal and beneficial estates can exist and be maintained separately in the same person is an inconceivable proposition. It is quite as much of an impossibility, legally considered, as it is physically.”

And in Woodward v. James, 115 N. Y., 346; 26 St. Rep., 147, the court said : “It is undoubtedly true that the same person cannot be both trustee and beneficiary of the same identical interest. To say that he could would be a contradiction in terms as complete and violent as to declare that two solid bodies can occupy the same space at the same instant.”

Upon these and other authorities which support the same view, it is strenuously urged by the appellant that the order of the court appointing Maria L. Collins trustee was an absolute nullity, upon the theory that no person can be both trustee and beneficiary for the same interest at one and the same, time ; that the existence of this dual relation is a physical and legal impossibility, and that no decree, however positive in its terms, can render such a relation a reality. We think that in this argument and in the authorities to which reference has been had, the appellant overlooks the distinction between the creation of a trust and the selection of a trustee to carry out the provisions of a valid trust. As held in Greene v. Greene, supra, the fact that the beneficiary was appointed trustee would prevent the creation of a valid trust, and for the reasons therein stated. But where a valid trust has been created, which it is conceded was the situation in the case at bar,, it remains but to determine what effect, if any, results from the appointment of the beneficiary for life as trustee of the trust fund. It no doubt would have been more advisable to have selected some one else, because, as the fund was intended eventually to go to persons other than the beneficiary for life, it would be more natural and apparently more secure to have it held by some one other than such life beneficiary, who might not be very zealous in seeing that the fund was preserved and kept intact for those who would succeed after her death. We do not think, however, that any of these reasons or suggestions as to the impropriety of the appointment are sufficient to justify our holding that the court was without jurisdiction, and that the order itself appointing the life beneficiary was void, or, as contended for by the appellant, an absolute nullity. Those interested might have a reasonable ground for applying for another trustee; but we fail to see how, upon the trial of an action brought by a trustee appointed by order of the court, the surety upon a bond given by a former trustee can thus collaterally assail the validity of this appointment Assuming, however, the surety has such right, we do not think that the order appointing the beneficiary as trustee was either a nullity or void, for, as held in Moke v. Norrie, 14 Hun, 132, “ a cestui que trust is not absolutely excluded from occupying the relation of trustee for his own benefit, and especially is this so where he is but one of several trustees.”

I, therefore, have reached the conclusion that for the principal sum shown to have been given to the trustee, and never accounted for to the beneficiaries, the surety is liable, less any amount which he can legally claim as an offset against the same. In this connection the defendant proved that he had given to the beneficiary some $900, and this fact was found by the learned trial judge. This finding was not excepted to, and no appeal having been taken by plaintiff from the judgment, the defendant is entitled to be credited with such amount.

My opinion is that the judgment in favor of the plaintiff should be reduced to the principal sum of $4,297.29, less the $900, for which balance, with interest thereon from the 22d day of May, 1884, the plaintiff should recover, and that the judgment as so modified should be affirmed, without costs to either party upon this appeal.

Ingraham, J.

I do not think that the judgment against the executor of Beebe is conclusive upon these defendants, who were sureties upon Beebe’s bond, but who were not parties to the action in which such judgment was rendered, and had no notice of its pendency.

It seems to me that this question was presented in the case of Thomson v. Mac Gregor, 81 N. Y., 596, and that the decision therein is controlling.

In that case one Biker was appointed receiver of the copartnership property, and he gave a bond, the condition' of which was “If the said Charles B. Biker shall henceforth faithfully discharge the duties of his trust.” Biker was removed as receiver, and, by an order upon an accounting, was directed to pay to his successor a sum of money as the balance in his hands.

It was held in the court below in that case that the order was conclusive upon his sureties, and in reversing the judgment against the sureties, the court say: “ If the order was wrong, if the receiver owed no balance, if he was required to pay what was not due, then he has faithfully performed his duty as receiver, though not obeying the mandate of the court. It is said the surety has contracted that the receiver will pay. Undoubtedly: but pay what f Not any sum which the court may order, unless, indeed, the surety had bound himself by that rigorous contract, but such sum as the receiver justly owes and as an honest and faithful officer ought to pay. And upon that question the surety has a right to be heard. We do not see that it avails anything to try to distinguish between an order which is binding as an adjudication against his principal, and an order which is conclusive evidence as a fact. The substantial thing remains, though the phrases are changed. The doctrine, pushed to its logical results, might make every surety for the performance of duty bound by the adjudication against his principal, or so nearly so as to practically abrogate the rule which holds him only when he has explicitly contracted to submit himself to the judgment of the court. We think the vice of the reasoning lies hid in the failure to sufficiently distinguish the relative positions of the principal and surety. As between the principal and the creditors of the fund, it is the receiver’s duty to pay according to the order, for he has been heard and is bound by the adjudication. But, as between the surety and such creditor, it is not the receiver’s duty to pay according to the order made without the surety’s knowledge, as to which he has not been heard, and which is not against him a binding adjudication.”

And in commenting upon the cases where it is held that the sureties on an administrator bond are bound by an adjudication as to the amount due by the administrator, such as Scofield v. Churchill, 72 N. Y., 565, and Casoni v. Jerome, 58 N. Y., 320, the court say: “ In these cases, besides the general covenant to faithfully execute the trust reposed, there is also the special agreement to obey all orders of the surrogate. That the rule in these cases which makes the adjudication against the principal conclusive on the surety is always based upon the special covenant, which in terms submit the latter to the judgment or order of the court, indicates very plainly that the general words were not deemed sufficient in and of themselves to effect that result” * * * «jn every decision which has made the adjudication against the principal conclusive upon the surety it has been founded on apt words or phrases other than the general promise to perform duty, and which indicate an understood purpose to contract beyond the ordinary liability.”

The condition of the obligation sued on in this case is as follows: “ Now the condition pf this obligation is such that if the above bounden Welcome R. Beebe shall and will well and faithfully perform and discharge his duties as such trustee as named in said order, then this obligation shall be void, else to be and remain in full force and virtue.” And, ns was said in Thomson v. Mac Gregor, supra, if the trustee accounts for the trust fund which has come into his hands he has well and faithfully performed and discharged the duties as such trustee, and the plaintiff, to recover upon the bond, must prove by evidence admissible against the sureties that the principal had failed to account for the trust estate in his-hands.

The court below found that Beebe was appointed trustee by an order of the supreme court, dated September 11, 1865. That fact was proved by the order of the court making the appointment, and that order is also recited in the bond signed by these defendants.

The court also found the making and execution of the bond sued on, which bond was also introduced in evidence. The court also found that on the 25th of October, 1865, the sum of $4,297.29 was paid to Beebe as trustee, and that fact was proved by the evidence of John Collins, who swore that he was present when the money was paid to Beebe. The court then found that Beebe continued to be trustee of the fund to the date of his death, which occurred ón the 22d of May, 1884; that he left a last will and testament, which was admitted to probate, and letters testamentary issued to his executors therein named, and there was evidence to sustain these findings.

The court then found that by an order dated 24th of June, 1884, Maria Louisa Collins, the relator, plaintiff in the action, was appointed by the court to receive and hold the said fund of $4,297.29 in place of said Beebe, and that fact was proved by the order making such appointment, and that the trustee therein named duly filed her bond and qualified.

The court also found that on the 24th day of January, 1885, a certified copy of such order was served upon Beebe’s executor, and a demand was made for the payment to the substituted trustee of the fund of $4,297.29, which demand was refused, and no payment was made, and that fact was proved by the person making the demand.

It was also found, and such finding was sustained by evidence, that the substituted trustee commenced an action against Beebe’s executors to recover that fund and the accrued interest thereon ; that judgment was subsequently entered against said executors for the amount of said fund and accrued interest, and execution having been issued upon such judgment, it was returned unsatisfied, and no part thereof has been jiaid.

It was thus clearly proven by competent evidence that the trustee had failed to perform and discharge his duty as trustee as to the principal of said trust fund, and plaintiff was, therefore, entitled to judgment against the sureties for the principal of such fund and interest from the date of the judgment against the trustee.

There was, however, no evidence in the case that the trustee had received or had failed to pay to the beneficiary named the income upon the trust fund prior to his death.

There is also another objection to the recovery oi any interest by this plaintiff which is fatal to such a recovery. The order appointing the plaintiff trustee is not printed in the case, but the court found that by such order “ the relator-plaintiff herein was appointed, upon Jier application to this court, trustee to receive and hold the said fund of $4,297.29, and to apply and use the interest and income thereof to her own use, as in and by the said last will of said Ann Bloodgood, her mother, directed, and to account for and pay over the principal unto the person or persons to whom the same shall be determined to belong.”

By this order the said substituted trustee was not appointed trustee of nor authorized to receive the income that had accrued prior to the death of Beebe. Indeed, such income was not part of the trust estate, but belonged to the person named as beneficiary individually, and it would appear that all the substituted trustee was entitled to recover from the estate of the deceased trustee was the trust fund, leaving the beneficiary to proceed against the trustee for the amount due her individually for income of such trust property.

The defendant, however, objects to judgment being entered, on the ground that the appointment of the substituted trustee in place of said Beebe was absolutely void, on the ground that the court had no poweh to appoint a beneficiary in such a trust as trustee.

I do not think, however, such order was void. It appeared by the will of Ann Bloodgood that Maria Louisa Collins, the person appointed such substituted trustee, was given and bequeathed the use, interest and income of the sum of $4,500 for and during her natural life, to be paid to her half yearly on her separate receipt. As no trustee was appointed by such will, this court, by an order entered on the 11th of September, 1865, appointed Welcome R. Beebe trustee to receive that sum and apply the use, interest and income of said fund in the manner and to the person in the said will of said Ann Bloodgood mentioned. This trustee was appointed by virtue of the jurisdiction vested in a court of ■equity to prevent the failure of- the trust by reason of the failure to appoint a trustee, and the court thus took upon itself the execution of the trust.

Upon the death of Beebe the trust vested in the supreme court, and it became the duty of the court to appoint a person to execute the trust. I think the court had power to appoint the beneficiary for that purpose, and it was that power that the court exercised when it appointed the relator-plaintiff as such trustee.

The decisions that hold that a valid trust is not created where the person creating the trust attempts to vest in the beneficiary the trust property, as trustee, do not apply, for here a valid trust was created, and there is no restriction in the power of the court as to the selection of its agent to cany out the trust.

It is not necessary that we should approve of the action of the court in appointing the beneficiary as the person to execute the trust, but I do not think that the action of the court m appointing such person was void, so that such action can be attacked collaterally.

■ It appears, therefore, that, under the order appointing plaintiff as such trustee, no recovery can be had in the action for interest upon the trust fund prior to the death of Beebe.

The court also found that defendant Donohue, between January 1, 1887, and January 1, 1890, lent and advanced to plaintiff divers sums of money amounting to the sum of $900, and a conclusion of law that defendant was entitled to deduct that sum from the amount due on the bond.

The plaintiff, in 'his brief submitted on the argument of this appeal, objected to the allowance of this sum, but he did not except to the finding of the court nor to the conclusion of law, and did not appeal from the judgment. The plaintiff cannot object, on this appeal, to the allowance of this $900, and it should be deducted from the amount due to plaintiff.

The judgment should be modified by reducing the recovery to the sum of $4,297.29, less $900, making $3,397.29, and interest thereon from the 22d day of May, 1884, and as so modified affirmed, without costs to either party upon this appeal.

Van Brunt, P. J. (dissenting)

Upon an inspection of this record it would appear that this action was tried at a circuit term of the supreme court of the state of Uew York. We are not aware of the existence of any such term or branch of the supreme court, and if the regularity of this judgment had been assailed upon the ground that it appeared upon its face that the proceedings were assumed to have been had in a court which had no existence, a serious question might have been raised. It is apparent that the counsel for the respondent is unaware of the fact that the circuit courts and the supreme court are entirely different tribunals, and that there is no provision of law by which issues of fact can be tried before a jury in the supreme court. But as no motion has been made to set aside this judgment upon that ground, it cannot be considered here. But this manifest looseness of practice and ignorance of the constitution of the courts cannot be allowed to pass unnoticed.

In the disposition of this case the questions of law involved will be considered upon the findings of the learned court below.

It appears that, by the will of one Ann Bloodgood, who died in March, 1855, there was given and bequeathed the use, income and interest of the sum of $4,500 to Maria Louisa Collins for and during her natural life, to be paid to her half yearly on her own separate receipt; that letters testamentary upon this will were issued to one William 0. Brinclcerhoff, an executor therein named ; that upon the settlement of the estate of said Ann Blood-good the said sum of $4,500 became reduced to the sum of $4,297.29 ; and that, by order of the court, in September, 1865, one Beebe was appointed trustee to receive said sum of $4,297.29 .and to apply the use. interest and income of said fund in the manner and to the person in said will ■ of said Ann Bloodgood mentioned; that said Beebe was required to give a bond in the penal sum of $10,000, and that the bond upon which this suit was brought was thereupon executed by the defendant Donohue and one Byckman, which bond was duly approved, and thereupon said sum of $4,297.29 was paid to Beebe; that Beebe continued to hold said sum until his death, -which occurred in May, 1884, and subsequently thereto his last will and testament were duly admitted to probate by the surrogate of the county of New York; that in June, 1884, this court attempted to appoint said Maria Louisa Collins, the beneficiary of the fund in question, upon her application upon her petition to the court, trustee, to receive and hold said fund, and to apply the use, interest and income thereof to her own use, and to account and pay over the principal to the person to whom the same should be determined to belong, and in January, 1885, said Collins, having duly qualified by executing the bond required by the order appointing her, demanded of the executors of Beebe the fund of $4,297 29, together with the interest thereon, and that they refused to comply with the demand so made; that in August, 1885, said Maria L. Collins, as trustee, commenced an action against the executrix and executors of Beebe for an accounting of the acts and proceedings of Beebe as to said fund, which accounting was duly ordered, and upon the coming in of. the referee’s report upon such accounting a judgment was entered for the sum of $12,367.65, being the principal sum of $9,696.40, together with interest thereon from the 22d of May, 1884, and $658.19, costs of the action, in all amounting to $13,015.84; that upon due leave of the surrogate execution was issued upon the judgment, which was returned by the sheriff wholly unsatisfied; that no'part of said judgment has been paid, and the same remains wholly unpaid; and that demand for the payment thereof has been made of the defendants Donohue and Byckman, and they both refused to comply with such demand. The court found that the defendant Donohue had loaned and advanced to said Maria L. Collins the sum of $900.

Upon these facts, judgment was given by the court against the defendants Donohue and Byckman for the amount of the bond, $10,000, with interest thereon from the 20th of December, 1888, $2,100, amounting in the aggregate to $12,100, less $900, making in all $11,200, besides the costs and disbursements of the action, and judgment having been thereupon entered, this appeal is taken.

Various questions have been raised upon this appeal, some of ■ which it is necessary very briefly to discuss. And the first is that the court had no power whatever to appoint Maria L. Collins trustee, and that she could obtain no title whatever to the trust fund by reason of such appointment.

It is claimed by the counsel for the respondent that said Maria L. Collins, as cestui que trust, was not excluded from occupying the relation of trustee for her own benefit, and he cites some authorities which favor that view. But it seems to us that a very brief consideration of three things necessary to the existence of a trust shows the fallacy of such a position, and the recent authorities are distinctly opposed to any such incongruity.

It seems to be absolutely certain that the court has no greater power in the appointment of a trustee than a testator has. And if a testator has no power to appoint a cestui que trust his trustee, then it would seem to follow as a natural consequence that an attempt upon the part of the court to make such an appointment would be wholly nugatory. There are three necessary ingredients to the existence of a trust: First, the subject matter of a trust; second, a trustee; and third, a beneficiary. And if there is an attempt to merge the functions and duties of a beneficiary with those of a trustee, the trust is absolutely destroyed.

In the case of Woodward, v. James, 115 N. Y., 346-357; 26 St. Rep., 147, this view was sanctioned, where it is held that “ it is undoubtedly true that the same person cannot be at the same time trustee and beneficiary of the same identical interest. To say that he could would be a contradiction in terms as complete and as violent as to declare that two solid bodies can occupy the same place at the same instant. Where, however, the trustee is made beneficiary of the same estate, both in respect to its quality and quantity, the inevitable result is that the equitable is merged in the legal estate, and the latter only remains.”

And in the case of Coster v. Lorillard, 14 Wend., 265, it was held that the legal character of the trustee is wholly separate and distinct from that of the beneficiary ; each is incompatible with the other, and both cannot by any possibility be united in the same person. It is, therefore, apparent that the court had no power to make the appointment of this beneficiary as a trustee for herself, and if such a thing was attempted to be done, such action upon the part of the court would be void.

Now it is to be observed that all that the court did was to appoint Maria L. Collins trustee to receive and hold the said fund of $4,297.29, and nothing else, and to apply the use and income of that fund to her own use, and to pay over the principal, etc. She was not appointed trustee of any claims which existed against the prior trustee, or of any income with which the prior trustee was chargeable. She was simply appointed trustee of the original fund of $4,297.29, and of nothing else.

Under these circumstances, it is difficult to see how she acquired title as trustee- to anything more than the fund of which she was appointed trustee. And, therefore, the claim sought to be enforced in this action, and for which judgment has been rendered, is far in excess of anything to which the court has attempted to confer title upon her.

If it be urged that the judgment against the executors of the former trustee is conclusive upon these defendants, it is sufficient, to say that it appears upon the face of the title upon which the rights of the plaintiff who brought the action absolutely depend, that she had no claim whatever to a large amount which went to make up that judgment. And there is no rule which makes a surety responsible simply because a j udgment is entered against his principal which, upon its face, shows that it was entered without right.

Under these circumstances, we think that the judgment appealed from was erroneous, and should be reversed, and a new trial ordered, with costs to the appellant to abide the event.

Judgment modified as directed in the prevailing opinions, and as modified affirmed, without costs to either party.


source: Caselaw Access Project

author: Kellogg, J. Herrick, J.

license: Public Domain

text:
    The Board of Education of Union Free School District No. 1, of the Town of Waterford, App’lt, v. The First National Bank of Richfield Springs et al., App’lts, and Alexander G. Cunningham, Resp’t.

      (Supreme Court, General Term, Third Department,

      Filed July 8, 1893.)

    1. Contract—Abandonment—Completion by surety.
    The contractors for building a school house abandoned their work prior to its completion, and respondent, who was the surety on their bond and assignee of the contract, went on and completed the same at an expense exceeding the balance of the contract price. Held, that he was only-entitled to recover such balance.
    2. Same—Value of work performed by contractor.
    The true test of the value of the work performed by the contractor to the time of abandonment is the contract price less the cost of completion, which, in this case, shows that the contractors were overpaid.
    3. Same—Estoppel.
    Provisions in a building contract, to the effect that any question as to the true meaning of drawings or specifications should be referred to the architects, whose decision should be final and conclusive; that the amount of work done and material furnished should be ascertained by the estimate of the architect, and that any disagreement that cannot be settled by the architects should he settled by arbitration, do not make the decision of the architects as to the monthly statements conclusive, and are not intended to influence the conduct of any outsider, and the owner is not thereby estopped to deny liability as against a third party who has advanced money on an estimate approved by the architects.
    Appeal by the plaintiff and the defendants, the First National Bank of Bichfield Springs, John D. Henderson, as receiver of John Brown and Charles Brown, Bichard J. Williams and Edward Manogue from a judgment in favor of defendant Cunningham.
    Action 'of interpleader and to quiet conflicting claims made against plaintiff under a contract to build a school house.
   The following is the opinion of the court below:

Kellogg, J.

This actionis brought, as appears by the complaint, to have determined to whom among the defendants plaintiff should pay money in its possession, and the amount to be paid to each. The apparent theory is that a certain sum of money is by order of the court deposited with the county treasurer, subject to distribution among the defendants by judgment of this court; the plaintiff being only interested in properly and safely being rid of the money and all liability to any defendant. That the defendants should litigate among themselves their rights thereto. The-answer of the several defendants, and the course the litigation has taken, develops a somewhat different theory, which may also be considered consistent with plaintiff’s right to maintain the action, viz.: To whom among defendants is plaintiff indebted, and in what sum or sums? Various independent claims have by the several defendants been made upon plaintiff, all growing out of a single transaction. One suit is pending by defendant Cunningham against plaintiff, claiming the entire sum in plaintiff’s possession. Another is threatened by defendant, the Bichfield Bank, claiming a portion of such money, and sundry proceedings supplemental to execution in favor of other defendants are also pending, liable to ripen into several actions in the name of the receiver of John and Charles* Brown (two other defendants) against the plaintiff. And while the sum of plaintiff’s total indebtedness is conceded to be a limited sum, and its present obligation to each and all of the defendants is based on a single contract made with defendants John and Charles Brown, and not upon its separate dealings with other defendants, yet the plaintiff is in peril from these various claims, and I think properly brings into court in one suit all these defendants, and is entitled to judgment here determining all questions raised Objection is made by no defendant except defendant Cunningham to this mode of procedure. There is no difficulty in making a full determination of all the questions in a single action. In such an action all matters of fact might properly be left to a j uiy, if a jury were insisted upon; and even if a jury trial were denied, I am of the opinion that theoretically great injustice to the litigant is outweighed by the threatened vexatious litigation and expense attending a denial to plaintiff of standing in court in such an action.

The wnole controversy grows out of a contract made by plaintiff in March, 1891, with defendants John and Charles Brown to build a school building in the village of Waterford for $32,000. The contract is in writing. The contractors entered upon performance promptly, but before completion, and on November 15, 1891, abandoned the work, and without excuse, or pretense of excuse, refused to further perform. And defendant Cunningham, who was one of the sureties on the contractors’ bond, and was also assignee of the contract from John and Charles Brown after the abandonment, completed the building after the manner prescribed by the contract. The contract stipulated for payments of ninety per cent, monthly as the work progressed. At the time of the abandonment by the Browns they had been paid in money by plaintiff $23,271.54. Extra work had been done, of value over certain proper deductions of $256.17 ; and after the above named payments the plaintiff at time of abandonment had in hand, to pay for balance of work and material to'complete the building, exactly $8,984.63. This was what plaintiff would have to have paid the Browns had they gone on and completed the building. About this there is no dispute : and this was known to Cunningham wdien he took his assignment from the Browns of the contract, and when he first began work after the Browns left. It is clear, I think, from the position taken by Cunningham from the beginning that he never had other expectation than to be paid out of that balance in plaintiff’s hands, and no sum in excess of it, however much the completion of the building might cost him. This from his actions and his conversation the plaintiff also had a right to understand. And the claim of counsel for this defendant, made at the close of this case, that the facts warrant a judgment upon a quantum meruit for the value of labor and materials in completion of the building by Cunningham, and in excess of the sum in hand, and without regard to the contract or to the payments actually made to the Browns, is untenable.

If Cunningham were the only party in interest here, obviously all that would be necessary in disposing of the case would be the ascertainment of the sum in the hands of plaintiff unpaid upon the contract, and direct the payment of such sum (with interest from the time when due) to him; but the interest of the other defendants, if any they have, is in the sum due the Browns at the time of abandonment, over and above the sums paid to them by plaintiff, and the plaintiff not seeking to claim any forfeiture by reason of the abandonment, investigation was largely directed to the determination of this question, to wit.: The actual value of the labor and materials furnished by the contractors, John and Charles Brown.

The testimony is practically undisputed that the contract price, $32,000, was a fair and reasonable estimate of the cost of construction o'f the building in accordance with the terms of the contract. It may also be regarded as undisputed that the actual and necessary cost of finishing the building after the Browns left it was $10,941.09. Evidently the only accurate test of value or cost of the unfinished building at time the contractors left it is the contract price less cost of completion. This test is eminently more satisfactory than any judgment of architects or builders as to value of work and materials furnished by the Browns prior to their departure. From this it appears beyond question that instead of there being anything owing the Browns when they left, that they had been largely overpaid in money by plaintiff for all they had furnished and done. This proof also established that after Cunningham is paid, there will be nothing in plaintiff’s hands for the Browns, or any of the defendants claiming under them, or either of them; for this cost of completion in thQ sum of $10,-941.09 was wholly borne by Cunningham.

It is contended, however, by the defendant, The Richfield Bank, that plaintiff is estopped from denying that it owed to the Browns on November 15,1891, in excess of the money already paid them, the further sum of $3,500, and this contention is based upon these facts, viz.:

The written contract for the construction of this building possesses the following language:

“ The contractors shall and will well and sufficiently perform and finish under the direction and to the satisfaction of said George C. Adams and W. P. Regan, architects, as aforesaid (acting as agents of said owners) all the work included in the specifications * * * according to the true intent and meaning of said drawings and specifications and of these presents. * * * In the event of any question arising respecting the true meaning of drawings or specifications, reference should be made to the architects, whose decision thereon, being just and impartial, shall be final and conclusive. * * * (The contract price, $32,000) to be paid as follows: On or before the tenth day of each month ninety per cent of the work done and material furnished during the month previous. The full amount of work done and material so furnished to he ascertained by the estimate of the architect.”

The specifications provide that the work shall be done to the satisfaction of the architect and “ building committee ” and “ any disagreement that cannot be settled by the architects or building committee shall be settled by three disinterested arbitrators.”

It is the contention of counsel for the bank that the architects or architect were made by this language final arbitrators or umpires, and that their decision on any matter was final and conclusive, and that this is especially so as to monthly estimates of value of work done and material furnished during the progress of the work. Without doubt the contractors before they could demand monthly pay were required to obtain (if practicable) the architect’s estimate. Wyckoff v. Meyers, 44 N. Y., 145. But I think it is contemplated by the parties that in case either the contractors or building committee were dissatisfied the “ disagreement shall be settled by arbitration,” and this provision destroys the claim of conclusiveness to such estimates in any event. It appears that on the 15th of November, 1891, the architect Began made what purported to be an estimate of all the work done and material furnished up to that time from the beginning. That such estimate was made under the supervision of JohnBrown, the contractor; and in addition to showing the value of such work and materials to be $29,252.51, also showed the amount paid Brown, viz., $19,171.54, and after deducting ten per cent found a balance due of $7,155.72. This pretended estimate is all in the handwriting of one Carroll, clerk of the contractors, and has across its face the name “ W. P. Began,” signed by the architect. This estimate purports on its face to be “an approximate estimate for work done on Waterford school to date.” When made the paper was handed by the architect to John Brown, who took it on the samé day (November 15) to the chairman of the building committee, Mi. Ford, who immediately expressed dissatisfaction and declared the estimate grossly excessive, and refused to pay more than $3,500 thereon. Such sum was paid to and received by Brown, and the paper left with Ford for the plaintiff. This seems to have been a settlement of this dispute without the intervention of arbitrators.

It is shown upon the trial that this estimate was, as stated by the building committee to Brown, grossly excessive; that the error was so great as to characterize it as made in bad faith and fraudulent. That instead of the value of the work and material being $29,252.21, its value was not in fact over $21,058.91. After receiving the $3,500 on this estimate from the building committee, Brown returned to the architect Began, and procured from him another paper similar in all respects to the one left with the building committee, except across its face was written by Began:

“ The above is approved by George C. Adams and W. P. Began, architects, per W. P. Began, Lawrence, Mass.”

This was signed by Began, at Brown’s solicitation, after being told of the conclusion of the building committee and of the refusal to pay the full sum of $7,155.72 ; and so signed to enable said Brown to procure the money elsewhere, and not for the information of either the plaintiff, its building committee or the contractors, or to enable the contractors to procure money from the plaintiff under the terms of the contract. It cannot be claimed, nor does counsel for the bank claim, that such a purpose (the issuing of estimates to procure money elsewhere) was contemplated by the parties in the language of the contract, or through any dealings between them thereunder.

This second paper was taken by Brown to the defendant, the Richfield Bank, a long distance from Waterford, and on the 17th of November, 1891, after the contract had in fact been abandoned, and used with said bank as collateral security to a note; and a loan of $3,500 was procured from the bank thereon. The bank made no inquiry of anyone but Brown; had no knowledge of the terms of the contract, or of the authority of the architect, or the reasons of refusal of payment by plaintiff. The plaintiff knew nothing of this transaction, and was ignorant of the acts and intentions of the architects and said Brown respecting the second paper.

It is under this state of facts that the bank now claims that the plaintiff is estopped from denying that it owed this $3,500 to Brown on November 15, 1891.

In the hands of the contractors, it needs no argument to convince that this paper purporting to be an estimate would have been valueless as the basis of a claim against the plaintiff. The architect’s estimate is not conclusive under the terms of this contract, even when honestly made; and when it purports simply to be an approximate ” estimate, it does not profess to fix the exact amount; and when the “ approximate ” estimate is made in bad faith, evidenced by mistakes so gross, as in this case, as to characterize the estimate as a fraudulent one, it is sufficient to destroy it for any purpose in the hands of the contractors. Kihlberg v. U. S., 97 U. S., 398; United States v. Robeson, 9 Peters, 319; Smith v. Briggs, 3 Den., 73; McMahon v. N. Y. & E. R. R. Co., 20 N. Y., 464; Smith v. Brady, 17 N. Y., 174; Butler v. Tucker, 24 Wend., 447; Whiteman v. Mayor, 21 Hun, 118.

As an “ award ” the essential elements are lacking—authorization, exactness and honesty.

In the hands of the defendant, the Richfield Bank, it is difficult to see how this paper can have greater value than if possessed by the Browns, or how the principle of equitable estoppel can be invoked in its aid. When a person has made a deliberate statement with a view to induce another to act, he may not be at liberty to deny the statement so made, but it must be a statement to or some neglect of duty to the person led into that belief, or, what comes to the same thing, to the general public of whom the person is one, before the benefit of the doctrine of estoppel can be claimed. When the declaration or statement is not made to the person directly, it must have been made under such circumstances as to indicate that it was intended to reach third persons, or the community at large. And the person claiming the benefit of the principle must show that he has acted in the transaction in which he was deceived with ordinary caution.

The plaintiff here made no statement to the bank directly, nor any statement to the general public. It did not clothe the architect with any authority to make any statement to any third person or to the public at large. It is not contemplated by the contract or by any previous dealings between plaintiff and the contractors that the estimates should be put upon the market, or be used as negotiable paper or as security, or that they should be dealt with in any manner by the public or by any member of it. These estimates were simply to be used as the measure of money to be handed out from the school board treasury monthly to the contractors on presentation, when the correctness of the estimate was not disputed. These estimates were never intended to influence the conduct of any outsider; and any such made and put out by the aid of the architect was unauthorized and not the act or declaration of the plaintiff.

In Mechanics' Bank v. N. Y. & N. H. R. R, 13 N. Y., 600, certificates of railroad stock issued by the transfer agent of the company were held not to partake of the character of negotiable instruments, and must be taken subject to all equities existing against the assignor, and as to such the doctrine of estoppel in pais was not applicable.

The same was held respecting a chose in action not negotiable in Bush v. Lathrop, 22 N. Y, 535.

The same in effect is held in Bank of Batavia v. N. Y., L. E. & W. R. R. Co., 106 N. Y., 195; 8 St. Rep., 209.

This was a delivery by the agent of a common carrier of a bill of lading. The court places great stress upon the fact that bills of lading not stamped “ non-negotiable ” were declarations by the common carrier to the general public, and any person might safely rely upon the statements therein contained ; that this was so understood by the common carrier and by the consignor and by the business world, and it was because of this recognized element in bills of lading that the court held that the principle of estoppel applied when these fell into the hands of innocent parties.

The reasoning of Selden, J., in Farmers' & M. Bk. v. Butchers' & D. Bk, 16 N. Y., 141, is to the same effect.

Statements may be made by a party which are not intended to influence the actions of others or intended to be communicated to them, and in such case the doctrine does not apply. See Reeves v. Kimball, 40 N. Y., 311; Mayenborg v. Haynes, 50 N. Y., 675.

Here it was held that a declaration of A. to B., not made for the purpose of being communicated to 0., constitutes no estoppel, although 0. hears of it and acts upon it.

To the same effect is Maguire v. Selden, 103 N. Y., 642; 3 St. Rep., 54.

It was here held: “however understood, could not be extended beyond the party to the transaction in relation to which they were made.”

It is unnecessary to continue citations of cases in the courts. The bare statement of the facts is sufficient when once the principle of estoppel here invoked is clearly understood. Without doubt the Bank of Richfield must stand in the shoes of its assignor of this chose of action, and hold the claim subject to all the defenses and equities which might be urged against the Browns.

C. C. Ormsby (J. W. Houghton, of counsel), for pl’ff, app’lt; James W. Verbeck, for app’lts, Bank, Williams & Manogue and Henderson; Smith & Wellington (Edgar T. Brackett, of counsel), for resp’t.

That the other defendants can have no claim against the plaintiff, since it was found that there was nothing due the Browns at the time of the abandonment of the contract, is too plain for argument. They possessed no legal or equitable claim upon this sum in the hand of the plaintiff, all of which was required to complete the building. They made no contract with plaintiff, and must be relegated to the persons with whom, they dealt—the contractors, John and Charles Brown.

The plaintiff contends that it should not be chargeable with interest or costs. The justice of this claim I do not fully see. ¡Nbr do I regard the nature of this action so far a presentation of equitable claims as to be addressed to the equity side of the court, wherein costs may be a matter of discretion; and if it were, I see no propriety or justice in the retention of the money which should have been promptly paid for the completion of the building. The facts of this case do not press the court with any considerable force to the conclusion that plaintiff was justified'in not paying over the money to Cunningham promptly and in accordance with the terms of the contract. This might have been done safely, and it was clearly plaintiff’s duty to have done it. In no respect is Cunningham at fault; and why he should suffer this delay and lose both interest and costs after a long and expensive struggle is not quite plain, and the justice of this claim of plaintiff does not gain weight upon reflection that really there has been nothing to struggle over. The whole claim of Cunningham has been conceded from the beginning, except the amount, and a proper resort to the contract and the architect at the time might have obviated any disagreement, and the amount have been promptly determined through means in plaintiff’s reach.

The delay caused by plaintiff to the completion of the building was, in the light of this trial, wholly inexcusable. The plaintiff was called upon to decide and to act promptly. It had open to it two courses. It might declare the contract forfeited and assume the completion itself, or it might recognize the contract as continuing, and accept the offices of .the surety, or accept the assignment as satisfactory and recognize him. It did neither. Cunningham acted only the part of a prudent man spending so much time in seeking recognition, and seeking so to avoid the peril of doing his work for nothing. This delay must be charged to plaintiff, and since it was sufficient to excuse the delay in completion of the building beyond April 1st, it must be sufficient to relieve from the stipulated forfeiture.

Herrick, J.

From an examination of the evidence in this case I am satisfied that there is evidence tending to establish the facts found by the trial court, and I do not feel that I would be justified in saying that such facts are not supported by the evidence in the case. .

The facts found by the court not being disturbed, the conclusions of law found naturally follow.

The opinion of the trial court is in the main satisfactory, and I see no reason to write another.

Judgment should be affirmed, with costs.

Mayham, P. J., and Putnam, J., concur.


author: Mayham, P. J.

text:
    Jeremie Scripture, Resp’t, v. Fannie E. Scripture, App’lt.

      (Supreme Court, General Term, Third Department,

      Filed July 8, 1893.)

    Divorce—Default—Subsequent remarriage of plaintiff.
    In an action for divorce, the answer denied the adultery charged and set up recriminatory charges. When the case was reached on the calendar a motion to postpone was made, based on an affidavit of merits and affidadavits showing that defendant was unable to attend on account of sickness, and that one of the co-respondents, who was a material witness as to the recriminatory charges, was absent in Europe. The motion was denied, a default taken, and plaintiff recovered. Notice was immediately given that motion would be made to open the default, but plaintiff within two weeks remarried. Held, that upon these facts defendant excused her default and was entitled to have the same opened; that plaintiff’s subsequent act could not deprive her of that right; but that the decree should be allowed to stand for the protection of the second wife, who is presumed to be innocent and ignorant of the facts, and the subsequent marriage sustained so far as that plaintiff’s cohabitation with the second wife shall not be treated as adulterous intercourse for the purpose of this action.
    Appeal from an order denying a motion to open a j udgment and decree of divorce taken by default by the plaintiff against the defendant at a circuit court held at Caldwell in June, 1892.

      Leavitt & Leavitt (Edwin R. Leavitt, of counsel), for app’lt; Whitman & Enches (J. M. Whitman, of counsel), for resp’t.
   Mayham, P. J.

This was an action brought by the plaintiff against the defendant for an absolute divorce on the ground of adultery. The adultery charged in the complaint was alleged to have been .committed in April, 1877, with Edward La Fay; also in December, 1886, with one T. Marshall Huntington; also charged the defendant with living in adulterous intercourse from March, 1886, to March, 1887, with said Huntington at 437 Fourth avenue, Hew York. The complaint also charged adulterous intercourse between the defendant and Henry Wygant on or about the 1st of January, 1889, also on or about the 1st of January, 1890, at 437 Fourth avenue, Hew York.

The defendant in her answer admitted her marriage, denying all the allegations of adultery charged in the complaint and charged the plaintiff with adulterous intercourse with several females at several different times and places, specifically designating the time of each alleged adulterous intercourse.

The answer also set up cruel and inhuman treatment by the plaintiff of the defendant and failure and neglect on his part to su :t the defendant.

issue was joined upon the above complaint and answer Hovember 14, 1891. On the 30th of May, 1892, the plaintiff noticed the cause for trial at a circuit and special term appointed to be held at Caldwell on the 13th day of June, 1892. On the last mentioned day the case was called upon the calendar, and on its being so called, Stearns, of counsel for the defendant, appeared and moved an adjournment and read an affidavit of Edwin R. Leavitt, one of the attorneys for the defendant, showing, among other things, that on the 6th day of June, 1892, defendant’s attorneys wrote to Stearns, of Glens Falls, requesting him to attend to the postponement of the trial, and' informing him why the defendant would not be ready for trial at the circuit on the 13th and requesting him to see the plaintiff’s attorneys and ask them to consent to an adjournment of the case.

The affidavit also shows that defendant’s attorneys in New York on the 10th of June, 1892, sent telegram to Stearns inquiring if he had received affidavits for adjournment, and requested an answer, to which Stearns replied “yes." In response to that, defendant’s attorneys informed Stearns by telegram “ they had sent papers.” On the 14th of June, 1892, defendant’s attorneys again telegraphed Stearns, in care of the clerk of the court, stating that he had forwarded affidavits of physician. The affidavit also disclosed that Dr. Huntington, one of the co-respondents charged in the complaint*with having adulterous intercourse with the defendant, was absent in Europe, where he had been for about two months, stating that he would not return in time to be a witness for defendant at the Caldwell circuit, and that he was a necessary and material witness for the defendant on the trial of the action. The affidavit also stated that the defendant was ill and unable to attend the court at which the case was noticed for trial, and that she was a necessary and material witness for the defendant. The counsel, in support of the motion to adjourn the case, also presented the affidavit of the defendant, setting forth her illness and inability to attend the circuit at which the cause was noticed for trial; also the absence of Dr. Huntington and her inability to procure him as a witness; also the materiality of said Huntington as a witness on her behalf, as she was advised by her counsel after stating what she expected to prove by him to her counsel, and that she could not safely proceed to the trial of the action without the testimony of Dr. Huntington; also the affidavit of Eber Scripture, defendant’s son, who resided with her at the time in New York, stating the illness of his mother and her inability to attend the trial at the circuit; also the certificate of Dr. Courcoula, that he was the attending physician of the defendant, and that she was ill of rheumatism and unable to attend the Caldwell circuit. This certificate was not sworn to, but its execution was acknowledged before a notary public. Counsel for the defendant also read an affidavit of Edwin R. Leavitt, substantially reiterating the facts contained in the other affidavits, and his inability to attend the circuit in person on account of pressing professional engagements.

The affidavit of Dr. Courcoula, verified on the 14th of June, 1892, and fully setting out the illness of the defendant and her inability to attend at such trial, was forwarded to Stearns, but not received in time to be used on the motion to postpone. The plaintiff on said motion to postpone gave no evidence, but the motion was denied by the learned trial court, and on the 14th of June, 1892, the case was heard before a jury, no one appearing on the part of the defendant, and the jury, after hearing the testimony and being charged by the court, returned into court with a verdict in favor of the plaintiff for a divorce.

The stenographic report of the testimony on the trial was made a part of the moving papers on this motion, from which it appears that the plaintiff Scripture was sworn on his own behalf, and swore that he was informed that his wife was guilty of adultery, and swore to having found a batch of letters purporting to have been written by T. E. Huntington, one of the co-respondents charged in the complaint—one of which letters was headed “ My darling little wife.” The contents of these letters was excluded by the court The witness was, however, permitted to swear that he had surrendered them to the defendant.

The answer of the defendant in this action was duly verified by her, and the affidavit upon which she asked to postpone the trial of this action contained an affidavit of merits on the part of the defendant.

The affidavits of the defendant used on this motion positively denied the adulterous intercourse charged in the complaint and alleged cruel and inhuman treatment by the plaintiff of her while they lived together as husband and wife; also the affidavit of the co-respondent, Edward La Fay, denies positively the adulterous intercourse charged in the complaint, and the circumstances tending to prove adultery proved upon the trial by the testimony of Nathan Henry Stafford.

The affidavit of the defendant also denies the testimony of Stafford that she ever admitted La Fay was in her room with her alone.

The affidavits also offered on the part of the defendant on this motion proved her character and conduct during all the time of her residence in New York to have been exceptionally good, and also tend to prove cruel and inhuman treatment on the part of the plaintiff towards her while they lived together as husband and wife at Glens Falls and Sandy Hill.

The affidavit of Dr. Huntington read on this motion denies all the allegations of adultery between him and the defendant in the complaint alleged; also denies proof that any letters were ever written by him or found in the possession of defendant as sworn to by the plaintiff on the trial.

The plaintiff offered in evidence the affidavit of several witnesses tending to prove his good moral character and character for truth. The case shows that on the trial of this action at the circuit, after the default was taken, counsel for the defendant notified the counsel for the plaintiff that a motion would be made to open the default. It appears from the record that the judgment was entered on the 18th of June, 1892, and the affidavit of the plaintiff discloses that on the 2d day of July, 1892, the plaintiff was married to Abbie Hale, of Norwood, St. Lawrence county.

I am clearly of the opinion that upon the facts disclosed on this motion the defendant excused her default, and unless the subsequent marriage of the plaintiff furnishes a reason why such default should not be opened the defendant should be permitted to try this case upon the merits. The evidence on this motion discloses that the defendant in her answer, and in her affidavit to postpone the case, swore to merits.

The evidence also shows on this motion, and the court cannot fail to see, that Dr. Huntington was a necessary and material witness for the defendant on the trial of this action, and that without his testimony she could not safely have proceeded to the trial, as she swore in her affidavit on the application to postpone the trial of the cause.

That being so, she had a right to assume that, as matter of legal justice, the trial would be postponed, and hence that she would not be required to prepare for trial in the absence of so material a witness whose testimony, as appears from the evidence on this motion, could subsequently, and within a reasonable time, have been procured. Nor do we think the announcement upon the trial that the plaintiff would not introduce evidence of the alleged adulterous intercourse with Huntington put the case in a position that- the defendant should have been forced to trial. She had alleged recriminatory adulterous acts on the part of the plaintiff, and in her affidavit she swears that she expects to prove such acts by the testimony of Huntington.

He was therefore necessary and material as a witness to prove her affirmative defense, even though no evidence was offered of adulterous intercourse with him. Whether the defendant sought affirmative relief and asked for an affirmative decree dissolving the marriage on her part, was immaterial, as the adulterous intercourse charged in the answer, if proved, would have amounted to a good defense in this action. Smith v. Smith, 4 Paige, 432.

There was no evidence offered by the plaintiff on the motion to postpone the trial calculated to impugn the good faith of the application to postpone, and the case as it was presented proved that the defendant was a necessary and material witness herself; was in such delicate health as to make her attendance upon the court at that time practically impossible; and that fact standing undisputed, with the additional fact of the materiality of the testimony of Huntington, and the defendant’s inability to procure his testimony, furnished clear and unquestioned legal right on her part to have the trial of the case postponed. And the learned trial judge on this motion so holds; but the embarrassing question in this case grows out of the fact that the plaintiff, subsequent to the entry of this decree, intermarried witli what we must presume an innocent person, wholly ignorant of the facts upon which it is sought to open this decree and permit a trial of the issue in this case.

The haste with which the plaintiff married the second time involves these two women in this unfortunate complication, and the learned judge at the circuit, and at the special term, when this motion was made, held that in determining between these two innocent persons, the last wife was entitled to the protection of the court.

If, as we have seen from the proof on this motion, the defendant was entitled, as matter of right, to have her default opened, and to be permitted to try this action, that right existed at the time of the perfecting of this decree.

That being so, no subsequent act of the plaintiff should deprive her of the benefit of that right.

The defendant’s attorney was notified of the decree on the 22nd of June, 1892, and immediately, on the 23rd, notified plaintiff’s attorney that he would move to open the decree, so that the plaintiff, through his attorney, was not ignorant of the fact, at the time of his alleged marriage, of the defendant’s purpose to move to open the decree. With this knowledge and before the defendant had, under the circumstances in this case, a.reasonable time to-prepare and serve motion papers, the plaintiff, by an act for which the defendant is in no way responsible, enters into a second marriage, and now seeks to shield himself from a trial of this case by such marriage. If, as we think, and as seemed to have been held by the trial judge, this motion should have been granted but for that second marriage, we c'an see no good reason for depriving the-defendant of that right by an act over which she had no control, and for which she was in no way responsible.

The court of equity has exercised the power of opening a decree of divorce, and letting in the defendant to defend, in cases-which would seem to appeal less strongly for such relief than in this case.

In Dunn v. Dunn, 4 Paige, 425, where the parties resided in this state, but the defendant was temporarily absent in another state, where the subpoena was personally served upon her to which she made no answer, and the bill was taken pro co esso, decree entered against her, her husband entered into a second marriage, the court after such marriage set aside the default and allowed the defendant to come in and defend, allowing the decree to stand until the trial and determination of the issue between the plaintiff and defendant, and provided in the order that if the defense was sustained, the decree should be set aside and the bill dismissed; but if the defendant was beaten the decree should stand in full force for the protection of the second wife. We think the rights-of all the parties in this action would be best subserved by making a similar order in this case.

The order of the special term should be so modified as that the defendant may be permitted to come in and defend in this action, on payment to the plaintiff of the term fee and witnesses’ fees for the term at which the decree was taken and ten dollars ($10)-costs of this motion, and the decree entered in this action to stand until the final determination of the action, and the subsequent marriage is so far upheld as that the plaintiff’s cohabitation with the second wife, from the time of his marriage to her until the time of the determination in this action, shall not be treated as-adulterous intercourse for the purpose of this action.

Let an order be entered accordingly.

Putnam and Herrick, JJ., concur.


author: Putnam, J.

text:
    Ella D. Sands, App’lt, v. Henrietta Church et al., Resp’ts. Charles Shafer, App’lt, v. Henrietta Church et al., Resp’ts. Edward Shafer, App’lt, v. Henrietta Church et al., Resp’ts.

      (Supreme Court, General Term, Third Department,

      Filed July 8, 1893.)

    1. Deed—Champerty.
    Where the complaint in an action of ejectment does not aver what title, if any, the defendant claimed, and the evidence does not show any claim of specific title adverse to that of plaintiffs’ grantors, the deed to plaintiffs cannot be held void under the statute of champerty.
    3. Ejectment —Pleading—Variance.
    The complaints in these actions were indefinite and obscure as to the nature of the title claimed by the plaintiffs, but contained statements that all rent had been fully paid; that should rent be found due and in arrear plaintiffs were ready to pay the same and perform all agreements which ought to be performed by the first lessee, and asked for an accounting of the use and occupation and that the same be set off against any rent that had accrued. No motion to make the complaint more definite and certain was made. Reid, that the pleader’s intent was to allege a leasehold title.
    3. Same.
    ■ Where the complaint contains all the allegations necessary to be stated in an action of ejectment, additional allegations, in anticipation of a defense, that defendant procured a fraudulent judgment and that such judgment did not affect plaintiffs’ rights, form no part of the cause of action and might be stricken out as irrelevant; even if the complaint could be deemed to assert two causes of action, one in ejectment and one to set aside the fraudulent judgment, a recovery could be properly had in the former although the latter remained unproved.
    Appeals in each case from judgment dismissing the complaint, with costs.

      W. & G. W. Youmans (W. Youmans, of counsel), for app’lts; Marcus T. Hun, for resp’t, Henrietta Church; William S. Dyer, for resp’t, Joseph Drum.
   Putnam, J.

These are actions in ejectment, each brought to recover an undivided one-third part of the premises described in the complaint.

On the trial plaintiffs established a leasehold title to said lands, and it being admitted that defendants were in possession thereof, rested. A motion was then made by defendants for a nonsuit, which motion the court granted, plaintiffs duly excepting. Plaintiffs also asked to go to the jury on the questions of fact involved in the case. This motion was denied and plaintiffs excepted.

One of the grounds urged by the defendants on the motion for a nonsuit, and upon this appeal to sustain the judgment, is that the conveyance from Arthur W. Shultes and others to plaintiffs on March 9, 1890, was void for champerty, as the property was then in possession of defendants, who claimed to hold it under a title adverse to that of said grantors.

After a careful examination of the evidence I am unable to believe that this position is well taken. The evidence does not show that Church claimed possession under any specific title. The complaint alleges that when the action against Quackenbush was commenced the latter had no title or interest in the demised premises and was not in possession thereof. And that the writ of possession issued under the judgment in said action was never executed according to law, nor in fact, and the possession of said premises was never delivered to said Church under said writ. The complaint also alleges that Church entered into possession of said premises by-virtue of an agreement with Ann E. Shafer set out in the complaint. There is no allegation that Church was in possession of said premises under the judgment against Quackenbush when the premises were conveyed to plaintiffs. Nor does the evidence show any claim of a specific title adverse to that of plaintiffs’ grantors by Church. The complaint does not aver nor does it appear what title, if any, Church claimed. Hence the deed to plaintiffs was -not void under the statute of champerty. ,See Crary v. Goodman, 22 N. Y., 170; Dawley v. Brown, 79 id., 396.

The defendants also urge that the plaintiffs in their complaints allege a title to the premises in controversy in fee simple, and the proof shows their interest, if any, is a leasehold title. The complaints are somewhat indefinite and obscure, and had a motion been made by defendants for an order requiring them to be made more certain and definite I have no doubt such a motion would have prevailed. But no such motion was made, and defendants entered upon the trial of the cases with the complaints as they are. I think it appears from the whole pleadings that the plaintiffs intended to allege a leasehold title. For instance, in stating the agreement between Church and Quackenbush, they alleged that it was agreed that an action should be commenced on a claim" that there was a large amount of rent in arrear; again, they state in the complaints that all the rent which has accrued upon said premises has been fully paid and satisfied; that should rent be found due and in arrear, plaintiffs are ready to pay the same, and to perform all the agreements which ought to be performed by the first lessee in said lease, and plaintiffs are ready and willing to pay said rent and charges. Plaintiffs in their complaints also ask that an accounting be had of the use and occupation of said premises, and that the same be set off against any rent and charges which may have accrued. I think, although defectively stated, the intent of the pleader in the complaints to allege a leasehold title in plaintiffs is apparent.

The defendants having entered upon the trial of the cases with the complaints as they are, with an indefinite, contradictory and obscure statement of title, I do not think that a nonsuit should have been granted because it appeared upon the trial that plaintiffs’ title was leasehold.

Had it alleged, however, an absolute fee in the plaintiffs, and the proof had shown merely a leasehold title, I doubt whether the variance could be deemed material. In either case the plaintiffs were entitled to a judgment for the possession of the premises; whether owners in fee or lessees, plaintiffs could recover the premises in suit. Such a variance should not be deemed material. Code, §§ 539, 540. The complaint, if necessary, could be amended on appeal. Smith v. Long, 12 Abb. N. C., 120.

Defendants also claim that the judgment of non-suit was-properly rendered because the complaint sounded in tort and a recovery could not be had thereunder in ejectment.

The complaint, however, alleges all the facts necessary to be stated in an action of ejectment. That the plaintiffs arc the owners of the premises in question and entitled to the immediate possession thereof and the defendants are in occupation.

I incline to regard these cases more like those considered in Graves v. Waite, 59 N. Y., 156 ; Bell v. Merrifield, 109 id., 206; 14 St. Rep., 796 ; Ross v. Terry, 63 N. Y, 614, and kindred cases, than like Barnes v. Quigley, 59 N. Y., 265; Degraw v. Elmore, 50 id., 1; Place v. Minster, 65 id., 101.

In the latter case the complaint alleged fraud and the following language is used in the opinion : “ It is, of course, necessary to prove fraud, and the plaintiff could not recover on entirely different grounds unless there were additional averments in the bill or complaint upon which such recovery can be had.” In these cases there were allegations of fraud, but outside of those were all the allegations necessary to be contained in an action of ejectment. In Ross v. Terry, supra, it was held : “ That the cause of action was not necessarily ex delicto because of the averments of false representations ; that they were not the controlling facts, but the gravamen of the action was ex contractu.” Conaughty v. Nichols,, 42 N. Y., 83 ; Ledwich v. McKim, 53 id., 308 ; Graves v. Waite 59 id., 156.

In the cases under consideration the actions were brought to recover the possession of one-third of the premises described in the-complaint. That the plaintiffs are the owners of the premises and entitled to the immediate possession thereof and that the defendants are in occupation thereof is stated in the complaints. In addition to the allegations stating the cause of action, plaintiffs, in anticipation of defendants’ defense, have inserted an averment as to an alleged fraudulent judgment obtained by Church against Quackenbush. The complaints allege, however, that when the action against Quackenbush was commenced the latter was not in possession of the demised premises and had conveyed his interest, therein to Joseph 1. Shultes, and had no interest whatever in said lot, and also possession of the premises in question was never-delivered to said Church under said judgment. Of course the said allegations in the complaints show that the plaintiffs’ rights-are not at all affected by the judgment or proceedings in the action of Church against Quackenbush. The object of the pleader seems to be to set out in the complaint a cause of action in ejectment, and anticipating that defendants would interpose as a defense the above mentioned judgment and proceedings thereunder, to assert the facts showing that said judgment and the proceedings’ thereunder, as to plaintiffs, was of no effect.

I do not think that the allegations contained in the complaint-in regard to the said Quackenbush judgment can properly be-deemed a part of the cause of action. They are in fact irrelevant,, and might have been stricken out on motion. The object of the-action is to recover the possession of the premises described in the complaint. If the complaint could be deemed to assert two causes of action, one in ejectment and one to set aside the fraudulent judgment, a recovery could be properly had in the former, although the latter cause of action remained unproved.

The plaintiffs, as above stated, when they rested, had shown title to the premises in suit, and that defendants were in occupation thereof. If in fact Glmrch, as owner of the landlord’s interest in the lease, re-entered for the non-payment of rent, and Quackenbush was in possession when the action was commenced and when the writ of possession was issued, and Church was put in possession under the judgment, such a state of facts would constitute a defense. But those facts did not appear upon the trial. I think, on the facts appearing, plaintiffs were entitled toa judgment, and hence that the judgment should be reversed, a new trial granted, costs to abide the event.

Mayham, P. J., concurs; Herrick, J., not acting.


text:
    George H. Sherman, Resp’t, v. Walter C. Rogers, App’lt.

      (Supreme Court, General Term, Third Department,

      Filed July 8, 1893.)

    1. Slander—-Evidence.
    In an action for slander in charging- plaintiff with being a thief and stealing a wagon from defendant, the answer was a general denial, and alleged in mitigation that defendant ivas excited by charges made against him by plaintiff, and in consequence thereof used stronger language than he would otherwise. On the trial there was no denial of the language alleged to have been used, but defendant claimed that it related to a transaction which was not in itself a larceny, and that the hearers of the words knew to what transaction they related. Held, that it was not error to exclude evidence as to the nature of the transaction, as it was not proper under the answer.
    2. Same—Damages.
    In such an action a verdict for $600 is not so large as to évince passion or prejudice on the part of the jury, and should not be interfered with as excessive.
    Appeal from a judgment entered on the verdict of a jury in favor of the plaintiff against the defendant, in an action for oral slander, for six hundred dollars ($600) and costs.
    The words charged in the complaint are “ You’re a thief; you’re a damned thief; you have stole a wagon from me; you’re a robber and I can prove it.”
    The answer was a general denial, and alleged in mitigation of damages that at the time of uttering the words charged in the complaint the defendant was greatly excited in consequence of charges made by plaintiff against him, and the language used by him in consequence of such excitement was stronger than it would otherwise have been.

      King & Ashley (J. M. Whitman, of counsel), for app’lt; Lyman Jenkins (H. A. Howard, of counsel), for resp’t.
   Mayham, P. J.

The words charged in the complaint were on the trial proved to have been uttered substantially as alleged. The case discloses that the plaintiff came to a shop in which the defendant was employed and asked who could give him the price of painting a wagon. The defendant replied, “ Oh, you go along I don’t want anything to do with you; you’ve stole a wagon from me and sold it, and I want nothing to do with you.”'

Defendant then started to go out of the shop an.d said “ Who. does painting here ? ” The answer was, “ Mr. Sherman does our painting.” Rogers spoke to the man in his wagon, “Drive on, Charlie, I don’t want anything to do with that man, he is a thief; he stole a wagon from me once; he can’t have any work of mine.”

Sherman said: “Hold on, you darned sucker, I will call you down sometime for calling me these names; you have no right to call me these names.” Defendant said: “You’re a thief and I can prove it." The evidence discloses no denial of this language by the defendant on the trial; but it is urged that evidence was offered by the defendant tending to show that the charges made by the defendant against the plaintiff relate to a transaction which was in itself not a larceny, and that the hearers of these actionable words knew to what transaction they related, and knew that they did not convey or intend to convey the charge of the crime of larceny; but we do not think that contention is justified by the proof.

It is also urged by the appellant that the court erred in excluding certain offers of the defendant tending to prove the nature of the transaction to which the words related which are claimed to be actionable; but we fail to see that the learned trial judge committed any error in excluding evidence. The evidence excluded, which is claimed by the appellant to be error, was not proper under the answer, and we think the court went as far as the rules of evidence justified, in admitting the witnesses to answer what, they understood from the charges made by the defendant.

It is also urged that the damages in this case were excessive, and that the refusal of the learned trial judge to set aside the verdict on that ground on a motion made upon the minutes was error. We do not think that the verdict in this case was so large as to evince passion or prejudice on the part of the jury. In actions of this character the rule is well settled that the verdict of a jury cannot be interfered with by the court, unless it is so large as to be evidence in itself that the jury in rendering the verdict, was actuated by passion or prejudice, or some undue influence, and not solely by the evidence. The charge in this case was proved beyond controversy. It was not sought to be justified; and we see no circumstance, either disclosed by the evidence or in the offers of proof made by the defendant, calculated in any considerable degree to mitigate the gravity of the charge made against the plaintiff.

On the whole case, we see no error for which this judgment should be reversed.

Judgment affirmed, with costs.

Putnam and Herrick, JJ., concur.


author: McCarthy, J. Fitzsimons, J.

text:
    Jacob Appel et al., Resp’ts, v. Aaron Brooks, Impl’d, App’lt.

      (City Court of New York, General Term,

      Filed June 28, 1893.)

    Judgment—Default—Infants.
    A judgment taken by default will not be vacated on the ground that it is void because the defendant was an infant at the time it was entered. The question of infancy can only be raised after the default is opened, and the defendant allowed to plead.
    Appeal by defendant Aaron Brooks from order denying his motion to vacate the judgment entered herein and all proceedings thereon.

      Otto J. Wise, for app’lt; George W. Galinger, for resp’t.
   The following is the opinion at special term:

McCarthy, J.

This isnot a motion to open a default and allow the defendant to come in and defend, but it is to vacate and set aside a judgment and execution taken by default on the ground that the defendant was not twenty-one years of age at the time of said judgment and execution, and that, therefore, they are hull and void. There is nothing in this contention. The question of infancy can only be raised after the default is opened, and the defendant allowed to plead. There may be reason why the default should be opened so as to allow it to be pleaded, but the defendant does not ask for this relief. Motion is denied, with ten dollars costs.

Fitzsimons, J.

Order affirmed upon the opinion of the special term justice, with costs.

Van Wyck, J., concurs.