text:
    THE NATIONAL BANK OF GLOVERSVILLE, Respondent, v. JOHN E. WELLS, WILLARD D. BURR and REMUS D. BURR, Appellants.

      National bank — indorsements of notes for commissions — title of, to such paper taken by it.

    The plaintiff, a national bank, agreed with one Burr to procure to be discounted for him a note, indorsed for Burr’s accommodation by the defendant Wells, on plaintiffs receiving a commission of five per cent, for so doing. The plaintiff indorsed the note, and sent it to a national bank in Albany, by which it was discounted. The note, not being paid, was protested, and notice sent to plaintiff, which subsequently took it up. Upon the trial of this action, brought to recover the amount of the note, it was insisted that the transaction was usurious; that the plaintiff had no title to the note, for the reason that it had no power to agree to sell its indorsement and procure notes to be discounted, upon payment of a commission; and that the taking up of the'note by it, was a purchase of it, which by its charter it had no right to make.

      Held, that, the transaction, as a matter of fact, was not usurious; that the plaintiff’s title did not depend upon the alleged unlawful agreement to loan its credit and procure the discount; that it got title through the Albany bank, a bona fide holder for value; and that it must, therefore, be held to be the lawful owner of the note, and entitled to enforce it. (Tappan, J., dissenting.)

      Appeal from a judgment in favor of the plaintiff, entered upon the report of a referee.
    This action was brought upon a promissory note, in the amount of $2,400, made by the defendants Barr to the order of and indorsed by the defendant Wells, the latter being an accommodation indorser. The referee before whom the action was tried found, among other things:
    That on or about the 9th day of August, 1875, the defendants Burr made their certain promissory note, described in the complaint, and upon which this action is brought, whereby they promised to pay, m two months from the date thereof, to the order of the defendant, John E. Wells, at the Metropolitan National Bank, New York, the sum of $2,400, which note was indorsed by the defendant, John E. Wells, for the accommodation of the makers. That said note, so indorsed, was, on or about the 11th day of August, 1875, delivered by the defendants Burr to the plaintiff’s cashier, for the purpose of having it discounted and raising money thereon with which to pay a note of $1,995.45 (indorsed by defendant Wells, and then indorsed by plaintiff, and by it caused . to be discounted by The Dry Goods Bank of Now York, plaintiff charging five per cent, for procuring the discount and loaning its credit), and another note, made by the defendants Burr, of the amount of $300, both of which were then held and owned by the ' plaintiff. That the said note for $2,400, being the note described in the complaint, was thereupon indorsed by the said cashier of ■ the plaintiff, and sent by him to the First National Bank of Albany, tó be by it discounted; and said bank received such note and discounted the same at the rate of seven per cent, per annum, for the time it had to run until the maturity thereof, as interest; and deducting such interest, remitted the said residue of the amount of such note to the plaintiff on or about the 16th day of August, 1875. That the plaintiff, on the said 16th day of August, 1875, applied the proceeds of such note so received from the First National Bank of Albany to the payment of said notes of $1,995.45 and $300, by the direction of the defendants Burr, and surrendered such notes to them. That the plaintiff demanded and received ■ from the deferidants Burr, out of the residue of the proceeds of such note, as a compensation for procuring the discounting thereof, and for the loan of its credit by indorsing the same, the sum of $14.67. That neither of said two notes of $1,995.45 and $2,400 was delivered to the plaintiff', or its cashier, as evidence of, security for, or under an agreement for, a loan of money made or to be made by said plaintiff, or its cashier. That on the 12th day of October, 1875, when the said note for $2,400, upon which this action is brought, became due, it was duly presented at the Metropolitan Bank in the city of New York, the place where it was made payable, and payment thereof then and there demanded, which was refused; whereupon said note was duly protested for non-payment, of all of which due notice was given to the defendant, John E. Wells. That on the 4th day of October, 1875, the defendants Burr made their three several promissory notes, all payable four months after date to the order of the defendant, John E. Wells, one bearing date September 15, 1875, for the sum of $2,000; one dated October 4, 1875, for the sum of $2,500; one dated October 9, 1875, for the sum of $2,000, and presented the same to the defendant, John E. Wells, and requested him to indorse the same for their accommodation, and the said John E. Wells thereupon indorsed the same. That such indorsement was añade by the said John E. Wells for the piarpose, aaad.with the clirectioaa giveaa to the defendants Burr, that said aaotes’ should be aased exclusively to pay aaad take up the said note for $2,400, upon which this actioia is brought, aaad two other aaotes of $1,000 each, then lyiiag iai plaintiff’s baaak, and one other aaoto of about $2,000, lyiiag at some bank in the city of New York, of all of which the said defendants Burr were the makers aaad the defendant Wells the indoa-ser. That the defeaadaiats Burr, oaa the said 4th day of October, 1875, aiegotiated aaad delivered the first two of said notes to the plaintiff, and the same were discounted by the plaintiff at the request of said Burr, who applied $1,000 of the proceeds thereof to the payment of oiae of the said $1,000 aaotes, of which the defendant Wells was indorser, and the balaiace to the payment of notes and liabilities of theirs other than the said $2,400 and the remaining $1,000 aaote. That on a subsequent day the defendants Burr delivered to the plaintiff the remaiaaing $2,000 note, as indorsed by defendant Wells, for the pua-pose of having it discoomted, aaad the plaintiff procured it to be discouaited at the First National Bank of Albany, -which remitted the proceeds thereof to the plaintiff, and the plaintiff placed the same to the credit of the defendants Burr, in their account with the plaintiff, on its books, on the 26th day of October, 1875, and the same •were subsequently paid by the plaintiff, upon the check of the ■defendants Burr, drawn on the plaintiff’s bank, on the 3d dayof ■November, 1875. That the plaintiff had no notice that the defendant Wells had indorsed the said three notes, or either of them, for any special purpose, or had placed any restriction upon the use to be made of them or either of them. That the interest upon the said $2,400 note, from the time of its maturity to the date of the report, was the sum of two hundred and one dollars and thirteen cents, which, with the sum mentioned in said note, amounted to the sum of two thousand six hundred and one dollars and thirteen cents. That the plaintiff, at the time of the commencement of this action, was and still is the owner and holder of said notes. As conclusions of law he found, that the plaintiff was entitled to recover of the defendants the sum of two thousand six hundred and one dollars and thirteen cents, besides the costs of this action.
    ■ James M. Dudley, for the appellants.

      Parkhurst c6 Baker, for the respondent.
   Learned, P. J.:

The defense set up by the defendant Wells is, that a short time before the note became due, on which this action is brought, he indorsed certain other notes of the defendants Burr, for the purpose of renewing or taking up the note in suit; that these notes were, in fact, received by the plaintiff with knowledge of the purpose with which Wells indorsed them; and that they should have been applied to the renewing or taking up of the note in suit; and that these new notes have been paid by him. Of course, a material part of this defense is the knowleiige on the part of the plaintiff of this purpose.

- The learned referee found that the purpose of the defendant Wells was such as is above stated; but he found that the plaintiff had no notice of such purpose, or of any restriction made by Wells as to the use of these notes. The defendant Wells, on this appeal, insists that this latter finding is erroneous.

The direct evidence on this point consists of the testimony given by Remus D. Burr, one of the defendants, and of that given by James M. Wood, the cashier of the plaintiff. Mr. Burr says that when he called at the bank, on the 4th of October, he had with him two of the three new notes' — one of $2,000, and' one of $2,500; that he stated to the cashier that there were the two notes of $1,000 each, shortly to be due, and the note of $2,400 (now in suit) to be taken care of out of this paper; that Wood said he did not think they had the $2,400 note; that Burr said it had to be taken care of, and Wood said: “ All right.” The third note, being for $2,000, was subsequently left at the bank by Burr.

It appears, however, that on the same day (the 4th of October) Burr gave a check on the bank, in the firm name, for $4,183.15, which, he says, represented part of the two notes then delivered. This check read: “Pay to notes and interest, or bearer.” Burr says he cannot remember for what notes that check was given.

Mr. Wood testifies that Burr made no statement to him as to what disposition Wells wanted to have made of the proceeds of the notes; that Burr told him that he wanted to pay a note of Johnson’s, one of Wells’ for $1,000, and one of Coulton, Ayers & Co.; that he (Wood) figured up the interest and protest, and that Burr gave the check of $4,183.15 for the amount of these notes. He testifies that Burr did not say he wanted to take up Wells’ paper.

The book-keeper of the bank also shows that the check was, in fact, given by Burr, to take up the notes above mentioned.

Thus, it may be seen, that Burr himself" does not state that he. told Wood of Wells’ purpose in indorsing. He told Wood only what he (Burr) wished to do; that is, that the $2,400 note was to be taken up out of that paper. And after having first made this statement of his wishes, he then immediately gave a check, by which he applied nearly all of the proceeds of the new notes to take up what is called the Johnson paper. He was at liberty to change his intention as to the application of the new notes, even assuming his own statement of the transaction to be correct. Wo think, therefore, that the referee was right in holding that the bank had no notice of Wells' purpose. The bank should not be held liable for a misappropriation, without clear evidence of notice to them of" the purpose with which Wells indorsed.

In regard to the third new note — that of $2,000 — Burr testifies that he left it at the bank the next day with the teller. The teller denies this. It appears to have been discounted some time in October, as the avails were credited to the Burrs on the 28th. On the 3d of November, the Burrs gave a cheek on the bank for $2,731.62.

There is no evidence for what notes this check was given. The defendant Wells insists that, inasmuch as the Burrs had this amount to their credit in the bank, it was applicable to the note in suit, and must be so applied. But it is not shown that the Burrs owed no other money to the plaintiff. They had the right to apply the money as they chose. The presumption is that they did not apply it to the note in suit, because that note has not been, in fact, taken up. And this check shows that the Burrs did make some application of the money; nor is it certain that this money was the avails of the discounting of the $2,000 note.

The remaining defense is common to all the defendants, and is that of usury. The referee has found, in respect to the notes, that they were not discounted by the plaintiff, but that they were delivered to the plaintiff, to be sent to other banks, and that they were discounted by such other banks at the legal rate of interest; that the plaintiff or the plaintiff's cashier demanded and received of the defendants a certain sum as a compensation for procuring the discounting, and for the loan of credit by indorsing.

An arrangement of this kind might, of course, be a mere cover for the taking of usury. If it were, then, on familiar principles, the notes would be usurious. But the referee finds, on the contrary, that the arrangement was as stated above, and that the notes were not evidence of security for or under an agreement for a loan made or to be made by the plaintiff or its cashier. And we see no reason to question the correctness of his findings in this respect.

If, then, there was no loan in any way by the plaintiff to defendants, for which these notes were evidence or security, the payment by the defendants of money to the plaintiff for any services, or for no services, did not render the notes usurious.

The defendants urge that the plaintiff had no power to indorse for their accommodation. Even if that be so, still the notes are not usurious, unless the plaintiff made a loan to the defendants. If the indorsements were void, and, therefore, valueless, possibly the defendants may recover what they paid for the indorsements, on the ground of a want of consideration; but the notes remain valid.

The defendants further insist that the plaintiff cannot recover, because it is not the owner of the note in suit. The note is in plaintiff’s possession, duly indorsed by the payee. That is sufficient prima facie. The defendants insist that the note was discounted by the First National Bank of Albany, and came into the plaintiff’s possession only after protest; and that the plaintiff could not purchase this paper. [First Nat. Bank of Rochester v. Pierson, 16 Alby. L. J., 319.)

The note, however, when it was discounted by the First National Ban!?: of Albany, had the indorsement of the plaintiff, by its cashier. That bank, therefore, taking the note in good faith, could look to the plaintiff as an indorser; and no reason is suggested why the plaintiff would not be liable after due protest.

If the plaintiff' had then taken up the note, it could not be said that the plaintiff had purchased the note for speculation, or for “ note shaving.” That is the kind of transaction condemned in the case last cited.

The case of West St. Louis Savings Bank v. Parmelee (6 N. Y. W. Dig., 251), cited by defendants, was where a cashier indorsed his individual note, adding his official title, without authority from the bank. It was held that this did not bind the bank. That has no application to the present case, where the act of the cashier was done by the authority of the plaintiff'.

And it should further be noticed' that the answers of the defendants do not allege any violation of the banking law other than usury. They do not allege any receipt by the plaintiff of a commission for indorsement. On the contrary, they allege a usurious discounting at twelve per cent. This point, therefore, urged by the defendants on the argument, was not within the issues, except as the answer denies plaintiff’s title to the note.

The plaintiff's title to the note does not depend on the alleged unlawful transaction. The plaintiff gets title through the First National Bank of Albany, a bona fide holder for value; and the plaintiff must be held to be the owner of the note, unless we adopt the principle that, under no circumstances, can a national bank get title to a note, except by discounting it.

The judgment should be affirmed, with costs.

Tapp an, J.

(dissenting):

I cannot concur in the opinion of the majority of the court in this case.

The plaintiff is a banking association, organized under the act of Congress of the' United States, entitled “An act to provide a national currency, secured by pledge of United States stocks, and to provide for the circulation and redemption thereof,” approved February 25th, 1863, and June 3d, 1864, and the several acts amendatory thereof, substantially re-enacted in title 62, page 992, Revised Statutes of the United States.

The evidence tended to prove, and the referee expressly found, that when the defendants Burr opened an account with the plaintiff the latter, by its cashier, agreed that the bank would discount for them to the extent of four or five times their average deposits; and if they should require discounts in excess of such amount, he would procure their paper to be discounted for them for a commission of five per cent, per annum for his services. Under such arrangement several notes made by the defendants Burr, and' indorsed by the defendant "Wells, and afterwards indorsed by James M. Wood as cashier of the plaintiff, were forwarded to other banks, and by such other banks discounted at legal rates, the avails received by plaintiff, and the balance, after deducting five per cent, credited to said defendants Burr.

In reference to the note in suit, the referee made the following special findings:

Seventh. That on or about the 9th day of August, 1875, the defendants Burr made their certain other promissory note, described in the complaint and upon which this action is brought, whereby they promised to pay in two months from the date thereof, to the order of defendant, John E. Wells, at the Metropolitan National Bank, New York, the sum of twenty-four hundred dollars, which note'was indorsed by the defendant, John E. Wells, for the accommodation of the makers.

Eighth. That said note so indorsed was, on or about the 11th day of August, 1875, delivered by the defendants Burr to the plaintiff’s cashier, for the purpose of having it discounted, and raising money thereon with which to pay the aforesaid note of $1,995.45, and another note made by the defendants Burr of the amount of $300, both of which were then hold and owned by the plaintiff.

Ninth. That said note of $2,400, being the note described in the complaint, was thereupon indorsed by the said cashier of the plaintiff, and sent by him to the Eirst National Bank of Albany, to be by it discounted, and said bank received such note and discounted the same at the rate of seven per centum per annum for the time it had to run until the maturity thereof, as interest, and deducting such interest, remitted the said residue of the amomit of such note to the plaintiff on or about the 16th day of August, 1875. * * * # * * * *

Eleventh. That the plaintiff demanded and received from the defendants Burr out of the residue of the proceeds of such note, as a compensation for procuring the discount thereof, and for the loan of its credit by indorsing the same, the sum of $14.67.

The note of $2,400 was put in evidence as plaintiff’s exhibit “ A ” upon the trial, from which it appears that the indorsement by Wood was as follows :

“ Pay A. Van Allen, cashier, or order.
“ J. M. WOOD, Cashier.”

The referee has found that this note was not delivered to the plaintiff or its cashier as evidence of, security for, or under an agreement for a loan, made or to be made, by plaintiff or its cashier. The note became due on the 12th day of October, 1875. Payment was then demanded at the Metropolitan Bank; and not being made, it was duly protested at that bank, and by it returned to the Eirst National Bank of Albany, and by the latter bank it was returned, with notice of protest, on the 14th or 15th of Octoher, 1875, to tbe plaintiff, which thereupon took up the note, and brought this action thereon.

Upon the trial the defendants requested the referee to find: “ That the plaintiff has no right or power as a corporation or banking association, under the law by which it is created, to soil or loan its credit by indorsement, or becoming surety for the accommodation of others, for a consideration or otherwise.”

The referee declined to find upon the question, upon the ground that it was not involved in the decision, and defendants excepted.

The agreement made by Wood with the defendants Burr appears to have been made by him as cashier for plaintiff; the indorsement of the note in suit was by W ood as cashier of plaintiff; and Wood says, in reference to the compensation taken for procuring the discount for the note in suit, and for-the loan of its credit by indorsing the same, that he took nothing, that the bank took the $14.67; and the referee, as appears by the eleventh finding above cited, reaches the same conclusion.

By the above exception the defendants raise the question whether the plaintiff, a national banking association, is authorized by law to receive paper, made to be indorsed by such association, to be discounted by another bank, for a compensation to be paid to it therefor. It is well-settled law that corporations created by statute must depend for their powers, and the mode of exercising them, upon the true construction of the statute itself. (Bank of the U. S. v. Dandridge, 12 Wheat., 68; Head & Amory v. The Providence Insurance Co., 2 Cranch, 127.)

By subdivision 7, § 5136, R. S. of U. S., it is provided that these associations, after filing articles of association and an organization certificate, shall have power to exercise, by their board of directors or duly authorized officers or agents, subject to law, all such incidental powers as shall be necessary to carry on the business of banking; by discounting and negotiating promissory notes, drafts, bills of exchange, and other evidences of debt; by receiving deposits; by buying and selling exchange, coin and bullion; by loaning money on personal security, and by obtaining, issuing and circulating notes, according to the provisions of .the act.

By section 5197, the rate of interest that these corporations are entitled to receive is prescribed, and by the next section a penalty for taking usurious interest is provided. (R. S. of U. S., 1011.)

The court of last resort in Maryland has determined that selling railroad bonds upon commission, is not within the corporate powers of a national bank. (Weckler v. First National Bank of Hagerstown, 42 Md., 581; S. C., 20 Am. R., 95.)

In First National Bank of Rochester v. Pierson, decided by the Supreme Court of Minnesota, September, 1877 (16 Albany Law Journal, 319), it ivas held that the purchase of a promissory note by a national bank, for the purpose of speculation, is ultra vires, and the bank acquires no title to and cannot recover on a note so purchased.

As was said in Weckler v. National Bank of Hagerstown (20 Am. R. [opinion], 102), these associations, when organized in their corporate name, are allowed to make contracts, sue and be sued, to elect directors and other officers, “ and exercise under this act all such incidental powers as shall be necessary to carry on the business of banking, by discounting and negotiating promissory notes, drafts, bills of exchange and other evidences of debt; by receiving deposits, by buying and selling exchange, coin and bullion; by loaning money on personal security and by obtaining, using and circulating’ notes, according to the provisions of this act.”

“By it the associations are not simply incorporated as banks, and the scope of their corporate business left wholly to implication; but the kind of banking which they may conduct is limited and defined.”

As wTe read the language of subdivision 7 of section 5,136, it authorizes the association to carry on banking “ by discounting and negotiating promissory notes,” etc.; and to exercise 1 all such incidental powers' as shall be necessary to conduct that business. The mode in which the incidental powers shall be executed, is not defined; but all incidental powers which they can exercise, must be necessary or incidental to the business of banking thus defined.

Under the act in question, the rate of interest allowed to be chai’ged for loan axxcl disco'uixts is defined. The plain ixxtexxt of Congress by this act, was to secure to the pxxblic loans and accommodations at reasonable rates of interest, and to protect the shareholders of the banks and the banks against the risk of loss from engaging in enterprises not incidental to the business of banking as defined in the act.

If one of these associations can lawfully make an agreement with a customer to obtain his note to be discounted by another association, at the rate of interest allowed by law, and receive for indorsing and obtaining such discount five per cent per annum additional; can the spirit of the act to protect the public from extortion and usurious rates of interest for accommodation be enforced? If it is lawful for one of these associations to make such an agreement, and receive the fruits of it, would it ordinarily have money to loan to its customers for their accommodation?

If such a transaction is lawful, the temptation that the officers of these associations would be subjected to, would tend to prevent discounting paper in a legitimate way by the bank applied to for such an accommodation, and tend to stimulate reciprocity among these associations in making discounts for each other, to secure a brokerage for procuring the discount and the loan of its credit by indorsing the note sent to the association applied to for discount.

If the First National Bank of Albany discounted the note in suit upon the indorsement of the plaintiff, by its cashier, without knowledge of this agreement, its officers might lawfully presume that plaintiff lawfully acquired the note; and plaintiff would be hable to it upon the indorsement. Would it tend to protect the capital of the bank and the shares of the stockholders to decide, that under this act one of these associations could pledge the credit of the bank, to enable it to obtain a brokerage for loaning its credit by indorsing customers’ notes ?

I am satisfied that Congress never intended to grant to these associations any such power. I agree with the Supreme Court of Minnesota in its construction of the meaning of the word “negotiate,” as used in this statute; that it is used to indicate, not an act of purchase, but one of transfer, whereby the negotiated paper is passed by the owner or holder, and put into circulation. (First National Bank of Rochester v. Pierson, 16 A. L. J., 319; Weckler v. First National Panic of Hagerstown, 20 Am. R. [opinion], 102.)

Webster defines “ negotiate, ” to soli; to pass; to transfer for a valuable consideration; as, to negotiate a bill of exchange.

There is no just reason why these associations should not be allowed to sell and transfer notes discounted by them in the ordinary transactions of their legitimate business, and the law intended to allow such sales and transfers, but does not admit of a construction that such language allows such associations to obtain a note by purchase for speculation, nor to engage in the business of indorsing notes to be discounted by other banks for a compensation. The First National Bank of Albany could have recovered upon .the note as a bona fide holder without knowledge .of the unlawful agreement to obtain plaintiff’s indorsement. Plaintiff took up the note as indorser with full knowledge of the agreement, and therefore derived no additional rights from the title thus obtained.

For these reasons I am of the opinion that the plaintiff, having no corporate capacity to make the contract by which it obtained the note in suit, never acquired any title to it, or to recover the money paid for it; that said contract and the several acts of the plaintiff under it, were strictly ultra vires, and conferred no rights whatever.

The judgment, entered upon the report of the referee, should be reversed, the order of reference vacated, and a new trial granted, costs to abide the event.

Present — Learned, P. J., Boardman and Tapp an. JJ.

Judgment affirmed, with costs.


source: Caselaw Access Project

author: Tappan, J.:

license: Public Domain

text:
    In the Matter of the Petition of the NEW YORK CENTRAL AND HUDSON RIVER RAILROAD COMPANY to acquire title to lands of PATRICK H. JUDGE and RICHARD L. VANDENBERGH.
    Commissioners to appraise lands for railroad purposes — what error's of, corrected on appeal — what evidence should be received by.

    When commissioners appointed to appraise lands to be taken for railroad purposes reject legal and competent evidence, or mistake the principle that should govern their appraisement, their award will be set aside.

      For many years, two tracks of tke petitioner ran diagonally across Broadway, in Albany, in front of a lot of one Judge, upon which stood his grocery store and dwelling-house. In 1874. the petitioner laid two additional tracks in the street, bringing them a few feet nearer Judge’s building. At the hearing before the commissioners appointed to appraise Judge’s damages arising from, the occupation of the portion of the street adjacent to Judge’s lot, taken for the additional tracks, and of which he owned the fee, Judge offered to prove that the passage of the heavily laden cars jarred the walls and partitions of his building so seriously as to require repairs to the extent of ¡51,000 a year ; that the portion of the lot not taken had been depreciated in value by the noise, smoke and increased danger, and that such remaining portion would, in the future, be depreciated in value by the running of the cars over the new tracks. The commissioners rejected the evidence. Held, that this was error.
    Appeal from tbe report and appraisal of commissioners appointed to ascertain and determine the compensation which should be made to the owners of real estate on Broadway, in the city of Albany, taken by the petitioner for the purpose of laying two additional tracks across Broadway, and at the time of such appraisal already having such two additional tracks thereon.

      Samuel Hand, for railroad company.
    The compensation can only be for the land taken, and the effect of taking it upon the part not taken, and hot of the use to which the property may be legally subjected after it has been taken. (Albany Northern JR. R. Co. v. Lansing, 16 Barb., 68; Canandaigua R. Co. v. Payne, id., 273; Blade River R. R. Co. v. Barnard, 9 Hun, 105; In re Prospect Parle R. R., 13 id., 345; Troy, etc., R. R. Co. v. Lee, 13 Barb., 169; In re U. V. and Johnsonville R. R., 53 Barb., 457.) The damage to the property not taken, caused by the use of that taken, is damnum absque injuria. (Corey v. Buffalo R. R., 23 Barb., 482; Arnold v. Hudson R. R., 49 Barb., 108; Radcliffr. Mayor, etc., 4 Comst., 195; Storey v. Elevated R. Co., 3 Abbott’s New Cases, 478.)

      Amasa J. Parker, for Patrick H. Judge, appellant.
    Taking the land under the report of the commissioners cuts off all future claim for damages. (Furniss v. The Hudson River R. R., 5 Sandf., 551.) The rule of damages laid down in 56 Barbour, 456, is a correct statement of the law in question. (See, also, JST. Y. Central and Metropolitan Gas-light Company, 6 Hun, 149, affirmed in Court of Appeals, and citing Trustees of College Point y. Dennett, 2 Hun, 669.) The decision in 56 Barbour is in accordance with the adjudications in other States. ( Wilber v. Pastern Co., 2 Mete., 147; ParherY. The Boston Co., 3 Cush., 107; Walker v. Old Colony B., 108 Mass., 10, 14; Concord B. Co. y. Guriy, 23 N. H., 237; Somerville B. Co. v. Doughty, 2 Zabr., 495; ■ Hornstein v. Great Western, 51 Penn. St., 87; Pittsburgh v. Gillelan, 56 id., 445; Will, and Read. Co. v. Stauffer, 60 id., 374; S. F. B. Co. y. Caldwell, 31 Cal., 367; Adden v. White Mts. Co., 55 N. H., 413; St. Louis Co. v. Mollet, 59 Ills., 235.) Under the English act, railroads have been held liable for all acts which, if done without legislative grant, would constitute a nuisance, and by which a party incurs special damage. (Queen v. Pastern Co., 2 Q. B., 347; Glover v. North Staffordshire, 5 Eng. L. and Eq., 335.) The appraisers are to assess all the damages, present and prospective, to which the party will once be entitled, by the prudent construction and operation of the road. (1 Redf. on Railways [5th ed.], 278, § 71; Dearborn v. Boston, 24 N. H., 179; Clark v. Vt. and Canada, 28 Verm., 103; Dorian v. P. Br. Co., 46 Penn. St., 520.) Where the commissioners reject legal and competent evidence, or where they mistake the principles that should govern their appraisal, the award will be set aside on appeal. (Troy and Boston v. Northern Co., 16 Barb., 100; Rochester v. Budlong, 6 How. Pr., 467; 13 Barb., 169.)
   Tappan, J.:

Petitioners had, for many years before 1874, had two tracks on which it ran its trains diagonally across the street, known as BroadAvay, in the city of Albany, in front of the lot of Patrick H. Judge, upon Avhich stands his grocery, meat and vegetable store and dwelling-house.

In 1874 the railroad company laid two additional tracks easterly and parallel Avith the old ones, in said street in front of said premises, bringing the neAV tracks a few feet nearer the sideAvalk than the old ones were. This is an appeal by Judge and the railroad company, pursuant to section 18, chapter 140, Luavs of 1850, from the appraisal and report of commissioners appointed at Special Term in a proceeding had under that statute, and the amendments in chapter 282, Laws of 1854, and chapter 582, Laws of Í864. The award by a majority of the commissioners was $1,000, as compensation for injury to the owner for taking the land.

The owner claims that the award was inadequate to compensate him for the injury sustained by such taking. All the land in question had been previously taken by the public for a street, and at each of the times when petitioners trades were laid thereon, was being used for that purpose.

The petitioners had made compensation to the owner of the land for using the street for the old tracks, and the company had the right to use the space occupied by these tracks for railroad purposes before the new tracks were laid, and this proceeding instituted. The use of the street as a railroad is a new burthen beyond the public easement, which cannot be imposed by legislative authority without compensation to the owner of the premises. (Williams v. N. Y. C. R. R. Co., 16 N. Y., 97; Carpenter v. Oswego & S. R. R. Co., 24 id., 655; Mahon v. N. Y. C. R. R. Co., 24 id., 658; Wager v. Troy & U. R. R. Co., 25 id., 526.) If the commissioners have rejected legal and competent evidence, or mistaken the principles that should govern their appraisal, this court should set aside the award on this appeal. (T. & B. R. R. Co. v. N. T. Co., 16 Barb., 100; Rochester v. Budlong, 6 How. P. R., 467; T. & B. R. R. Co. v. Lee, 13 Barb., 169.) In making the-appraisal in this case, it was the duty of the commissioners to regard the land sought to be condemned, as forming a part of the lands of Judge, to whom it had belonged subject to the public easement of a street, and the right of the railroad company to use the two tracks then existing therein. (Matter of P. P. & C. I. R. R. Co., to acquire lands, etc., 20 N. Y. S. C. R., 345.) In making such appraisal, the commissioners could not properly allow indirect or consequential damages. Such loss has always been regarded as damnum absque injuria. (Raddiff's Executors v. Mayor of Brooklyn, 4 Comst., 195 [opinion 206]; Lansing v. Smith, 8 Cow., 146, same case affirmed, 4 Wend., 9; Charles River Bridge v. Warren Bridge, 11 Peters, 420; Troy & Boston R. R. Co. v. N. T. Co., 16 Barb., 100 [opinion 106]; Matter of Application of U. V. & J. R. R. Co., to take lands of Nathan G. Akin, 53 Barb., 457; Corey v. B. C. & N. Y. R. R. Co., 23 Barb., 482; Arnold et al. v. H. R. R. R. Co., 49 Barb., 108.)

Upon the hearing before the commissioners, certain evidence offered by the owner was excluded. He complains that such exclusion was error, and for that reason the award ought to be vacated. He offered to prove before the commissioners that between the hours of five in the morning and nine at night, 120 trains pass over the new track up, as had been ascertained by actual count since a former meeting of the commissioners, and that a proportionate number of cars pass up and over such new track between the hours of nine at night and five in the morning; that the cars are heavily loaded, and cause great and injurious jar to the walls of such building. This evidence was objected to by petitioners and excluded. The owner also offered to prove that since the laying of the new track, his buildings standing on a lot of which a portion of the street taken for the new tracks is a part has been seriously injured by the jarring caused by the trains, to such an extent as to shake down the walls and partitions, and cause the stairway to be rebuilt, and that the injury caused by the use of said tracks, damages the building in question so as to make an expense of $1,000 a year necessary to keep it in repair. This evidence was objected to by petitioners and excluded. ' The owner offered to prove that that portion of his lot not proposed to be taken, has been depreciated in value by the noise, smoke and increased danger, and by the jarring caused by the running of the heavy trains on the now trades. This evidence was also excluded by the commissioners. The owner also offered to prove that the residue of his lot not taken is depreciated in value by the noise, smoke and increased danger caused by the running of trains over the new track, and would be so depreciated. This evidence was also excluded.

Under the law defining the rule to govern the commissioners. and the decisions of the court construing the same, was the evidence offered competent, and ought it to have been received? Section 16 provides that the commissioners are “ to ascertain and determine the compensation which ought justly to be made by the company to the owners or persons interested in the real estate appraised by them : and in fixing the amount of said compensation, said commissioners shall not make any allowance or deduction on account of any real or supposed benefits which the parties interested may derive from the construction of the proposed railroad, or the construction of the proposed improvements connected with such road, by which such real estate may be taken.” The question as to what construction ought to be put upon this statute has been frequently before the court, and while it can be hardly maintained that any of the cases upon the facts existing in the particular case were erroneously decided, there is apparently some conflict of decision in reference to the principles declared, by which the commissioners should bo governed. In Rood v. N. Y. & R. R. R. Co. (18 Barb., 80), it was held that if a party conveyed his land to a railroad company for the roadway, he cannot afterwards recover for damages caused by fire by operating the road, where no negligence is proved, because of the presumption that the parties had that risk in view when the sale was made, and that part of the consideration paid was intended to cover that risk, and it has been held by the court that the rule is the same in a case where the title of the railroad company is acquired by an appraisal; that such appraisal and payment of the sum awarded would give as complete a title to the railroad company, and the right to use it be as extensive as it is when derived by a conveyance from the owner and the presumption be equally strong that all such risks had been included in the appraisement. (C. & N. R. R. Co. v. Payne, 16 Barb., 273; Matter of Utica, etc., R. R. Co., 56 id. [opinion], 464, 465; Matter of P. P. & C. I. R. Co., 20 N. Y. S. C. E. [opinion], 347.) The last case of appeal from such an appraisement, to which our attention has been called, is that of the Matter of the Application of the P. P. & C. I. R. R. Co., to acquire lands of Moynahan. (20 N. Y. S. C. R., 345.) Gilbert, J., delivered the unanimous opinion of the court at General Term, in which the rule of damages is laid down in the following language: “The true inquiry is, what was the whole property, from which the railroad was severed, fairly worth in the market before the taking, and what was its value with the railroad upon the land taken ?” This is substantially the opinion given by this court at General Term in the Matter of the Utica Railroad Company (56 Barb., 456), and the court there say that everything that will depreciate the value of that residue is to be taken into account. If, by taking the land acquired, access to that remaining is more difficult and dangerous ; if the land remaining is located in a city and is valuable only to be built upon, and occupied as a dwelling or for business purposes, and is in such close proximity to the established tracks of the railroad that the jarring has affected the structures, and the smoke and noise rendered the remaining premises less valuable for use, from which it can be inferred that the same effect will bo produced by the same cause in future, the market value of the remaining land would thereby be affected, and evidence showing these circumstances should have been received by the commissioners.

The owner’s land can dnly be taken for a public use. In this case it is proposed to be taken for two additional tracks for this railroad company. To hold that the owners shall not be allowed to show fully the condition of the remaining premises after the additional tracks have been constructed, is really to deprive him of the ability to show what the actual market value of such premises are, after the taking with these additional tracks on the land taken. The whole subject was carefully and ably discussed by Justice Foster, in the Matter of the U R. R. Co. (56 Barb., 156), and his reasons for this construction of the law are so cogent and convincing, that we do not deem it necessary to pursue the subject further.

Order affirming report of commissioners should be reversed, their report set aside and proceedings sent back to new commissioners. Ten dollars costs of motion and disbursements for printing allowed to appellant Judge. Form of the order to be settled by Justice Learned.

Present — Learned, P. J., Boardman and Tappan, JJ.

Ordered accordingly.


text:
    WILLIAM S. KENNEDY, Receiver of the Estate, Real and Personal, of JOHN McGUIRE, Respondent, v. MARY E. McGUIRE, Appellant.

      Creditor’s trill — statements of husband — when inad/missihle against wife.

    This action was brought by a. receiver of John McGuire, to have a judgment against him declared a lien upon a lot conveyed by his father to the defendant, John McGuire’s wife, plaintiff claiming that the consideration for the lot and the cost of a building erected upon it had been furnished by the son. Upon the trial John McGuire was examined, and testified that the money he had paid to the contractor had been paid by him as agent for his father. A referee, before whom he had been examined in supplementary proceedings, was then called, and was allowed, against defendant’s objection and exception, to testify that on such examination McGuire swore that this money was loaned to him by his father; and also, that he (John McGuire) gave the deed to his wife as a present.

      JBeld, that this evidence was inadmissible as'against the wife.
    Appeal from a judgment in favor of the plaintiff, entered upon the report of a referee.

      Thomas McManus and Nathaniel G. Moa/c, for the appellant.

      la Mott W. Rhodes, for the respondent.
   Tappan, J.:

Defendant appeals from a judgment entered upon the report of a referee.

One Thomas Curley, on the 17th of November, 1874, recovered a judgment against said John McGuire for $292.10; and, after the return of an execution against such debtor, instituted proceedings supplemental to execution, under which, on March 11th, 1876, plaintiff was appointed receiver of the property of such debtor; and, as such, by leave of the court, brought this action to have such judgment declared a lien upon a lot of land on the west side of Second street, in the eleventh ward of the city of Troy; and, after trial before a referee, obtained a decree herein that such judgment is a lien upon said premises, subject to a mortgage to Jonas C. Heartt; directing that such premises be sold on execution to be issued to the sheriff of Rensselaer county, subject to such mortgage; and that, from the avails of such sale, said judgment be paid, $65, costs of such supplemental proceedings and the costs of this action. The defendant is the wife of John McGuire. They were married in 1868. Previously to February 27th, 1873, the land in question had for several years been owned by William McGuire, the father of John. On that day, and just after a new house had been erected thereon, William conveyed the premises to the defendant, without any consideration passing from defendant to him. The judgment in question was recovered for carpenter work and material furnished by Curley, between November 18th, 1872 and the date of the conveyance, in finishing the house upon the premises in question, under a written contract between said Curley and said John McGuire, as follows:

“Troy, N. Y., Nov. 18, 1872.
“ I agree to pay Thomas Curley the sum of $745 for the carpenter work of my house on Second street, in the city of Troy, N. Y.” “ Mr. JOHN McGUIRE.”

Accompanying- the contract were specifications of the work to be done and the materials to be furnished. The theory of the plaintiff upon the trial, and that sustained by the findings of the referee, was that, at the time of the conveyance by William McGuire to the defendant, her husband furnished the consideration which was the moving cause for such conveyance, and was at the time really the equitable owner of the premises, by reason of. a verbal agreement of his father to give the same to him, under which he had paid taxes and expended money for building a house thereon; that Curley was a creditor of said John McGuire; and that, as to such creditor, and plaintiff, who represented him, such conveyance is presumed fraudulent to the extent necessary to satisfy such debt. (2 R. S. [6th ed.], 1105, §§ 51, 52.). If John McGuire paid the consideration, and caused the conveyance. to be made to his wife, plaintiff’s position is correct.

By issuing execution against the property of the judgment debtor, which has been returned unsatisfied, Curley exhausted his legal remedy; and, upon the appointment of a receiver and the commencement of this action, he acquired a lien upon any equitable estate of the debtor in the lands in question. (Neate v. Duke of Marlborough, 3 Myl. & Craig, 407, 415; Beck v. Burdett, 1 Paige, 305; O. N. Bank v. Olcott, 46 N. Y., 12; opinion of' Church, J., 19, 20.)

The conveyance being good as between the grantor, grantee and the person who has paid the consideration, the law requires .that the legal remedies against the person who has paid the consideration shall be exhausted by the creditor of the latter, before resort is had to the trust created by the statute to obtain such payment. (Garfield v. Hatmaker, 15 N. Y., 475 ; McCartney v. Bostwick, 32 id., 53; Tappan v. Butler, 7 Bosw. 480.)

The presumption raised by the statute is not conclusive. The burden is cast upon defendant, in defense of her title, to disprove a fraudulent intent. (See case last above cited.) Also Dunlap v. Hawkins (59 N. Y., 342); and the question upon the evidence Avas Avhether John McGuire did actually pay the consideration for the deed, and if so, Avhether such deed Avas made with intent to cheat and defraud Curley. (Savage, Deceiver, v. Murphy, 34 N. Y., 508; Case v. Phelps, 39 id., 164; Shand v. Hanly, 5 W. D., 551.

The innocence of any fraudulent intent on the part of the defendant will not protect the title. (Young v. Heermans, 66 N. Y., 374; Pendleton v. Hughes, 65 Barb., 136.)

Defendant insisted upon the trial that her husband had no interest in the lot before the house Avas erected; that William McGuire had built the house at his oavii expense, and had paid all the bills thei’efor, eAren to paying her husband for his work upon it; that certain moneys claimed by plaintiff to have been borrowed by John, and expended on his oavii account upon the house, Avere really voluntarily expended by William, and that John was not in any manner liable to him therefor; that William Avas liable for the debt in suit. The creditor, or a receiver acting under his judgment, cannot reach a trust fund, created by a person other than the debtor, for the latter’s benefit. (2 R. S., 273, §§ 38, 39; Campbell v. Foster, 35 N. Y., 361; Harm v. Van Voorhis, 5 Hun, 425.)

The referee found the facts substantially according to the plaintiff’s claim, and the most important question on this appeal is whether incompetent evidence was received that influenced the report and prejudiced the defendant. John McGuire was sworn as a witness for the plaintiff, and gave evidence tending to show that he paid from $500 to $1,000 upon contracts to build portions of the house.. To explain this testimony, and to show that, although John paid a considerable part of the money paid to contractors on the house, he paid it as agent for and on behalf of his father, defendant, on. cross-examination, drew out evidence tending to show that he so paid it. Plaintiff then called Torrance, a referee before whom John had testified in the supplemental proceeding, and, under defendant’s objection, was allowed to prove that, on his examination in such proceeding, John testified that his father loaned him the money. On cross-examination of the same witness, defendant inquired if he requested his father to give the deed to his wife, to which the witness answered; “No.” The referee ivas allowed to testify, under defendant’s objection, that, on witness’ examination in such supplemental proceeding, he testified that he gave the deed to his wife as a present; that he so stated to her.

The declarations of the husband were not original evidence, competent as against his wife. (Gillespie v. Walker, 56 Barb., 185; Lormore v. Campbell, 60 Barb., 62.) The plaintiff called John McGuire as a witness. By such act he presented him to the court as a person worthy of confidence and belief. After having done so, it was not competent for him to attempt to impeach his general character, nor to prove that at some other time he had made statements inconsistent with his testimony at the trial, for the purpose of discrediting him. We think this evidence was erroneously admitted. It bore upon an important point litigated; its admission was calculated to prejudice the defendant. (Thompson v. Blanchard, 4 N. Y., 303; People v. Safford, 5 Denio, 112; Hunt v. Fish, 4 Barb., 324.) .

On the trial defendant claimed that the reason that Curley’s bill for work and materials was not paid, was because he had not done the work and furnished the materials according to the specifications. Curley was examined as a witness by defendant, and was asked the question whether he remembered that when he first asked John for the bill he disputed it, and said that if Curley did not have work torn down'and properly done, he would not pay the bill. This was objected to by plaintiff, and excluded by the referee under defendant’s exception. We think this was error; that the evidence, if allowed, would have tended to show that the payment of the bill was refused by (John for good reason, and not ill bad faith with intent to cheat Curley.

The referee allowed plaintiff to show that the land had been assessed and taxed to J ohn McGuire, but refused to allow defendant to show that it was without the knowledge of his father. The evidence offered would have tended to explain the apparent act of dominion by J ohn, that had been given as evidence by plaintiff, and was competent for that purpose. (Teed v. Valentine, 65 N. Y., 471.)

Except for these errors to the prejudice of the defendant, we would not have been inclined to disturb the finding of the referee, although the competent evidence that J ohn McGuire had any equitable title in the land in question is not conclusive.

Judgment reversed; order of reference vacated; new trial ordered with costs to abide event.

Learned, P. J., and Boardman, J., concurred in the result on the ground that the evidence of Torrance was not admissible.

Ordered accordingly.


text:
    PETER GRATTAN as Executor, etc., of TERENCE GRATTAN, Deceased, Respondent, v. THE NATIONAL LIFE INSURANCE COMPANY OF THE UNITED STATES OF AMERICA, Appellant.

      Policy of life insurance payable to executors in trust — who may maintain action upon — Insurable interest — who has — Physician—cannot disclose informa- ■ tion acquired from jiatient.

    Where a policy of life insurance is made payable to the executors or administrators of the insured, in trust for his father1, the executor is the ti-ustee of an express trust, and may maintain an action to x-ecover the amount of the policy.

      A father has an insux-able intei'est in the life of his son.

      When the relation, whether of consanguinity or of affinity, between the insured and the beneficiary is such as to warrant the conclusion that the beneficiary has an interest in the life of the insured, whether pecuniary or arising from dependence or natural affection, it is sufficient to sustain the policy.
    Information acquired by a physician in attending a patient, cannot be disclosed by him.
    Appeal from a judgment in favor of the plaintiff, entered upon the report of a referee.

      William H. Ingersoll, for the appellant.

      La Mott W. Rhodes, for the respondent.
   Tappan, J.:

Defendant appeals from a judgment entered against it upon the report of a referee.

The action was brought upon two policies of insurance, issued by the defendant, upon the life of Terence Grattan, February 28th, 1876. Each policy was issued upon the written application of said Terence Grattan, signed also by the plaintiff as the intended beneficiary under the policy applied for. The policies issued upon these applications, and the applications provided that such application and each statement made therein formed a part of the contract of insurance, and that the assured and any person accepting, or acquiring any interest in the contract, admitted the same to be material, and warranted the same to be full and true, and the only statements upon which the contract was made. And each of the policies provided, that if anything in the application should be in any respect untrue, or mis-stated, the consideration of the contract should be deemed to have failed, and the company should not be liable under it.

One of the policies was for $5,000, and was payable after the death of Terence Grattan to his executors or administrators, “for the use of Peter Grattan, his father.” The other policy was for $1,000, to be paid to Terence Grattan, or such person as he should appoint, on the28th day of February, 1896; “ or if Terence Grattan, the person insured under this policy, shall sooner die, then, after his death, to his executors or administrators, for the use oí Peter Grattan, his father.”

Terence Grattan was ill about four months, and. died November 8th, 1876, then aged twenty-one years and one month. He died of consumption. No evidence was given which would have justified the referee in finding that on February 18th, 1876, or at the time the policies wea-e issued, he was diseased. Defendant urged upon the trial, and has argued here, that there was no proof whatever that the claim in this action was in any way related to, or was for the benefit of, the estate of Terence Grattan, for whom plaintiff sued as executor; and that, plaintiff personally had no insurable interest in the life of his son.

It will be noticed that the policies are in terms, payable to the executors or administrators of the insured, for the use of Peter Grattan, his father. The policies are payable to the party named therein. In this case, to the executor of the insured, who is trustee of an express trust, to hold the money for the plaintiff. The insured having named his father as the executor of his will, in that capacity he as eaatitled to recover the moaaey. (Code of Civil Procedure, § 449.)

At the time the iaasuraaaee was perfected, Tea*ence Grattan was the minor son of plaintiff; he was entitled to his services until his soar should attain his majority, and after that age this soar, iia case of indigence of his father, the plaintiff, might be compelled to aid iiu his support aaad maintenance.

It seems to be well-settled law that a parent has an insurable iaatea-est iaa the life of his child. The iaasured need aaot necessarily have any pecuniary interest in the life of the cestui que vie. The coiatract of life insurance is not one merely of indemnity for a pecuiaiaay loss, as in marine aiad fire policies; it is sufficient to show that the policy is aaot invalid as a wager policy. If it appear that the relation, whether of coiasaiaguiiaity or of affinity, was such between the person whose life was insured arad the beneficiary named in the policy, as warrants the conclusion that the beaaeficiary had ara interest, whether pecuniary or arising from dependence or natural affection, in the life of the person insured, such iaatea-est will uphold the policy.

Where it appears that the stipulated event has happened, and the iaasured had ara iiasurable iaatea-est in the life of the person iaasured at the inception of the contract, this is eaaough to authorize a recovery. (Ins. Co. v. Bailey, 13 Wall. [U. S.], 616; Rawls v. Am. Mu. Life Ins. Co., 27 N. Y., 282; Loomis v. Eagle Life Ins. Co., 6 Gray, 399; Conn. Mut. Life Ins. Co. v. Schaeffer, 15 A. L. J., 394.) The insured was not bound to furnish proof of his interest. (Smith v. Ætna Life Ins. Co., 5 Lans., 545.) The policies are in the nature of valued policies. (Miller v. Eagle Life and Health Ins. Co. 2 E. D. Smith, 268.)

Upon the trial the defendant produced Doctors Hun, Shepherd and Shiland, who had attended Terence Grattan, or his mother, Ellen Grattan, and offered to prove by them that certain answers which had been given by the insured to interrogatories contained in the application, in reference to the disease of which she died, and his own previous health, were untrue. The knowledge of these witnesses had been obtained while attending the mother and son as physicians. A large number of questions were asked to obtain the information sought after, to each of which the plaintiff interposed the objection, that the evidence sought tended to disclose privileged communications and information obtained while acting in a professional capacity. The referee sustained the objections and excluded all evidence of this character, and the defendant excepted. It is provided by statute (3 R. S. [6th ed. ], 671, § 119) that ‘ ‘ no person, duly authorized to practice physic or surgery, shall be allowed to disclose any information which he .may have acquired in attending any patient in a professional character, and which information was necessary to enable him to prescribe for such patient as a physician, or to do any act for him as a surgeon.” And, substantially, the same provision is contained in section 834 of the Code of Procedure ; and section 836 of such Code, provides that this section shall apply to the examination of a person as a witness, unless the provisions thereof are expressly waived by the patient This law was recently construed by this court in the case of Edington v. Mut. Life Ins. Co. of N. Y. (5 Hun, 1), and in the same case by the Court of Appeals (67 N. Y., 185), where that court uses this language : “ There is no ground for claiming that the right of objecting to the disclosure of a privileged communication is strictly personal to the party making it, or to his personal representatives, and that it cannot be available to a third party.” That court also held that, when the statute refers to information, “ it means not only communications received from the lips of the patient, but such knowledge as may be acquired from the patient himself; from the statement of others who may surround him at the time, or from observation of his appearance and symptoms. * *- * Information thus acquired is clearly within the scope and meaning of the statute.”

Wo have examined the several questions, objections and offers, and the rulings of the referee thereon, and do not perceive that the referee in excluding evidence extended the rule beyond that held by the coui't in the above case. We have not failed to see .the suspicion which an objection to this class of evidence casts upon the plaintiff’s case, nor the embarrassment of life insurance companies in ferreting out attempts to defraud ; these are considerations for the Legislature, but can have no legitimate weight with the court where the statute is plain and has received judicial construction. The defendant upon the trial sought to use the letters of some of these physicians upon the subject of their proposed exámination which had been excluded by the referee, and the fact that one of these letters was written and addressed to the plaintiff, and delivered to the agent of the defendant, was urged as establishing its competency. The evidence was properly excluded; it was, at most, a statement of a third person, not verified, hearsay and incompetent; the difficulty in proving the facts sought to be established by legal and competent evidence, when the testimony of attending physicians is excluded, docs not allow the party to resort to reputation, the declarations of third persons not under oath, or other incompetent evidence to prevent the failure of justice. The applications and the statements therein contained, were the basis of, and a part of the policies of insurance; the policies by their terms make the statements material to the risks assumed; and if any of the statements are untrue, this avoids the policies, although such statements were made in good faith, and in the belief of their truth. (Foot v. Ætna Life Ins. Co., 61 N. Y., 571; Brennan v. Security, Life & Annuity Co., 4 Daly, 296; Wright v. Equi. Life A. S., 50 How. Prac. Rep., 367; Cushman v. U. S. Life Ins. Co., 63 N. Y., 404.) The defendant alleged in its answer that the statement in the application for insurance that Ellen Grattan, the mother of the insured, had died of intermittent fever after child-birth was untrue ; that she had really died of consumption. The burden of proving these allegations was upon the defendant. (Piedmont & Arlington Life Ins. Co. v. Ewing, 92 U. S. Rep.; 2 Otto, 377; Jones v. Brooklyn Life Ins. Co., 61 N. Y., 79.)

In the absence of proof, other than the policies, applications and proofs of loss, the referee was justified in finding that she died as * stated in the applications. The other evidence offered on that-subject was not so conclusive as to justify this court on appeal in reversing the finding- of the réferee.

Judgment should be affirmed, with costs.

Present — Learned, P. J.; Boardman and Tappan, JJ.

Judgment affirmed, with costs


author: Learned, P. J.:

text:
    SOLOMON V. GIFFORD, Respondent, v. MARVIN SACKETT, Executor, Etc., of STEPHEN WATERMAN, Deceased, Appellant.

      Section 399 of Code of Procedure•— what evidence inadmissible under.

    Under section 399 of the Code of Procedure one entitled to a legacy under a will, could not he examined as to personal transactions with the deceased, as against his executors, although her interest was adverse to that of the party calling her.
    Appeal from a judgment in favor of the plaintiff, entered upon the report of referees. The plaintiff presented a claim against, defendant’s estate for services rendered by plaintiff and his wife," and for money expended. The claim tvas referred to referees, pursuant to statute.
    By her father’s will, plaintiff’s wife is entitled for her life to .interest- on one-third of his personal estate remaining after the payment of his debts. Upon the hearing she was allowed, against defendant’s objections, to testify to certain personal communications and transactions had by her with the testator.

      Horace P. Peck, for the appellant.

      8. L. Magoun, for the respondent.
   Learned, P. J.:

It seems to be settled in this court, that under section 399 of the Code (in force at the time of the trial), the testimony of Mrs. Gifford was inadmissible. She was entitled to a certain legacy' { under the will of the deceased. Hence she was interested in the event of this action, and could not testify as to personal transactions with the deceased against his executor. It is true that her interest was adverse to that of the person calling her as a witness. But it has been decided that this section makes no exception on that account. (LeClare v. Stewart, 8 Hun, 127; Howell v.

Taylor, 11 Hun, 214; Cornell v. Cornell, 12 Hun, 312.)

The judgment must he reversed, reference discharged, and a new trial granted; costs to abide the final order of the court.

Present — Learned, P. J.; Boardman and Westbrook, JJ.

Judgment reversed; new trial granted; reference discharged; costs to abide event.


text:
    HANNAH ALLEN, Plaintiff, v. THE UTICA, ITHACA AND ELMIRA RAILROAD COMPANY, Defendant.

      Taking land by railroad — proceedings under chapter 140 of 1850 — cannot be attacked eollatemlly, except for want of jurisdiction.

    This action was brought to recover the possession of certain land, which the defendant claimed to have taken under certain proceedings had under the General Railroad Act. The plaintiff insisted that no title was obtained by the proceedings, for the reason that the map of the location of the road, filed in the clerk’s office, did not embrace the lands desciibed in the petition and now in dispute. The petition alleged that the line had been surveyed, the map filed, the road located, and that the land in dispute was required for the purposes of constructing and operating the i-oad.

      Held, that, as the plaintiff might have then contested any of these allegations, but had failed to do so, she was concluded by the orders made in the proceedings, and could not now attack them collaterally.
    Notice of the motion to confirm the report of the commissioners could not be found, although the order recited that it had been given.

      Held, that the service of the notice of motion for confirmation was only a step i» the'proceeding — a matter of practice; that the failure to give it would not deprive the court of the' jurisdiction already acquired or render the order liable to he attacked collaterally.
    That the court having acquired jurisdiction of the proceedings, which partook of the nature of an action, they could not be attacked collaterally.
    Motion for a new trial on exceptions ordered to be heard in the first instance at the General Term, after a judgment in favor of the plaintiff, entered upon the verdict of a jury.

      M. M. Wafers, for the plaintiff.

      W L. Dailey and Marcus Lyon, for’ thé defendant.
   Learned, P. J.:

The complaint alleges that the plaintiff was the owner of a certain piece of land; that the defendant, by virtue of certain alleged proceedings under the General Railroad Act, has entered upon and taken possession thereof, and it asks that these proceedings be declared void, and that the plaintiff recover possession and damages. The defects alleged are that no notice of the filing of the map or profile of the route was given to the plaintiff; that no notice of the application for' confirmation of the report of the commissioners, or of the hearing before them, was given to her.

The answer sets up the proceedings before the commissioners' in detail. On the trial, the court directed a verdict that the plaintiff recover possession and nominal damages. The'defendant appeals.

On the argüinení of the cáse, it was urged by'the plaintiff that the' lands in dispute aré' not the lands described'in'the petition presented to the Supreme Court for the talcing of lands under the railroad act; and that, therefore, these lands had never' been taken. No evidence, however, was given to show this; and, in fact, the evidence seems to be the contrary.

The descriptions correspond; and the testimony of the appraiser tends to show that the land-in question is that-which was' described in the petition. If it were as the plaintiff claimed- on'the argument, this would' have appeared' distinctly on the trial, for it would-have been too important a point to bé"ovéflooked.

■ Another ground on which the plaintiff relied on the argument, and which was evidently one of the principal grounds at the trial, was, that by the map of the original location of the railroad, as filed in the clerk’s office, the railroad did not embrace any of the lands described in the petition and now in dispute. The plaintiff insists, therefore, that this fact defeats the title obtained by the statutory proceedings.

In the case of New York and Boston R. R. Co. v. Godwin (12 Abb. [N. S.], 21), a motion was made for the appointment of commissioners of appraisal under the General Railroad Act. In opposition to that motion, it was shown that a proper map, as required by section 22, had not been filed, and the proper notice required by that section had not been given. For that reason, the proceedings were dismissed. That decision seems to be correct. But it does not apply to the present case. If the present plaintiff, when served with the petition for the acquiring title to her lands, had appeared at the time appointed in the notice, she might then have shown, if the fact were so, that no location of the road had been properly made which included her lands. The petition itself alleged that the line had been surveyed, the map filed and the road located, and that the land in question was required for the purpose of constructing and operating said road. These allegations, or any of them, the plaintiff might have then contested; but she did not do this. On every sound principle, they must be taken as established against her. When the law creates a tribunal authorized to decide, and a party, on being legally notified, neglects to appear and contest facts which are within the power of the tribunal, such neglect concludes the party. (Matter of N.Y. and Jamaica R. R. Co., 21 How., 435; Dyckman v. Mayor, 5 N. Y., 440; Rens. and Sar. R. R. v. Davis, 43 id., 143.

The proceedings were before this court, not as a court of limited jurisdiction. Jurisdiction having been acquired, the proceedings cannot be assailed collaterally. (Porter v. Purdy, 29 N. Y., 106; Matter of N. Y. C. & H. R. R. R., 64 id., 62.)

The next objection made by the plaintiff is that the appraisers did not meet in pursuance of any appointment by order of the court, nor was the meeting on notice, nor was the appraisal separate.

The report of the commissioners is produced. That shows that they met at the time appointed in the order; and that they determined the compensation to which the plaintiff was entitled before proceeding to the examination of any other claims. Two of the commissioners were called as witnesses on the trial. Although they do not recollect the exact details of their proceedings, yet they say that they always agreed on the amount of the award before proceeding to another case. The formal report was signed afterwards. It appears by the plaintiff’s own testimony that she was present when the commissioners appraised the land in dispute.

On the filing of the report of the commissioners, the final order was'entered, reciting the fact of notice to the parties of a motion to confirm; and ordering that the report should be confirmed, and the money which had been awarded to the plaintiff should be deposited in a .certain bank to her credit. This order was made in 1870, and the money was so deposited.

It was proved on the trial, that search had been made for the proof of notice of motion for confirmation, and that it could not be found. Some parol evidence was given that such proof had-been presented to the court when the report was confirmed. The notice of motion for confirmation is only a step in the proceeding. It is to bo given “ to the parties or their attorneys, according to the rules and practice of the court.” (Section 17, General Railroad Act.) Jurisdiction of the parties and of the subject-matter — that is, the land — is obtained by the service of the petition, and of the notice of its presentation. It cannot be necessary, then, to show, as a matter of jurisdiction, when the proceedings are attacked collaterally, that this notice of the motion for confirmation was served. The court, as laid down in Matter of N. Y. C. & H. R. R. R. Co. (ut supra), had all its powers over the proceedings, to control- them and to set them aside. They have been held to be, as it were, a quasi action; and the question whether due notice of the motion to confirm was given, must be treated like any similar question as to due notice of trial or due notice of any motion in an action. The fact that such notice, by the act, may be given to the attorneys, and is to be according to the rules and practice, shows it to be a matter of practice. The plaintiff knew that soon afterwards the defendant, in pursuance thereof, took possession of the land.

We do not think that a want of jurisdiction has been shown, which authorized the court to direct a verdict for the plaintiff.

The judgment must be reversed; a new trial granted; costs to abide the event.

Present — Learned, P. J., Boardman and Tappan, JJ.

Judgment reversed; new trial granted; costs to abide event.


text:
    In the Matter of the PEOPLE OF THE STATE OF NEW YORK, by AUGUSTUS SCHOONMAKER, Jr., Attorney-General, v. THE ATLANTIC MUTUAL LIFE INSURANCE COMPANY.

      Chap. 902 of 1869 — when the court will not direct a receiver to continue the business of the company.

    The authority conferred upon the court by section 7 of chapter 902,of 1869, to direct the receiver of an insurance company, upon certain facts being established, to continue the business considered and such direction refused under the circumstances of this case.
    Appeal from an order made at the Special Term, upon the filing of the report by the actuary appointed by the Receiver of the Atlantic Mutual Life Insurance Company, directing the receiver to take the necessary steps to convert the assets of the company into cash, and distribute the same as provided by law.
    The appellants insisted that the court should have directed the receiver to continue the business, as is authorized by section 7 of' chapter 902 of 1869.

      The Attorney-General, for the people.

      William Barnes, for the Atlantic Mutual Life Insurance Company.

      S. W. JRosendalet for the Superintendent of the Insurance Department.
   Learned, P. J.:

Under section 7, chapter 902, Laws of 1869, it hás been, upon ' proper application, decided by this court that the assets and funds of this company are not sufficient to justify the further continuance of the business. This decision of the Special Term has been affirmed by the General Term and by the Court of Appeals. That question, at léast, then, múst be deemed tó bé settled.

There are sóiñe provisions in the following sections of that act which seem to indicate, that in one case the receiver, iii the closing up of the affairs of the company, is to continue to receive the future premiums on policies which had been issued at the time of his appointment; and that, in respect tó these policies, he is tó continue the business, at least uiitil there be an accumulation of funds sufficient to meet ail the oligations of the company, and to pay its stock. (Sections 8, 9, 10.)

I do not propose to examine this somewhat peculiar scheme for having this court, through its officer, carry oh life insurance business. It is certainly undesirable that this court, or its officer, should be thus engaged, especially when we consider that in every such case it must have been already decided that the assets and funds were not sufficient tó justify the further continuance of thé business. At least, it should appear, from the facts before us and from the statute, that it is our imperative duty tó have the. receiver carry on business before we undertake it.

The statute says, that if it shall be found, by the actuary’s report, that the securities in the department, and the assets and credits, including the future premiums that will accrue on the outstanding' policies, and other obligations of the company, are sufficient to pay all the policies, annuities, and other obligations as they mature, and the legal costs and expenses of the business ; and if the actuary’s report be confirmed by the court, then the receiver is to notify the policyholders, etc.

It will be seen that the actuary’s report is not conclusive, but that the court must confirm the report before its officer is to attempt to continue the business. And it appears to me that this question is not one of mere mathematical calculation. A great deal has been said in the argument about net valuation and gross valuation. It has been urged that the statute requires the actuary to make ' his report on the basis of one valuation, while he has actually made it on the basis of the other. I think there are other matters to be considered. Since August 1, 1877, or about that time, this company has been in a receiver’s hands. For several months prior thereto, the proceedings had been pending. A deposit oí some $118,000, made in the Hope Banking Company, was secured ' by collateral, worth about $30,000, and that is all the deposit is worth according to the actuary’s report. The whole capital stock is only $110,000.

Now, without referring in detail to the facts, which have appeared in regard to the company, it is apparent that its credit is gone. An opportunity had been afforded by the Special Term, before the appointment of a receiver, for the stockholders to make good the deficiency. They failed to do so. And the question now must be not merely whether if the future premiums should be aid, they and the existing assets would be sufficient to |iay the 2iolicies, but there must be another question decided, before we authorize any jiroceedhigs towards carrying on the business through a receiver. That question is whether, under the circumstances, there will jirobably be any considerable amount of future premiums 2>aid. It is useless to attenqit to carry on this business if the circumstances are such that few, if any, jiolicyholders will 2irobably, in fact, pay any future 2>remiums. I am satisfied from all the circumstances, that an attenqit to notify the 2iolicyholders and require them to pay their pi'emiums, would now be a failure. And not only would it be a failure, but it would result in injustice to them. Few would wish to 2>ay premiums to the receiver of a discredited corporation. And to forfeit their 2iolicies for non-payment would, afford an 02i2iortunity for great speculation and wrong. It would be like that 2iractice of some of these insurance comqianies which has acquired the slang name of freezing out the Iiolicyholders.

For these reasons, I think that the order should be affirmed.

Present — Learned, P. J., Boardman and Tappan, JJ.

Order affirmed, without costs.


author: Learned, P. J. :

text:
    CALVIN H. GAYLORD, as Executor, etc., of RICHARD KNAPP, Deceased, Appellant, v. ASA KNAPP, Respondent.
    1 JS. S., 738, § 139'— remedy of mortgagee when no bond is given — vendor’s- lien— how discharged.

    Under the provisions of 1 Revised Statutes, 738, section 139, where a mortgage is given to secure the payment of a sum of money, there being no pre-existing debt, the mortgagee’s remedies are confined to the land mentioned in the mortgage, unless he has inserted therein an express covenant for its payment, or taken a bond or other separate instrument to secure the same.

      Semble, that a different rule might prevail where the mortgage was given as collateral to a pre-existing debt.
    A vendor’s equitable lien for the purchase-money is destroyed by taking back a purchase-money mortgage.
    Appeal from a judgment in favor of the defendant, entered upon the report of a referee.
    The action was brought to recover a deficiency arising upon a sale had on the foreclosure of a mortgage.
    . The referee found “ that on or about the 7th day of April, 1870, the defendant in this action purchased of Richard Knapp, deceased, who then and there sold and conveyed to said defendant the premises in the complaint in this action described, for the price of $5,500, to secure the payment of which, the said defendant gave to said Richard Knapp a mortgage as in the complaint in this action set forth.
    “ That said mortgage contained no express covenant for the payment of said sum of money, or any part thereof, and said defendant did not then, or at any time execute or deliver to said Richard Kuapp, any bond or other separate instrument to secure the payment of said, sum of money, or any part thereof; nor has he in any manner expressly promised to pay the same, or any part thereof, except by or through sáid mortgage; nor does any implication of such promise arise from the transaction between the defendant and said Richard Knapp.
    “ That said mortgage, after stating in the conditions thereof the time and manner of payment of said sum of money, proceeds as follows: 1 According to the condition of a bond this day executed and delivered by the said Asa Knapp to the said Richard Knapp, the said party of the second part.’
    “That said mortgage was foreclosed, and the mortgaged premises sold on such foreclosure to the defendant, at and for the sum in the complaint in this action set forth,” and directed judgment in favor of defendant.

      W. II. Ilecox, for the appellant.
    The defendant having agreed to pay that sum for the land is liable therefor. The debt is the principal, and the mortgage but a collateral security for the debt. (Hitt v. Beebe, 13 N. Y., 556, 567; 13 Yesey, 204; Gox v. Wheeler, 7 Paige, 252; 2 Gallison, 154; 4 Kent’s Com., 182.) Yol. 1 of Revised Statutes, 738, § 139, does not apply to- the case. (Culver v. Bisson, 3 N. Y, 265; Lansing y. Qoelet, 9 Cow., 355, 356, 368, 379, 384, 390.) That confines the remedies of the mortgagee under the mortgage to the lands pledged as collateral security for the debt. The defendant was estopped by the recital in the mortgage from denying- that he gave a bond. (4 Kent’s Com., 261, note b; 9 Wend., 209; 4 Den., 480; 4. Cranch C. C. R., 81; 41 N. Y., 435 ; 14 Abb. [N. S.j, 38; Lee v. Claris, 1 Hill, 56; 2 Best on Ev., § 542; 4 Cal., 247; 3 Mo., 529; 3 Wash, on Real Prop., § 25, pp. 93, 96; 11 How. [U. S.], 325; Herman’s Law of Estoppel, pp. 231, 252, 256, 258; 18 Barb., 14, 203.) An equitable lien in favor of the estate of the testator exists on the farm sold by him to his son, the defendant, and can be enforced by his executor. (Smith v. Smith, 9 Abb. [N. S.], 422; Vide, 2 Story Eq. Ju„ §§ 1218, 1219, 1220, 1226, 1227.) The lien was not released by vendor’s taking the mortgage on the same property. (Story’s Eq., § 1226; In Be Bryan, 3 Bankrupt R., 110; In Be Bryan, 4 id., 787.)

      A. McDoioell, for the respondent.
    The recital appears in the-mortgage, but the mortgage is just as perfect without as with the recital; and as the action is not based upon the mortgage, defendant is not estopped from denying it. (19 Barb., 488; Reed v,. McCount, 41 N. Y., 438, 439; 6 N. Y. Weekly Digest, 107; 5 Selden, 529; 22 N. Y., 37; 16 id., 343; 64 id-, 457; 4 Seld., 416.)
   Learned, P. J. :

The referee finds that there was no bond executed with the mortgage. That finding is sustained by the evidence. No bond was found among the papers of the testator. The mortgage was found, and the bond would probably have been with it. There ■was evidence given that no bond had been executed. The recital in the mortgage of the existence of the bond is evidence of that fact. But it is not conclusive. The mortgage is valid, although there was no bond. And it is not necessary, therefore, to the validity of the mortgage, that the mortgagor should be estopped from denying the existence of the bond; so far as any rights under the bond are to be obtained. (Reed v. McCourt, 41 N. Y., 435 ; Champlain & St. L. R. R. Co. v. Valentine, 19 Barb., 484.)

If, then, there was no bond given with the mortgage, the Revised Statutes confine the remedies of the mortgagee to the lands mentioned in the mortgage. (1 R. S., m. p. 738, section 159 [139]). The language of that section is explicit. But the plaintiff urges that the section speaks of the remedies of the mortgagee, and that it applies only to his remedies in that character. Such a construction would make the section meaningless ; because, as mortgagee simply, he would, aside from the section, be confined for his remedies to the land mentioned in the mortgage.

And the plaintiff further urges that there was a debt contracted by the defendant to the testator ; that this has been ¡laid only in part; that, therefore, the plaintiff has a right of action upon that' debt to recover the balance. I am not prepared to say that this view may not be sound, whore there has been a pre-existing debt and a mortgage without bond, or separate instrument, or covenant, is taken as collateral to such debt; it may be that such debt remains, notwithstanding the mortgage; and that this section of the statute does not, apply in that case. (Hone v. Fisher, 2 Barb. Ch., 559.)

But where thei’e has been no pre-existing debt, and a mortgage is given to secure the payment of a sum of money, then I think that the mortgagee’s remedies are confined to the land mentioned in the mortgage, unless he has taken an express covenant for the payment, or a bond, or other separate instrument to secure the same. (Hone v. Fisher, ut supra; Vrooman v. Dunlap, 30 Barb., 203; Severance v. Griffith, 2 Lans., 38.) The reasons of this statute ■ (as indicated by the revisers), is probably, that when the mortgagee takes no covenant or written agreement to secure the payment of the money, he intends to accept the land as his security. The absence of any written agreement to repay must have been considered by them to be evidence that the party who received the money intended to incur no personal obligation. The opposite view, the revisers suppose “to be contrary to received and very natural opinions.” (See revisers’ notes to this section.) The plaintiff also has a claim in his complaint for an equitable lien for purchase-money. But such a lien does not exist where a mortgage has been taken. And, even if there were such a lien, it could be of no avail to the plaintiff in the present action. The premises which were sold to the defendant have already been foreclosed under the mortgage given for the purchase-money.

The judgment should be affirmed, with costs against plaintiff as executor.

Present — Learned, P. J. Boardman and Tappan, JJ.

Judgment affirmed, with costs.


text:
    MARCUS M. WELLS and LYMAN GREENE, as Assignees of MERTON GREENE, Plaintiffs, v. CASSIUS MAPLES, Defendant.

      Fixtures — what not, as between mortgager and mortgagee.

    The defendant upon the foreclosure of a mortgage purchased certain real estate, consisting of a grist-mill, saw-mill, machine shop and water privilege. Before the execution of the mortgage a shingle-machine was put in the building; it 'stood in a box, about sixteen inches high, and was not fastened to the floor, except by a strip to prevent its slipping; it was set into a post cut away to • make l'oom for it. A planing-machine was put in after the execution of the .mortgage; it was not fastened to the floor, but was held in place by its own weight, and was connected with the machinery by a movable belt; at the sale the referee stated that the shingle-machine and planer were part of the realty.
    In an action between an assignee of the mortgagor — the assignment having been made after the execution of the mortgage — and the purchaser, held, that the shingle-machine and planer were personal property, and that the assignee was entitled thereto.

      Motion for a now trial, on exceptions ordered to be heard, in the first instance, at the General Term, after a verdict in favor of the plaintiff1. The action was brought to recover the purchase-price of a planing-machine and a shingle-machine alleged to have been sold by the plaintiff to the defendant.
    The defendant had purchased certain real estate, upon a foreclosure sale, consisting of mill property and a water privilege; subsequently the machinery in question had been sold by the plaintiffs at auction and purchased by the defendant.
    The latter now resisted payment, on the ground that both the planer and shingle-machine had passed to him at the foreclosure sale, and that the plaintiffs, who were the assignees of the mortgagor, had no title thorteo.

      Lynes c6 Van Horn, for the plaintiffs.

      L. Woolsey Lockwood, for the defendant.
   Learned, P. J.:

No question is made by the parties whether the defendant, having purchased the property in question in the manner stated, may not be estopped from insisting that it is a part of the realty. The case is argued on the theory that, if the property is a part of the realty, the plaintiffs cannot recover. Nor is any point made upon the fact of the plaintiffs’ possession.

Whether articles affixed to the realty become part thereof, or retain their character of personal property, is sometimes controlled or decided by acts of the parties mortgaging or conveying it. (McRea v. Central Nat. Bk., 66 N. Y., 489.) Butin the present case, no acts of that kind have expressed the intent of the parties. The defendant is a purchaser, at a foreclosure, of a mortgage on the real estate. The plaintiffs are general assignees of the mortgagor, under an assignment made subsequent to the making of the mortgage. The real estate was a grist-mill, sawmill, machine shop, and the water privilege. The shingle-mill was put into the building before the mortgage was executed; the planer afterwards. At the mortgage foreclosure sale, the referee announced that the shingle-mill and planer passed with the real estate. The case then arises substantially as between mortgagor and mortgagee of real estate. . .

The planer is not fastened to anything, but is held in place by its own weight. It is connected with the machinery by a belt, that can be slipped off; and that is all the connection. It can be taken up and set on one side, and this had been done several times.

The shingle machine stands on a box, the size of the machine, made of four-inch plank, about sixteen inches high. It is not franred to the floor, nor fastened to the floor, except that on one side there is a strip so that it cannot slip. A portion of a post in the building was cut to make room for the machine, and the machine is wedged into this place.

The shingle-machine was placed in the mill for permanent uses, for custom work, as one of the original owners says. We do not understand, by this testimony, that the witness states that they intended 1 ‘ to make a permanent accession to the freehold. ” (Potter v. Cromwell, 40 N. Y., 297.) The fastening of the shingle-machine was to prevent it from moving.

We think that the learned justice was correct in holding, under these circumstances, that the planer and shingle-machine were personal property. (Murdock v. Gifford, 18 N. Y., 28.) In Potter v. Cromwell (48 N. Y., 287), the “ portable grist-mill” was put into- a building previously used as á tannery, aiid it was firmly bolted to the frame of the building. While, in the present instance, as in the case of Murdoch v. Gifford, the machines were not fastened, except so far as needed to keep them in place. In Voorhees v. McGinnis (48 N. Y., 278), so far as any opinion was expressed as to the planing-machine, fire-pumps, etc., they weíé held to be personal property. In the case of McRae v. Central Nat. Bank [ut supra), on which the defendant relies, there were1 circumstances which do not exist in this case. The' building had been erected for a. twine factory, and the machinery was- expressly adapted to it and used with it. The owner intended to make the machinery a part of the freehold. The contract of sale, in pursuance of which the purchase-money mortgage was given, Was for the twine factory, together with all- the machinery, tools and fixtures.. And the court said that the dealings between the- plain-; tiff and Inis vendee showed that the articles in question were regarded as fixtures, which passed with the land.

The judgment must be affirmed, with costs.

Present — Learned, P. J., Boardman and Táppan, JJ.

Motion for new trial denied, and judgment ordered on verdict, with costs.